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 ~~September 30, 2022~~March 31, 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 ~~October 28, 2022,~~May 5, 2023, JBG SMITH Properties had ~~113,787,934~~111,443,983 common shares outstanding.

Table of Contents

JBG SMITH PROPERTIES

QUARTERLY REPORT ON FORM 10-Q

QUARTER ENDED ~~SEPTEMBER 30, 2022~~MARCH 31, 2023

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	Page
	Condensed Consolidated Balance Sheets (unaudited) as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022	3
	Condensed Consolidated Statements of Operations (unaudited) for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~	4
	Condensed Consolidated Statements of Comprehensive Income ~~(Loss)~~ (unaudited) for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~	5
	Condensed Consolidated Statements of Equity (unaudited) for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~	6
	Condensed Consolidated Statements of Cash Flows (unaudited) for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~	87
	Notes to Condensed Consolidated Financial Statements (unaudited)	109

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	3127
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	5043
Item 4.	Controls and Procedures	5144

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	5244
Item 1A.	Risk Factors	5245
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5245
Item 3.	Defaults Upon Senior Securities	5245
Item 4.	Mine Safety Disclosures	5245
Item 5.	Other Information	5345
Item 6.	Exhibits	5347
	Signatures	5548

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)


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
ASSETS
Real estate, at cost:
Land and improvements		$	1,273,947	$	1,378,218		$	1,267,022	$	1,302,569
Buildings and improvements			4,117,823		4,513,606			4,157,110		4,310,821
Construction in progress, including land			471,867		344,652			619,111		544,692
			5,863,637		6,236,476			6,043,243		6,158,082
Less: accumulated depreciation			(1,299,818)		(1,368,003)			(1,355,655)		(1,335,000)
Real estate, net			4,563,819		4,868,473			4,687,588		4,823,082
Cash and cash equivalents			258,871		264,356			279,553		241,098
Restricted cash			212,998		37,739			42,339		32,975
Tenant and other receivables			48,221		44,496			46,241		56,304
Deferred rent receivable			161,994		192,265			159,287		170,824
Investments in unconsolidated real estate ventures			360,846		462,885			312,651		299,881
Intangible assets, net			155,812		201,956			149,243		162,246
Other assets, net			133,419		240,160			158,118		117,028
Assets held for sale			—		73,876
TOTAL ASSETS		$	5,895,980	$	6,386,206		$	5,835,020	$	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		$	1,741,605	$	1,777,699
Mortgage loans, net							$	1,802,051	$	1,890,174
Revolving credit facility			100,000		300,000			—		—
Unsecured term loans, net			546,888		398,664			547,256		547,072
Accounts payable and accrued expenses			130,408		106,136			124,268		138,060
Other liabilities, net			98,831		342,565			164,627		132,710
Total liabilities			2,617,732		2,925,064			2,638,202		2,708,016
Commitments and contingencies
Redeemable noncontrolling interests			491,479		522,725			457,778		481,310
Shareholders' equity:
Preferred shares, $0.01 par value - 200,000 shares authorized; none issued			—		—			—		—
Common shares, $0.01 par value - 500,000 shares authorized; 113,764 and 127,378 shares issued and outstanding as of September 30, 2022 and December 31, 2021			1,138		1,275
Common shares, $0.01 par value - 500,000 shares authorized; 113,583 and 114,013 shares issued and outstanding as of March 31, 2023 and December 31, 2022								1,137		1,141
Additional paid-in capital			3,265,659		3,539,916			3,282,290		3,263,738
Accumulated deficit			(558,788)		(609,331)			(607,465)		(628,636)
Accumulated other comprehensive income (loss)			46,870		(15,950)
Accumulated other comprehensive income								32,036		45,644
Total shareholders' equity of JBG SMITH Properties			2,754,879		2,915,910			2,707,998		2,681,887
Noncontrolling interests			31,890		22,507			31,042		32,225
Total equity			2,786,769		2,938,417			2,739,040		2,714,112
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY		$	5,895,980	$	6,386,206		$	5,835,020	$	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 September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		2022		2021		2023		2022
REVENUE
Property rental	$	119,811	$	125,900	$	368,445	$	370,960	$	124,033	$	131,598
Third-party real estate services, including reimbursements		21,845		25,842		67,972		90,694		22,784		23,970
Other revenue		5,958		5,280		18,667		15,301		6,145		6,397
Total revenue		147,614		157,022		455,084		476,955		152,962		161,965
EXPENSES
Depreciation and amortization		50,056		56,726		157,597		178,130		53,431		58,062
Property operating		36,380		40,198		112,469		109,929		35,612		40,644
Real estate taxes		14,738		18,259		47,870		55,127		15,224		18,186
General and administrative:
Corporate and other		12,072		12,105		42,669		38,475		16,123		15,815
Third-party real estate services		21,230		25,542		72,422		80,035		23,823		27,049
Share-based compensation related to Formation Transaction and special equity awards		548		3,480		4,369		12,866		351		2,244
Transaction and other costs		1,746		2,951		4,632		8,911		2,472		899
Total expenses		136,770		159,261		442,028		483,473		147,036		162,899
OTHER INCOME (EXPENSE)
Income (loss) from unconsolidated real estate ventures, net		(13,867)		20,503		(12,829)		23,513
Income from unconsolidated real estate ventures, net										433		3,145
Interest and other income, net		984		192		16,902		163		4,077		14,246
Interest expense		(17,932)		(17,243)		(50,251)		(50,312)		(26,842)		(16,278)
Gain on the sale of real estate, net		—		—		158,631		11,290
Gain (loss) on the sale of real estate, net										40,700		(136)
Loss on the extinguishment of debt		(1,444)		—		(3,073)		—		—		(591)
Total other income (expense)		(32,259)		3,452		109,380		(15,346)		18,368		386
INCOME (LOSS) BEFORE INCOME TAX EXPENSE		(21,415)		1,213		122,436		(21,864)
Income tax expense		(166)		(217)		(2,600)		(4,527)
INCOME (LOSS) BEFORE INCOME TAX BENEFIT										24,294		(548)
Income tax benefit										16		471
NET INCOME (LOSS)		(21,581)		996		119,836		(26,391)		24,310		(77)
Net (income) loss attributable to redeemable noncontrolling interests		2,546		(103)		(15,712)		2,472
Net (income) loss attributable to noncontrolling interests		(258)		—		(174)		1,108
Net income attributable to redeemable noncontrolling interests										(3,363)		(10)
Net loss attributable to noncontrolling interests										224		55
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(19,293)	$	893	$	103,950	$	(22,811)	$	21,171	$	(32)
EARNINGS (LOSS) PER COMMON SHARE - BASIC AND DILUTED	$	(0.17)	$	0.00	$	0.86	$	(0.18)	$	0.19	$	—
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED		114,360		131,351		120,741		131,456		114,052		126,682

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 September 30,

Nine Months Ended September 30,


2022

2021

2022

2021
NET INCOME (LOSS)

$
(21,581)

$
996

$
119,836

$
(26,391)
OTHER COMPREHENSIVE INCOME:








Change in fair value of derivative financial instruments

32,939

(329)

65,259

4,678
Reclassification of net (income) loss on derivative financial instruments from accumulated other comprehensive income (loss) into interest expense

(333)

3,901

6,214

11,476
Total other comprehensive income

32,606

3,572

71,473

16,154
COMPREHENSIVE INCOME (LOSS)

11,025

4,568

191,309

(10,237)
Net (income) loss attributable to redeemable noncontrolling interests

2,546

(103)

(15,712)

2,472
Net (income) loss attributable to noncontrolling interests

(258)

—

(174)

1,108
Other comprehensive income attributable to redeemable noncontrolling interests

(4,376)

(413)

(8,653)

(1,621)
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO JBG SMITH PROPERTIES

$
8,937

$
4,052

$
166,770

$
(8,278)


	Three Months Ended March 31,
	2023		2022
NET INCOME (LOSS)	$	24,310	$	(77)
OTHER COMPREHENSIVE INCOME (LOSS):
Change in fair value of derivative financial instruments		(8,969)		25,095
Reclassification of net (income) loss on derivative financial instruments from accumulated other comprehensive income into interest expense		(7,816)		3,756
Total other comprehensive income (loss)		(16,785)		28,851
COMPREHENSIVE INCOME		7,525		28,774
Net income attributable to redeemable noncontrolling interests		(3,363)		(10)
Net loss attributable to noncontrolling interests		224		55
Other comprehensive (income) loss attributable to redeemable noncontrolling interests		2,225		(2,966)
Other comprehensive loss attributable to noncontrolling interests		952		—
COMPREHENSIVE INCOME ATTRIBUTABLE TO JBG SMITH PROPERTIES	$	7,563	$	25,853

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

Table of Contents

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Equity

(Unaudited)

(In thousands)


								Accumulated													Accumulated
								Other													Other
				Additional				Comprehensive									Additional				Comprehensive
	Common Shares			Paid-In		Accumulated		Income		Noncontrolling		Total		Common Shares			Paid-In		Accumulated		Income		Noncontrolling		Total
	Shares	Amount		Capital		Deficit		(Loss)		Interests		Equity		Shares	Amount		Capital		Deficit		(Loss)		Interests		Equity
BALANCE AS OF JUNE 30, 2022	115,862	$	1,160	$	3,285,511	$	(513,746)	$	18,640	$	31,640	$	2,823,205
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	—		—		—		(19,293)		—		258		(19,035)	—		—		—		21,171		—		(224)		20,947
Conversion of common limited partnership units ("OP Units") to common shares	213		2		4,889		—		—		—		4,891	756		8		13,774		—		—		—		13,782
Common shares repurchased	(2,311)		(24)		(53,979)		—		—		—		(54,003)	(1,205)		(12)		(20,086)		—		—		—		(20,098)
Common shares issued pursuant to employee incentive compensation plan and Employee Share Purchase Plan ("ESPP")	—		—		377		—		—		—		377	19		—		624		—		—		—		624
Dividends declared on common shares ($0.225 per common share)	—		—		—		(25,749)		—		—		(25,749)
Distributions to noncontrolling interests, net	—		—		—		—		—		(8)		(8)	—		—		—		—		—		(7)		(7)
Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation	—		—		28,861		—		(4,376)		—		24,485
Total other comprehensive income	—		—		—		—		32,606		—		32,606
BALANCE AS OF SEPTEMBER 30, 2022	113,764	$	1,138	$	3,265,659	$	(558,788)	$	46,870	$	31,890	$	2,786,769
Redeemable noncontrolling interests redemption value adjustment and total other comprehensive loss allocation														—		—		24,240		—		2,225		—		26,465
Other comprehensive loss														—		—		—		—		(16,785)		—		(16,785)
Other comprehensive loss attributable to noncontrolling interest																						952		(952)		—
BALANCE AS OF MARCH 31, 2023														113,583	$	1,137	$	3,282,290	$	(607,465)	$	32,036	$	31,042	$	2,739,040

BALANCE AS OF JUNE 30, 2021	131,841	$	1,319	$	3,650,217	$	(466,230)	$	(28,605)	$	16,540	$	3,173,241
Net income attributable to common shareholders and noncontrolling interests	—		—		—		893		—		—		893
BALANCE AS OF DECEMBER 31, 2021														127,378	$	1,275	$	3,539,916	$	(609,331)	$	(15,950)	$	22,507	$	2,938,417
Net loss attributable to common shareholders and noncontrolling interests														—		—		—		(32)		—		(55)		(87)
Conversion of OP Units to common shares	180		2		5,668		—		—		—		5,670	208		2		6,012		—		—		—		6,014
Common shares repurchased	(2,317)		(23)		(68,907)		—		—		—		(68,930)	(3,341)		(34)		(93,114)		—		—		—		(93,148)
Common shares issued pursuant to employee incentive compensation plan and ESPP	—		—		210		—		—		—		210	3		—		286		—		—		—		286
Dividends declared on common shares ($0.225 per common share)	—		—		—		(29,696)		—		—		(29,696)
Distributions to noncontrolling interests, net	—		—		—		—		—		(45)		(45)
Contributions from noncontrolling interests, net														—		—		—		—		—		5,986		5,986
Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation	—		—		19,274		—		(413)		—		18,861	—		—		(8,307)		—		(2,966)		—		(11,273)
Total other comprehensive income	—		—		—		—		3,572		—		3,572
BALANCE AS OF SEPTEMBER 30, 2021	129,704	$	1,298	$	3,606,462	$	(495,033)	$	(25,446)	$	16,495	$	3,103,776
Other comprehensive income														—		—		—		—		28,851		—		28,851
BALANCE AS OF MARCH 31, 2022														124,248	$	1,243	$	3,444,793	$	(609,363)	$	9,935	$	28,438	$	2,875,046

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 attributable to common shareholders and noncontrolling interests

—

—

—

103,950

—

174

104,124
Conversion of OP Units to common shares

493

5

12,662

—

—

—

12,667
Common shares repurchased

(14,151)

(142)

(360,900)

—

—

—

(361,042)
Common shares issued pursuant to employee incentive compensation plan and ESPP

44

—

1,806

—

—

—

1,806
Dividends declared on common shares
($0.45 per common share)

—

—

—

(53,407)

—

—

(53,407)
Contributions from noncontrolling interests, net

—

—

—

—

—

9,209

9,209
Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation

—

—

72,175

—

(8,653)

—

63,522
Total other comprehensive income

—

—

—

—

71,473

—

71,473
BALANCE AS OF SEPTEMBER 30, 2022

113,764

$
1,138

$
3,265,659

$
(558,788)

$
46,870

$
31,890

$
2,786,769

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

—

—

—

(22,811)

—

(1,108)

(23,919)
Conversion of OP Units to common shares

829

8

27,342

—

—

—

27,350
Common shares repurchased

(2,937)

(29)

(88,104)

—

—

—

(88,133)
Common shares issued pursuant to employee incentive compensation plan and ESPP

34

—

1,549

—

—

—

1,549
Dividends declared on common shares
($0.45 per common share)

—

—

—

(59,278)

—

—

(59,278)
Contributions from noncontrolling interests, net

—

—

—

—

—

17,436

17,436
Redeemable noncontrolling interests redemption value adjustment and total other comprehensive income allocation

—

—

8,032

—

(1,621)

—

6,411
Total other comprehensive income

—

—

—

—

16,154

—

16,154
BALANCE AS OF SEPTEMBER 30, 2021

129,704

$
1,298

$
3,606,462

$
(495,033)

$
(25,446)

$
16,495

$
3,103,776

~~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)


	Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		2023		2022
OPERATING ACTIVITIES:
Net income (loss)	$	119,836	$	(26,391)	$	24,310	$	(77)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Share-based compensation expense		32,324		38,320		10,428		12,904
Depreciation and amortization, including amortization of deferred financing costs		160,797		181,217
Depreciation and amortization expense, including amortization of deferred financing costs						54,637		59,162
Deferred rent		(14,764)		(17,463)		(8,733)		(3,706)
(Income) loss from unconsolidated real estate ventures, net		12,829		(23,513)
Income from unconsolidated real estate ventures, net						(433)		(3,145)
Amortization of market lease intangibles, net		(874)		(896)		(253)		(353)
Amortization of lease incentives		6,175		6,083		741		2,374
Loss on the extinguishment of debt		3,073		—
Gain on the sale of real estate, net		(158,631)		(11,290)
Loss on operating lease and other receivables		1,392		1,071
(Gain) loss on the sale of real estate, net						(40,700)		136
(Income) loss on operating lease and other receivables						(1,215)		587
Income from investments, net		(14,733)		—		(1,798)		(14,071)
Return on capital from unconsolidated real estate ventures		8,483		13,212		3,861		2,879
Other non-cash items		(7,352)		583		3,032		(3,105)
Changes in operating assets and liabilities:
Tenant and other receivables		(5,044)		3,704		11,624		(1,793)
Other assets, net		(20,552)		(12,059)		1,420		(1,367)
Accounts payable and accrued expenses		(3,648)		5,954		(16,069)		(4,575)
Other liabilities, net		11,055		(4,120)		1,780		23,748
Net cash provided by operating activities		130,366		154,412		42,632		69,598
INVESTING ACTIVITIES:
Development costs, construction in progress and real estate additions		(218,835)		(108,361)		(78,332)		(52,686)
Acquisition of real estate		(15,232)		—		(450)		—
Deposits for real estate and other acquisitions		(1,750)		(10,263)
Proceeds from the sale of real estate		923,108		14,370		68,998		3,149
Proceeds from the sale of investments		19,030		—		—		17,796
Distributions of capital from unconsolidated real estate ventures		54,759		40,188		—		6,020
Investments in unconsolidated real estate ventures and other investments		(86,678)		(32,685)		(16,889)		(7,230)
Net cash provided by (used in) investing activities		674,402		(96,751)
Net cash used in investing activities						(26,673)		(32,951)
FINANCING ACTIVITIES:
Borrowings under mortgages payable		134,263		85,000
Borrowings under revolving credit facility		100,000		—
Borrowings under unsecured term loans		150,000		—
Repayments of mortgages payable		(268,627)		(4,462)
Repayments of revolving credit facility		(300,000)		—
Borrowings under mortgage loans						223,303		—
Repayments of mortgage loans						(133,860)		(1,178)
Debt issuance and modification costs		(5,135)		(5,747)		(7,206)		(531)
Proceeds from common shares issued pursuant to ESPP		800		880
Redemption of partner's noncontrolling interest						(647)		—
Common shares repurchased		(361,042)		(82,300)		(20,098)		(91,148)
Dividends paid to common shareholders		(82,072)		(88,928)		(25,664)		(28,665)
Distributions to redeemable noncontrolling interests		(12,398)		(13,705)		(3,968)		(4,005)
Distributions to noncontrolling interests		(166)		(22)
Contributions from noncontrolling interests		9,383		17,464		—		5,998
Net cash used in financing activities		(634,994)		(91,820)
Net cash provided by (used in) financing activities						31,860		(119,529)
Net increase (decrease) in cash and cash equivalents, and restricted cash		169,774		(34,159)		47,819		(82,882)
Cash and cash equivalents, and restricted cash, beginning of period		302,095		263,336		274,073		302,095
Cash and cash equivalents, and restricted cash, end of period	$	471,869	$	229,177	$	321,892	$	219,213

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

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JBG SMITH PROPERTIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

Nine Months Ended September 30,


2022

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


Cash and cash equivalents

$
258,871

$
194,277
Restricted cash

212,998

34,900
Cash and cash equivalents, and restricted cash

$
471,869

$
229,177

SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND NON-CASH INFORMATION:


Cash paid for interest (net of capitalized interest of $6,816 and $4,854 in 2022 and 2021)

$
52,620

$
46,010
Accrued capital expenditures included in accounts payable and accrued expenses

74,735

41,660
Write-off of fully depreciated assets

10,642

46,278
Deconsolidation of real estate asset

—

26,476
Conversion of OP Units to common shares

12,667

27,350
Cash paid for amounts included in the measurement of lease liabilities for operating leases

1,638

1,761


	Three Months Ended March 31,
	2023		2022
CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD:
Cash and cash equivalents	$	279,553	$	189,140
Restricted cash		42,339		30,073
Cash and cash equivalents, and restricted cash	$	321,892	$	219,213

SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND NON-CASH INFORMATION:
Cash paid for interest (net of capitalized interest of $5,175 and $1,771 in 2023 and 2022)	$	22,705	$	18,219
Accrued capital expenditures included in accounts payable and accrued expenses		72,375		60,044
Write-off of fully depreciated assets		192		8,341
Conversion of OP Units to common shares		13,782		6,014
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		398		546

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

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JBG SMITH PROPERTIES

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1.Organization and Basis of Presentation

Organization

JBG SMITH Properties ("JBG SMITH"), a Maryland real estate investment trust, ~~("REIT"),~~ owns and operates a portfolio of ~~commercial~~multifamily and ~~multifamily~~commercial assets amenitized with ancillary retail. JBG SMITH's portfolio reflects its longstanding strategy of owning and operating assets within Metro-served submarkets in the Washington, D.C. metropolitan area with high barriers to entry and vibrant urban amenities. Approximately two-thirds of our portfolio is in National Landing, ~~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 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 ~~September 30, 2022,~~March 31, 2023, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned ~~88.3%~~88.5% 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~~our: (i) 10.0% subordinated interest in one commercial building, ~~and our~~(ii) 33.5% subordinated interest in four commercial buildings (the "Fortress Assets") and (iii) 49.0% interest in three commercial buildings (the "L'Enfant Plaza Assets"), as well as the associated non-recourse ~~mortgages payable,~~mortgage loans, held through unconsolidated real estate ventures; these interests and debt are excluded because our investment in each real estate venture is zero, we do not anticipate receiving any near-term cash flow distributions from the real estate ventures, and we have not guaranteed their obligations or otherwise committed to providing financial support.

We were organized for the purpose of receiving, via the spin-off on July 17, 2017 (the "Separation"), substantially all of the assets and liabilities of Vornado Realty Trust's ("Vornado") Washington, D.C. 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 ~~September 30, 2022,~~March 31, 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 ~~(6,608~~(6,756 units at our share) and two wholly owned land assets for which we are the ground lessor. Additionally, we ~~have: (i)~~have two under-construction 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 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

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for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ are not necessarily indicative of the results that may be expected for a full year. These condensed consolidated financial statements should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~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 ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, and for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022. References to our balance sheets refer to our condensed consolidated balance sheets as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022. References to our statements of operations refer to our condensed consolidated statements of operations for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 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 nine~~ months ended ~~September 30, 2022~~March 31, 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 nine months ended September 30, 2022, we~~We elected to apply the hedge accounting 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, (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

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

~~Acquisition~~

On August 1, 2022, we acquired the remaining 36.0% ownership interest in an unconsolidated real estate venture that owned Atlantic Plumbing, a multifamily asset, which was encumbered by a $100.0 million mortgage, for a purchase price of $19.7 million and our partner’s share of the working capital. The mortgage was repaid on August 10, 2022. Atlantic Plumbing was consolidated as of the date of acquisition.

Dispositions

The following is a summary of activity for the ~~nine~~three months ended ~~September 30, 2022:~~March 31, 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 represents estimated or approved potential development density.~~

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

~~Table of Contents~~

~~Assets Held for Sale~~

~~There were no assets held for sale as of September 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

~~(1)~~

~~Sold to Amazon in May 2022. Total square feet represents estimated or approved potential development density.~~a prior period disposition.

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⁾	September 30, 2022		December 31, 2021
Real Estate Venture						Interest ⁽¹⁾	March 31, 2023		December 31, 2022

		(In thousands)					(In thousands)
Prudential Global Investment Management	50.0%	$	207,236	$	208,421	50.0%	$	200,578	$	203,529
Landmark Partners ("Landmark") ⁽²⁾	18.0% - 49.0%		8,835		28,298
CBREI Venture ⁽³⁾	5.0% - 10.0%		17,074		57,812
Canadian Pension Plan Investment Board ("CPPIB") ⁽⁴⁾	55.0%		—		48,498
J.P. Morgan Global Alternatives ("J.P. Morgan") ⁽⁵⁾	50.0%		62,441		52,769
Berkshire Group ⁽⁶⁾	50.0%		50,963		52,770
J.P. Morgan Global Alternatives ("J.P. Morgan") ⁽²⁾						50.0%		66,771		64,803
4747 Bethesda Venture ⁽³⁾						20.0%		13,799		—
Brandywine Realty Trust	30.0%		13,755		13,693	30.0%		13,757		13,678
CBREI Venture						9.9% - 10.0%		12,508		12,516
Landmark Partners ⁽⁴⁾						18.0%		4,669		4,809
Other			542		624			569		546
Total investments in unconsolidated real estate ventures ⁽⁷⁾		$	360,846	$	462,885
Total investments in unconsolidated real estate ventures ⁽⁵⁾ ⁽⁶⁾							$	312,651	$	299,881

(1)	Reflects our effective ownership interests in the underlying real estate as of ~~September 30, 2022.~~March 31, 2023. We have multiple investments with certain venture partners with varying ownership interests in the underlying real estate.

(2)

~~In connection with~~J.P. Morgan is the ~~preparation and review of the third quarter 2022 financial statements,~~advisor for an impairment loss of $15.4 million associated with certain commercial and future development assets located in Washington, D.C. was included in "Income (loss) from unconsolidated real estate ventures, net" in our statements of operations for the three and nine months ended September 30, 2022.institutional investor.

(3)

~~On August 1, 2022,~~In March 2023, we ~~acquired the remaining 36.0% ownership~~sold an 80.0% interest in ~~an unconsolidated~~4747 Bethesda Avenue for a gross sales price of $196.0 million, representing a gross valuation of $245.0 million and retained a 20.0% interest. We will provide leasing, property management and other real estate services to the venture. In connection with the transaction, the real estate venture ~~that owned Atlantic Plumbing, a multifamily asset.~~assumed the related $175.0 million mortgage loan.

(4)	~~Our effective ownership interest reflects an investment in~~Excludes the ~~real estate venture that owns 1101 17~~^th ~~Street~~L'Enfant Plaza Assets for which we have a zero investment balance and discontinued applying the equity method of ~~accounting.~~accounting after September 30, 2022.

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

~~(6)~~

~~On October 5, 2022, we acquired the remaining 50.0% ownership~~Excludes (i) 10.0% subordinated interest in ~~8001 Woodmont, a multifamily asset owned by~~one commercial building, (ii) the ~~venture, for a purchase price of $115.0 million, including~~Fortress Assets and (iii) the ~~assumption of the $51.9 million mortgage at our share. The asset is encumbered by a $103.8 million mortgage, which is consolidated in our balance sheet as of the date of acquisition.~~

~~(7)~~

~~As of September 30, 2022 and December 31, 2021, our total investments in~~L'Enfant Plaza Assets held through unconsolidated real estate ~~ventures were greater than~~ventures. For more information see Note 1. Also, excludes our interest in an investment in the real estate venture that owns 1101 17th Street for which we have discontinued applying the equity method of accounting since June 30, 2018 because we received distributions in excess of our contributions and share of ~~the net book value of the underlying assets by $4.4 million and $18.6 million, resulting principally from capitalized interest and~~earnings, which reduced our ~~zero~~ investment ~~balance in certain real estate ventures.~~to zero; further, we are not obligated to provide for losses, have not guaranteed its obligations or otherwise committed to provide financial support.

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 four 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

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

(6)

As of March 31, 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 $6.9 million and $8.9 million, resulting principally from capitalized interest and our zero investment balance in certain real estate ventures.

We provide leasing, property management and other real estate services to our unconsolidated real estate ventures. We recognized revenue, including expense reimbursements, of ~~$6.1~~$5.3 million and ~~$18.2~~$5.5 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and $5.9 million and $17.8 million for the three and nine months ended September 30, 2021,~~ for such services.

We evaluate reconsideration events as we become aware of them. Reconsideration events include, among other criteria, amendments to real estate venture agreements or changes in the capital requirements of the real estate venture. A reconsideration event could cause us to consolidate an unconsolidated real estate venture or deconsolidate a consolidated entity.

~~The following is a summary of disposition activity by our unconsolidated real estate ventures for the nine months ended September 30, 2022:~~

Mortgages

Proportionate

Real Estate

Gross

Payable

Share of

Venture

Ownership

Sales

Repaid by

Aggregate
Date Disposed

Partner

Assets

Percentage

Price

Venture

Gain ⁽¹⁾

(In thousands)
January 27, 2022

Landmark

The Alaire, The Terano and
12511 Parklawn Drive

1.8% - 18.0%

$
137,500

$
79,829

$
5,243
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⁾

September 30, 2022

December 31, 2021

(In thousands)
Variable rate ⁽²⁾

5.67%

$
509,393

$
785,369
Fixed rate ⁽³⁾

4.57%

163,810

309,813
Mortgages payable ⁽⁴⁾

673,203

1,095,182
Unamortized deferred financing costs

(393)

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

$
672,810

$
1,089,943


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

		(In thousands)
Variable rate ⁽²⁾	5.90%	$	358,768	$	184,099
Fixed rate ⁽³⁾	4.13%		60,000		60,000
Mortgage loans ⁽⁴⁾			418,768		244,099
Unamortized deferred financing costs and premium / discount, net			(10,814)		(411)
Mortgage loans, net ^{(4) (5)}		$	407,954	$	243,688

(1)	Weighted average effective interest rate as of ~~September 30, 2022.~~March 31, 2023.

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

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

(4)	Excludes ~~mortgages~~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:


	March 31, 2023		December 31, 2022

	(In thousands)
Combined balance sheet information: ⁽¹⁾
Real estate, net	$	1,072,386	$	888,379
Other assets, net		201,713		160,015
Total assets	$	1,274,099	$	1,048,394

Mortgage loans, net	$	407,954	$	243,688
Other liabilities, net		54,143		54,639
Total liabilities		462,097		298,327
Total equity		812,002		750,067
Total liabilities and equity	$	1,274,099	$	1,048,394

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

September 30, 2022

December 31, 2021

(In thousands)
Combined balance sheet information: ⁽¹⁾

Real estate, net

$
1,507,159

$
2,116,290
Other assets, net

215,099

264,397
Total assets

$
1,722,258

$
2,380,687

Mortgages payable, net

$
672,810

$
1,089,943
Other liabilities, net

77,706

118,752
Total liabilities

750,516

1,208,695
Total equity

971,742

1,171,992
Total liabilities and equity

$
1,722,258

$
2,380,687


	Three Months Ended September 30,					Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		X	2022		2021		2023		2022

	(In thousands)									(In thousands)
Combined income statement information: ⁽¹⁾
Total revenue	$	40,881	$	45,289		$	125,135	$	141,370	$	20,033	$	42,874
Operating income (loss) ⁽²⁾		(7,468)		51,068			77,066		94,275
Operating income ⁽²⁾											2,491		48,426
Net income (loss) ⁽²⁾		(15,034)		42,261			49,376		69,091		(1,720)		39,283

(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 months ended March 31, 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 ~~$77.4 million during the nine months ended September 30, 2022, and $47.4 million and $85.5~~$45.1 million during the three ~~and nine~~ months ended ~~September 30, 2021. Includes an impairment loss of $16.1 million during the three and nine months ended September 30,~~March 31, 2022.

5.Variable Interest Entities

We hold various interests in entities deemed to be VIEs, which we evaluate at acquisition, formation, after a change in the ownership agreement, after a change in the entity's economics or after any other reconsideration event to determine if the VIE should be consolidated in our financial statements or should no longer be considered a VIE. An entity is a VIE because it is in the development stage and/or does not hold sufficient equity at risk, or conducts substantially all its operations on behalf of an investor with disproportionately few voting rights. We will consolidate a VIE if we are the primary beneficiary of the VIE, which entails having the power to direct the activities that most significantly impact the VIE’s economic performance. Certain criteria we assess in determining whether we are the primary beneficiary of the VIE include our influence over significant business activities, our voting rights and any noncontrolling interest kick-out or participating rights.

Unconsolidated VIEs

As of ~~September 30, 2022~~March 31, 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 ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the net carrying amounts of our investment in these entities ~~was $84.7~~were $85.3 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 is included in "Income ~~(loss)~~ from unconsolidated real estate ventures, net" in our statements of operations. Our maximum loss exposure in these entities is limited to our investments, construction commitments and debt guarantees. See Note 17 for additional information.

~~Table of Contents~~

Consolidated VIEs

JBG SMITH LP is our most significant consolidated VIE. We hold ~~88.3%~~88.5% 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.

As of ~~September 30,~~March 31, 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 ~~$199.5~~$326.0 million and $265.5 million, and liabilities of ~~$69.7 million. As of December 31, 2021, excluding JBG SMITH LP, we consolidated three VIEs with total assets of $269.7~~$158.2 million and ~~liabilities~~$116.3 million, primarily consisting of ~~$13.9 million.~~construction in process and mortgage loans. The assets of the VIEs can only be used to settle the obligations of the VIEs, and the liabilities include third-party liabilities of the VIEs for which the creditors or beneficial interest holders do not have recourse against us.

Table of Contents

6.Other Assets, Net

The following is a summary of other assets, net:


	September 30, 2022		December 31, 2021		March 31, 2023		December 31, 2022

	(In thousands)				(In thousands)
Prepaid expenses	$	30,895	$	17,104	$	14,429	$	16,440
Derivative agreements, at fair value		62,055		951		41,689		61,622
Deferred financing costs, net		6,064		11,436		5,003		5,516
Deposits		3,661		1,938		386		483
Operating lease right-of-use assets(1)		1,452		1,660		62,688		1,383
Finance lease right-of-use assets ⁽¹⁾		—		180,956
Investments in funds ⁽²⁾		15,894		9,840		18,645		16,748
Other investments ⁽³⁾		3,746		8,869		3,563		3,524
Other		9,652		7,406		11,715		11,312
Total other assets, net	$	133,419	$	240,160	$	158,118	$	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 March 31, 2023.

(2)

Consists of investments in real ~~estate focused~~estate-focused technology companies, which are recorded at their fair value based on their reported net asset value. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~we recorded~~ unrealized gains ~~(losses) totaling ($267,000) and $928,000~~ related to these investments were $2.0 million and $156,000, which ~~are~~were included in "Interest and other income, net" in our statements of operations. During the three months ended March 31, 2023, realized losses related to these investments were $129,000, which were included in "Interest and other income, net" in our statement of operations.

(3)

Primarily consists of equity investments that are carried at cost. During the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022, ~~we recorded~~ realized gains ~~(losses) of ($300,000) and $13.8 million~~ related to these investments were $13.9 million, which iswere included in "Interest and other income, net" in our ~~statements~~statement of operations.

~~Table of Contents~~

7.Debt

~~Mortgages Payable~~Mortgage Loans

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


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

		(In thousands)					(In thousands)
Variable rate ⁽²⁾	4.60%	$	846,432	$	867,246	5.47%	$	754,281	$	892,268
Fixed rate ⁽³⁾	4.40%		907,516		921,013	4.43%		1,063,634		1,009,607
Mortgages payable			1,753,948		1,788,259
Mortgage loans								1,817,915		1,901,875
Unamortized deferred financing costs and premium / discount, net ⁽⁴⁾			(12,343)		(10,560)			(15,864)		(11,701)
Mortgages payable, net		$	1,741,605	$	1,777,699
Mortgage loans, net							$	1,802,051	$	1,890,174

(1)	Weighted average effective interest rate as of ~~September 30, 2022.~~March 31, 2023.

(2)

Includes variable rate ~~mortgages~~mortgage loans with interest rate cap agreements. For mortgage loans with interest rate caps, the weighted average interest rate cap strike is 2.35%, and the weighted average maturity date of the interest rate caps is August 1, 2023. The interest rate cap strike is exclusive of the credit spreads associated with the mortgage loans. As of ~~September 30, 2022,~~March 31, 2023, one-month LIBOR was ~~3.14%~~4.86% and one-month term Secured Overnight Financing Rate ("SOFR") was ~~3.04%, as applicable.~~4.80%.

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

(4)	As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, excludes ~~$2.3~~$2.1 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 ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the net carrying value of real estate collateralizing our ~~mortgages payable~~mortgage loans totaled ~~$1.9 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 for additional information.

Table of Contents

In ~~August 2022,~~January 2023, we entered into a ~~mortgage with a principal balance of $97.5~~$187.6 million loan facility, collateralized by ~~WestEnd25.~~ The ~~mortgage~~Wren and F1RST Residences. The loan has a seven-year term and ana fixed interest rate of ~~SOFR plus 1.45%~~5.13%. ~~We also entered into an interest rate swap with~~This loan is the initial advance under a ~~total notional value of $97.5~~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 on 2121 Crystal Drive, which ~~effectively fixes SOFR at an average~~had a fixed interest rate of ~~2.71% through the maturity date.~~5.51%.

As of ~~September 30, 2022~~March 31, 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.

Credit Facility

As of ~~September 30,~~March 31, 2023 and December 31, 2022, our $1.6 billion credit facility consisted of aan undrawn $1.0 billion revolving credit facility maturing in January 2025, a $200.0 million unsecured term loan ("Tranche A-1 Term Loan") maturing in January 2025, and a ~~$400.0~~$350.0 million unsecured term loan ("Tranche A-2 Term Loan") maturing in January 2028, of which has a $50.0 million ~~remains~~additional advance available, ~~to be borrowed until July~~which we will draw in May 2023.

In January 2022, the Tranche A-1 Term Loan was amended to extend the maturity date to January 2025 with two one-year extension options, and to amend the interest rate to SOFR plus 1.15% to SOFR plus 1.75%, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets. In connection with the loan amendment, we amended the related interest rate swaps, extending the maturity to July 2024 and converting the hedged rate from one-month LIBOR to one-month term SOFR.

~~Table of Contents~~

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 2.80% through the maturity date. Additionally, we amended the interest rate of the revolving credit facility 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 following is a summary of amounts outstanding under the credit facility:


	Effective					Effective
	Interest Rate ⁽¹⁾	September 30, 2022		December 31, 2021		Interest Rate ⁽¹⁾	March 31, 2023		December 31, 2022

		(In thousands)					(In thousands)
Revolving credit facility ^{(2) (3)}	4.19%	$	100,000	$	300,000	5.95%	$	—	$	—

Tranche A-1 Term Loan ⁽⁴⁾	2.61%	$	200,000	$	200,000	2.61%	$	200,000	$	200,000
Tranche A-2 Term Loan ⁽⁴⁾	3.40%		350,000		200,000	3.39%		350,000		350,000
Unsecured term loans			550,000		400,000			550,000		550,000
Unamortized deferred financing costs, net			(3,112)		(1,336)			(2,744)		(2,928)
Unsecured term loans, net		$	546,888	$	398,664		$	547,256	$	547,072

(1)	Effective interest rate as of ~~September 30, 2022.~~March 31, 2023. The interest rate for our revolving credit facility excludes a 0.15% facility fee.

(2)

As of ~~September 30, 2022,~~March 31, 2023, one-month term SOFR was ~~3.04%~~4.80%. As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, letters of credit with an aggregate face amount of $467,000 ~~and $911,000~~ were outstanding ~~under our revolving credit facility. In October 2022, we repaid the outstanding balance~~ under our revolving credit facility.

(3)	As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, excludes ~~$3.8~~$2.9 million and ~~$5.0~~$3.3 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, ~~net."~~net" in our balance sheets.

(4)

As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the outstanding balance was fixed by interest rate swap ~~agreements. As of September 30, 2022, the interest rate swaps~~agreements, which fix SOFR at a weighted average interest rate of 1.46% for the Tranche A-1 Term Loan and ~~2.15%~~2.14% 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 $150.0 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 at a weighted average interest rate of 2.61% through the maturity date. The interest rate for our Tranche A-2 Term Loan excludes a 0.15% per annum commitment fee on the undrawn $50.0 million of commitments.

Table of Contents

8.Other Liabilities, Net

The following is a summary of other liabilities, net:

September 30, 2022

December 31, 2021

(In thousands)
Lease intangible liabilities, net

7,715

8,272
Lease assumption liabilities

3,349

5,399
Lease incentive liabilities

5,419

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

5,499

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

—

162,510
Prepaid rent

15,402

19,852
Security deposits

13,802

18,188
Environmental liabilities

18,009

18,168
Deferred tax liability, net

5,680

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

19,845

19,691
Other

4,111

6,108
Total other liabilities, net

$
98,831

$
342,565


	March 31, 2023		December 31, 2022

	(In thousands)
Lease intangible liabilities, net	$	6,839	$	7,275
Lease assumption liabilities		1,964		2,647
Lease incentive liabilities		11,434		11,539
Liabilities related to operating lease right-of-use assets ⁽¹⁾		66,511		5,308
Prepaid rent		18,295		15,923
Security deposits		13,432		13,963
Environmental liabilities		17,990		17,990
Deferred tax liability, net		4,887		4,903
Dividends payable		—		29,621
Derivative agreements, at fair value		166		—
Deferred purchase price related to the acquisition of a development parcel		19,047		19,447
Other		4,062		4,094
Total other liabilities, net	$	164,627	$	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 March 31, 2023.

~~Table of Contents~~

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. During the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ unitholders redeemed ~~493,596~~756,356 and ~~829,107~~207,882 OP Units, which we elected to redeem for an equivalent number of our common shares. As of ~~September 30, 2022,~~March 31, 2023, outstanding OP Units and redeemable LTIP Units totaled ~~15.1~~14.8 million, representing an ~~11.7%~~11.5% ownership interest in JBG SMITH LP. Our OP Units and certain vested LTIP Units are presented at the higher of their redemption value or their carrying value, with adjustments to the redemption value recognized in "Additional paid-in capital" in our balance sheets. Redemption value per OP Unit is equivalent to the market value of one ~~of our~~ common ~~shares~~share at the end of the period. In April 2023, unitholders redeemed 685,132 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. ~~Our partners can redeem their interest for cash under certain conditions.~~ As of ~~September 30,~~March 31, 2022, we held a 96.0% ownership interest in the real estate venture. OnIn October 4, 2022, one ~~of our partners~~partner redeemed ~~their~~its 3.7% interest, ~~for $9.5 million,~~and in February 2023, another partner redeemed its 0.3% interest, increasing our ownership interest to ~~99.7%.~~

~~The following is a summary~~100.0% as of ~~the activity of redeemable noncontrolling interests:~~

Three Months Ended September 30,

2022

2021

Consolidated

Consolidated

JBG

Real Estate

JBG

Real Estate


SMITH LP

Venture

Total

SMITH LP

Venture

Total

(In thousands)
Balance, beginning of period

$
513,426

$
7,966

$
521,392

$
536,171

$
8,468

$
544,639
OP Unit redemptions

(4,891)

—

(4,891)

(5,670)

—

(5,670)
Net income (loss)

(2,557)

11

(2,546)

116

(13)

103
Other comprehensive income

4,376

—

4,376

413

—

413
Distributions

(4,083)

(119)

(4,202)

(3,993)

—

(3,993)
Share-based compensation expense

6,211

—

6,211

10,695

—

10,695
Adjustment to redemption value

(30,681)

1,820

(28,861)

(20,748)

1,474

(19,274)
Balance, end of period

$
481,801

$
9,678

$
491,479

$
516,984

$
9,929

$
526,913

Nine Months Ended September 30,

2022

2021

Consolidated

Consolidated

JBG

Real Estate

JBG

Real Estate


SMITH LP

Venture

Total

SMITH LP

Venture

Total

(In thousands)
Balance, beginning of period

$
513,268

$
9,457

$
522,725

$
522,882

$
7,866

$
530,748
OP Unit redemptions

(12,667)

—

(12,667)

(27,350)

—

(27,350)
LTIP Units issued in lieu of cash bonuses ⁽¹⁾

6,584

—

6,584

5,614

—

5,614
Net income (loss)

15,680

32

15,712

(2,400)

(72)

(2,472)
Other comprehensive income

8,653

—

8,653

1,621

—

1,621
Distributions

(8,193)

(267)

(8,460)

(9,282)

—

(9,282)
Share-based compensation expense

31,107

—

31,107

36,066

—

36,066
Adjustment to redemption value

(72,631)

456

(72,175)

(10,167)

2,135

(8,032)
Balance, end of period

$
481,801

$
9,678

$
491,479

$
516,984

$
9,929

$
526,913

~~(1)~~

~~See Note 11 for additional information.~~

March 31, 2023.

1916

Table of Contents

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


	Three Months Ended March 31,
	2023						2022
			Consolidated						Consolidated
	JBG		Real Estate				JBG		Real Estate
	SMITH LP		Venture		Total		SMITH LP		Venture		Total

	(In thousands)
Balance, beginning of period	$	480,663	$	647	$	481,310	$	513,268	$	9,457	$	522,725
Redemptions		(13,782)		(647)		(14,429)		(6,014)		—		(6,014)
LTIP Units issued in lieu of cash bonuses ⁽¹⁾		4,456		—		4,456		5,597		—		5,597
Net income (loss)		3,363		—		3,363		(3)		13		10
Other comprehensive income (loss)		(2,225)		—		(2,225)		2,966		—		2,966
Distributions		—		—		—		—		(69)		(69)
Share-based compensation expense		9,543		—		9,543		12,527		—		12,527
Adjustment to redemption value		(24,240)		—		(24,240)		8,384		(77)		8,307
Balance, end of period	$	457,778	$	—	$	457,778	$	536,725	$	9,324	$	546,049

(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 September 30,					Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		X	2022		2021		2023		2022

	(In thousands)									(In thousands)
Fixed	$	109,193	$	114,100		$	335,328	$	339,321	$	113,071	$	120,637
Variable		10,618		11,800			33,117		31,639		10,962		10,961
Property rental revenue	$	119,811	$	125,900		$	368,445	$	370,960	$	124,033	$	131,598

11.Share-Based Payments

LTIP Units and Time-Based LTIP Units

~~In January 2022,~~During the three months ended March 31, 2023, we granted to certain employees ~~660,785~~922,459 LTIP Units with time-based vesting requirements ("Time-Based LTIP Units") and a weighted average grant-date fair value of ~~$27.41~~$17.73 per unit that primarily vest ratably over four years subject to continued employment. Compensation expense for these units is primarily being recognized over a four-year period.

In 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.~~

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

The aggregate grant-date fair value of the Time-Based LTIP Units and the LTIP Units granted during the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was ~~$25.7~~$20.8 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% to 41.0%~~26.0%
Risk-free interest rate		~~0.4%~~4.6% to ~~2.9%~~4.8%
Post-grant restriction periods		2 ~~to 6~~ years

Table of Contents

In May 2023, as part of their annual compensation, we granted to non-employee trustees a total of 155,523 fully vested LTIP Units with a grant-date fair value of $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.

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 LTIP Units expire on the tenth anniversary of their grant date.

~~Table of Contents~~

The aggregate grant-date fair value of the AO LTIP Units granted during the ~~nine~~three months ended ~~September 30, 2022~~March 31, 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.

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

~~Pursuant~~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 ~~ESPP, employees purchased 39,851 common shares for $801,000~~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 ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023 was $1.5 million. The ~~following is a summary~~Time-Based RSUs were valued based on the closing common share price on the date of ~~the significant assumptions used to value the ESPP common shares using the Black-Scholes model:~~


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

grant.

Share-Based Compensation Expense

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


	Three Months Ended September 30,					Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		X	2022		2021		2023		2022

	(In thousands)									(In thousands)
Time-Based LTIP Units	$	3,496	$	3,999		$	15,824	$	12,494	$	5,532	$	6,126
AO LTIP Units and Performance-Based LTIP Units		2,167		3,216			9,914		9,615		3,660		4,157
LTIP Units		—		—			1,000		1,091
Other equity awards ⁽¹⁾		1,413		1,473			4,239		4,395		1,536		1,427
Share-based compensation expense - other		7,076		8,688			30,977		27,595		10,728		11,710
Formation Awards		281		476			1,424		1,923
OP Units and LTIP Units ⁽²⁾		(423)		1,676			408		6,725
Formation awards, OP Units and LTIP Units ⁽²⁾											108		957
Special Time-Based LTIP Units and Special Performance-Based LTIP Units ⁽³⁾		690		1,328			2,537		4,218		243		1,287
Share-based compensation related to Formation Transaction and special equity awards ⁽⁴⁾		548		3,480			4,369		12,866		351		2,244
Total share-based compensation expense		7,624		12,168			35,346		40,461		11,079		13,954
Less: amount capitalized		(675)		(740)			(3,022)		(2,141)		(651)		(1,050)
Share-based compensation expense	$	6,949	$	11,428		$	32,324	$	38,320	$	10,428	$	12,904

Table of Contents

(1)	Primarily 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)	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.

~~Table of Contents~~

As of ~~September 30, 2022,~~March 31, 2023, we had ~~$50.5~~$53.2 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 ~~3.2~~2.8 years.

12.Transaction and Other Costs

The following is a summary of transaction and other costs:


	Three Months Ended September 30,					Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		X	2022		2021		2023		2022

	(In thousands)									(In thousands)
Completed, potential and pursued transaction expenses ⁽¹⁾										$	47	$	732
Severance and other costs											1,448		145
Demolition costs	$	—	$	1,422		$	428	$	2,869		977		22
Integration and severance costs		1,146		154			2,018		616
Completed, potential and pursued transaction expenses ⁽¹⁾		600		1,375			2,186		5,426
Transaction and other costs	$	1,746	$	2,951		$	4,632	$	8,911	$	2,472	$	899

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

13.Interest Expense

The following is a summary of interest expense:


	Three Months Ended September 30,					Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		X	2022		2021		2023		2022

	(In thousands)									(In thousands)
Interest expense before capitalized interest	$	22,801	$	17,278		$	60,100	$	50,744	$	27,908	$	18,442
Amortization of deferred financing costs		1,118		1,096			3,369		3,188		1,279		1,130
Interest expense related to finance lease right-of-use assets		—		430			2,091		1,284		—		1,844
Net unrealized (gain) loss on derivative financial instruments designated as ineffective hedges		(3,099)		37			(8,493)		(50)
Net (gain) loss on derivative financial instruments designated as ineffective hedges:
Net unrealized (gain) loss											2,697		(3,367)
Net realized loss											133		—
Capitalized interest		(2,888)		(1,598)			(6,816)		(4,854)		(5,175)		(1,771)
Interest expense	$	17,932	$	17,243		$	50,251	$	50,312	$	26,842	$	16,278

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, ~~which it~~and in May 2023, increased the common share repurchase authorization to ~~an aggregate of $1.0 billion in June 2022.~~$1.5 billion. During the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, we repurchased and retired ~~2.3 million and 14.2~~1.2 million common shares for ~~$54.0 million and $361.0~~$20.1 million, a weighted average purchase price per share of ~~$23.35 and $25.49.~~$16.66. During the three ~~and nine~~ months ended ~~September 30, 2021,~~March 31, 2022, we repurchased and retired ~~2.3 million and 2.9~~3.3 million common shares for ~~$68.9 million and $88.1~~$93.1 million, a weighted average purchase price per share of ~~$29.73 and $29.99.~~$27.86. Since we began the share repurchase program, as of March 31, 2023, we have repurchased and retired ~~23.3~~24.5 million common shares for ~~$623.5~~$643.6 million, a weighted average purchase price per share of ~~$26.74.~~$26.25.

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During the second quarter of 2023, through the date of this filing, we repurchased and retired 2.8 million common shares for $40.1 million, a weighted average purchase price per share of $14.16, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

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~~attributable to common shareholders used in calculating basic and diluted earnings (loss) per common share:


	Three Months Ended September 30,					Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		X	2022		2021		2023		2022

	(In thousands, except per share amounts)									(In thousands, except per share amounts)
Net income (loss)	$	(21,581)	$	996		$	119,836	$	(26,391)	$	24,310	$	(77)
Net (income) loss attributable to redeemable noncontrolling interests		2,546		(103)			(15,712)		2,472
Net (income) loss attributable to noncontrolling interests		(258)		—			(174)		1,108
Net income attributable to redeemable noncontrolling interests											(3,363)		(10)
Net loss attributable to noncontrolling interests											224		55
Net income (loss) attributable to common shareholders		(19,293)		893			103,950		(22,811)	$	21,171	$	(32)
Distributions to participating securities		(658)		(763)			(671)		(1,497)
Net income (loss) available to common shareholders - basic and diluted	$	(19,951)	$	130		$	103,279	$	(24,308)

Weighted average number of common shares outstanding - basic and diluted		114,360		131,351			120,741		131,456		114,052		126,682

Earnings (loss) per common share - basic and diluted	$	(0.17)	$	0.00		$	0.86	$	(0.18)	$	0.19	$	—

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 ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ is excluded in the computation of diluted earnings (loss) per common share as the assumed exchange of such units for common shares on a one-for-one basis was antidilutive (the assumed redemption of these units would have no impact on the determination of diluted earnings (loss) per share). Since OP Units, Time-Based LTIP Units, LTIP Units and Special Time-Based LTIP Units, which are held by noncontrolling interests, are attributed gains at an identical proportion to the common shareholders, the gains attributable and their equivalent weighted average 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 ~~5.9~~5.5 million and 6.0 million for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 5.2 million and 4.9 million for the three and nine months ended September 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 ~~October 2022~~May 2023

On ~~October 25, 2022,~~May 4, 2023, our Board of Trustees declared a quarterly dividend of $0.225 per common share, payable on ~~November 22, 2022~~June 30, 2023 to shareholders of record as of ~~November 8, 2022.~~June 23, 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 ~~September 30, 2022~~March 31, 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 ~~$54.2~~$37.1 million and ~~($17.2)~~$55.0 million as of ~~September 30, 2022~~March 31, 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 ~~$22.8~~$26.0 million of the net unrealized gain as a decrease to interest expense.

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

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

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

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

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

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


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

	(In thousands)								(In thousands)
September 30, 2022
Derivative financial instruments designated as effective hedges:
Classified as assets in "Other assets, net"	$	52,618		—	$	52,618		—
Derivative financial instruments designated as ineffective hedges:
Classified as assets in "Other assets, net"		9,437		—		9,437		—

December 31, 2021
March 31, 2023
Derivative financial instruments designated as effective hedges:
Classified as assets in "Other assets, net"	$	393		—	$	393		—	$	36,381		—	$	36,381		—
Classified as liabilities in "Other liabilities, net"		18,361		—		18,361		—		166		—		166		—
Derivative financial instruments designated as ineffective hedges:
Classified as assets in "Other assets, net"		558		—		558		—		5,308		—		5,308		—

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 ~~September 30, 2022~~March 31, 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 nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ were attributable to the net change in unrealized gains or losses related to 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.

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Financial Assets and Liabilities Not Measured at Fair Value

As of ~~September 30, 2022~~March 31, 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:


	September 30, 2022				December 31, 2021				March 31, 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	$	1,753,948	$	1,650,983	$	1,788,259	$	1,814,780
Revolving credit facility		100,000		100,030		300,000		300,363
Mortgage loans									$	1,817,915	$	1,741,108	$	1,901,875	$	1,830,651
Unsecured term loans		550,000		550,816		400,000		400,519		550,000		550,929		550,000		551,369

(1)	The carrying amount consists of principal only.

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

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 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. 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 March 31,
	2023		2022

	(In thousands)
Property management fees	$	4,952	$	4,808
Asset management fees		1,103		1,771
Development fees		1,986		3,539
Leasing fees		1,356		1,839
Construction management fees		340		150
Other service revenue		1,224		816
Third-party real estate services revenue, excluding reimbursements		10,961		12,923
Reimbursement revenue ⁽¹⁾		11,823		11,047
Third-party real estate services revenue, including reimbursements		22,784		23,970
Third-party real estate services expenses		23,823		27,049
Third-party real estate services revenue less expenses	$	(1,039)	$	(3,079)

2522

Table of Contents

Three Months Ended September 30,

Nine Months Ended September 30,


2022

2021
X
2022

2021

(In thousands)
Property management fees

$
4,791

$
4,831

$
14,575

$
14,549
Asset management fees

1,479

2,145

4,763

6,602
Development fees ⁽¹⁾

1,426

4,032

7,113

22,705
Leasing fees

1,713

1,822

4,590

4,106
Construction management fees

169

—

356

375
Other service revenue

1,909

1,295

4,224

4,783
Third-party real estate services revenue, excluding reimbursements

11,487

14,125

35,621

53,120
Reimbursement revenue ⁽²⁾

10,358

11,717

32,351

37,574
Third-party real estate services revenue, including reimbursements

21,845

25,842

67,972

90,694
Third-party real estate services expenses

21,230

25,542

72,422

80,035
Third-party real estate services revenue less expenses

$
615

$
300

$
(4,450)

$
10,659

(1)

As of September 30, 2022, we had estimated unrecognized development fee revenue totaling $41.1 million, of which $3.6 million, $12.4 million and $6.8 million is expected to be recognized during the remainder of ~~2022~~, ~~2023~~ ~~and~~ ~~2024, and $18.3 million is expected to be recognized thereafter~~ ~~through~~ ~~2027 as unsatisfied performance obligations are completed.Changes in the timing and costs of planned development projects may impact these amounts.~~

~~(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 ~~$15.2~~$12.2 million and ~~$19.6~~$13.7 million as of ~~September 30, 2022~~March 31, 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 March 31,
	2023		2022

	(in thousands)
Net income (loss) attributable to common shareholders	$	21,171	$	(32)
Add:
Depreciation and amortization expense		53,431		58,062
General and administrative expense:
Corporate and other		16,123		15,815
Third-party real estate services		23,823		27,049
Share-based compensation related to Formation Transaction and special equity awards		351		2,244
Transaction and other costs		2,472		899
Interest expense		26,842		16,278
Loss on the extinguishment of debt		—		591
Income tax benefit		(16)		(471)
Net income attributable to redeemable noncontrolling interests		3,363		10
Net loss attributable to noncontrolling interests		(224)		(55)
Less:
Third-party real estate services, including reimbursements revenue		22,784		23,970
Other revenue		1,726		2,196
Income from unconsolidated real estate ventures, net		433		3,145
Interest and other income, net		4,077		14,246
Gain (loss) on the sale of real estate, net		40,700		(136)
Consolidated NOI	$	77,616	$	76,969

2623

Table of Contents

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

Three Months Ended September 30,

Nine Months Ended September 30,


2022

2021
X
2022

2021

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

$
(19,293)

$
893

$
103,950

$
(22,811)
Add:








Depreciation and amortization expense

50,056

56,726

157,597

178,130
General and administrative expense:








Corporate and other

12,072

12,105

42,669

38,475
Third-party real estate services

21,230

25,542

72,422

80,035
Share-based compensation related to Formation Transaction and special equity awards

548

3,480

4,369

12,866
Transaction and other costs

1,746

2,951

4,632

8,911
Interest expense

17,932

17,243

50,251

50,312
Loss on the extinguishment of debt

1,444

—

3,073

—
Income tax expense

166

217

2,600

4,527
Net income (loss) attributable to redeemable noncontrolling interests

(2,546)

103

15,712

(2,472)
Net income (loss) attributable to noncontrolling interests

258

—

174

(1,108)
Less:








Third-party real estate services, including reimbursements revenue

21,845

25,842

67,972

90,694
Other revenue

1,764

1,568

5,758

5,658
Income (loss) from unconsolidated real estate ventures, net

(13,867)

20,503

(12,829)

23,513
Interest and other income, net

984

192

16,902

163
Gain on the sale of real estate, net

—

—

158,631

11,290
Consolidated NOI

$
72,887

$
71,155

$
221,015

$
215,547

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 September 30, 2022


Commercial

Multifamily

Other

Total

(In thousands)
Property rental revenue

$
71,257

$
45,639

$
2,915

$
119,811
Parking revenue

3,859

248

87

4,194
Total property revenue

75,116

45,887

3,002

124,005
Property expense:


Property operating

20,151

16,108

121

36,380
Real estate taxes

8,603

5,311

824

14,738
Total property expense

28,754

21,419

945

51,118
Consolidated NOI

$
46,362

$
24,468

$
2,057

$
72,887

Three Months Ended September 30, 2021


Commercial

Multifamily

Other

Total

(In thousands)
Property rental revenue

$
89,099

$
35,020

$
1,781

$
125,900
Parking revenue

3,520

111

81

3,712
Total property revenue

92,619

35,131

1,862

129,612
Property expense:






Property operating

27,064

14,212

(1,078)

40,198
Real estate taxes

12,098

4,930

1,231

18,259
Total property expense

39,162

19,142

153

58,457
Consolidated NOI

$
53,457

$
15,989

$
1,709

$
71,155

~~Table of Contents~~


	Nine Months Ended September 30, 2022								Three Months Ended March 31, 2023
	Commercial		Multifamily		Other		Total		Commercial		Multifamily		Other		Total

	(In thousands)								(In thousands)
Property rental revenue	$	230,781	$	130,686	$	6,978	$	368,445	$	71,917	$	49,910	$	2,206	$	124,033
Parking revenue		12,058		632		219		12,909		4,138		224		57		4,419
Total property revenue		242,839		131,318		7,197		381,354		76,055		50,134		2,263		128,452
Property expense:
Property operating		65,977		44,733		1,759		112,469		19,371		17,455		(1,214)		35,612
Real estate taxes		29,398		15,586		2,886		47,870		9,001		5,608		615		15,224
Total property expense		95,375		60,319		4,645		160,339		28,372		23,063		(599)		50,836
Consolidated NOI	$	147,464	$	70,999	$	2,552	$	221,015	$	47,683	$	27,071	$	2,862	$	77,616

	Nine Months Ended September 30, 2021								Three Months Ended March 31, 2022
	Commercial		Multifamily		Other		Total		Commercial		Multifamily		Other		Total

	(In thousands)								(In thousands)
Property rental revenue	$	265,469	$	100,324	$	5,167	$	370,960	$	87,621	$	42,108	$	1,869	$	131,598
Parking revenue		9,169		286		188		9,643		4,012		134		55		4,201
Total property revenue		274,638		100,610		5,355		380,603		91,633		42,242		1,924		135,799
Property expense:
Property operating		76,125		38,449		(4,645)		109,929		26,202		13,755		687		40,644
Real estate taxes		36,018		15,240		3,869		55,127		11,777		5,221		1,188		18,186
Total property expense		112,143		53,689		(776)		165,056		37,979		18,976		1,875		58,830
Consolidated NOI	$	162,495	$	46,921	$	6,131	$	215,547	$	53,654	$	23,266	$	49	$	76,969

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


	Commercial		Multifamily		Other		Total		Commercial		Multifamily		Other		Total

	(In thousands)								(In thousands)
September 30, 2022
March 31, 2023
Real estate, at cost	$	2,747,473	$	2,707,292	$	408,872	$	5,863,637	$	2,567,810	$	3,055,495	$	419,938	$	6,043,243
Investments in unconsolidated real estate ventures		225,283		56,984		78,579		360,846		229,642		—		83,009		312,651
Total assets		3,025,885		2,042,272		827,823		5,895,980		2,507,262		2,444,022		883,736		5,835,020
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 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.

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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.

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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 ~~September 30, 2022,~~March 31, 2023, we had assets under construction that, based on our current plans and estimates, require an additional ~~$468.1~~$346.5 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 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 $18.0 million ~~and $18.2 million~~ as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 and are included in "Other liabilities, net" in our balance sheets.

Other

As of ~~September 30, 2022,~~March 31, 2023, we had committed tenant-related obligations totaling ~~$67.3~~$60.6 million ($~~64.9~~58.6 million related to our consolidated entities and ~~$2.4~~$2.0 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 ~~September 30, 2022,~~March 31, 2023, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures and other investments totaling ~~$64.0~~$62.6 million. As of ~~September 30, 2022,~~March 31, 2023, we had no principal payment guarantees related to our unconsolidated real estate ventures.

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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

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lenders, tenants and other third parties for the completion of development projects. As of ~~September 30, 2022,~~March 31, 2023, the aggregate amount of principal payment guarantees was $8.3 million for our consolidated entities.

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

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. 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 ~~September 30, 2022,~~March 31, 2023, the WHI Impact Pool had completed closings of capital commitments totaling $114.4 million, which included a commitment from us of $11.2 million. As of ~~September 30, 2022,~~March 31, 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 ~~$4.9~~$5.0 million and ~~$15.1~~$5.5 million for the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023 and ~~$5.6 million and $17.2 million for the three and nine months ended September 30, 2021.~~2022. As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, we had receivables from the JBG Legacy Funds and the WHI Impact Pool and its affiliates totaling ~~$4.1~~$5.2 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 $214,000 and $922,000~~incurred $158,000 of rent expense for the three ~~and nine~~ months ended ~~September 30, 2022,~~March 31, 2023, which is included in "General and ~~$246,000 and $1.0 million for the three and nine months ended September 30, 2021.~~administrative expense" in our statement 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 ~~$2.7~~$2.4 million and ~~$7.8~~$3.1 million during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and $4.9 million and $13.4 million for the three and nine months ended September 30, 2021,~~ which is included in "Property operating expenses" in our statements of operations.

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

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

JBG SMITH Properties ("JBG SMITH"), a Maryland real estate investment trust, ~~("REIT"),~~ owns and operates a portfolio of ~~commercial~~multifamily and ~~multifamily~~commercial assets amenitized with ancillary retail. JBG SMITH's portfolio reflects its longstanding strategy of owning and operating assets within Metro-served submarkets in the Washington, D.C. metropolitan area with high barriers to entry and vibrant urban amenities. Approximately two-thirds of our portfolio is in National Landing, ~~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 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. 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~~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; 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. ~~Occupancy, non-GAAP financial measures, leverage metrics, operating assets and operating metrics also exclude these subordinated interests.~~

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~~operations for the three~~March 31, 2023 and ~~nine months ended September 30, 2022 and 2021.~~2022. References to our statements of cash flows refer to our condensed consolidated statements of cash flows for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022.

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; 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

We continue to implement our comprehensive plan to reposition our holdings in National Landing 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 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,~~We expect Amazon ~~announced it had selected sites~~to occupy its new headquarters at Metropolitan Park in National Landing ~~as the location of its new headquarters.~~in June 2023. We currently have leases with Amazon totaling 1.0 million square feet atacross six office buildings in National Landing. We ~~have~~ sold to Amazon two of our National Landing development sites, Metropolitan Park and Pen Place. We are the developer, property manager and retail leasing agent for Amazon's new headquarters at National Landing. We are currently constructing two new office buildings for Amazon on Metropolitan Park, totaling 2.1 million square feet, inclusive of ~~over~~

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approximately 50,000 square feet of street-level retail with new shops and restaurants. ~~We are the developer, property manager and retail leasing agent for Amazon's new headquarters at National Landing.~~

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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 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 as well as land sites where a ground lease or joint venture execution may represent the most attractive path to maximizing value. Successful execution of our capital allocation strategy enables us to source capital at NAV from the disposition of assets generating low cash yields and invest those proceeds in new acquisitions with higher cash yields and growth, 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. 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 as of ~~September 30, 2022 declined~~March 31, 2023 increased by 2010 basis points as compared to ~~June 30,~~December 31, 2022. Although new leasing has 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 were able to execute ~~207,000~~114,000 square feet ~~at our share~~ of office leases during the first quarter, over ~~50%~~90% of which comprised ~~new~~ leases in National Landing. We ~~expect~~have 619,000 square feet of office leases expiring in 2023 with another 40,500 square feet currently in month-to-month status. Our ability to renew or re-lease this ~~lag to continue to~~space will impact our occupancy ~~levels for the foreseeable future. We have seen an increase~~ in the number of employees returning to the office and higher transient parking, with parking revenue in our commercial portfolio at approximately 79% of pre-pandemic levels of approximately $25 million annually, at our share.2023.

Our multifamily portfolio occupancy as of ~~September 30, 2022 improved~~March 31, 2023 decreased by ~~140~~70 basis points as compared to ~~June 30, 2022. Average in-place rents ended~~December 31, 2022 as lower leasing volume is typical for the ~~quarter 8.4% below asking rents.~~first quarter. For ~~third~~first quarter lease expirations, we increased rents by ~~6.7%~~9.3% upon renewal while achieving a ~~57.1%~~54.7% renewal rate across our portfolio.

Operating Results

Key highlights for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 included:

●

net income attributable to common shareholders of $21.2 million, or $0.19 per diluted common share, compared to a net loss attributable to common shareholders of ~~$19.3 million, or $0.17 per diluted common share, for the three months ended September 30, 2022 compared to net income attributable to common shareholders of $893,000,~~$32,000, or $0.00 per diluted common share, for the three months ended September 30, 2021. Net income attributable to common shareholders of $104.0 million, or $0.86 per diluted common share, for the nine months ended September 30, 2022 compared to a net loss attributable to common shareholders of $22.8 million, or $0.18 per diluted common share, for the nine months ended September 30, 2021;March 31, 2022;

●

third-party real estate services revenue, including reimbursements, of ~~$21.8~~$22.8 million ~~and $68.0~~compared to $24.0 million for the three ~~and nine~~ months ended ~~September 30, 2022 compared to $25.8 million and $90.7 million for the three and nine months ended September 30, 2021;~~March 31, 2022;

●

operating commercial portfolio leased and occupied percentages at our share of ~~88.3%~~87.6% and ~~85.9%~~85.2% as of ~~September 30, 2022~~March 31, 2023 compared to ~~87.3%~~88.5% and ~~86.1%~~85.1% as of ~~June 30,~~December 31, 2022, and ~~84.9%~~85.2% and ~~82.6%~~83.3% as of ~~September 30, 2021;~~March 31, 2022;

●

operating multifamily portfolio leased and occupied percentages⁽¹⁾ at our share of ~~95.5%~~95.0% and ~~93.7%~~92.9% as of ~~September 30, 2022~~March 31, 2023 compared to ~~95.7%~~94.5% and ~~92.3%~~93.6% as of ~~June 30,~~December 31, 2022, and ~~94.0%~~94.1% and ~~92.4%~~91.6% as of ~~September 30, 2021;~~March 31, 2022;

●

the leasing of ~~207,000~~114,000 square feet at our share, at an initial rent⁽²⁾of ~~$45.87~~$50.92 per square foot and a GAAP-basis weighted average rent per square foot ⁽³⁾of ~~$46.81 for the three months ended September 30, 2022, and the leasing of 743,000 square feet at our share, at an initial rent~~⁽²⁾~~of $45.69 per square foot and a GAAP-basis weighted average rent per square foot~~⁽³⁾~~of $45.03 for the nine months ended September 30, 2022;~~$51.03; and

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●

~~an increase~~a decrease in same store ⁽⁴⁾NOI of ~~11.5%~~0.7% to ~~$78.1~~$76.1 million compared to $76.6 million for the three months ended ~~September 30, 2022 compared to $70.0 million for the three months ended September 30, 2021, and an increase in same store~~ ⁽⁴⁾~~NOI of 13.0% to $231.5 million for the nine months ended September 30, 2022 compared to $204.9 million for the nine months ended September 30, 2021.~~March 31, 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.

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Additionally, investing and financing activity during the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 included:

●

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 ~~acquisition of~~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 ~~remaining 36.0% ownership interest~~loan were used, in ~~an unconsolidated real estate venture that owned Atlantic Plumbing, a multifamily asset, which was encumbered by a $100.0~~part, to repay the $131.5 million mortgage ~~for~~loan on 2121 Crystal Drive, which had a ~~purchase price~~fixed interest rate of ~~$19.7 million and our partner’s share of the working capital. See Note 3 to the financial statements for additional information;~~5.51%;

●	the sale of ~~the Universal Buildings, Pen Place and~~ a development parcel for ~~an aggregate~~a gross sales price of ~~$429.3 million. See Note 3 to the financial statements for additional information;~~$5.5 million;

●

the ~~formation~~sale 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 million from the sale of various assets by our unconsolidated real estate ventures. See Note 4 to the financial statements for additional information;~~

●	~~the sale of investments in equity securities during the first quarter of 2022, which had been carried at cost, resulting in a realized gain of $13.9 million;~~

●

the amendment of a $200.0 million unsecured term loan ("Tranche A-1 Term Loan"), originally maturing in January 2023, to extend the maturity date to January 2025 with two one-year extension options, and to amend the interest rate to Secured Overnight Financing Rate ("SOFR") plus 1.15% to SOFR plus 1.75%, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets;

●

the amendment of a $200.0 million unsecured term loan ("Tranche A-2 Term Loan") to increase its borrowing capacity by $200.0 million. The incremental $200.0 million includes a delayed draw feature, of which $150.0 million was drawn in September 2022 and the remaining $50.0 million 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%, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets. See Note 7 to the financial statements for additional information;

●	the net repayment of the outstanding balance on our revolving credit facility totaling $200.0 million, 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;

●

a new mortgage loan with a principal balance of $97.5 million collateralized by WestEnd25. The mortgage loan has a seven-year term and an interest rate of SOFR plus 1.45%. We also entered into an interest rate swap with a total notional value of $97.5 million, which effectively fixes SOFR at an average interest rate of 2.71% through the maturity date;

●	the payment of dividends totaling ~~$82.1~~$25.7 million and distributions to redeemable noncontrolling interests of ~~$12.4~~$4.0 million;

●	the repurchase and retirement of ~~14.2~~1.2 million of our common shares for ~~$361.0~~$20.1 million, a weighted average purchase price per share of ~~$25.49;~~$16.66; and

●	the investment of ~~$218.8~~$78.3 million in development, construction in progress and real estate additions.

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Activity subsequent to ~~September 30, 2022~~March 31, 2023 included:

●	the ~~acquisition~~increase by our Board of ~~an additional 3.7% interest in The Wren, a multifamily asset owned by a consolidated real estate venture, for $9.5 million, increasing~~Trustees of our ~~ownership interest~~common share repurchase authorization to ~~99.7%;~~$1.5 billion;

●

the ~~acquisition~~repurchase and retirement of 2.8 million common shares for $40.1 million, a weighted average purchase price per share of $14.16, pursuant to a repurchase plan under Rule 10b5-1 of the ~~remaining 50.0% ownership interest in 8001 Woodmont, a multifamily asset owned by an unconsolidated real estate venture, for a purchase price~~Securities Exchange Act of ~~$115.0 million, including the assumption of the $51.9 million mortgage at our share. The asset is encumbered by a $103.8 million mortgage, which is consolidated in our balance sheet~~1934, as ~~of the date of acquisition;~~

●	~~the repayment of the outstanding balance on our revolving credit facility of $100.0 million;~~amended; and

●	the declaration of a quarterly dividend of $0.225 per common share, payable on ~~November 22, 2022~~June 30, 2023 to shareholders of record as of ~~November 8, 2022.~~June 23, 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 ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023.

Recent Accounting Pronouncements

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

Results of Operations

During the ~~nine~~three months ended ~~September 30,~~March 31, 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, we acquired The Batley, and in August~~ 2022, we acquired the remaining 36.0% ownership interest in anAtlantic Plumbing and the remaining 50.0% ownership interest in 8001 Woodmont, which were previously owned by unconsolidated real estate ~~venture that owned Atlantic Plumbing, which was~~ventures and consolidated upon acquisition.

Table of Contents

Comparison of the Three Months Ended ~~September 30,~~March 31, 2023 to 2022 ~~to 2021~~

The following summarizes certain line items from our statements of operations that we believe are important in understanding our operations and/or those items which significantly changed in the three months ended ~~September 30, 2022~~March 31, 2023 compared to the same period in ~~2021:~~2022:


		Three Months Ended March 31,
		2023		2022		% Change

	(Dollars in thousands)
Property rental revenue		$	124,033	$	131,598	(5.7)	%
Third-party real estate services revenue, including reimbursements			22,784		23,970	(4.9)	%
Depreciation and amortization expense			53,431		58,062	(8.0)	%
Property operating expense			35,612		40,644	(12.4)	%
Real estate taxes expense			15,224		18,186	(16.3)	%
General and administrative expense:
Corporate and other			16,123		15,815	1.9	%
Third-party real estate services			23,823		27,049	(11.9)	%
Share-based compensation related to Formation Transaction and special equity awards			351		2,244	(84.4)	%
Income from unconsolidated real estate ventures, net			433		3,145	(86.2)	%
Interest and other income, net			4,077		14,246	(71.4)	%
Interest expense			26,842		16,278	64.9	%
Gain (loss) on the sale of real estate, net			40,700		(136)	*

* Not meaningful.

Three Months Ended September 30,


2022

2021

% Change

(Dollars in thousands)

Property rental revenue

$
119,811

$
125,900

(4.8)
%
Third-party real estate services revenue, including reimbursements

21,845

25,842

(15.5)
%
Depreciation and amortization expense

50,056

56,726

(11.8)
%
Property operating expense

36,380

40,198

(9.5)
%
Real estate taxes expense

14,738

18,259

(19.3)
%
General and administrative expense:

Corporate and other

12,072

12,105

(0.3)
%
Third-party real estate services

21,230

25,542

(16.9)
%
Share-based compensation related to Formation Transaction and special equity awards

548

3,480

(84.3)
%
Transaction and other costs

1,746

2,951

(40.8)
%
Income (loss) from unconsolidated real estate ventures, net

(13,867)

20,503

(167.6)
%
Interest expense

17,932

17,243

4.0
%

Property rental revenue decreased by approximately ~~$6.1~~$7.6 million, or ~~4.8%~~5.7%, to ~~$119.8~~$124.0 million in ~~2022~~2023 from ~~$125.9~~$131.6 million in ~~2021.~~2022. The decrease was primarily due to a ~~$17.8~~$15.7 million decrease in revenue from our commercial assets, partially offset by a ~~$10.6~~$7.8 million increase in revenue from our multifamily assets. The decrease in revenue from our commercial assets

~~Table of Contents~~

was primarily due to an ~~$18.2~~$18.5 million decrease related to the Disposed ~~Properties.~~Properties, partially offset by a $1.2 million decrease in bad debt reserves. The increase in revenue from our multifamily assets was primarily due to ~~(i)~~ a ~~$2.6~~$5.4 million increase related to ~~The Batley, (ii)~~the consolidation of Atlantic Plumbing and 8001 Woodmont, and a ~~$2.6~~$1.6 million increase ~~at RiverHouse and The Bartlett~~ due to higher ~~occupancy~~occupancies and rents ~~(iii) a $2.1 million increase related to higher occupancy~~ at ~~several recently developed properties (West Half,~~RiverHouse, The ~~Wren, 900 W~~Bartlett and 2221 S. Clark Street ~~and 901 W Street) and (iv) a $1.7 million increase related to Atlantic Plumbing.~~- Residential.

Third-party real estate services revenue, including reimbursements, decreased by approximately ~~$4.0~~$1.2 million, or ~~15.5%~~4.9%, to ~~$21.8~~$22.8 million in ~~2022~~2023 from ~~$25.8~~$24.0 million in ~~2021.~~2022. The decrease was primarily due to a ~~$2.6~~$1.6 million decrease in development fees related to the timing of development projectsand a ~~$1.4 million~~$668,000 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 $776,000 increase in reimbursement revenue.

Depreciation and amortization expense decreased by approximately ~~$6.7~~$4.6 million, or ~~11.8%~~8.0%, to ~~$50.1~~$53.4 million in ~~2022~~2023 from ~~$56.7~~$58.1 million in ~~2021.~~2022. The decrease was primarily due to a ~~$7.7~~$7.3 million decrease related to the Disposed Properties ~~which~~and a $2.9 million decrease due to the amortization of the acquired in-place lease intangible in 2022 at The Batley. The decrease in depreciation and amortization expense was partially offset by a ~~$1.4~~$6.2 million increase related to ~~The Batley.~~the consolidation of Atlantic Plumbing and 8001 Woodmont.

Property operating expense decreased by approximately ~~$3.8~~$5.0 million, or ~~9.5%~~12.4%, to ~~$36.4~~$35.6 million in ~~2022~~2023 from ~~$40.2~~$40.6 million in ~~2021.~~2022. The decrease was primarily due to a ~~$6.5~~$6.7 million decrease related to the Disposed ~~Properties.~~Properties, and a $1.5 million decrease in costs incurred related to digital infrastructure initiatives in National Landing. The decrease in property operating expense was partially offset by ~~(i)~~ a ~~$940,000~~$2.7 million increase related to ~~The Batley, (ii) a $756,000~~the consolidation of Atlantic Plumbing and 8001 Woodmont, and an $876,000 increase in ~~cleaning, and repairs and maintenance~~property expenses across our ~~same store~~multifamily portfolio, ~~and (iii) a $531,000 increase~~primarily related to ~~Atlantic Plumbing.~~higher compensation expenses, cleaning expenses and rising costs.

Real estate tax expense decreased by approximately ~~$3.5~~$3.0 million, or ~~19.3%~~16.3%, to ~~$14.7~~$15.2 million in ~~2022~~2023 from ~~$18.3~~$18.2 million in ~~2021.~~2022. The decrease was primarily due to a ~~$3.7~~$3.3 million decrease related to the Disposed ~~Properties.~~Properties, partially offset by a $727,000 increase related to the consolidation of Atlantic Plumbing and 8001 Woodmont.

Table of Contents

General and administrative expense: corporate and other ~~remained relatively unchanged at $12.1~~increased by approximately $308,000, or 1.9%, to $16.1 million in ~~2022 and 2021 as~~2023 from $15.8 million in 2022. The increase was primarily due to a decrease in ~~employee compensation costs was~~capitalized payroll, partially offset by ~~an increase in travel and costs associated with employees working in the office.~~lower compensation expenses.

General and administrative expense: third-party real estate services decreased by approximately ~~$4.3~~$3.2 million, or ~~16.9%~~11.9%, to ~~$21.2~~$23.8 million in ~~2022~~2023 from ~~$25.5~~$27.0 million in ~~2021.~~2022. The decrease was primarily due to a decrease in ~~reimbursable~~compensation expenses.

General and administrative expense: share-based compensation related to Formation Transaction and special equity awards decreased by approximately ~~$2.9~~$1.9 million, or ~~84.3%~~84.4%, to ~~$548,000~~$351,000 in ~~2022~~2023 from ~~$3.5~~$2.2 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 $1.7 million in 2022 primarily included $1.0 million of severance costs and $600,000 of expenses related to completed, potential and pursued transactions. Transaction and other costs of $3.0 million in 2021 primarily included $1.4 million of demolition costs related to 2000/2001 South Bell Street and $1.4 million of expenses related to completed, potential and pursued transactions.

Income ~~(loss)~~ from unconsolidated real estate ventures decreased by approximately ~~$34.4~~$2.7 million, or ~~167.6%~~86.2%, to ~~a loss of $13.9 million for 2022~~$433,000 in 2023 from ~~income of $20.5~~$3.1 million in ~~2021.~~2022. The decrease was primarily due to a ~~$23.1~~$5.2 million gain at our share from the sale of ~~500 L'Enfant~~various assets in 2022. The decrease in income from unconsolidated real estate ventures was partially offset by a $1.8 million increase related to the consolidation of Atlantic Plumbing and 8001 Woodmont as these assets are not yet stabilized, and an $883,000 increase related to our suspension of the equity method of accounting for the L’Enfant Plaza Assets.

Interest and other income decreased by approximately $10.2 million, or 71.4%, to $4.1 million in ~~2021 and~~2023 from $14.2 million in 2022 primarily due to a ~~$14.0~~realized gain of $13.9 million in 2022 from the sale of investments in equity securities, partially offset by a $2.1 million increase in ~~impairment losses~~interest income on our outstanding cash balances and a $1.8 million increase in ~~2022 compared to 2021.~~unrealized gains from investments in real estate-focused technology companies.

Interest expense increased by approximately ~~$689,000,~~$10.6 million, or ~~4.0%~~64.9%, to ~~$17.9~~$26.8 million in ~~2022~~2023 from ~~$17.2~~$16.3 million in ~~2021.~~2022. The increase in interest expense was primarily due to (i) a ~~$2.2~~$6.1 million change in the fair value of our ineffective interest rate caps due to a decline in the forward interest rate curve, (ii) a $4.7 million increase related to 1225 S. Clark Street, The Bartlett, 1221 Van Street, 220 20^th Street, 4747 Bethesda Avenue and 800 North Glebe Road, due to rising interest rates, (iii) a $2.8 million increase due to new mortgage loans entered into ~~during 2022 and 2021~~ at WestEnd25, ~~1225 S. Clark Street~~The Wren and ~~1215 S. Clark Street, (ii)~~F1RST Residences, (iv) a ~~$954,000 increase at 4747 Bethesda due to rising interest rates and (iii) a $789,000~~$2.1 million increase related to the consolidation of Atlantic Plumbing and 8001 Woodmont, and (v) a ~~higher average outstanding balance~~$1.6 million increase related to additional draws on our ~~revolving credit facility.~~term loans. The increase in interest expense was partially offset by ~~a $3.1 million increase in the fair value of our interest rate caps due to rising interest rates.~~

~~Table of Contents~~

~~Comparison of the Nine Months Ended September 30, 2022 to 2021~~

The following summarizes certain line items from our statements of operations that we believe are important in understanding our operations and/or those items which significantly changed in the nine months ended September 30, 2022 compared to the same period in 2021:

Nine Months Ended September 30,


2022

2021

% Change

(Dollars in thousands)

Property rental revenue

$
368,445

$
370,960

(0.7)
%
Third-party real estate services revenue, including reimbursements

67,972

90,694

(25.1)
%
Depreciation and amortization expense

157,597

178,130

(11.5)
%
Property operating expense

112,469

109,929

2.3
%
Real estate taxes expense

47,870

55,127

(13.2)
%
General and administrative expense:

Corporate and other

42,669

38,475

10.9
%
Third-party real estate services

72,422

80,035

(9.5)
%
Share-based compensation related to Formation Transaction and special equity awards

4,369

12,866

(66.0)
%
Transaction and other costs

4,632

8,911

(48.0)
%
Income (loss) from unconsolidated real estate ventures, net

(12,829)

23,513

(154.6)
%
Interest and other income, net

16,902

163

*

Interest expense

50,251

50,312

(0.1)
%
Gain on the sale of real estate, net

158,631

11,290

*

* Not meaningful.

Property rental revenue decreased by approximately $2.5 million, or 0.7%, to $368.4 million in 2022 from $371.0 million in 2021. The decrease was primarily due to a $34.7 million decrease in revenue from our commercial assets, partially offset by a $30.4 million increase in revenue from our multifamily assets. The decrease in revenue from our commercial assets was primarily due to (i) a $36.8 million decrease related to the Disposed Properties and (ii) a $2.0 million decrease related to 2451 Crystal Drive due to construction management services provided to tenants in 2021, partially offset by (iii) a $3.4 million increase related to the commencement of a lease with Amazon at 2100 Crystal Drive. The increase in revenue from our multifamily assets was primarily due to (i) a $10.6 million increase related to higher occupancy at several recently developed properties (West Half, The Wren, 900 W Street and 901 W Street), (ii) an $8.0 million increase related to The Batley, (iii) a $7.8 million increase at RiverHouse, The Bartlett and 2221 S. Clark Street - Residential due to higher occupancy and rents and (iv) a $1.7 million increase related to Atlantic Plumbing.

Third-party real estate services revenue, including reimbursements, decreased by approximately $22.7 million, or 25.1%, to $68.0 million in 2022 from $90.7 million in 2021. The decrease was primarily due to (i) a $15.6 million decrease in development fees related to the timing of development projects, (ii) a $5.2 million decrease in reimbursement revenue due to the termination of a management agreement~~and (iii) a $1.8 million decrease in asset management fees due to the sale of assets within the JBG Legacy Funds.~~

Depreciation and amortization expense decreased by approximately $20.5 million, or 11.5%, to $157.6 million in 2022 from $178.1 million in 2021. The decrease was primarily due to a $26.4 million decrease related to the Disposed Properties and a $4.9 million decrease related to 2345 Crystal Drive primarily due to the amortization and disposal of certain tenant improvements in 2021. The decrease in depreciation and amortization expense was partially offset by an $8.6 million increase related to The Batley and a $1.2 million increase related to 1770 Crystal Drive due to Amazon taking occupancy.

Property operating expense increased by approximately $2.5 million, or 2.3%, to $112.5 million in 2022 from $109.9 million in 2021. The increase was primarily due to (i) a $5.6 million increase in utility, cleaning, repairs and maintenance, and other property expenses across our same store portfolio, (ii) a $2.7 million increase related to The Batley, (iii) a $2.5 million increase related to technology initiatives in National Landing, (iv) a $1.8 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), and (v) a $912,000 increase related to 2221 S. Clark Street – Residential due to higher property management and other operating expenses resulting from higher occupancy. The increase in property operating expense was partially offset by a $12.2 million decrease related to the Disposed Properties.

~~Table of Contents~~

Real estate tax expense decreased by approximately $7.3 million, or 13.2%, to $47.9 million in 2022 from $55.1 million in 2021. The decrease was primarily due to a $7.4 million decrease related to the Disposed Properties.

General and administrative expense: corporate and other increased by approximately $4.2 million, or 10.9%, to $42.7 million in 2022 from $38.5 million in 2021. The increase was primarily due to an increase in compensation expense.

General and administrative expense: third-party real estate services decreased by approximately $7.6 million, or 9.5%, to $72.4 million in 2022 from $80.0 million in 2021. The decrease was primarily due to a decrease in reimbursable expenses.

General and administrative expense: share-based compensation related to Formation Transaction and special equity awards decreased by approximately $8.5 million, or 66.0%, to $4.4 million in 2022 from $12.9 million in 2021. The decrease was primarily due to the graded vesting of certain awards issued in prior years, which resulted in lower expense as portions of the awards vested.

Transaction and other costs of $4.6 million in 2022 included (i) $2.2 million of expenses related to completed, potential and pursued transactions, (ii) $2.0 million of integration and severance costs and (iii) $428,000 of demolition costs primarily related to 223 23^rd Street and 2250/2300 Crystal Drive. Transaction and other costs of $8.9 million in 2021 included (i) $5.4 million of expenses related to completed, potential and pursued transactions, (ii) $2.9 million of demolition costs related to 2000/2001 South Bell Street and (iii) $616,000 of integration and severance costs.

Income (loss) from unconsolidated real estate ventures decreased by approximately $36.3 million, or 154.6%, to a loss of $12.8 million for 2022 from income of $23.5 million in 2021. The decrease was primarily due to a $22.1 million reduction in gains at our share from the sale of various assets in 2022 as compared to 2021 and a $14.0 million increase in impairment losses in 2022 compared to 2021.

Interest and other income of $16.9 million in 2022 was primarily related to a realized gain of $13.9 million from the sale of investments in equity securities, which had been carried at cost, during the first quarter of 2022 and a $928,000 unrealized gain in 2022 related to equity investments carried at fair value.

Interest expense remained relatively unchanged at $50.3 million in 2022 and 2021. Interest expense decreased by $8.4 million due to an increase in the fair value of our interest rate caps as a result of rising interest rates and a $2.0 million increase in capitalized interest primarily related to 1900 Crystal ~~Drive. The decrease in interest expense was offset by (i) a $4.1 million increase due to new mortgage loans entered into in 2022 and 2021 at WestEnd25, 1225 S. Clark Street and 1215 S. Clark Street,~~Drive, (ii) a ~~$2.1~~$2.9 million ~~increase~~decrease related to the Disposed Properties and (iii) an $870,000 decrease related to a ~~higher~~lower average outstanding balance on our revolving credit facility, (iii) a $1.6 million increase related to Courthouse Plaza 1 and 2 as its associated ground lease was reclassified to a finance lease in December 2021, (iv) a $1.3 million increase related to 4747 Bethesda Avenue due to rising interest rates, (v) a $947,000 increase related to additional draws on our term loans and (vi) a $565,000 increase related to Atlantic Plumbing.facility.

Gain on the sale of real estate of ~~$158.6~~$40.7 million in ~~2022~~2023 was primarily due to the sale of ~~the Disposed Properties. See Note 3 to the financial statements for additional information. Gain~~an 80.0% interest in 4747 Bethesda Avenue. Loss on the sale of real estate of ~~$11.3 million~~$136,000 in ~~2021~~2022 was ~~based on~~due to the ~~cash received and the remeasurement~~sale of ~~our retained interest in the land we contributed to one of our unconsolidated real estate ventures.~~a development parcel.

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 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, which implicitly assumes that the value of real estate diminishes predictably over time rather than fluctuating based on market 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.

Table of Contents

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

Three Months Ended September 30,

Nine Months Ended September 30,


2022

2021
X
2022

2021

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

$
(19,293)

$
893

$
103,950

$
(22,811)
Net income (loss) attributable to redeemable noncontrolling interests

(2,546)

103

15,712

(2,472)
Net income (loss) attributable to noncontrolling interests

258

—

174

(1,108)
Net income (loss)

(21,581)

996

119,836

(26,391)
Gain on the sale of real estate, net of tax

—

—

(155,506)

(11,290)
Gain on the sale of unconsolidated real estate assets

—

(23,137)

(6,179)

(28,326)
Real estate depreciation and amortization

47,840

54,547

150,599

171,522
Impairment related to unconsolidated real estate ventures ⁽¹⁾

15,401

1,380

15,401

1,380
Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures

4,999

7,002

18,285

21,590
FFO attributable to noncontrolling interests

(336)

(54)

(409)

976
FFO attributable to common limited partnership units ("OP Units")

46,323

40,734

142,027

129,461
FFO attributable to redeemable noncontrolling interests

(6,227)

(4,703)

(17,070)

(13,242)
FFO attributable to common shareholders

$
40,096

$
36,031

$
124,957

$
116,219

~~(1)~~

~~Related to decreases in the value of the underlying assets.~~


	Three Months Ended March 31,
	2023		2022

Net income (loss) attributable to common shareholders	$	21,171	$	(32)
Net income attributable to redeemable noncontrolling interests		3,363		10
Net loss attributable to noncontrolling interests		(224)		(55)
Net income (loss)		24,310		(77)
(Gain) loss on the sale of real estate, net of tax		(40,700)		136
Gain on the sale of unconsolidated real estate assets		—		(5,243)
Real estate depreciation and amortization		51,611		55,517
Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures		2,760		6,870
FFO attributable to noncontrolling interests		224		(26)
FFO attributable to common limited partnership units ("OP Units")		38,205		57,177
FFO attributable to redeemable noncontrolling interests		(5,203)		(5,877)
FFO attributable to common shareholders	$	33,002	$	51,300

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 ~~September 30, 2022,~~March 31, 2023, our same store pool increased to 5349 properties from 5247 properties due to the inclusion of The ~~Wren. During~~Wren and The Batley as they were in service for the ~~nine months ended September 30, 2022, our same store pool decreased to 52 properties from 55 properties due to~~entirety of the inclusion of West Half, 901 W Street, 900 W Street, 1770 Crystal Drive, and 4747 Bethesda Avenue, and the exclusion 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.

Table of Contents

Same store NOI ~~increased $8.1 million,~~decreased $528,000, or ~~11.5%~~0.7%, to ~~$78.1~~$76.1 million for the three months ended ~~September 30, 2022~~March 31, 2023 from ~~$70.0~~$76.6 million for the same period in ~~2021. Same store NOI increased $26.6 million, or 13.0%, to $231.5 million for the nine months ended September 30, 2022 from $204.9 million for the same period in 2021.~~2022. The ~~increase~~decrease was substantially attributable to (i) increased abatement and higher ~~occupancy and rents and lower concessions in our multifamily portfolio, (ii) higher occupancy and average daily rates at the Crystal City Marriott, (iii)~~utilities, partially offset by an increase in parking revenue in our commercial portfolio and ~~(iv) abatement burn-off at certain assets.~~(ii) higher occupancy and rents in our 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 September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		2022		2021		2023		2022

	(Dollars in thousands)								(Dollars in thousands)
Net income (loss) attributable to common shareholders	$	(19,293)	$	893	$	103,950	$	(22,811)	$	21,171	$	(32)
Add:
Depreciation and amortization expense		50,056		56,726		157,597		178,130		53,431		58,062
General and administrative expense:
Corporate and other		12,072		12,105		42,669		38,475		16,123		15,815
Third-party real estate services		21,230		25,542		72,422		80,035		23,823		27,049
Share-based compensation related to Formation Transaction and special equity awards		548		3,480		4,369		12,866		351		2,244
Transaction and other costs		1,746		2,951		4,632		8,911		2,472		899
Interest expense		17,932		17,243		50,251		50,312		26,842		16,278
Loss on the extinguishment of debt		1,444		—		3,073		—		—		591
Income tax expense		166		217		2,600		4,527
Net income (loss) attributable to redeemable noncontrolling interests		(2,546)		103		15,712		(2,472)
Net income (loss) attributable to noncontrolling interests		258		—		174		(1,108)
Income tax benefit										(16)		(471)
Net income attributable to redeemable noncontrolling interests										3,363		10
Net loss attributable to noncontrolling interests										(224)		(55)
Less:
Third-party real estate services, including reimbursements revenue		21,845		25,842		67,972		90,694		22,784		23,970
Other revenue		1,764		1,568		5,758		5,658		1,726		2,196
Income (loss) from unconsolidated real estate ventures, net		(13,867)		20,503		(12,829)		23,513
Income from unconsolidated real estate ventures, net										433		3,145
Interest and other income, net		984		192		16,902		163		4,077		14,246
Gain on the sale of real estate, net		—		—		158,631		11,290
Gain (loss) on the sale of real estate, net										40,700		(136)
Consolidated NOI		72,887		71,155		221,015		215,547		77,616		76,969
NOI attributable to unconsolidated real estate ventures at our share		7,107		7,336		22,371		22,951		4,429		6,967
Non-cash rent adjustments ⁽¹⁾		(6,018)		(3,701)		(9,787)		(12,554)		(8,377)		(1,791)
Other adjustments ⁽²⁾		6,230		4,683		20,689		14,608		6,845		8,760
Total adjustments		7,319		8,318		33,273		25,005		2,897		13,936
NOI		80,206		79,473		254,288		240,552		80,513		90,905
Less: out-of-service NOI loss ⁽³⁾		(548)		(2,019)		(4,043)		(4,638)		(710)		(1,448)
Operating Portfolio NOI		80,754		81,492		258,331		245,190		81,223		92,353
Non-same store NOI ⁽⁴⁾		2,645		11,450		26,828		40,262		5,114		15,716
Same store NOI ⁽⁵⁾	$	78,109	$	70,042	$	231,503	$	204,928	$	76,109	$	76,637

Change in same store NOI		11.5%				13.0%				(0.7%)
Number of properties in same store pool		53				52				49

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

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

(3)	Includes the results of our under-construction assets and ~~near-term and future~~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

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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.

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	Three Months Ended September 30,					Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		X	2022		2021		2023		2022

	(In thousands)									(In thousands)
Property management fees	$	4,791	$	4,831		$	14,575	$	14,549	$	4,952	$	4,808
Asset management fees		1,479		2,145			4,763		6,602		1,103		1,771
Development fees ⁽¹⁾		1,426		4,032			7,113		22,705		1,986		3,539
Leasing fees		1,713		1,822			4,590		4,106		1,356		1,839
Construction management fees		169		—			356		375		340		150
Other service revenue		1,909		1,295			4,224		4,783		1,224		816
Third-party real estate services revenue, excluding reimbursements		11,487		14,125			35,621		53,120		10,961		12,923
Reimbursement revenue ⁽²⁾⁽¹⁾		10,358		11,717			32,351		37,574		11,823		11,047
Third-party real estate services revenue, including reimbursements		21,845		25,842			67,972		90,694		22,784		23,970
Third-party real estate services expenses		21,230		25,542			72,422		80,035		23,823		27,049
Third-party real estate services revenue less expenses	$	615	$	300		$	(4,450)	$	10,659	$	(1,039)	$	(3,079)

(1)

As of September 30, 2022, we had estimated unrecognized development fee revenue totaling $41.1 million, of which $3.6 million, $12.4 million and $6.8 million is expected to be recognized during the remainder of 2022, 2023 and 2024, and $18.3 million is expected to be recognized thereafter through 2027 as unsatisfied performance obligations are completed.~~Changes in the timing and costs of planned development projects may impact these amounts.~~

~~(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 nine~~ months ended ~~September 30, 2022~~March 31, 2023 in the preceding pages under "Results of Operations."

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

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Property revenue is calculated as property rental revenue plus parking revenue. Property expense is calculated as property operating expenses plus real estate taxes. Consolidated NOI is calculated as 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 nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021.~~ 2022.

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The following is a summary of NOI by segment:


	Three Months Ended September 30,					Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		X	2022		2021		2023		2022

	(In thousands)									(In thousands)
Property revenue:
Commercial	$	75,116	$	92,619		$	242,839	$	274,638	$	76,055	$	91,633
Multifamily		45,887		35,131			131,318		100,610		50,134		42,242
Other ⁽¹⁾		3,002		1,862			7,197		5,355		2,263		1,924
Total property revenue		124,005		129,612			381,354		380,603		128,452		135,799

Property expense:
Commercial		28,754		39,162			95,375		112,143		28,372		37,979
Multifamily		21,419		19,142			60,319		53,689		23,063		18,976
Other ⁽¹⁾		945		153			4,645		(776)		(599)		1,875
Total property expense		51,118		58,457			160,339		165,056		50,836		58,830

Consolidated NOI:
Commercial		46,362		53,457			147,464		162,495		47,683		53,654
Multifamily		24,468		15,989			70,999		46,921		27,071		23,266
Other ⁽¹⁾		2,057		1,709			2,552		6,131		2,862		49
Consolidated NOI	$	72,887	$	71,155		$	221,015	$	215,547	$	77,616	$	76,969

(1)	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.

Comparison of the Three Months Ended ~~September 30,~~March 31, 2023 to 2022 ~~to 2021~~

Commercial: Property revenue decreased by ~~$17.5~~$15.6 million, or ~~18.9%~~17.0%, to ~~$75.1~~$76.1 million in ~~2022~~2023 from ~~$92.6~~$91.6 million in ~~2021.~~2022. Consolidated NOI decreased by ~~$7.1~~$6.0 million, or ~~13.3%~~11.1%, to ~~$46.4~~$47.7 million in ~~2022~~2023 from ~~$53.5~~$53.7 million in ~~2021.~~2022. The decreases in property revenue and consolidated NOI were due to the Disposed Properties, ~~which were~~ partially offset by ~~an increase~~increased occupancy at 1550 Crystal Drive and 241 18^th Street, and the ~~Crystal City Marriott due to higher occupancy and an increase in parking revenue driven by an increase in both contract and transient parking.~~recovery of previously reserved balances.

Multifamily: Property revenue increased by ~~$10.8~~$7.9 million, or ~~30.6%~~18.7%, to ~~$45.9~~$50.1 million in ~~2022~~2023 from ~~$35.1~~$42.2 million in ~~2021.~~2022. Consolidated NOI increased by ~~$8.5~~$3.8 million, or ~~53.0%~~16.4%, to ~~$24.5~~$27.1 million in ~~2022~~2023 from ~~$16.0~~$23.3 million in ~~2021.~~2022. The increases in property revenue and consolidated NOI were due to the ~~acquisition~~consolidation of ~~The Batley~~Atlantic Plumbing and 8001 Woodmont in ~~November 2021,~~2022, and higher occupancy and rental rates across the portfolio. The increase in consolidated NOI was partially offset by an increase in operating costs.

~~Comparison of the Nine Months Ended September 30, 2022 to 2021~~

Commercial: Property revenue decreased by $31.8 million, or 11.6%, to $242.8 million in 2022 from $274.6 million in 2021. Consolidated NOI decreased by $15.0 million, or 9.3%, to $147.5 million in 2022 from $162.5 million in 2021. The decreases in property revenue and consolidated NOI were 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.

Multifamily: Property revenue increased by $30.7 million, or 30.5%, to $131.3 million in 2022 from $100.6 million in 2021. Consolidated NOI increased by $24.1 million, or 51.3%, to $71.0 million in 2022 from $46.9 million in 2021. The increases in property revenue and consolidated NOI were due to the acquisition of The Batley in November 2021, and

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~~higher occupancy and rental rates across the portfolio. The increase in consolidated NOI was partially offset by an increase in 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 estate services business provides fee-based real estate services to 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~~36

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Mortgage Loans

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


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

		(In thousands)					(In thousands)
Variable rate ⁽²⁾	4.60%	$	846,432	$	867,246	5.47%	$	754,281	$	892,268
Fixed rate ⁽³⁾	4.40%		907,516		921,013	4.43%		1,063,634		1,009,607
Mortgages payable			1,753,948		1,788,259
Mortgage loans								1,817,915		1,901,875
Unamortized deferred financing costs and premium/discount, net ⁽⁴⁾			(12,343)		(10,560)			(15,864)		(11,701)
Mortgages payable, net		$	1,741,605	$	1,777,699
Mortgage loans, net							$	1,802,051	$	1,890,174

(1)	Weighted average effective interest rate as of ~~September 30, 2022.~~March 31, 2023.

(2)

Includes variable rate ~~mortgages~~mortgage loans with interest rate cap agreements. For mortgage loans with interest rate caps, the weighted average interest rate cap strike is 2.35%, and the weighted average maturity date of the interest rate caps is August 1, 2023. The interest rate cap strike is exclusive of the credit spreads associated with the mortgage loans. As of ~~September 30, 2022,~~March 31, 2023, one-month London Interbank Offered Rate ("LIBOR") was ~~3.14%~~4.86% and one-month term ~~SOFR~~Secured Overnight Financing Rate ("SOFR") was ~~3.04%, as applicable.~~4.80%.

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

(4)	As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, excludes ~~$2.3~~$2.1 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.

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Credit Facility

As of ~~September 30,~~March 31, 2023 and December 31, 2022, our $1.6 billion credit facility consisted of aan undrawn $1.0 billion revolving credit facility maturing in January 2025, a $200.0 million unsecured term loan ("Tranche A-1 Term ~~Loan~~Loan") maturing in January 2025, and a ~~$400.0~~$350.0 million unsecured term loan ("Tranche A-2 Term ~~Loan~~Loan") maturing in January 2028, of which has a $50.0 million ~~remains~~additional advance available, ~~to be borrowed until July~~which we will draw in May 2023.

Table of our total outstanding indebtedness to a valuation of certain real property and assets. In connection with the loan amendment, we amended the related interest rate swaps, extending the maturity to July 2024 and converting the hedged rate from one-month LIBOR to one-month term SOFR.Contents

In July 2022, the Tranche A-2 Term Loan was amended to increase its borrowing capacity by $200.0 million. The incremental $200.0 million includes a delayed draw feature, of which $150.0 million was drawn in September 2022 and the remaining $50.0 million 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%, varying based on a ratio of our total outstanding indebtedness to a valuation of certain real property and assets. We entered into two interest rate swaps with an effective date of September 30, 2022 and a total notional value of $150.0 million, which effectively fix SOFR at a weighted average interest rate of 2.15% through the maturity date. 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 2.80% through the maturity date. Additionally, we amended the interest rate of the revolving credit facility 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 following is a summary of amounts outstanding under the credit facility:


	Effective					Effective
	Interest Rate ⁽¹⁾	September 30, 2022		December 31, 2021		Interest Rate ⁽¹⁾	March 31, 2023		December 31, 2022

		(In thousands)					(In thousands)
Revolving credit facility ^{(2) (3)}	4.19%	$	100,000	$	300,000	5.95%	$	—	$	—

Tranche A-1 Term Loan ⁽⁴⁾	2.61%	$	200,000	$	200,000	2.61%	$	200,000	$	200,000
Tranche A-2 Term Loan ⁽⁴⁾	3.40%		350,000		200,000	3.39%		350,000		350,000
Unsecured term loans			550,000		400,000			550,000		550,000
Unamortized deferred financing costs, net			(3,112)		(1,336)			(2,744)		(2,928)
Unsecured term loans, net		$	546,888	$	398,664		$	547,256	$	547,072

(1)	Effective interest rate as of ~~September 30, 2022.~~March 31, 2023. The interest rate for our revolving credit facility excludes a 0.15% facility fee.

(2)

(3)	As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, excludes ~~$3.8~~$2.9 million and ~~$5.0~~$3.3 million of net deferred financing costs related to our revolving credit facility that were included in "Other assets, ~~net."~~net" in our balance sheets.

(4)

As of ~~September 30, 2022,~~March 31, 2023, we had ~~floating rate~~ debt with a principal balance totaling ~~$882.7~~$692.7 million and hedging arrangements with a notional value totaling $1.0 billion that use 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 of the one-week and two-month USD-LIBOR immediately following the December 31, 2021 publications, and the remaining USD-LIBOR tenors immediately following the June 30, 2023 publications. Though an alternative reference rate for LIBOR, the SOFR, exists, significant uncertainties still remain. We can provide no assurance regarding the future of LIBOR and when our LIBOR-based instruments will transition from LIBOR as a reference rate to SOFR or another reference rate. The discontinuation of a benchmark rate or other financial metric, changes in a benchmark rate or other financial metric, or changes in market perceptions of the acceptability of a benchmark rate or other financial

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metric, including LIBOR, could, among other things, result in increased interest payments, changes to our risk exposures, or require renegotiation of previous transactions. In addition, any such discontinuation or changes, whether actual or anticipated, could result in market volatility, adverse tax or accounting effects, increased compliance, legal and operational costs, and risks associated with contract negotiations.

Common Shares Repurchased

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program, as of March 31, 2023, we have repurchased and retired ~~23.3~~24.5 million common shares for ~~$623.5~~$643.6 million, a weighted average purchase price per share of ~~$26.74.~~$26.25.

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 ~~September 30, 2022,~~March 31, 2023, we had ~~no mortgages payable~~$143.0 million on a consolidated basis and ~~$22.5~~$165.0 million at our share scheduled to mature in ~~2022.In October 2022, we repaid the outstanding balance on our revolving credit facility of $100.0 million;~~2023;

●

capital expenditures, including major renovations, tenant improvements and leasing costs — Asas of ~~September 30, 2022,~~March 31, 2023, we had committed tenant-related obligations totaling ~~$67.3~~$60.6 million ($~~64.9~~58.6 million related to our consolidated entities and ~~$2.4~~$2.0 million related to our unconsolidated real estate ventures at our share);

●	development expenditures — Asas of ~~September 30, 2022,~~March 31, 2023, we had assets under construction that, based on our current plans and estimates, require an additional ~~$468.1~~$346.5 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 October 25, 2022,~~on May 4, 2023, our Board of Trustees declared a quarterly dividend of $0.225 per common share;

●	possible common share ~~repurchases;~~repurchases — during the second quarter of 2023, through the date of this filing, we repurchased and retired 2.8 million common shares for $40.1 million; and

●

possible acquisitions of properties, either directly or indirectly through the acquisition of equity interests – On October 5, 2022, we acquired the remaining 50.0% ownership interest in 8001 Woodmont, a multifamily asset owned by an unconsolidated real estate venture, for a purchase price of $115.0 million, including the assumption of the $51.9 million mortgage at our share. The asset is encumbered by a $103.8 million mortgage, which is consolidated in our balance sheet as of the date of acquisition. On October 4, 2022, we acquired an additional 3.7% ownership interest in The Wren, a multifamily asset owned by a consolidated real estate venture, for $9.5 million, increasing our ownership interest to 99.7%.interests.

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

●	cash and cash equivalents — Asas of ~~September 30, 2022,~~March 31, 2023, we had cash and cash equivalents of ~~$258.9 million and had restricted cash of $188.0 million held by a qualified intermediary all of which was released in October 2022;~~$279.6 million;

●	cash flows from operations;

●	distributions from real estate ventures;

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●	borrowing capacity under our current credit facility — Asas of ~~September 30, 2022,~~March 31, 2023, we had ~~$949.5 million~~$1.0 billion of availability under our credit facility, including $50.0 million undrawn under our Tranche A-2 Term ~~Loan;~~Loan which we will draw in May 2023; and

●	proceeds from financings, asset sales and recapitalizations.

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 ~~nine~~three months ended ~~September 30, 2022,~~March 31, 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 $200.0 million net decrease in the principal amount due on our revolving credit facility, a $164.8 million decrease in the principal amount due on mortgages payable related to the Disposed Properties, a $150.0 million draw under our unsecured term loan and a new mortgage loan with a principal balance of $97.5 million collateralized by WestEnd25.Report.

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

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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:


	Nine Months Ended September 30,				Three Months Ended March 31,
	2022		2021		2023		2022

	(In thousands)				(In thousands)
Net cash provided by operating activities	$	130,366	$	154,412	$	42,632	$	69,598
Net cash provided by (used in) investing activities		674,402		(96,751)
Net cash used in financing activities		(634,994)		(91,820)
Net cash used in investing activities						(26,673)		(32,951)
Net cash provided by (used in) financing activities						31,860		(119,529)

Cash Flows for the ~~Nine~~Three Months Ended ~~September 30, 2022~~March 31, 2023

Cash and cash equivalents, and restricted cash increased ~~$169.8~~$47.8 million to ~~$471.9~~$321.9 million as of ~~September 30, 2022,~~March 31, 2023, compared to ~~$302.1~~$274.1 million as of December 31, ~~2021.~~2022. This increase resulted from ~~$674.4 million of net cash provided by investing activities and $130.4~~$42.6 million of net cash provided by operating activities and $31.9 million of net cash provided by financing activities, partially offset by ~~$635.0~~$26.7 million of net cash used in ~~financing~~investing activities. Our outstanding debt was $2.4 billion and $2.5 billion as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022.

Net cash provided by operating activities of ~~$130.4~~$42.6 million ~~primarily~~ comprised: (i) ~~$140.1~~$40.0 million of net income (before ~~$178.9~~$56.4 million of non-cash items and a ~~$158.6~~$40.7 million gain on the sale of real estate), (ii) ~~$8.5~~$3.9 million of return on capital from unconsolidated real estate ventures and (iii) ~~$18.2~~$1.2 million of net change in operating assets and liabilities. Non-cash income adjustments of ~~$178.9~~$56.4 million primarily include depreciation and amortization expense, share-based compensation expense, deferred rent ~~net income from investments, amortization of lease incentives~~ and other non-cash items.

Net cash ~~provided by~~used in investing activities of ~~$674.4~~$26.7 million primarily comprised: (i) $923.1 million of proceeds from the sale of real estate, (ii) $54.8 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) $218.8$78.3 million of development costs, construction in progress and real estate additions ~~(v) $86.7~~and (ii) $16.9 million of investments in unconsolidated real estate ventures and other investments, ~~and (vi) $15.2~~partially offset by (iii) $69.0 million ~~for~~of proceeds from the ~~acquisition~~sale of real estate.

Net cash ~~used in~~provided by financing activities of ~~$635.0~~$31.9 million primarily comprised: (i) ~~$361.0~~$223.3 million of ~~common shares repurchased,~~borrowings under mortgage loans, partially offset by (ii) ~~$300.0~~$133.9 million of repayments of ~~our revolving credit facility,~~mortgage loans, (iii) ~~$268.6 million of repayments of mortgages payable, (iv) $82.1~~$25.7 million of dividends paid to common shareholders, (iv) $20.1 million of common shares repurchased, (v) $7.2 million of debt issuance and ~~(v) $12.4~~modification costs, and (vi) $4.0 million of distributions to our redeemable noncontrolling interests, partially offset by (vi) $150.0 million of borrowings under our unsecured term loan, (vii) $134.3 million of borrowings under mortgages payable, (viii) $100.0 million of borrowings under our revolving credit facility and (ix) $9.4 million of contributions from noncontrolling interests.

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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 ~~September 30, 2022,~~March 31, 2023, we had investments in unconsolidated real estate ventures totaling ~~$360.8~~$312.7 million. For these investments, we exercise significant influence over but do not control these entities and, therefore, account for these investments using the equity method of accounting. For a more complete description of our real estate ventures, see Note 4 to the financial statements.

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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.

Commitments and Contingencies

Insurance

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Construction Commitments

As of ~~September 30, 2022,~~March 31, 2023, we had assets under construction that, based on our current plans and estimates, require an additional ~~$468.1~~$346.5 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

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 ~~September 30, 2022,~~March 31, 2023, the aggregate amount of principal payment guarantees was $8.3 million for our consolidated entities.

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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 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

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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 $18.0 million ~~and $18.2 million~~ as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022 and are included in "Other liabilities, net" in our balance sheets.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

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

September 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⁾

$
846,432

4.60%

$
8,582

$
867,246

2.01%

Fixed rate ⁽²⁾

907,516

4.40%

—

921,013

4.32%

$
1,753,948

$
8,582

$
1,788,259

Credit facility:

Revolving credit facility ⁽³⁾

$
100,000

4.19%

$
1,014

$
300,000

1.15%

Tranche A-1 Term Loan ⁽⁴⁾

200,000

2.61%

—

200,000

2.59%

Tranche A-2 Term Loan ⁽⁴⁾

350,000

3.40%

—

200,000

2.49%

$
650,000

$
1,014

$
700,000

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

Variable rate ⁽¹⁾

$
130,587

6.31%

$
1,324

$
281,608

2.56%

Fixed rate ⁽²⁾

84,905

4.55%

—

91,653

4.49%

$
215,492

$
1,324

$
373,261


	March 31, 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⁾	$	754,281		5.47%	$	2,525	$	892,268	5.21%
Fixed rate ⁽²⁾		1,063,634		4.43%		—		1,009,607	4.44%
	$	1,817,915			$	2,525	$	1,901,875
Credit facility:
Revolving credit facility ⁽³⁾	$	—		5.95%	$	—	$	—	5.51%
Tranche A-1 Term Loan ⁽⁴⁾		200,000		2.61%		—		200,000	2.61%
Tranche A-2 Term Loan ⁽⁴⁾		350,000		3.39%		—		350,000	3.40%
	$	550,000			$	—	$	550,000
Pro rata share of debt of unconsolidated real estate ventures (contractual balances):
Variable rate ⁽¹⁾	$	57,005		5.69%	$	165	$	22,065	6.45%
Fixed rate ⁽²⁾		33,000		4.13%		—		33,000	4.13%
	$	90,005			$	165	$	55,065

(1)

Includes variable rate ~~mortgages~~mortgage loans with interest rate cap agreements. For consolidated mortgage loans with interest rate caps, the weighted average interest rate cap strike is 2.35%, and the weighted average maturity date of the interest rate caps is August 1, 2023. The interest rate cap strike is exclusive of the credit spreads associated with the mortgage loans. As of ~~September 30, 2022,~~March 31, 2023, one-month LIBOR was ~~3.14%~~4.86% and one-month term SOFR was ~~3.04%, as applicable.~~4.80%. 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 with interest rates fixed by interest rate swap agreements.

(3)	As of ~~September 30, 2022,~~March 31, 2023, one-month term SOFR was ~~3.04%~~4.80%. The interest rate for our revolving credit facility excludes a 0.15% facility fee.

(4)

As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the outstanding balance was fixed by interest rate swap agreements. As of ~~September 30, 2022,~~March 31, 2023, the interest rate swaps fix SOFR at a weighted average interest rate of 1.46% for the Tranche A-1 Term Loan and ~~2.15%~~2.14% for the Tranche A-2 Term Loan. The interest rate for our Tranche A-2 Term Loan excludes a 0.15% per annum commitment fee on the undrawn $50.0 million of commitments. See Note 7 to the financial statements for additional information.

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 ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the estimated fair value of our consolidated debt was $2.3 billion and ~~$2.5~~$2.4 billion. These estimates of

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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.

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Hedging Activities

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 ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, we had interest rate swap and cap agreements with an aggregate notional value of ~~$1.4~~$1.2 billion 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 ~~$52.6~~$36.4 million and ~~$393,000~~$53.5 million as of ~~September 30, 2022~~March 31, 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 ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, we had various interest rate ~~swap and~~ cap agreements with an aggregate notional value of $711.8 ~~million and $867.7~~ 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 ~~$9.4~~$5.3 million and ~~$558,000~~$8.1 million as of ~~September 30, 2022~~March 31, 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 ~~September 30, 2022,~~March 31, 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 ~~September 30, 2022~~March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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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.

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ITEM 1A. RISK FACTORS

There have been no material changes to the risk factors previously disclosed in our Annual Report.

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
July 1, 2022 - July 31, 2022

1,503,040

$
23.92

1,503,040

$
394,530,230
August 1, 2022 - August 31, 2022

351,400

22.77

351,400

386,523,151
September 1, 2022 - September 30, 2022

456,634

21.90

456,634

376,514,358
Total for the three months ended September 30, 2022

2,311,074

23.35

2,311,074

Total for the nine months ended September30, 2022

14,150,588

25.49

14,150,588

Program total since inception in March 2020

23,297,409

26.74

23,297,409


Period	Total Number Of Common Shares Purchased		Average Price Paid Per Common Share	Total Number Of Common Shares Purchased As Part Of Publicly Announced Plans Or Programs		Approximate Dollar Value Of Common Shares That May Yet Be Purchased Under the Plan Or Programs
January 1, 2023 - January 31, 2023	-	$	-	-	$	376,514,358
February 1 2023 - February 28, 2023	-		-	-		376,514,358
March 1, 2023 - March 31, 2023	1,205,188		16.66	1,205,188		356,415,525
Total for the three months ended March 31, 2023	1,205,188		16.66	1,205,188
Program total since inception in March 2020 ⁽¹⁾	24,502,597		26.25	24,502,597

(1)	During the second quarter of 2023, through the date of this filing, we repurchased and retired 2.8 million common shares for $40.1 million, a weighted average purchase price per share of $14.16, 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, ~~which it~~and in May 2023, increased the authorized repurchase amount to ~~an aggregate of $1.0 billion in June 2022.~~$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

On May 4, 2023, we held our 2023 Annual Meeting of Shareholders (the "Annual Meeting"). At the Annual Meeting, our shareholders voted on the (i) election of 10 trustees to the Board of Trustees (the "Board") to serve until our 2024 annual meeting of shareholders, (ii) approval, on a non-binding advisory basis, of the compensation of the named executive officers and (iii) ratification of the appointment of Deloitte & Touche LLP ("Deloitte") as our independent registered public accounting firm for the fiscal year ending December 31, 2023. The proposals are described in detail in our Proxy Statement

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~~ITEM 5. OTHER INFORMATION~~for the Annual Meeting, which was filed with the Securities and Exchange Commission on March 22, 2023. The final voting results for each proposal are set forth below.

~~None.~~

Proposal 1: Election of Trustees

At the Annual Meeting, shareholders voted on the election of 10 trustees to the Board to serve until the 2024 annual meeting of shareholders and until their respective successors have been duly elected and qualified. The table below sets forth the voting results for each trustee nominee:


Nominee	Votes For	Votes Against	Abstentions	Broker Non-Votes
Phyllis R. Caldwell	97,084,598	1,298,479	60,141	3,920,563
Scott A. Estes	98,050,072	272,061	121,085	3,920,563
Alan S. Forman	95,022,052	3,380,709	40,457	3,920,563
Michael J. Glosserman	97,905,408	497,524	40,286	3,920,563
W. Matthew Kelly	98,254,982	147,940	40,296	3,920,563
Alisa M. Mall	96,260,581	2,122,326	60,311	3,920,563
Carol A. Melton	97,526,133	856,705	60,380	3,920,563
William J. Mulrow	94,532,875	3,849,775	60,568	3,920,563
D. Ellen Shuman	96,919,290	1,403,208	120,720	3,920,563
Robert A. Stewart	96,717,989	1,684,056	41,173	3,920,563

Proposal 2: Advisory Vote on Executive Compensation

At the Annual Meeting, our shareholders voted affirmatively on a non-binding resolution to approve the compensation of our named executive officers. The table below sets forth the voting results for this proposal:


Votes For	Votes Against	Abstentions	Broker Non-Votes
88,591,869	9,787,656	63,693	3,920,563

Proposal 3: Ratification of the Appointment of Deloitte as our Independent Registered Public Accounting Firm

At the Annual Meeting, our shareholders ratified the appointment of Deloitte to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2023. The table below sets forth the voting results for this proposal:


Votes For	Votes Against	Abstentions
102,048,462	267,935	47,384

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ITEM 6. EXHIBITS

(a) Exhibit Index


Exhibits	Description
3.1	Declaration of Trust of JBG SMITH Properties, as amended and restated (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on July 21, 2017).
3.2	Articles Supplementary to Declaration of Trust of JBG SMITH Properties (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on March 6, 2018).
3.3	Articles of Amendment to Declaration of Trust of JBG SMITH Properties (incorporated by reference to Exhibit 3.1 to our current report on Form 8-K, filed on May 3, 2018).
3.4	Amended and Restated Bylaws of JBG SMITH Properties (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on February 21, 2020).
~~10.1~~	Credit Agreement, dated as of 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 (incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q, filed on August 2, 2022).
~~10.2~~	Fourth Amendment to Credit Agreement, dated as of 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 (incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q, filed on August 2, 2022).
~~10.3~~	First Amendment to Credit Agreement, dated as of 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 (incorporated by reference to Exhibit 10.3 to our Quarterly Report on Form 10-Q, filed on August 2, 2022).
~~10.4†~~	Retirement Agreement and Release, dated as of July 29, 2022, by and between JBG SMITH Properties and David P. Paul (incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q, filed on August 2, 2022).
31.1**	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended and Section 302 of the Sarbanes-Oxley Act of 2002.
31.2**	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended and Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended and 18 U.S.C 1350, as created by Section 906 of the Sarbanes- Oxley Act of 2002.
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Extension Calculation Linkbase
101.LAB	Inline XBRL Extension Labels Linkbase
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase

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~~Exhibits~~	~~Description~~
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


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

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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:	~~November 1, 2022~~May 9, 2023	/s/ M. Moina Banerjee
		M. Moina Banerjee
		Chief Financial Officer
		(Principal Financial Officer)


		JBG SMITH Properties

Date:	~~November 1, 2022~~May 9, 2023	/s/ Angela Valdes
		Angela Valdes
		Chief Accounting Officer
		(Principal Accounting Officer)

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			Total	Assets Held
Assets	Segment	Location	Square Feet	for Sale

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