urf
Quarterly Investor Package
JBGS Divider
Management Letter
February 22, 2022
2022 did not bring an end to the pandemic, but it did shed a flickering light on what the new normal might look like. Despite hybrid work arrangements dominating the labor market and headlines foretelling the death of big cities, we have seen steady and sustained signs of strength returning to the market. In particular, our concentration on multifamily and National Landing office aligns well with urban-suburban demand trends, and our investments in physical and digital placemaking are starting to bear fruit. As Amazon and Virginia Tech continue to grow their anchor presence, we have accelerated our growth pipeline and exceeded the capital recycling targets designated to fund it. This growth pipeline positions us incredibly well to capitalize on what we expect to be years of strong and sustained growth in one of the most unique innovation clusters in the country. On top of this, we have established ourselves as leaders in sustainability (Leader in the Light, no less!), equity, and inclusion, both internally and externally. This year's accomplishments are part of the bedrock on which we are building long-term NAV per share growth, and we take great pride in sharing them with you.
2021 Accomplishments
Paved the Way for Amazon’s Continued Expansion in National Landing
| ● | Progressed construction on Metropolitan Park, the 2.1 million square foot first phase of Amazon HQ2, with 20 of the planned 22 stories currently above ground and an unchanged planned 2023 delivery. |
| ● | Advanced entitlements and expect to receive final approvals and close in the second quarter on the sale of Pen Place to Amazon for an increased purchase price of $198 million. |
| ● | Executed new leases with Amazon in National Landing, bringing its total existing leased office space from JBG SMITH to approximately 1.0 million square feet. |
Expanded Growth Footprint Surrounding Virginia Tech’s $1 Billion Innovation Campus in National Landing
| ● | Entered a joint venture with institutional investors advised by J.P. Morgan Global Alternatives with respect to approximately 2.0 million square feet of new mixed-use development (1.1 million square feet of office and 900,000 square feet of multifamily) in Potomac Yard, the southern portion of National Landing. In addition to our 50% ownership stake in the joint venture, we will act as pre-developer, developer, property manager, and leasing agent for all future commercial and residential properties on the site. |
| o | In advanced stages of design for Potomac Yard Landbay F (Blocks 15 and 19), a planned 470-unit multifamily development, which we expect will commence construction in 2022. The assets are immediately adjacent to Virginia Tech’s $1 billion Innovation Campus (which opened in 2020 with new campus buildings expected to deliver in 2024). |
Over 210,000 Retail Square Feet, Representing Over 50 New Retailers, Well Underway in National Landing
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| o | 100% leased or committed to 10 retailers at Central District Retail, the first phase of our retail repositioning in National Landing, opening in 2022. |
| o | In March 2021, commenced construction on 20 street-level retail spaces at 1900 Crystal Drive, with expected delivery in 2023. |
| o | Expect to break ground on two noteworthy retail placemaking projects encompassing 11 retail spaces in National Landing in the first quarter of 2022: Dining in the Park and Water Park, opening in 2023. |
| o | Partnered with Amazon to identify and execute leases with 14 new retailers at the under-construction Metropolitan Park, expected to open by the end of 2023. |
| o | New anchor retailers in the submarket will include Alamo Theater and an Amazon Fresh grocer, with openings planned this year. |
Establishing National Landing as the First 5G-Enabled Connected City at Scale in the Country
| ● | Entered into an innovative public-private partnership with Arlington County to activate existing dark fiber and conduit assets across National Landing, accelerating the rollout of 5G networks. |
| ● | Signed a definitive agreement with AT&T to deploy 5G ubiquitously across National Landing. AT&T is leveraging a combination of our controlled fiber, power, and real estate assets to deploy their 5G public network. |
Completed 1.7 Million Square Feet of Office Leasing Activity
| ● | 1.7 million square feet of leases (the majority of which were renewals) executed, highlighting tenants’ continued commitment to office space. |
| o | 8-year weighted average lease term and 2% cash mark-to-market in the fourth quarter. |
| o | Includes 1.3 million square feet of leasing in National Landing, where our 2021 retention rate was 74%. |
Grew Multifamily Occupancy and Rents
| ● | Increased in-service multifamily occupancy (excluding newly developed and acquired assets) by 380 basis points to 94.9%. |
| ● | Increased our portfolio asking rents by 15%. |
| o | In-place rents remain approximately 9% below asking rents, indicating significant embedded growth as we begin 2022. |
Expanded Multifamily Portfolio by 3,313 Units Through Development and Acquisitions at an Average Yield of 5.9%
| ● | Continued lease-up of 1,298 units across five newly delivered multifamily assets (West Half, 900 and 901 W Street, The Wren, and 8001 Woodmont). |
| ● | In March 2021, commenced construction at 1900 Crystal Drive, an 808-unit multifamily asset located in National Landing. |
| ● | In January 2022, commenced construction at 2000 and 2001 South Bell Street, two multifamily towers in National Landing totaling 775 units. |
| ● | In November 2021, acquired The Batley, a 432-unit multifamily asset in DC’s Union Market. |
Advanced Design and Entitlement on 11.3 million Square Feet, or 77%, of our Development Pipeline
| ● | 100% of our 5.1 million square foot Near-Term Development Pipeline is either fully entitled or has been submitted for final entitlements. |
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| ● | 82% of our 9.5 million square foot Future Development Pipeline is either fully entitled or in advanced stages of design and entitlement. |
Concentrating Portfolio in Multifamily and National Landing Office by Successfully Recycling Non-Core Office and Land Holdings
| ● | $108 million sold since the beginning of 2021 and over $800 million under firm contract today, subject to financing and customary closing conditions. |
| ● | Acquired The Batley, a 432-unit multifamily asset, for $205 million, with expected annualized stabilized NOI of approximately $8 - $8.5 million. |
Preserved our Balance Sheet Strength and Liquidity
| ● | Maintained approximately $1.6 billion of liquidity. |
| ● | Continued our non-recourse asset-level financing strategy, securing mortgage loans on two commercial assets with an aggregate principal balance of $190 million. |
| ● | In January 2022, amended our $200 million Term Loan A-1 to reduce pricing, extend the maturity date to 2025 (plus two 1-year extension options), and incorporate sustainability-focused pricing reductions. |
Leading the Market on ESG Initiatives
| ● | Achieved carbon neutrality for energy consumed across our operating portfolio. |
| ● | Received a 5-star rating in the GRESB Assessment and named Global Sector Leader for both our operating portfolio and Development Pipeline. |
| ● | Received Nareit’s 2021 Diversified Leader in the Light award in recognition of our sustained ESG efforts. |
| ● | Achieved Fitwel Viral Response Certification for all our office assets, building on our entity level certification earlier this year, and became a Fitwel Champion. |
| ● | Through the JBG SMITH-managed Washington Housing Initiative (WHI) Impact Pool, financed over 1,600 affordable workforce housing units across four jurisdictions, including 825 units in partnership with Amazon. |
| ● | Launched our inaugural Diversity & Inclusion and WHI Impact Pool reports. |
| ● | Increased the inclusivity of our Board of Trustees, which now includes four women (out of 11 Trustees), one of whom identifies as diverse. |
JBG SMITH Overview
We own and operate urban mixed-use properties concentrated in what we believe are the highest growth submarkets of the historically recession-resilient Washington, DC metro area.
Our concentration in these submarkets, our substantial portfolio of operating and development opportunities, and our market-leading platform position us to capitalize on the significant growth we anticipate in our target submarkets.
Over 50% of our holdings are in the National Landing submarket in Northern Virginia, directly across the Potomac River from Washington, DC, where Amazon’s new 5 million+ square foot headquarters and Virginia Tech’s $1 billion Innovation Campus that are under construction are located.
The Commonwealth of Virginia has incentivized Amazon to bring up to 38,000 new jobs to National Landing, which, based on data from the National Landing Business Improvement District, would increase the daytime population in the submarket from approximately 50,000 people to nearly 90,000 people in the future, representing dramatic growth of nearly 80%. Amazon announced its hybrid return-to-the-office policy in late 2021, requiring employees to
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live locally and within commuting distance of the office for at least 11 months of the year. This policy aligns well with Amazon’s aggressive hiring in the current competitive job market.
At its Seattle headquarters, approximately 20% of Amazon’s employees live within walking or biking distance to work, and Amazon provides $350 monthly stipends to employees who bike to HQ2. Using Amazon’s Seattle employee patterns and preferences as proxies for behaviors that might be expected at HQ2, 20% of employees, or up to 7,600 Amazon employees, could be expected to live within the National Landing submarket. This potential influx of demand for additional multifamily units aligns well with our plans to deliver new multifamily supply to the submarket. In addition to the 1,583 units currently under construction in National Landing (1900 Crystal Drive and 2000 and 2001 South Bell Street), our Near-Term Development Pipeline has the potential to add as many as 1,760 more new multifamily units to National Landing.
While we control most of the existing office supply and unencumbered development density in National Landing, the balance of our portfolio is concentrated in what we believe are the highest growth submarkets in the Washington, DC metro region, the majority of which are within a 20-minute commute of the growing technology ecosystem in National Landing.
We believe the strong technology sector tailwinds created by Amazon, the Virginia Tech Innovation Campus, and our National Landing digital infrastructure initiatives, including our 5G rollout and other connectivity enhancements with best-in-class partners, will drive substantial long-term NAV per share growth.
Our successful track record and well-established platform position us to maximize the value of our Development Pipeline and to access attractively priced capital through opportunistic land sales, ground leases, and/or recapitalizations with private investors.
As of February 2022, we had two multifamily developments under construction in the heart of National Landing – 1900 Crystal Drive (planned for 808 units), and 2000 and 2001 South Bell Street (planned for 775 units). Since our formation in 2017, we have successfully delivered 2.8 million square feet of mixed-use development, with estimated stabilized yields of 6.5% for multifamily assets and 7.0% for commercial assets.
Over the past year, we advanced the design and entitlement of approximately 77% of our Development Pipeline, 60% of which is in National Landing. Our 14.6 million square foot Development Pipeline, 73% of which is multifamily, includes both a 5.1 million square foot Near-Term Development Pipeline and a 9.5 million square foot Future Development Pipeline. Our Near-Term Development Pipeline comprises what we believe to be the most accretive and strategic development opportunities in our growth pipeline – those which have the potential to commence construction over the next 36 months, subject to receipt of final entitlements, completion of design, and market conditions. Within our Future Development Pipeline, we have fully entitled 3.6 million square feet and are actively advancing design and entitlement on an additional 4.2 million square feet. We believe that advancing entitlement and design of these assets is the best way to maximize optionality and value, either through internal development, land sales, ground lease structures, and/or recapitalizations with third parties. The remaining 1.7 million square feet within our Future Development pipeline primarily includes encumbered assets that we are not currently entitling.
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Our capital allocation strategy is to shift our portfolio to multifamily and concentrate our office portfolio in National Landing.
We expect our portfolio shift to majority multifamily will occur through a combination of investing in multifamily assets and opportunistically divesting non-core office and land assets. Since our formation, we have sold $1.7 billion of non-core, primarily office assets located in downtown Washington, DC.
Our capital allocation strategy is grounded in our primary goal of maximizing long-term NAV per share growth for our shareholders. This strategy entails two key elements: repositioning our portfolio to concentrate our office in National Landing; and transitioning to a majority multifamily portfolio that continues to expand in high-growth, amenity-rich DC metro submarkets through acquisitions and development. Opportunistic dispositions of income-producing office assets outside of National Landing, as well as the sale, ground lease, or joint venture of non-core land holdings, serve as an important source of NAV-priced capital to fund our strategy.
We are pleased to report that we have substantially advanced our goal to market $1 billion of non-core office and land assets in 2022. We are currently under firm contract to transact on over $800 million, subject to financing and customary closing conditions, with capitalization rates in the 5% - 6% range. These transactions include the recently announced agreement to form a joint venture with affiliates of Fortress Investment Group LLC for a 1.6 million square foot portfolio of non-core office and land holdings. Barring any significant changes in market conditions, we will continue to market non-core assets for sale and pursue accretive investment opportunities. Our asset recycling strategy has enabled us to source capital at full NAV from assets generating low cash yields and to invest in new acquisitions with higher cash yields and growth potential, including development projects with significant yield spreads and profit potential.
Finally, our capital allocation strategy demands that we seek investment opportunities with the highest potential risk-adjusted returns, which may include share repurchases. When our stock trades at a material discount to NAV, share repurchases are one of the most accretive uses of capital available to us. During the fourth quarter, we repurchased 2.4 million shares at a weighted average price per share of $28.56, totaling $69.6 million, bringing our total shares repurchased in 2021 to $157.7 million. Since the beginning of the pandemic, we have repurchased 9.1 million shares at a weighted average price per share of $28.67, totaling $262.4 million.
Financial and Operating Metrics
For the three months ended December 31, 2021, we reported Core FFO attributable to common shareholders of $40.4 million, or $0.31 per diluted share. Same Store NOI for the quarter increased 9.5% year-over-year to $78.4 million, and NOI for our operating portfolio and Adjusted EBITDA increased year-over-year by 20.9% and 14.2%. Our operating portfolio ended the quarter at 87.7% leased and 85.8% occupied. For second generation leases, the rental rate mark-to-market was 2.0%. As we have mentioned before, our mark-to-market will vary from quarter to quarter depending on the leases signed.
As of December 31, 2021, our Net Debt/Total Enterprise Value was 38.5%. Our Net Debt/Annualized Adjusted EBITDA ended the fourth quarter at 9.6x. In November 2021, we closed on the acquisition of The Batley for approximately $205 million. The Batley has been identified as our like-kind exchange candidate for the sale of Pen Place, which is expected to generate gross proceeds of $198 million upon closing in Q2 2022. Adjusting for the sale, net debt to annualized Adjusted EBITDA would have been 8.9x in Q4 2021. As we have discussed in the
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past, our leverage levels may increase during periods of active development, but we may also use some of the proceeds from our ongoing capital recycling activity to moderate these increases.
Operating Portfolio
Our office portfolio had a strong finish to the year, with 467,000 square feet leased in the fourth quarter and a weighted average lease term of eight years, bringing our 2021 total leasing volume to 1.7 million square feet –double the leasing volume in 2020 and 77% of the leasing volume in 2019. Over 50% of the leasing success in the fourth quarter can be attributed to our leasing team securing several early renewals with our mission critical GSA tenants, highlighting the resiliency of this tenant base and their commitment to office space. Despite this robust leasing activity, occupancy only increased 30 basis points quarter-over-quarter, primarily as a result of pre-pandemic decision making. As we mentioned in our prior letter, we believe the pandemic has delayed our ability to backfill some known 2021 and 2022 office vacates related to tenants’ pre-pandemic leasing decisions. Looking ahead to 2022, we feel confident that we will renew at or above our historical retention rates on the 912,000 square feet of leases rolling. While this is positive news, new leasing has been slow to recover over the past 18 months and will likely continue to lag due to delayed return-to-the-office plans and decision-making related to future office utilization. We expect this lag to continue to impact our occupancy levels through 2022.
Market-Wide Trends (based on JLL Q4 2021 reporting)
While the DC metro region saw continued negative net absorption through the fourth quarter, the rate of losses slowed. Negative net absorption of 395,000 square feet represents the lowest rate of losses for any quarter in 2021 and suggests that the market may have found its bottom. That same trajectory was apparent in the results for Northern Virginia in particular, where the fourth quarter was the third consecutive quarter of declining losses. While overall absorption in Northern Virginia remained negative, National Landing exhibited modest positive net absorption of 19,000 square feet in the fourth quarter. Physical occupancy data from Kastle Systems as of February 1st show that our market continues to see more companies returning to in-person work (29.9%) than other gateway markets such as New York (25.8%) and San Francisco (21.5%), although we have yet to see any significant change in occupancy associated with a widespread return-to-office.
Our multifamily portfolio performance continues to improve, despite seasonality typical in the fourth quarter. Residents continue to return to urban environments as offices reinstate in-person mandates and cities repopulate, resulting in strong leasing metrics as we capitalize on returning demand. Our portfolio ended the quarter 91.8% occupied, slightly down from the prior quarter, and 93.6% leased. Asking rents in our portfolio ended the quarter 2% below pre-pandemic (March 2020) levels, after declining 15% from March 2020 to December 2020. With demand remaining strong and our portfolio in-place rents still approximately 9% below asking rents, our residential portfolio has significant embedded growth. Pandemic-related concessions continue to burn-off, though some remain based on submarket fundamentals for certain assets.
Market-Wide Trends (based on CoStar and Apartment List data)
Our multifamily markets continue to recover as both occupancy and asking rents remain above pre-pandemic levels. Data from Apartment List show that occupancy across the DC metro region remains strong at 95.5% and in-line with that of other gateway markets including Boston, New York, and San Francisco, which average 96.1%. Meanwhile, asking rents in our market have increased 4.5% as compared to Q1 2020, outperforming other gateway markets (3.6%), signaling a strong ability to hold onto rebounding rents across the market. Seeing the strong recovery in multifamily asking rents and occupancy, developers in our market continued to move forward on
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development projects before year-end. Data from CoStar and Urban Turf indicates that a total of 6,700 units commenced construction in 2021 in our tracked submarkets. This represents a modest increase from the 6,100 reported for 2020 and a 28% decrease from the 9,300 reported for 2019. Average expected annual deliveries from 2021 through 2023 in the same submarkets now total 7,100 units. For comparison, there were more than 9,000 units delivered annually from 2010 through 2019, indicating that we expect less competition from new supply than we saw in the previous cycle.
Retail Trends
Despite the surge in COVID-19 cases in the latter half of the quarter, our retail leasing plans remained unaltered, and interest in our assets persisted. Ahead of an anticipated return of consumer demand, our team diligently pursued tenant leads yielding strong results – we executed 11 leases in the fourth quarter totaling just over 26,000 square feet.
In National Landing specifically, we executed eight leases over the course of 2021. Interest in this submarket remains incredibly high, which we attribute almost entirely to our successful anchor leasing, planned multifamily deliveries, and overall successful placemaking track record. We are advancing the most critical milestones of our overall Crystal Drive retail repositioning, including the upcoming groundbreakings on two notable placemaking projects – Dining in the Park and Water Park; and, as the retail leasing partner for Amazon’s under-construction Metropolitan Park, leasing progress is coming to fruition well in advance of the anticipated 2023 completion date. In addition to the new multifamily supply under construction, these projects are crucial to our submarket repositioning, serving as the all-important main street in our overall placemaking strategy. JBG SMITH’s and Amazon’s other planned retail deliveries in the next few years will almost triple the number of street-level retailers in National Landing.
Environmental, Social, and Governance
In November, we received Nareit’s 2021 Diversified Leader in the Light award in recognition of our sustained ESG efforts. The 2021 Leader in the Light Awards are based on the results of the GRESB Annual Survey, as well as scored responses to supplemental questions by an interdisciplinary panel of judges. The award was presented to REITs in eight property sectors, and JBG SMITH was honored with the highest achievement across all Diversified companies.
In December, the WHI Impact Pool provided financing to the Washington Housing Conservancy for its first acquisition in the District of Columbia, Huntwood Courts, a 214-unit multifamily asset located in the Deanwood neighborhood of Northeast, Washington, DC. With the addition of this asset, the WHI Impact Pool has now financed over 1,600 affordable workforce housing units across four jurisdictions, including 825 units with Amazon, all of which are managed by JBG SMITH.
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Despite the roller coaster ride of the pandemic throughout 2021, our team did not miss a beat, and we continued to advance our strategic objectives on all fronts. Looking forward, we are incredibly energized by the opportunities before us. When our near-term capital recycling objectives are complete, we will be a majority multifamily company with an office portfolio concentrated in National Landing – in our view, the best-located and fastest growing urban/suburban submarket in the Washington Metro Area. Our efforts there are delivering a dramatically upgraded amenity base, much needed new housing stock to balance daytime and evening populations, and the first of its kind digital infrastructure at scale anywhere in the country. Amazon’s meteoric growth in hiring is expected to surge in the coming years, and Virginia Tech’s Innovation Campus has already exceeded timing and funding expectations.
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Coupled with the existing anchor presence of the Pentagon and the Department of Defense, our holdings in National Landing sit amidst a powerhouse combination of current and future demand drivers. To serve the growing needs of this innovation cluster, state and local governments have fully committed $4.7 billion to critical transportation projects, the first of which is planned to commence in 2023. Thanks to our capital recycling success over the past four years, we are concentrated where we see the greatest levels of future growth and are well-positioned to fund it with ample balance sheet and continued funding capacity.
Our team’s track record of skilled capital allocation and development-driven value creation positions us well to capitalize on the incredible opportunities before us. As we emerge (knock on wood) from the pandemic, we are excited to have both the mass and the velocity to build on the momentum of everything we have started during this time.
I remain deeply thankful to our team for their grit and resilience during the past few years and to each of our fellow shareholders for your continued trust and confidence.
Sincerely,
W. Matthew Kelly
Chief Executive Officer
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Section Two – Earnings Release
FOR IMMEDIATE RELEASE |
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Earnings Release
CONTACT
Barbat Rodgers
Senior Vice President, Investor Relations
(240) 333-3805
brodgers@jbgsmith.com
JBG SMITH ANNOUNCES FOURTH QUARTER AND FULL YEAR 2021 RESULTS
Bethesda, MD (February 22, 2022) - JBG SMITH (NYSE: JBGS), a leading owner and developer of high-quality, mixed-use properties in the Washington, DC market, today filed its Form 10-K for the year ended December 31, 2021 and reported its financial results. Additional information regarding our results of operations, properties and tenants can be found in our Fourth Quarter 2021 Investor Package, which is posted in the Investor Relations section of our website at www.jbgsmith.com. We encourage investors to consider the information presented here with the information in that document.
Fourth Quarter 2021 Highlights
| ● | For the three months ended December 31, 2021, net loss attributable to common shareholders of $0.45 per diluted share, Funds From Operations ("FFO") attributable to common shareholders of $0.33 per diluted share and Core Funds From Operations ("Core FFO") attributable to common shareholders of $0.31 per diluted share. |
| ● | For the year ended December 31, 2021, net loss attributable to common shareholders of $0.63 per diluted share, FFO attributable to common shareholders of $1.22 per diluted share and Core FFO attributable to common shareholders of $1.36 per diluted share. |
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FOURTH QUARTER AND FULL YEAR COMPARISON | |||||||||||||||||||||
in millions, except per share amounts | | Three Months Ended | | Year Ended | |||||||||||||||||
| | | December 31, 2021 | | December 31, 2020 | | December 31, 2021 | | December 31, 2020 | ||||||||||||
| | | Amount | Per Diluted Share | | Amount | Per Diluted Share | | Amount | Per Diluted Share | | Amount | Per Diluted Share | ||||||||
| Net loss (1) | | $ | (56.4) | $ | (0.45) | | $ | (45.7) | $ | (0.36) | | $ | (79.3) | $ | (0.63) | | $ | (62.3) | $ | (0.49) |
| FFO | | $ | 43.1 | $ | 0.33 | | $ | 23.1 | $ | 0.17 | | $ | 159.4 | $ | 1.22 | | $ | 115.9 | $ | 0.87 |
| Core FFO | | $ | 40.4 | $ | 0.31 | | $ | 32.7 | $ | 0.25 | | $ | 177.5 | $ | 1.36 | | $ | 159.1 | $ | 1.19 |
Note: All the above are attributable to common shareholders.
| (1) | Includes impairment losses recorded in connection with the preparation and review of our 2021 annual consolidated financial statements totaling $25.1 million related to non-core assets, which were written down to their estimated fair value, and an impairment loss recorded by one of our unconsolidated real estate ventures, of which our proportionate share was $23.9 million. Excluding these impairment losses and related tax effect, our net loss would have been $13.9 million and $36.8 million for the three months and year ended December 31, 2021. |
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| ● | Annualized Net Operating Income ("NOI") for the three months ended December 31, 2021 was $345.8 million, compared to $324.0 million for the three months ended September 30, 2021, at our share. |
| ● | Same Store Net Operating Income ("SSNOI") at our share increased 9.5% to $78.4 million for the three months ended December 31, 2021 compared to the three months ended December 31, 2020. |
| o | The increase in SSNOI for the three months ended December 31, 2021 was substantially attributable to (i) higher occupancy and rents and lower concessions in our multifamily portfolio and (ii) a decrease in uncollectable operating lease receivables and rent deferrals across our portfolio. |
| ● | SSNOI at our share decreased 0.9% year-over-year to $299.7 million for the year ended December 31, 2021. |
| o | We believe the decrease in SSNOI for the year ended December 31, 2021 was substantially attributable to the COVID-19 pandemic, which commenced at the end of the first quarter of 2020, including (i) higher concessions and lower rents in our multifamily portfolio and (ii) lower occupancy and a decline in parking revenue in our commercial portfolio. These declines were partially offset by a decrease in uncollectable operating lease receivables and rent deferrals. |
| ● | NOI for our operating portfolio increased 20.9% year-over-year to $86.8 million, and Adjusted EBITDA increased 14.2% year-over-year to $66.2 million for the three months ended December 31, 2021. |
Operating Portfolio
| ● | The operating commercial portfolio was 84.9% leased and 82.9% occupied as of December 31, 2021, compared to 84.9% and 82.6% as of September 30, 2021, at our share. |
| ● | The operating multifamily portfolio was 93.6% leased and 91.8% occupied as of December 31, 2021, compared to 94.0% and 92.4% as of September 30, 2021, at our share. Our multifamily portfolio in-service assets were 95.4% leased and 93.4% occupied as of December 31, 2021, compared to 96.3% and 94.5% as of September 30, 2021, at our share. |
| ● | Executed approximately 467,000 square feet of office leases at our share during the three months ended December 31, 2021, comprising approximately 117,000 square feet of first-generation leases and approximately 350,000 square feet of second-generation leases, which generated a 0.1% rental rate increase on a GAAP basis and a 2.0% rental rate increase on a cash basis. |
| ● | Executed approximately 1.7 million square feet of office leases at our share during the year ended December 31, 2021, comprising approximately 291,000 square feet of first-generation leases and approximately 1.4 million square feet of second-generation leases, which generated a 2.8% rental rate increase on a GAAP basis and a 0.6% rental rate increase on a cash basis. |
Development Portfolio
Under-Construction
| ● | As of December 31, 2021, we had one multifamily asset under construction consisting of 808 units at our share. |
| ● | In January 2022, we commenced construction on 2000 South Bell Street and 2001 South Bell Street ("2000/2001 South Bell Street") in National Landing, a 775-unit multifamily asset. The land underlying 2000/2001 South Bell Street was leased to a ground lessee which engaged us to be the development manager for the construction, and separately, we are the lessee in a master lease of the asset. We have an option to acquire the asset until a specified period after completion. 2000/2001 South Bell Street was in the near-term development pipeline as of December 31, 2021. |
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Near-Term Development Pipeline
| ● | As of December 31, 2021, we had 11 near-term development pipeline assets consisting of 5.0 million square feet of estimated potential development density at our share. |
Future Development Pipeline
| ● | As of December 31, 2021, we had 25 future development pipeline assets consisting of 11.6 million square feet of estimated potential development density at our share, including the 2.1 million square feet held for sale to Amazon.com, Inc. ("Amazon"). |
Third-Party Asset Management and Real Estate Services Business
| ● | For the three months ended December 31, 2021, revenue from third-party real estate services, including reimbursements, was $23.3 million. Excluding reimbursements and service revenue from our interests in consolidated and unconsolidated real estate ventures, revenue from our third-party asset management and real estate services business was $12.0 million, primarily driven by $6.2 million of property and asset management fees, $2.8 million of development fees, $1.7 million of leasing fees and $1.2 million of other service revenue. |
Balance Sheet
| ● | As of December 31, 2021, our total enterprise value was approximately $6.6 billion, comprising 142.3 million common shares and units valued at $4.1 billion, and debt (net of premium / (discount) and deferred financing costs) at our share of $2.8 billion, less cash and cash equivalents at our share of $282.1 million. |
| ● | As of December 31, 2021, we had $264.4 million of cash and cash equivalents ($282.1 million of cash and cash equivalents at our share), and $699.1 million of capacity under our credit facility. |
| ● | Net debt to annualized Adjusted EBITDA at our share for the three months ended December 31, 2021 was 9.6x and our net debt / total enterprise value was 38.5% as of December 31, 2021. Net debt to annualized Adjusted EBITDA would have been 8.9x in Q4 2021, after adjusting for $198.0 million of gross proceeds from the sale of Pen Place that is expected to close in Q2 2022. We intend to use the proceeds from the sale in a like-kind exchange for The Batley, which was acquired in November 2021. In December 2021, we finalized the agreement for the sale of Pen Place for $198.0 million, which represents a $48.1 million increase over the previously estimated contract value. |
Investing and Financing Activities
| ● | We acquired The Batley, a 432-unit multifamily asset in the Union Market submarket of Washington, DC, for a purchase price of $205.3 million. |
| ● | We drew $300.0 million under our revolving credit facility. |
| ● | We entered into a mortgage loan with a principal balance of $105.0 million, collateralized by 1215 S. Clark Street. The mortgage loan has a five-year term and an interest rate of LIBOR plus 1.25% per annum. |
| ● | We repurchased and retired 2.4 million common shares for $69.6 million, a weighted average purchase price per share of $28.56. |
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Subsequent to December 31, 2021:
| ● | On February 11, 2022, we entered into a definitive agreement with affiliates of Fortress Investment Group LLC ("Fortress") to form an unconsolidated real estate venture. The real estate venture will acquire a 1.6 million square foot portfolio of four commercial assets valued at $580 million from us. The assets include 7200 Wisconsin Avenue, 1730 M Street, RTC-West and Courthouse Plaza 1 and 2. The transaction is expected to close in the first half of 2022, subject to financing and customary closing conditions. |
| ● | Effective as of January 14, 2022, the Tranche A-1 Term Loan was amended to extend the maturity date to January 2025 with two one-year extension options, and to amend the leverage-based pricing grid, reducing the interest rate 15 basis points to Secured Overnight Financing Rate (including a credit spread adjustment) plus 1.05%, based upon our current leverage level. |
Dividends
| ● | On December 10, 2021, our Board of Trustees declared a quarterly dividend of $0.225 per common share, which was paid on January 14, 2022 to shareholders of record as of December 30, 2021. |
About JBG SMITH
JBG SMITH owns, operates, invests in and develops a dynamic portfolio of mixed-use properties in the high growth and high barrier-to-entry submarkets in and around Washington, DC. Through an intense focus on placemaking, JBG SMITH cultivates vibrant, amenity-rich, walkable neighborhoods throughout the Washington, DC metropolitan area. Over half of JBG SMITH’s holdings are in the National Landing submarket in Northern Virginia, where it serves as the developer for Amazon’s new headquarters, and where Virginia Tech’s $1 billion Innovation Campus is under construction. JBG SMITH's portfolio currently comprises 17.4 million square feet of high-growth office, multifamily and retail assets at share, 98% of which are metro-served. It also maintains a development pipeline encompassing 16.6 million square feet of mixed-use development opportunities. JBG SMITH is committed to the operation and development of green, smart, and healthy buildings and plans to maintain carbon neutral operations annually. For more information on JBG SMITH please visit www.jbgsmith.com.
Forward-Looking Statements
Certain statements contained herein may 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 performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Consequently, the future results of JBG SMITH Properties ("JBG SMITH", the "Company", "we", "us", "our" or similar terms) may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "approximate", "hypothetical", "potential", "believes", "expects", "anticipates", "estimates", "intends", "plans", "would", "may" or similar expressions in this earnings release. One of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the adverse effect of the current pandemic of the novel coronavirus, or COVID-19, and the ensuing economic turmoil on the Company, our financial condition, results of operations, cash flows, performance, our tenants, the real estate market, and the global economy and financial markets. The extent to which COVID-19 continues to impact us and our tenants depends on future developments, many of which are highly uncertain and cannot be predicted with confidence.
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These developments include: the continued severity, duration, transmission rate and geographic spread of COVID-19 in the United States, the speed of the vaccine distribution, the effectiveness and willingness of people to take COVID-19 vaccines, the duration of associated immunity and vaccine efficacy against variants of COVID-19, the extent and effectiveness of other containment measures taken, and the response of the overall economy, the financial markets and the population (including the potential effects of inflation), particularly in areas in which we operate and whether the residential market in the Washington, DC area and any of our properties will be materially impacted by the various moratoriums on residential evictions, among others. Moreover, investors are cautioned to interpret many of the risks identified under the section titled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. We also note the following forward-looking statements: the impact of COVID-19 and the ensuing economic turmoil on our Company, NOI, SSNOI, net asset value, share price, occupancy rates, revenue from our multifamily and commercial portfolios, operating costs, deferrals of rent, uncollectable operating lease receivables, parking revenue, and burn-off of rent abatement; the impact of disruptions to the credit and capital markets on our ability to access capital, including refinancing maturing debt; changes to the amount and manner in which tenants use space; whether we incur additional costs or make additional concessions or offer other incentives to existing or prospective tenants to reconfigure space; whether the Washington, DC area will be more resilient than other parts of the country in any recession resulting from COVID-19; whether we will recognize currently estimated unrecognized development fee revenue on the anticipated timing or at all; our annual dividend per share and dividend yield; whether in the case of our under-construction and near-term development pipeline assets, estimated square feet, estimated number of units and in the case of our future development pipeline assets, estimated potential development density are accurate; expected key Amazon transaction terms and timeframes for closing any Amazon transactions not yet closed; planned infrastructure and educational improvements related to Amazon's additional headquarters and the Virginia Tech Innovation Campus; the economic impact, job growth, expansion of public transportation and related demand for multifamily and commercial properties of Amazon's additional headquarters on the DC area and National Landing and the speed with which such impact occurs and Amazon’s plans for accelerated hiring and in-person work requirements; the impact of our role as the developer, property manager and retail leasing agent in connection with Amazon's new headquarters; our development plans related to Amazon's additional headquarters; our ability to satisfy environmental, social or governance standards set by various constituencies; whether we can access agency debt secured by our currently unencumbered multifamily assets timely, on reasonable terms or at all; whether our contemplated like-kind exchange of the Batley for the sale of Pen Place will occur; whether our sale of Pen Place will generate the amount of proceeds anticipated; whether the transactions contemplated by our agreement with affiliates of Fortress Investment Group LLC will occur on the anticipated timing or at all; and whether the allocation of capital to our share repurchase plan has any impact on our share price.
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. These factors include, among others: adverse economic conditions in the Washington, DC metropolitan area, including in relation to COVID-19, the timing of and costs associated with development and property improvements, financing commitments, and general competitive factors. For further discussion of factors that could materially affect the outcome of our forward-looking statements and other risks and uncertainties, see "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Cautionary Statement Concerning Forward-Looking Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 and other periodic reports the Company files with the
6
Securities and Exchange Commission. For these 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. 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 hereof.
Pro Rata Information
We present certain financial information and metrics in this release "at JBG SMITH Share," which refers to our ownership percentage of consolidated and unconsolidated assets in real estate ventures (collectively, "real estate ventures") as applied to these financial measures and metrics. Financial information "at JBG SMITH Share" is calculated on an asset-by-asset basis by applying our percentage economic interest to each applicable line item of that asset's financial information. "At JBG SMITH Share" information, which we also refer to as being "at share," "our pro rata share" or "our share," is not, and is not intended to be, a presentation in accordance with GAAP. Given that a substantial portion of our assets are held through real estate ventures, we believe this form of presentation, which presents our economic interests in the partially owned entities, provides investors valuable information regarding a significant component of our portfolio, its composition, performance and capitalization.
We do not control the unconsolidated real estate ventures and do not have a legal claim to our co-venturers' share of assets, liabilities, revenue and expenses. The operating agreements of the unconsolidated real estate ventures generally allow each co-venturer to receive cash distributions to the extent there is available cash from operations. The amount of cash each investor receives is based upon specific provisions of each operating agreement and varies depending on certain factors including the amount of capital contributed by each investor and whether any investors are entitled to preferential distributions.
With respect to any such third-party arrangement, we would not be in a position to exercise sole decision-making authority regarding the property, real estate venture or other entity, and may, under certain circumstances, be exposed to economic risks not present were a third-party not involved. We and our respective co-venturers may each have the right to trigger a buy-sell or forced sale arrangement, which could cause us to sell our interest, or acquire our co-venturers' interests, or to sell the underlying asset, either on unfavorable terms or at a time when we otherwise would not have initiated such a transaction. Our real estate ventures may be subject to debt, and the repayment or refinancing of such debt may require equity capital calls. To the extent our co-venturers do not meet their obligations to us or our real estate ventures or they act inconsistent with the interests of the real estate venture, we may be adversely affected. Because of these limitations, the non-GAAP "at JBG SMITH Share" financial information should not be considered in isolation or as a substitute for our financial statements as reported under GAAP.
Non-GAAP Financial Measures
This release includes non-GAAP financial measures. For these measures, we have provided an explanation of how these non-GAAP measures are calculated and why JBG SMITH's management believes that the presentation of these measures provides useful information to investors regarding JBG SMITH's financial condition and results of operations. Reconciliations of certain non-GAAP measures to the most directly comparable GAAP financial measure are included in this earnings release. Our presentation of non-GAAP financial measures may not be
7
comparable to similar non-GAAP measures used by other companies. In addition to "at share" financial information, the following non-GAAP measures are included in this release:
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), EBITDA for Real Estate ("EBITDAre") and "Adjusted EBITDA" are non-GAAP financial measures. EBITDA and EBITDAre are used by management as supplemental operating performance measures, which we believe help investors and lenders meaningfully evaluate and compare our operating performance from period-to-period by removing from our operating results the impact of our capital structure (primarily interest charges from our outstanding debt and the impact of our interest rate swaps) and certain non-cash expenses (primarily depreciation and amortization on our assets). EBITDAre is computed in accordance with the definition established by the National Association of Real Estate Investment Trusts ("Nareit"). Nareit defines EBITDAre as GAAP net income (loss) adjusted to exclude interest expense, income taxes, depreciation and amortization expenses, gains and losses on sales of real estate 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 of unconsolidated real estate ventures. These supplemental measures may help investors and lenders understand our ability to incur and service debt and to make capital expenditures. EBITDA and EBITDAre are not substitutes for net income (loss) (computed in accordance with GAAP) and may not be comparable to similarly titled measures used by other companies.
Adjusted EBITDA represents EBITDAre adjusted for items we believe are not representative of ongoing operating results, such as Transaction and Other Costs, impairment write-downs of right-of-use assets associated with leases in which we are a lessee, gain (loss) on the extinguishment of debt, earnings (losses) and distributions in excess of our investment in unconsolidated real estate ventures, lease liability adjustments, income from investment funds, business interruption insurance proceeds and share-based compensation expense related to the Formation Transaction and special equity awards. We believe that adjusting such items not considered part of our comparable operations, provides a meaningful measure to evaluate and compare our performance from period-to-period.
Because EBITDA, EBITDAre and Adjusted EBITDA have limitations as analytical tools, we use EBITDA, EBITDAre and Adjusted EBITDA to supplement GAAP financial measures. Additionally, we believe that users of these measures should consider EBITDA, EBITDAre and Adjusted EBITDA in conjunction with net income (loss) and other GAAP measures in understanding our operating results.
Funds from Operations ("FFO"), "Core FFO" and Funds Available for Distribution ("FAD") are non-GAAP financial measures. FFO is computed in accordance with the definition established by 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 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.
Core FFO represents FFO adjusted to exclude items (net of tax) which we believe are not representative of ongoing operating results, such as Transaction and Other Costs, impairment write-downs of right-of-use assets associated with leases in which we are a lessee, gains (or losses) on extinguishment of debt, earnings (losses) and distributions in excess of our investment in unconsolidated real estate ventures, share-based compensation expense related to the Formation Transaction and special equity awards, lease liability adjustments, income from
8
investment funds, business interruption insurance proceeds, amortization of the management contracts intangible and the mark-to-market of derivative instruments including our share of such adjustments for unconsolidated real estate ventures.
FAD represents Core FFO less recurring tenant improvements, leasing commissions and other capital expenditures, net deferred rent activity, third-party lease liability assumption payments, recurring share-based compensation expense, accretion of acquired below-market leases, net of amortization of acquired above-market leases, amortization of debt issuance costs and other non-cash income and charges, including our share of such adjustments for unconsolidated real estate ventures. FAD is presented solely as a supplemental disclosure that management believes provides useful information as it relates to our ability to fund dividends.
We believe FFO, Core FFO and FAD are meaningful non-GAAP financial measures useful in comparing our levered operating performance from period-to-period and as compared to similar real estate companies because these non-GAAP measures exclude real estate depreciation and amortization expense and other non-comparable income and expenses, which implicitly assumes that the value of real estate diminishes predictably over time rather than fluctuating based on market conditions. FFO, Core FFO and FAD do not represent cash generated from operating activities and are 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, Core FFO and FAD may not be comparable to similarly titled measures used by other companies.
"Net Debt" is a non-GAAP financial measurement. Net Debt represents our total consolidated and unconsolidated indebtedness less cash and cash equivalents at our share. Net Debt is an important component in the calculations of Net Debt to Annualized Adjusted EBITDA and Net Debt / total enterprise value. We believe that Net Debt is a meaningful non-GAAP financial measure useful to investors because we review Net Debt as part of the management of our overall financial flexibility, capital structure and leverage. We may utilize a considerable portion of our cash and cash equivalents at any given time for purposes other than debt reduction. In addition, cash and cash equivalents at our share may not be solely controlled by us. The deduction of cash and cash equivalents at our share from consolidated and unconsolidated indebtedness in the calculation of Net Debt, therefore, should not be understood to mean that it is available exclusively for debt reduction at any given time.
Net Operating Income ("NOI") and "Annualized NOI" are non-GAAP financial measures management uses to assess a segment's performance. The most directly comparable GAAP measure is net income (loss) attributable to common shareholders. We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only property related revenue (which includes base rent, tenant reimbursements and other operating revenue, net of Free Rent and payments associated with assumed lease liabilities) less operating expenses and ground rent for operating leases, if applicable. NOI also excludes deferred rent, related party management fees, interest expense, and certain other non-cash adjustments, including the accretion of acquired below-market leases and the amortization of acquired above-market leases and below-market ground lease intangibles. Management uses NOI as a supplemental performance measure of our assets and believes it provides useful information to investors because it reflects only those revenue and expense items that are incurred at the asset level, excluding non-cash items. In addition, NOI is considered by many in the real estate industry to be a useful starting point for determining the value of a real estate asset or group of assets. However, because NOI excludes depreciation and amortization and
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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 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. Annualized NOI, for all assets except Crystal City Marriott, represents NOI for the three months ended December 31, 2021 multiplied by four. Due to seasonality in the hospitality business, Annualized NOI for Crystal City Marriott represents the trailing 12-month NOI as of December 31, 2021. Management believes Annualized NOI provides useful information in understanding our financial performance over a 12-month period, however, investors and other users are cautioned against attributing undue certainty to our calculation of Annualized NOI. Actual NOI for any 12-month period will depend on a number of factors beyond our ability to control or predict, including general capital markets and economic conditions, any bankruptcy, insolvency, default or other failure to pay rent by one or more of our tenants and the destruction of one or more of our assets due to terrorist attack, natural disaster or other casualty, among others. We do not undertake any obligation to update our calculation to reflect events or circumstances occurring after the date of this earnings release. There can be no assurance that the Annualized NOI shown will reflect our actual results of operations over any 12-month period.
"Non-Same Store" refers to all operating assets excluded from the same store pool.
"Same Store" refers to the pool of assets that were in-service for the entirety of both periods being compared, which excludes assets for which significant redevelopment, renovation, or repositioning occurred during either of the periods being compared.
Definitions
“First-generation” is a lease on space that had been vacant for at least nine months or a lease on newly delivered space.
"Formation Transaction" refers collectively to the spin-off on July 17, 2017 of substantially all of the assets and liabilities of Vornado Realty Trust's Washington, DC segment, which operated as Vornado / Charles E. Smith, and the acquisition of the management business and certain assets and liabilities of The JBG Companies.
"Free Rent" means the amount of base rent and tenant reimbursements that are abated according to the applicable lease agreement(s).
"Future Development Pipeline" refers to assets that are development opportunities on which we do not intend to commence construction within the next three years where we (i) own land or control the land through a ground lease or (ii) are under a long-term conditional contract to purchase, or enter into, a leasehold interest with respect to land.
"GAAP" refers to accounting principles generally accepted in the United States of America.
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"In-Service" refers to commercial or multifamily assets that are at or above 90% leased or have been operating and collecting rent for more than 12 months as of December 31, 2021.
"Near-Term Development Pipeline" refers to select assets that have the potential to commence construction over the next three years, subject to receipt of full entitlements, completion of design and market conditions.
"Second-Generation" is a lease on space that had been vacant for less than nine months.
"Transaction and Other Costs" include demolition costs, integration and severance costs, pursuit costs related to other completed, potential and pursued transactions, as well as other expenses.
"Under-Construction" refers to assets that were under construction during the three months ended December 31, 2021.
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CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| | | | | | | | |
| in thousands | | December 31, 2021 | | December 31, 2020 |
| ||
| | | | | | | |
|
| ASSETS | | | | | | |
|
| Real estate, at cost: |
| |
|
| |
| |
| Land and improvements | | $ | 1,378,218 | | $ | 1,391,472 | |
| Buildings and improvements | |
| 4,513,606 | |
| 4,341,103 | |
| Construction in progress, including land | |
| 344,652 | |
| 268,056 | |
| | |
| 6,236,476 | |
| 6,000,631 | |
| Less: accumulated depreciation | |
| (1,368,003) | |
| (1,232,690) | |
| Real estate, net | |
| 4,868,473 | |
| 4,767,941 | |
| Cash and cash equivalents | |
| 264,356 | |
| 225,600 | |
| Restricted cash | |
| 37,739 | |
| 37,736 | |
| Tenant and other receivables | |
| 44,496 | |
| 55,903 | |
| Deferred rent receivable | |
| 192,265 | |
| 170,547 | |
| Investments in unconsolidated real estate ventures | |
| 462,885 | |
| 461,369 | |
| Other assets, net | |
| 442,116 | |
| 286,575 | |
| Assets held for sale | |
| 73,876 | |
| 73,876 | |
| TOTAL ASSETS | | $ | 6,386,206 | | $ | 6,079,547 | |
| | | | | | | | |
| LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | |
|
| |
|
| |
| Liabilities: | |
|
| |
|
| |
| Mortgages payable, net | | $ | 1,777,699 | | $ | 1,593,738 | |
| Revolving credit facility | |
| 300,000 | |
| — | |
| Unsecured term loans, net | |
| 398,664 | |
| 397,979 | |
| Accounts payable and accrued expenses | |
| 106,136 | |
| 103,102 | |
| Other liabilities, net | |
| 342,565 | |
| 247,774 | |
| Total liabilities | |
| 2,925,064 | |
| 2,342,593 | |
| Commitments and contingencies | |
|
| |
|
| |
| Redeemable noncontrolling interests | |
| 522,725 | |
| 530,748 | |
| Total equity | |
| 2,938,417 | |
| 3,206,206 | |
| TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | | $ | 6,386,206 | | $ | 6,079,547 | |
Note: For complete financial statements, please refer to our Annual Report on Form 10-K for the year ended December 31, 2021.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| | | | | | | | | | | | |
in thousands, except per share data | | Three Months Ended December 31, | | Year Ended December 31, | ||||||||
| | 2021 | | 2020 | | 2021 | | 2020 | ||||
REVENUE | | | | | | | | | | | | |
Property rental |
| $ | 128,626 |
| $ | 104,439 | | $ | 499,586 |
| $ | 458,958 |
Third-party real estate services, including reimbursements | |
| 23,309 | |
| 30,069 | |
| 114,003 | |
| 113,939 |
Other revenue | |
| 5,472 | |
| 14,121 | |
| 20,773 | |
| 29,826 |
Total revenue | |
| 157,407 | |
| 148,629 | |
| 634,362 | |
| 602,723 |
EXPENSES | |
|
| |
|
| |
|
| |
|
|
Depreciation and amortization | |
| 58,173 | |
| 64,170 | |
| 236,303 | |
| 221,756 |
Property operating | |
| 40,709 | |
| 39,758 | |
| 150,638 | |
| 145,625 |
Real estate taxes | |
| 15,696 | |
| 17,536 | |
| 70,823 | |
| 70,958 |
General and administrative: | |
|
| |
|
| |
| | |
|
|
Corporate and other | |
| 15,344 | |
| 9,156 | |
| 53,819 | |
| 46,634 |
Third-party real estate services | |
| 27,124 | |
| 28,569 | |
| 107,159 | |
| 114,829 |
Share-based compensation related to Formation Transaction and special equity awards | |
| 3,459 | |
| 6,246 | |
| 16,325 | |
| 31,678 |
Transaction and other costs | |
| 1,518 | |
| 1,144 | |
| 10,429 | |
| 8,670 |
Total expenses | |
| 162,023 | |
| 166,579 | |
| 645,496 | |
| 640,150 |
OTHER INCOME (EXPENSE) | |
|
| |
|
| |
|
| |
|
|
Loss from unconsolidated real estate ventures, net | |
| (25,583) | |
| (3,194) | |
| (2,070) | |
| (20,336) |
Interest and other income (loss), net | |
| 8,672 | |
| (1,646) | |
| 8,835 | |
| (625) |
Interest expense | |
| (17,649) | |
| (17,661) | |
| (67,961) | |
| (62,321) |
Gain on sale of real estate | |
| — | |
| — | |
| 11,290 | |
| 59,477 |
Loss on extinguishment of debt | |
| — | |
| (29) | |
| — | |
| (62) |
Impairment loss | | | (25,144) | | | (10,232) | | | (25,144) | | | (10,232) |
Total other income (expense) | |
| (59,704) | |
| (32,762) | |
| (75,050) | |
| (34,099) |
LOSS BEFORE INCOME TAX (EXPENSE) BENEFIT | |
| (64,320) | |
| (50,712) | |
| (86,184) | |
| (71,526) |
Income tax (expense) benefit | |
| 986 | |
| 544 | |
| (3,541) | |
| 4,265 |
NET LOSS | |
| (63,334) | |
| (50,168) | |
| (89,725) | |
| (67,261) |
Net loss attributable to redeemable noncontrolling interests | |
| 6,256 | |
| 4,513 | |
| 8,728 | |
| 4,958 |
Net loss attributable to noncontrolling interests | | | 632 | |
| — | | | 1,740 | | | — |
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | | $ | (56,446) | | $ | (45,655) | | $ | (79,257) | | $ | (62,303) |
LOSS PER COMMON SHARE - BASIC AND DILUTED | | $ | (0.45) | | $ | (0.36) | | $ | (0.63) | | $ | (0.49) |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED | |
| 129,009 | |
| 132,042 | |
| 130,839 | |
| 133,451 |
Note: For complete financial statements, please refer to our Annual Report on Form 10-K for the year ended December 31, 2021.
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EBITDA, EBITDAre AND ADJUSTED EBITDA RECONCILIATIONS (NON-GAAP)
(Unaudited)
| | | | | | | | | | | | | | |
| dollars in thousands |
| Three Months Ended December 31, | | Year Ended December 31, |
| ||||||||
| | | 2021 | | 2020 | | 2021 | | 2020 |
| ||||
| | | | | | | | | | | | | |
|
| EBITDA, EBITDAre and Adjusted EBITDA |
| | | | | | | |
| | |
| |
| Net loss | | $ | (63,334) | | $ | (50,168) | | $ | (89,725) | | $ | (67,261) | |
| Depreciation and amortization expense | | | 58,173 | | | 64,170 | | | 236,303 | | | 221,756 | |
| Interest expense | | | 17,649 | | | 17,661 | | | 67,961 | | | 62,321 | |
| Income tax expense (benefit) | | | (986) | | | (544) | | | 3,541 | | | (4,265) | |
| Unconsolidated real estate ventures allocated share of above adjustments | | | 9,696 | | | 10,072 | | | 40,588 | | | 41,588 | |
| EBITDA attributable to noncontrolling interests | | | 546 | | | (2) | | | 1,522 | | | (9) | |
| EBITDA | | $ | 21,744 | | $ | 41,189 | | $ | 260,190 | | $ | 254,130 | |
| Gain on sale of real estate | | | — | | | — | | | (11,290) | | | (59,477) | |
| (Gain) loss on sale of unconsolidated real estate assets | | | — | | | (826) | | | (28,326) | | | 2,126 | |
| Real estate impairment loss (1) | | | 25,144 | | | 7,805 | | | 25,144 | | | 7,805 | |
| Impairment related to unconsolidated real estate ventures (2) | | | 23,883 | | | — | | | 25,263 | | | 6,522 | |
| | | | | | | | | | | | | | |
| EBITDAre | | $ | 70,771 | | $ | 48,168 | | $ | 270,981 | | $ | 211,106 | |
| Transaction and other costs (3) | | | 888 | | | 1,144 | | | 8,691 | | | 8,670 | |
| Business interruption insurance proceeds | | | (4,517) | | | — | | | (4,517) | | | — | |
| Income from investment funds, net | | | (3,620) | | | — | | | (3,620) | | | — | |
| Impairment loss related to right-of-use asset (1) | | | — | | | 2,427 | | | — | | | 2,427 | |
| Loss on extinguishment of debt | | | — | | | 29 | | | — | | | 62 | |
| Share-based compensation related to Formation Transaction and special equity awards | | | 3,459 | | | 6,246 | | | 16,325 | | | 31,678 | |
| Losses and distributions in excess of our investment in unconsolidated real estate venture | | | (181) | | | (152) | | | (883) | | | (459) | |
| Lease liability adjustments | | | (134) | | | — | | | (134) | | | — | |
| Unconsolidated real estate ventures allocated share of above adjustments | | | (497) | | | 90 | | | (327) | | | 1,555 | |
| | | | | | | | | | | | | | |
| Adjusted EBITDA | | $ | 66,169 | | $ | 57,952 | | $ | 286,516 | | $ | 255,039 | |
| | | | | | | | | | | | | | |
| Net Debt to Annualized Adjusted EBITDA (4) | | | 9.6 | x | | 9.2 | x | | 8.9 | x | | 8.4 | x |
| | | | | | | | | | | | | | |
| | | | | | | | | December 31, 2021 | | December 31, 2020 | | ||
| Net Debt (at JBG SMITH Share) | | | | | | | | |
| | |
| |
| Consolidated indebtedness (5) | | | | | | | | $ | 2,464,927 | | $ | 1,985,061 | |
| Unconsolidated indebtedness (5) | | | | | | | | | 370,743 | | | 395,550 | |
| Total consolidated and unconsolidated indebtedness | | | | | | | | | 2,835,670 | | | 2,380,611 | |
| Less: cash and cash equivalents | | | | | | | | | 282,097 | | | 241,066 | |
| Net Debt (at JBG SMITH Share) | | | | | | | | $ | 2,553,573 | | $ | 2,139,545 | |
Note: All EBITDA measures as shown above are attributable to common limited partnership units ("OP Units").
| (1) | In connection with the preparation and review of our annual financial statements, we determined that certain assets were impaired and recorded impairment losses in the three months and year ended December 31, 2021 and 2020 totaling $25.1 million and $10.2 million ($7.8 million related to real estate and $2.4 million related to the right-of-use asset associated with a ground lease). |
| (2) | Includes an impairment on real estate assets taken by an unconsolidated real estate venture and impairments of our investment in unconsolidated real estate ventures related to decreases in the value of the underlying assets. |
| (3) | Includes demolition costs, integration and severance costs, pursuit costs related to other completed, potential and pursued transactions, as well as other expenses. For the three months and year ended December 31, 2021, excludes $0.6 million and $1.7 million of transaction costs attributable to noncontrolling interests. For the year ended December 31, 2020, includes a charitable commitment of $4.0 million to the Washington Housing Conservancy, a non-profit that acquires and owns affordable workforce housing in the Washington, DC metropolitan area. |
| (4) | Calculated using the Net Debt below. Quarterly Adjusted EBITDA is annualized by multiplying by four. Net Debt to Annualized Adjusted EBITDA would have been 8.9x and 8.2x for the three months and year ended December 31, 2021, after adjusting for $198.0 million of gross proceeds from the sale of Pen Place that is expected to close in the second quarter of 2022. |
| (5) | Net of premium/discount and deferred financing costs. |
14
FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)
(Unaudited)
| | | | | | | | | | | | | | |
| in thousands, except per share data | | Three Months Ended December 31, | | Year Ended December 31, |
| ||||||||
| |
| 2021 |
| 2020 | XX | 2021 |
| 2020 | | ||||
| | | | | | | | | | | | | | |
| FFO and Core FFO | | | | | | | | | | | | | |
| Net loss attributable to common shareholders | | $ | (56,446) |
| $ | (45,655) | | $ | (79,257) |
| $ | (62,303) | |
| Net loss attributable to redeemable noncontrolling interests | |
| (6,256) |
| | (4,513) | |
| (8,728) |
| | (4,958) | |
| Net loss attributable to noncontrolling interests | |
| (632) |
| | — | |
| (1,740) |
| | — | |
| Net loss | |
| (63,334) |
| | (50,168) | |
| (89,725) |
| | (67,261) | |
| Gain on sale of real estate | |
| — |
| | — | |
| (11,290) |
| | (59,477) | |
| (Gain) loss on sale of unconsolidated real estate assets | |
| — |
| | (826) | |
| (28,326) |
| | 2,126 | |
| Real estate depreciation and amortization | |
| 55,902 |
| | 61,865 | |
| 227,424 |
| | 211,455 | |
| Real estate impairment loss, net of tax (1) | | | 24,301 | | | 7,805 | | | 24,301 | | | 7,805 | |
| Impairment related to unconsolidated real estate ventures (2) | | | 23,883 | | | — | | | 25,263 | | | 6,522 | |
| Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures | |
| 6,626 |
| | 7,219 | |
| 28,216 |
| | 28,949 | |
| FFO attributable to noncontrolling interests | |
| 546 |
| | (2) | |
| 1,522 |
| | (9) | |
| FFO Attributable to OP Units | | $ | 47,924 |
| $ | 25,893 | | $ | 177,385 |
| $ | 130,110 | |
| FFO attributable to redeemable noncontrolling interests | |
| (4,792) |
| | (2,810) | |
| (18,034) |
| | (14,163) | |
| FFO Attributable to Common Shareholders | | $ | 43,132 |
| $ | 23,083 | | $ | 159,351 |
| $ | 115,947 | |
| | | | | | | | | | | | | | |
| FFO attributable to OP Units | | $ | 47,924 |
| $ | 25,893 | | $ | 177,385 |
| $ | 130,110 | |
| Transaction and other costs, net of tax (3) | |
| 865 |
| | 1,071 | |
| 8,586 |
| | 8,247 | |
| Business interruption insurance proceeds | | | (4,517) | | | — | | | (4,517) | | | — | |
| Income from investment funds, net | | | (2,711) | | | — | | | (2,711) | | | — | |
| Impairment loss related to right-of-use asset (1) | | | — | | | 2,427 | | | — | | | 2,427 | |
| (Gain) loss from mark-to-market on derivative instruments | |
| (292) |
| | 11 | |
| (342) |
| | 184 | |
| Loss on extinguishment of debt | |
| — |
| | 29 | |
| — |
| | 62 | |
| Losses and distributions in excess of our investment in unconsolidated real estate venture | |
| (181) |
| | (152) | |
| (883) |
| | (459) | |
| Share-based compensation related to Formation Transaction and special equity awards | |
| 3,459 |
| | 6,246 | |
| 16,325 |
| | 31,678 | |
| Lease liability adjustments | |
| (134) |
| | — | |
| (134) |
| | — | |
| Amortization of management contracts intangible, net of tax | |
| 1,073 |
| | 1,073 | |
| 4,290 |
| | 4,360 | |
| Unconsolidated real estate ventures allocated share of above adjustments | |
| (543) |
| | 36 | |
| (435) |
| | 1,884 | |
| Core FFO Attributable to OP Units | | $ | 44,943 |
| $ | 36,634 | | $ | 197,564 |
| $ | 178,493 | |
| Core FFO attributable to redeemable noncontrolling interests | |
| (4,494) |
| | (3,976) | |
| (20,106) |
| | (19,433) | |
| Core FFO Attributable to Common Shareholders | | $ | 40,449 |
| $ | 32,658 | | $ | 177,458 |
| $ | 159,060 | |
| FFO per common share - diluted | | $ | 0.33 |
| $ | 0.17 | | $ | 1.22 |
| $ | 0.87 | |
| Core FFO per common share - diluted | | $ | 0.31 |
| $ | 0.25 | | $ | 1.36 |
| $ | 1.19 | |
| Weighted average shares - diluted (FFO and Core FFO) | |
| 129,009 |
| | 132,628 | |
| 130,839 |
| | 134,022 | |
See footnotes on page 16.
15
FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)
(Unaudited)
| | | | | | | | | | | | | | |
| in thousands, except per share data | | Three Months Ended December 31, | | Year Ended December 31, |
| ||||||||
| |
| 2021 |
| 2020 | | 2021 |
| 2020 | | ||||
| | | | | | | | | | | | | | |
| FAD | | | | | | | | | | | | | |
| Core FFO attributable to OP Units |
| $ | 44,943 |
| $ | 36,634 | | $ | 197,564 |
| $ | 178,493 | |
| Recurring capital expenditures and second-generation tenant improvements and leasing commissions (4) | |
| (21,773) | |
| (15,284) | |
| (56,554) | |
| (49,373) | |
| Straight-line and other rent adjustments (5) | |
| (2,985) | |
| 15,433 | |
| (15,539) | |
| 5,535 | |
| Third-party lease liability assumption payments | |
| — | |
| (836) | |
| (1,803) | |
| (3,860) | |
| Share-based compensation expense | |
| 9,663 | |
| 6,496 | |
| 34,583 | |
| 33,625 | |
| Amortization of debt issuance costs | |
| 1,142 | |
| 1,059 | |
| 4,469 | |
| 3,183 | |
| Unconsolidated real estate ventures allocated share of above adjustments | |
| (1,332) | |
| 1,265 | |
| (5,469) | |
| (2,615) | |
| Non-real estate depreciation and amortization | |
| 795 | |
| 829 | |
| 2,975 | |
| 4,300 | |
| FAD available to OP Units (A) | | $ | 30,453 | | $ | 45,596 | | $ | 160,226 | | $ | 169,288 | |
| Distributions to common shareholders and unitholders (B) | | $ | 33,137 | | $ | 33,362 | | $ | 135,771 | | $ | 135,086 | |
| FAD Payout Ratio (B÷A) (6) | |
| 108.8 | % |
| 73.2 | % |
| 84.7 | % |
| 79.8 | % |
| | | | | | | | | | | | | | |
| Capital Expenditures | | | | | | | | | | | | | |
| Maintenance and recurring capital expenditures | | $ | 8,121 | | $ | 6,325 | | $ | 23,827 | | $ | 18,520 | |
| Share of maintenance and recurring capital expenditures from unconsolidated real estate ventures | |
| 168 | |
| 186 | |
| 804 | |
| 1,022 | |
| Second-generation tenant improvements and leasing commissions | |
| 12,815 | |
| 8,773 | |
| 30,095 | |
| 28,108 | |
| Share of second-generation tenant improvements and leasing commissions from unconsolidated real estate ventures | |
| 669 | |
| — | |
| 1,828 | |
| 1,723 | |
| Recurring capital expenditures and second-generation tenant improvements and leasing commissions | |
| 21,773 | |
| 15,284 | |
| 56,554 | |
| 49,373 | |
| Non-recurring capital expenditures | |
| 15,008 | |
| 6,380 | |
| 28,081 | |
| 23,647 | |
| Share of non-recurring capital expenditures from unconsolidated real estate ventures | |
| 145 | |
| 160 | |
| 429 | |
| 554 | |
| First-generation tenant improvements and leasing commissions | |
| 6,229 | |
| 8,910 | |
| 11,370 | |
| 36,643 | |
| Share of First-generation tenant improvements and leasing commissions from unconsolidated real estate ventures | |
| 987 | |
| 747 | |
| 2,471 | |
| 2,408 | |
| Non-recurring capital expenditures | |
| 22,369 | |
| 16,197 | |
| 42,351 | |
| 63,252 | |
| Total JBG SMITH Share of Capital Expenditures | | $ | 44,142 | | $ | 31,481 | | $ | 98,905 | | $ | 112,625 | |
| (1) | In connection with the preparation and review of our annual financial statements, we determined that certain assets were impaired and recorded impairment losses in the three months and year ended December 31, 2021 and 2020 totaling $25.1 million ($24.3 million after tax) and $10.2 million ($7.8 million related to real estate and $2.4 million related to the right-of-use asset associated with a ground lease). |
| (2) | Includes an impairment on real estate assets taken by an unconsolidated real estate venture and impairments of our investment in unconsolidated real estate ventures related to decreases in the value of the underlying assets. |
| (3) | Includes demolition costs, integration and severance costs, pursuit costs related to other completed, potential and pursued transactions, as well as other expenses. For the three months and year ended December 31, 2021, excludes $0.6 million and $1.7 million of transaction costs attributable to noncontrolling interests. For the year ended December 31, 2020, includes a charitable commitment of $4.0 million to the Washington Housing Conservancy, a non-profit that acquires and owns affordable workforce housing in the Washington, DC metropolitan area. |
| (4) | Includes amounts, at JBG SMITH Share, related to unconsolidated real estate ventures. |
| (5) | Includes straight-line rent, above/below market lease amortization and lease incentive amortization. |
| (6) | The quarterly FAD payout ratio is not necessarily indicative of an amount for the full year due to fluctuation in the timing of capital expenditures, the commencement of new leases and the seasonality of our operations. |
16
NOI RECONCILIATIONS (NON-GAAP)
(Unaudited)
| | | | | | | | | | | | | | |
| dollars in thousands | | Three Months Ended December 31, | | Year Ended December 31, |
| ||||||||
| | | 2021 | | 2020 | | 2021 | | 2020 | | ||||
| | | | | | | | | | | | | | |
| Net loss attributable to common shareholders |
| $ | (56,446) |
| $ | (45,655) | | $ | (79,257) |
| $ | (62,303) | |
| Add: | |
|
| |
|
| |
|
| |
|
| |
| Depreciation and amortization expense | |
| 58,173 | |
| 64,170 | |
| 236,303 | |
| 221,756 | |
| General and administrative expense: | |
|
| |
|
| |
|
| |
|
| |
| Corporate and other | |
| 15,344 | |
| 9,156 | |
| 53,819 | |
| 46,634 | |
| Third-party real estate services | |
| 27,124 | |
| 28,569 | |
| 107,159 | |
| 114,829 | |
| Share-based compensation related to Formation Transaction and special equity awards | |
| 3,459 | |
| 6,246 | |
| 16,325 | |
| 31,678 | |
| Transaction and other costs | |
| 1,518 | |
| 1,144 | |
| 10,429 | |
| 8,670 | |
| Interest expense | |
| 17,649 | |
| 17,661 | |
| 67,961 | |
| 62,321 | |
| Loss on extinguishment of debt | |
| — | |
| 29 | |
| — | |
| 62 | |
| Impairment loss | | | 25,144 | | | 10,232 | | | 25,144 | | | 10,232 | |
| Income tax expense (benefit) | |
| (986) | |
| (544) | |
| 3,541 | |
| (4,265) | |
| Net loss attributable to redeemable noncontrolling interests | |
| (6,256) | |
| (4,513) | |
| (8,728) | |
| (4,958) | |
| Net loss attributable to noncontrolling interests | | | (632) | |
| — | | | (1,740) | | | — | |
| Less: | |
|
| |
|
| |
|
| |
|
| |
| Third-party real estate services, including reimbursements revenue | |
| 23,309 | |
| 30,069 | |
| 114,003 | |
| 113,939 | |
| Other revenue | |
| 2,013 | |
| 9,934 | |
| 7,671 | |
| 15,372 | |
| Loss from unconsolidated real estate ventures, net | |
| (25,583) | |
| (3,194) | |
| (2,070) | |
| (20,336) | |
| Interest and other income (loss), net | |
| 8,672 | |
| (1,646) | |
| 8,835 | |
| (625) | |
| Gain on sale of real estate | |
| — | |
| — | |
| 11,290 | |
| 59,477 | |
| | | | | | | | | | | | | | |
| Consolidated NOI | |
| 75,680 | |
| 51,332 | |
| 291,227 | |
| 256,829 | |
| NOI attributable to unconsolidated real estate ventures at our share | |
| 6,289 | |
| 7,521 | |
| 29,232 | |
| 27,693 | |
| Non-cash rent adjustments (1) | |
| (2,985) | |
| 15,433 | |
| (15,539) | |
| 5,535 | |
| Other adjustments (2) | |
| 6,107 | |
| (3,284) | |
| 20,732 | |
| 6,058 | |
| Total adjustments | |
| 9,411 | |
| 19,670 | |
| 34,425 | |
| 39,286 | |
| NOI | | $ | 85,091 | | $ | 71,002 | | $ | 325,652 | | $ | 296,115 | |
| Less: out-of-service NOI loss (3) | |
| (1,745) | |
| (801) | |
| (6,382) | |
| (5,789) | |
| Operating Portfolio NOI | | $ | 86,836 | | $ | 71,803 | | $ | 332,034 | | $ | 301,904 | |
| Non-Same Store NOI (4) | |
| 8,455 | |
| 206 | |
| 32,326 | |
| (427) | |
| Same Store NOI (5) | | $ | 78,381 | | $ | 71,597 | | $ | 299,708 | | $ | 302,331 | |
| | | | | | | | | | | | | | |
| Change in Same Store NOI | | | 9.5 | % | | | |
| (0.9) | % |
| | |
| Number of properties in Same Store pool | | | 56 | | | | |
| 55 | |
|
| |
| (1) | Adjustment to exclude straight-line rent, above/below market lease amortization and lease incentive amortization. |
| (2) | Adjustment to include other revenue and payments associated with assumed lease liabilities related to operating properties and to exclude commercial lease termination revenue and allocated corporate general and administrative expenses to operating properties. |
| (3) | Includes the results of our Under-Construction assets, and Near-Term and Future Development Pipelines. |
| (4) | Includes the results of properties that were not In-Service for the entirety of both periods being compared and properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared. |
| (5) | Includes the results of the properties that are owned, operated and In-Service for the entirety of both periods being compared. |
17
SEP | |
TABLE OF CONTENTS | DECEMBER 31, 2021 |
Table of Contents
| Page |
Overview | |
3-5 | |
6 | |
7 | |
8-9 | |
10 | |
Financial Information | |
11 | |
12 | |
Unconsolidated Real Estate Ventures - Balance Sheet and Operating Information | 13 |
14 | |
EBITDA, EBITDAre and Adjusted EBITDA Reconciliations (Non-GAAP) | 15 |
16-17 | |
Third-Party Asset Management and Real Estate Services Business (Non-GAAP) | 18 |
Pro Rata Adjusted General and Administrative Expenses (Non-GAAP) | 19 |
20 | |
21-22 | |
23 | |
24 | |
25 | |
26 | |
Leasing Activity | |
27 | |
28 | |
29 | |
30 | |
31 | |
32 | |
Property Data | |
33 | |
Property Tables: | |
34-36 | |
37-39 | |
40 | |
41-42 | |
43 | |
44 | |
Debt | |
45 | |
46-47 | |
Real Estate Ventures | |
48-49 | |
50-54 | |
Appendices – Transaction and Other Costs, and Reconciliations of Non-GAAP Financial Measures | 55-59 |
| | Page 2 |
Disclosures
Certain statements contained herein may 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 performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Consequently, the future results of JBG SMITH Properties ("JBG SMITH", the "Company", "we", "us", "our" or similar terms) may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "approximate", "hypothetical", "potential", "believes", "expects", "anticipates", "estimates", "intends", "plans", "would", "may" or similar expressions in this Investor Package. One of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the adverse effect of the current pandemic of the novel coronavirus, or COVID-19, and the ensuing economic turmoil on the Company, our financial condition, results of operations, cash flows, performance, our tenants, the real estate market, and the global economy and financial markets. The extent to which COVID-19 continues to impact us and our tenants depends on future developments, many of which are highly uncertain and cannot be predicted with confidence. These developments include: the continued severity, duration, transmission rate and geographic spread of COVID-19 in the United States, the speed of the vaccine distribution, the effectiveness and willingness of people to take COVID-19 vaccines, the duration of associated immunity and vaccine efficacy against variants of COVID-19, the extent and effectiveness of other containment measures taken, and the response of the overall economy, the financial markets and the population (including the potential effects of inflation), particularly in areas in which we operate and whether the residential market in the Washington, DC area and any of our properties will be materially impacted by the various moratoriums on residential evictions, among others. Moreover, investors are cautioned to interpret many of the risks identified under the section titled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 as being heightened as a result of the ongoing and numerous adverse impacts of the COVID-19 pandemic. We also note the following forward-looking statements: the impact of COVID-19 and the ensuing economic turmoil on our Company, Net Operating Income, Same Store Net Operating Income, net asset value, share price, liquidity, occupancy rates, property rental revenue, operating costs, deferrals of rent, uncollectable operating lease receivables, parking revenue, burn-off of rent abatement, construction costs, the timing of disposition of assets in the JBG Legacy Funds, demand for new office space and potential bias of multifamily leasing to renewals; the impact of disruptions to the credit and capital markets on our ability to access capital, including refinancing maturing debt; potential Net Operating Income growth and the assumptions on which such growth is premised, our estimated future leverage (Net Debt/Annualized Adjusted EBITDA and Net Debt/Total Enterprise Value) profile, the economic impact, job growth, expansion of public transportation and related demand for multifamily and commercial properties of Amazon.com, Inc.’s ("Amazon") additional headquarters on the Washington, DC metropolitan area and National Landing and the speed with which such impact occurs and Amazon’s plans for accelerated hiring and in-person work requirements; changes to the amount and manner in which tenants use space; whether we incur additional costs or make additional concessions or offer other incentives to existing or prospective tenants to reconfigure space; long-term trends in demand for housing (including multifamily) within major urban employment centers; whether the Washington, DC area will be more resilient than other parts of the country in any recession resulting from COVID-19; whether we will recognize currently estimated unrecognized development fee revenue on the anticipated timing or at all; potential countercyclical growth caused by the concentration in the Washington, DC area of Amazon, the federal government, government contractors, and the Virginia Tech Innovation campus; the economic impact of DC's diversification into technology; our anticipated acquisitions and dispositions and the ability to identify associated like-kind exchanges; our annual dividend per share and dividend yield; annualized Net Operating Income; adjusted annualized Net Operating Income; expected key Amazon transaction terms and timeframes for closing any Amazon transactions not yet closed; planned infrastructure and educational improvements related to Amazon's additional headquarters; the impact of our role as the developer, property manager and retail leasing agent in connection with Amazon's new headquarters; our development plans related to Amazon's additional headquarters; the impact on our net asset value of the Amazon transactions; in the case of any further Amazon lease transactions and our new development opportunities in National Landing, the total square feet to be leased to Amazon and the expected net effective rent; the impact of increases in government spending on increases in agency and contractor spending locally; whether we can access agency debt secured by our currently unencumbered multifamily assets timely, on reasonable terms or at all; whether our contemplated like-kind exchange of the Batley for the sale of Pen Place will occur; whether our sale of Pen Place will generate the amount of proceeds anticipated; whether the transactions contemplated by our agreement with affiliates of Fortress Investment Group LLC will occur on the anticipated timing or at all; whether Batley will generate the annualized NOI anticipated; whether we will succeed in our contemplated recycling of disposition proceeds into acquisitions yielding the anticipated stabilized capitalization rates; whether we are able to renew at or above our historical retention rates on rolling leases; whether the allocation of capital to our share repurchase plan has any impact on our share price; whether our rent estimates are accurate; whether in the case of our Under-Construction and Near-Term Development Pipeline assets, estimated square feet, estimated number of units, estimated construction start, occupancy stabilization dates, the estimated completion date, estimated stabilization date, Estimated Incremental Investment, Estimated Total Investment, Projected NOI Yield, weighted average Projected NOI Yield, NOI yield or Estimated Total Project Cost, estimated total NOI weighted average completion date, weighted average stabilization date, intended type of asset use and potential tenants, Estimated Potential Development Density, and Estimated Stabilized NOI are accurate; whether our Under-Construction assets will deliver the Annualized NOI that we anticipate; our ability to satisfy environmental, social or governance standards set by various constituencies; whether our plans related to our investment in 5G wireless spectrum across National Landing will be a significant demand catalyst; and in the case of our Future Development Pipeline opportunities, estimated commercial SF/multifamily units to be replaced, estimated remaining acquisition cost, estimated capitalized cost, Estimated Total Investment, Estimated Potential Development Density and the potential for delays in the entitlement process.
| | Page 3 |
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. These factors include, among others: adverse economic conditions in the Washington, DC metropolitan area, including in relation to COVID-19, the timing of and costs associated with development and property improvements, financing commitments, and general competitive factors. For further discussion of factors that could materially affect the outcome of our forward-looking statements and other risks and uncertainties, see "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Cautionary Statement Concerning Forward-Looking Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 and other periodic reports the Company files with the Securities and Exchange Commission. For these 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. 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 hereof.
Organization and Basis of Presentation
JBG SMITH Properties ("JBG SMITH") was organized as a Maryland real estate investment trust ("REIT") 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 Washington, DC segment. On July 18, 2017, JBG SMITH acquired the management business and certain assets and liabilities of The JBG Companies ("JBG") (the "Combination"). The Separation and the Combination are collectively referred to as the "Formation Transaction."
The information contained in this Investor Package does not purport to disclose all items required by the accounting principles generally accepted in the United States of America ("GAAP") and is unaudited information, unless otherwise indicated.
Pro Rata Information
We present certain financial information and metrics in this Investor Package "at JBG SMITH Share," which refers to our ownership percentage of consolidated and unconsolidated assets in real estate ventures (collectively, "real estate ventures") as applied to these financial measures and metrics. Financial information "at JBG SMITH Share" is calculated on an asset-by-asset basis by applying our percentage economic interest to each applicable line item of that asset's financial information. "At JBG SMITH Share" information, which we also refer to as being "at share," "our pro rata share" or "our share," is not, and is not intended to be, a presentation in accordance with GAAP. Given that a substantial portion of our assets are held through real estate ventures, we believe this form of presentation, which presents our economic interests in the partially owned entities, provides investors valuable information regarding a significant component of our portfolio, its composition, performance and capitalization.
We do not control the unconsolidated real estate ventures and do not have a legal claim to our co-venturers' share of assets, liabilities, revenue and expenses. The operating agreements of the unconsolidated real estate ventures generally allow each co-venturer to receive cash distributions to the extent there is available cash from operations. The amount of cash each investor receives is based upon specific provisions of each operating agreement and varies depending on certain factors including the amount of capital contributed by each investor and whether any investors are entitled to preferential distributions.
With respect to any such third-party arrangement, we would not be in a position to exercise sole decision-making authority regarding the property, real estate venture or other entity, and may, under certain circumstances, be exposed to economic risks not present were a third-party not involved. We and our respective co-venturers may each have the right to trigger a buy-sell or forced sale arrangement, which could cause us to sell our interest, or acquire our co-venturers' interests, or to sell the underlying asset, either on unfavorable terms or at a time when we otherwise would not have initiated such a transaction. Our real estate ventures may be subject to debt, and the repayment or refinancing of such debt may require equity capital calls. To the extent our co-venturers do not meet their obligations to us or our real estate ventures or they act inconsistent with the interests of the real estate venture, we may be adversely affected. Because of these limitations, the non-GAAP "at JBG SMITH Share" financial information should not be considered in isolation or as a substitute for our financial statements as reported under GAAP.
Definitions
See pages 50-54 for definitions of terms used in this Investor Package.
Information herein with respect to the proposed transactions with Amazon is based on executed leases and a purchase and sale agreement between us and Amazon. Closing under this agreement is subject to customary closing conditions.
| | Page 4 |
Non-GAAP Measures
This Investor Package includes non-GAAP measures. For these measures, we have provided an explanation of how these non-GAAP measures are calculated and why our management believes that the presentation of these measures provides useful information to investors regarding our financial condition and results of operations. Reconciliations of certain non-GAAP measures to the most directly comparable GAAP financial measure are included in this Investor Package. Our presentation of non-GAAP financial measures may not be comparable to similar non-GAAP measures used by other companies.
In addition to "at share" financial information, the following non-GAAP measures are included in this Investor Package:
| ● | Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") |
| ● | EBITDA for Real Estate ("EBITDAre") |
| ● | Adjusted EBITDA |
| ● | Funds from Operations ("FFO") |
| ● | Core FFO |
| ● | Funds Available for Distribution ("FAD") |
| ● | Third-Party Asset Management and Real Estate Services Business |
| ● | Net Operating Income ("NOI") |
| ● | Annualized NOI |
| ● | Estimated Stabilized NOI |
| ● | Projected NOI Yield |
| ● | Same Store NOI |
| ● | Consolidated and Unconsolidated Indebtedness |
| ● | Net Debt |
| ● | Pro Rata Adjusted General and Administrative Expenses |
| | Page 5 |
| |
COMPANY PROFILE | DECEMBER 31, 2021 |
|
| | | | | | | | | |
Executive Officers | | Company Snapshot as of December 31, 2021 | |||||||
| | | | | | | | | |
W. Matthew Kelly |
| Chief Executive Officer and Trustee |
| | Exchange/ticker |
| | NYSE: JBGS | |
David P. Paul |
| President and Chief Operating Officer |
| | Indicated annual dividend per share | | $ | 0.90 | |
M. Moina Banerjee |
| Chief Financial Officer |
| | Dividend yield | |
| 3.1 | % |
Kevin P. Reynolds |
| Chief Development Officer |
| |
| |
|
| |
George L. Xanders | | Chief Investment Officer |
| | Total Enterprise Value (dollars in billions, except share price) | |
|
| |
Steven A. Museles |
| Chief Legal Officer |
| | Common share price | | $ | 28.71 | |
| | |
| | Common shares and common limited partnership units ("OP Units") | |
| 142.33 | |
| | |
| | Total market capitalization | | $ | 4.09 | |
| | |
| | Total consolidated and unconsolidated indebtedness at JBG SMITH Share | |
| 2.84 | |
| | |
| | Less: cash and cash equivalents at JBG SMITH Share | |
| (0.28) | |
| | |
| | Net Debt | | $ | 2.55 | |
| | |
| | Total Enterprise Value | | $ | 6.64 | |
| | | | | | | | | |
|
|
|
| | Net Debt / Total Enterprise Value | |
| 38.5 | % |
| | | | | | | | | |
| | Page 6 |
| |
FINANCIAL HIGHLIGHTS | DECEMBER 31, 2021 |
| | | | | | | | | |
| dollars in thousands, except per share data |
| Three Months Ended | | | Year Ended | | ||
| | | December 31, 2021 | | | December 31, 2021 | | ||
| | | | | | | | | |
| Summary Financial Results | | | | | | | | |
| Total revenue | | $ | 157,407 | | | $ | 634,362 | |
| Net income (loss) attributable to common shareholders | | $ | (56,446) | | | $ | (79,257) | |
| Per diluted common share | | $ | (0.45) | | | $ | (0.63) | |
| Operating portfolio NOI | | $ | 86,836 | | | $ | 332,034 | |
| FFO (1) | | $ | 47,924 | | | $ | 177,385 | |
| Per OP Unit | | $ | 0.33 | | | $ | 1.22 | |
| Core FFO (1) | | $ | 44,943 | | | $ | 197,564 | |
| Per OP Unit | | $ | 0.31 | | | $ | 1.36 | |
| FAD (1) | | $ | 30,453 | | | $ | 160,226 | |
| FAD payout ratio | |
| 108.8 | % | |
| 84.7 | % |
| EBITDA (1) | | $ | 21,744 | | | $ | 260,190 | |
| EBITDAre (1) | | $ | 70,771 | | | $ | 270,981 | |
| Adjusted EBITDA (1) | | $ | 66,169 | | | $ | 286,516 | |
| Net Debt / total enterprise value | |
| 38.5 | % | |
| 38.5 | % |
| Net Debt to annualized Adjusted EBITDA (2) | |
| 9.6 | x | |
| 8.9 | x |
| | | | | | | | | |
| | | | | | | December 31, 2021 | | |
| | | | | | | | | |
| Debt Summary and Key Ratios (at JBG SMITH Share) | | | | | |
|
| |
| Total consolidated indebtedness (3) | | | | | | $ | 2,464,927 | |
| Total consolidated and unconsolidated indebtedness (3) | | | | | | $ | 2,835,670 | |
| Weighted average interest rates: | | | | | |
|
| |
| Variable rate debt | | | | | |
| 1.94 | % |
| Fixed rate debt | | | | | |
| 3.83 | % |
| Total debt | | | | | |
| 2.87 | % |
| Cash and cash equivalents | | | | | | $ | 282,097 | |
| (1) | Attributable to OP Units, which include units owned by JBG SMITH. |
| (2) | Net Debt to annualized Adjusted EBITDA would have been 8.9x and 8.2x for the three months and year ended December 31, 2021, after adjusting for $198.0 million of gross proceeds from the sale of Pen Place that is expected close in Q2 2022. |
| (3) | Net of premium/discount and deferred financing costs. |
| | Page 7 |
| |
FINANCIAL HIGHLIGHTS – TRENDS | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| |||||||||||||
| dollars in thousands, except per share data, at JBG SMITH Share |
| Q4 2021 |
| Q3 2021 |
| Q2 2021 |
| Q1 2021 |
| Q4 2020 | | |||||
| Commercial NOI | | $ | 62,775 | | $ | 62,385 | | $ | 64,334 | | $ | 63,026 | | $ | 57,652 | |
| Multifamily NOI | |
| 24,061 | |
| 19,107 | |
| 18,644 | |
| 17,775 | |
| 14,151 | |
| Operating portfolio NOI | | $ | 86,836 | | $ | 81,492 | | $ | 82,978 | | $ | 80,801 | | $ | 71,803 | |
| Total Annualized NOI | | $ | 345,763 | | $ | 324,001 | | $ | 330,682 | | $ | 322,241 | | $ | 288,230 | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) attributable to common shareholders | | $ | (56,446) | | $ | 893 | | $ | (2,973) | | $ | (20,731) | | $ | (45,655) | |
| Per diluted common share | | $ | (0.45) | | $ | 0.00 | | $ | (0.03) | | $ | (0.16) | | $ | (0.36) | |
| FFO (1) | | $ | 47,924 | | $ | 40,734 | | $ | 41,914 | | $ | 46,813 | | $ | 25,893 | |
| Per OP Unit | | $ | 0.33 | | $ | 0.27 | | $ | 0.29 | | $ | 0.32 | | $ | 0.17 | |
| Core FFO (1) | | $ | 44,943 | | $ | 48,083 | | $ | 49,629 | | $ | 54,909 | | $ | 36,634 | |
| Per OP Unit | | $ | 0.31 | | $ | 0.32 | | $ | 0.34 | | $ | 0.38 | | $ | 0.25 | |
| FAD (1) | | $ | 30,453 | | $ | 39,992 | | $ | 42,147 | | $ | 47,634 | | $ | 45,596 | |
| FAD payout ratio | |
| 108.8 | % |
| 84.2 | % |
| 79.5 | % |
| 74.4 | % |
| 73.2 | % |
| EBITDA (1) | | $ | 21,744 | | $ | 85,275 | | $ | 80,668 | | $ | 72,503 | | $ | 41,189 | |
| EBITDAre (1) | | $ | 70,771 | | $ | 63,518 | | $ | 64,189 | | $ | 72,503 | | $ | 48,168 | |
| Adjusted EBITDA (1) | | $ | 66,169 | | $ | 69,799 | | $ | 70,817 | | $ | 79,731 | | $ | 57,952 | |
| Net Debt / total enterprise value | |
| 38.5 | % |
| 34.3 | % |
| 32.1 | % |
| 31.9 | % |
| 32.0 | % |
| Net Debt to annualized Adjusted EBITDA (2) | |
| 9.6 | x |
| 7.9 | x |
| 7.6 | x |
| 6.8 | x |
| 9.2 | x |
| | | | | | | | | | | | | | | | | |
| | | Q4 2021 | | Q3 2021 | | Q2 2021 | | Q1 2021 | | Q4 2020 | | |||||
| | | | | | | | | | | | | | | | | |
| Number of Operating Assets | |
|
| |
|
| |
|
| |
|
| |
|
| |
| Commercial | |
| 42 | |
| 42 | |
| 43 | |
| 42 | |
| 41 | |
| Multifamily | |
| 22 | |
| 21 | |
| 21 | |
| 21 | |
| 21 | |
| Total | |
| 64 | |
| 63 | |
| 64 | |
| 63 | |
| 62 | |
| | | | | | | | | | | | | | | | | |
| Operating Portfolio % Leased | |
|
| |
|
| |
|
| |
|
| |
|
| |
| Commercial (3) | |
| 84.9 | % |
| 84.9 | % |
| 85.9 | % |
| 87.3 | % |
| 88.1 | % |
| Multifamily (4) | |
| 93.6 | % |
| 94.0 | % |
| 92.8 | % |
| 91.5 | % |
| 87.3 | % |
| Weighted Average | |
| 87.7 | % |
| 87.7 | % |
| 88.0 | % |
| 88.6 | % |
| 87.8 | % |
| | | | | | | | | | | | | | | | | |
| Operating Portfolio % Occupied (5) | |
|
| |
|
| |
|
| |
|
| |
|
| |
| Commercial (3) | |
| 82.9 | % |
| 82.6 | % |
| 84.4 | % |
| 86.9 | % |
| 87.7 | % |
| Multifamily (4) | |
| 91.8 | % |
| 92.4 | % |
| 88.7 | % |
| 86.6 | % |
| 81.7 | % |
| Weighted Average | |
| 85.8 | % |
| 85.7 | % |
| 85.7 | % |
| 86.8 | % |
| 85.8 | % |
See footnotes on page 9.
| | Page 8 |
| |
FINANCIAL HIGHLIGHTS – TRENDS | DECEMBER 31, 2021 |
Footnotes
Note: See appendices for reconciliations of non-GAAP financial measures to their respective comparable GAAP financial measures.
| (1) | Attributable to OP Units, which include units owned by JBG SMITH. |
| (2) | Net Debt to Annualized Adjusted EBITDA would have been 8.9x in Q4 2021, after adjusting for $198.0 million of gross proceeds from the sale of Pen Place that is expected to close in Q2 2022. |
| (3) | Crystal City Marriott and 1700 M Street (for which we are the ground lessor) are excluded from the Percent Leased and the Percent Occupied metrics. |
| (4) | Includes Recently Delivered assets. In-Service assets were 95.4% leased and 93.4% occupied as of Q4 2021, 96.3% leased and 94.5% occupied as of Q3 2021, 96.4% leased and 92.7% occupied as of Q2 2021, 92.9% leased and 89.2% occupied as of Q1 2021, and 91.0% leased and 87.3% occupied as of Q4 2020. 2221 S. Clark Street - Residential and 900 W Street are excluded from the Percent Leased and the Percent Occupied metrics as they are operated as short-term rental properties. |
| (5) | Percent Occupied excludes occupied retail SF. |
| | Page 9 |
| |
PORTFOLIO OVERVIEW | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | 100% Share | | At JBG SMITH Share |
| |||||||||||||
| | | | | | | | | | | | | | | Annualized | | | |
| ||
| | | | | | | | | | | | | | | Rent per | | | | | ||
| | | | | | | | | | | | | Annualized | | Square Foot/ | | |
| |||
| | | Number of | | Square Feet/ | | Square Feet/ | | % | | | | Rent | | Monthly Rent | | Annualized NOI | | |||
| | | Assets | | Units | | Units | | Leased | | % Occupied (1) | | (in thousands) | | Per Unit (2) | | (in thousands) |
| |||
| | | | | | | | | | | | | | | | | | | | | |
| Operating | | | | | | | | | | | | | | | | | | | | |
| Commercial (3) | | | | | | | | | | | | | | | | | | | | |
| National Landing | | 22 | | 6,793,578 | | 6,793,578 | | 86.3% | | 85.5% | | $ | 234,884 | | $ | 43.03 | | $ | 147,671 | |
| Other VA | | 7 | | 2,708,439 | | 1,774,912 | | 89.0% | | 88.1% | | | 76,028 | | | 50.79 | | | 54,064 | |
| DC | | 10 | | 2,796,830 | | 1,962,101 | | 76.2% | | 70.5% | | | 80,025 | | | 57.55 | | | 32,720 | |
| MD | | 3 | | 784,247 | | 784,247 | | 86.2% | | 79.9% | | | 32,445 | | | 49.35 | | | 15,064 | |
| In-Service |
| 42 |
| 13,083,094 |
| 11,314,838 |
| 84.9% | | 82.9% | | $ | 423,382 |
| $ | 46.88 |
| $ | 249,519 | |
| Multifamily (4) |
|
|
|
|
|
|
|
|
|
| |
|
| |
|
| |
|
| |
| National Landing | | 4 | | 2,856 | | 2,856 | | 96.2% | | 94.6% | | $ | 62,081 | | $ | 2,015 | | $ | 38,072 | |
| DC | | 12 | | 3,743 | | 3,042 | | 94.3% | | 91.6% | | | 85,688 | | | 2,320 | | | 52,352 | |
| MD | | 5 | | 1,287 | | 498 | | 98.3% | | 97.5% | | | 9,455 | | | 1,595 | | | 6,380 | |
| In-Service |
| 21 |
| 7,886 | | 6,396 |
| 95.4% | | 93.4% | | | 157,224 | | | 2,124 | | | 96,804 | |
| Recently Delivered |
| 1 |
| 322 |
| 161 |
| 41.0% | | 33.2% | |
| 2,184 | |
| 2,763 | |
| (560) | |
| Total / weighted average |
| 22 |
| 8,208 |
| 6,557 |
| 93.6% | | 91.8% | | $ | 159,408 | | $ | 2,130 | | $ | 96,244 | |
| | | | | | | | | | | | | | | | | | | | | |
| Operating - In-Service |
| 63 |
| 13,083,094 SF/ 7,886 Units |
| 11,314,838 SF/ 6,396 Units |
| 88.3% | | 86.3% | | $ | 580,606 | | | $46.88 per SF/ | | $ | 346,323 | |
| |
| | | | | | | | | | | | | | | | | | | |
| Operating - Recently Delivered |
| 1 |
| 322 Units |
| 161 Units |
| 41.0% | | 33.2% | | $ | 2,184 | | | $2,763 per unit | | $ | (560) | |
| |
| | | | | | | | | | | | | | | | | | | |
| Operating - Total / Weighted Average |
| 64 |
| 13,083,094 SF/ 8,208 Units |
| 11,314,838 SF/ 6,557 Units |
| 87.7% | | 85.8% | | $ | 582,790 | | | $46.88 per SF/ | | $ | 345,763 | |
| | | | | | | | | | | | | | | | | | | | | |
| Development (5) |
|
|
|
|
|
|
|
|
|
| |
|
| |
|
| |
|
| |
| | | | | | | | | | | | | | | | | | | | | |
| Under-Construction |
| 1 |
| 808 Units |
| 808 Units |
| | |
| |
| | |
| | |
|
| |
| | | | | | | | | | | | | | | | | | | | | |
| Near-Term Development |
| 11 |
| 5,259,300 |
| 5,049,700 |
|
|
|
| |
|
| |
| | |
|
| |
| | | | | | | | | | | | | | | | | | | | | |
| Future Development |
| 25 |
| 14,328,100 |
| 11,597,600 |
|
|
|
| |
|
| |
| | |
|
| |
| (1) | Percent Occupied excludes retail SF. |
| (2) | For commercial assets, represents annualized office rent divided by occupied office SF; annualized retail rent and retail SF are excluded from this metric. For multifamily assets, represents monthly multifamily rent divided by occupied units; retail rent is excluded from this metric. Annualized Rent and Annualized Rent per Square Foot exclude percentage rent and the square footage of office tenants that only pay percentage rent. Occupied square footage may differ from leased square footage because leased square footage includes space for leases that have been signed but the tenant has not yet taken occupancy (not yet included in Percent Occupied metrics). |
| (3) | Crystal City Marriott and 1700 M Street (for which we are the ground lessor) are excluded from Percent Leased, Percent Occupied, Annualized Rent and Annualized Rent per Square Foot metrics. |
| (4) | 2221 S. Clark Street - Residential and 900 W Street are excluded from Percent Leased, Percent Occupied, Annualized Rent and Monthly Rent Per Unit metrics. |
| (5) | Refer to pages 40-43 for detail on Under-Construction assets, and Near-Term and Future Development Pipelines. |
| | |
| | Page 10 |
| |
CONDENSED CONSOLIDATED BALANCE SHEETS | DECEMBER 31, 2021 |
Condensed Consolidated Balance Sheets
| | | | | | | | |
| in thousands | | December 31, 2021 | | December 31, 2020 |
| ||
| | | | | | | |
|
| ASSETS | | | | | | | |
| Real estate, at cost: |
| |
|
| |
| |
| Land and improvements | | $ | 1,378,218 | | $ | 1,391,472 | |
| Buildings and improvements | |
| 4,513,606 | |
| 4,341,103 | |
| Construction in progress, including land | |
| 344,652 | |
| 268,056 | |
| | |
| 6,236,476 | |
| 6,000,631 | |
| Less: accumulated depreciation | |
| (1,368,003) | |
| (1,232,690) | |
| Real estate, net | |
| 4,868,473 | |
| 4,767,941 | |
| Cash and cash equivalents | |
| 264,356 | |
| 225,600 | |
| Restricted cash | |
| 37,739 | |
| 37,736 | |
| Tenant and other receivables | |
| 44,496 | |
| 55,903 | |
| Deferred rent receivable | |
| 192,265 | |
| 170,547 | |
| Investments in unconsolidated real estate ventures | |
| 462,885 | |
| 461,369 | |
| Other assets, net | |
| 442,116 | |
| 286,575 | |
| Assets held for sale | |
| 73,876 | |
| 73,876 | |
| TOTAL ASSETS | | $ | 6,386,206 | | $ | 6,079,547 | |
| | | | | | | | |
| LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | |
|
| |
|
| |
| Liabilities: | |
|
| |
|
| |
| Mortgages payable, net | | $ | 1,777,699 | | $ | 1,593,738 | |
| Revolving credit facility | |
| 300,000 | |
| — | |
| Unsecured term loans, net | |
| 398,664 | |
| 397,979 | |
| Accounts payable and accrued expenses | |
| 106,136 | |
| 103,102 | |
| Other liabilities, net | |
| 342,565 | |
| 247,774 | |
| Total liabilities | |
| 2,925,064 | |
| 2,342,593 | |
| Commitments and contingencies | |
|
| |
|
| |
| Redeemable noncontrolling interests | |
| 522,725 | |
| 530,748 | |
| Total equity | |
| 2,938,417 | |
| 3,206,206 | |
| TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY | | $ | 6,386,206 | | $ | 6,079,547 | |
Note: For complete financial statements, please refer to our Annual Report on Form 10-K for the year ended December 31, 2021.
| | |
| | Page 11 |
| |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | DECEMBER 31, 2021 |
Condensed Consolidated Statements of Operations
| | | | | | | | | | | | | | |
| in thousands, except per share data | | Three Months Ended December 31, | | Year Ended December 31, |
| ||||||||
| | | 2021 | | 2020 | | 2021 | | 2020 |
| ||||
| REVENUE | | | | | | | | | | | | | |
| Property rental |
| $ | 128,626 |
| $ | 104,439 | | $ | 499,586 |
| $ | 458,958 | |
| Third-party real estate services, including reimbursements | |
| 23,309 | |
| 30,069 | |
| 114,003 | |
| 113,939 | |
| Other revenue | |
| 5,472 | |
| 14,121 | |
| 20,773 | |
| 29,826 | |
| Total revenue | |
| 157,407 | |
| 148,629 | |
| 634,362 | |
| 602,723 | |
| EXPENSES | |
|
| |
|
| |
|
| |
|
| |
| Depreciation and amortization | |
| 58,173 | |
| 64,170 | |
| 236,303 | |
| 221,756 | |
| Property operating | |
| 40,709 | |
| 39,758 | |
| 150,638 | |
| 145,625 | |
| Real estate taxes | |
| 15,696 | |
| 17,536 | |
| 70,823 | |
| 70,958 | |
| General and administrative: | |
| | |
| | |
| | |
| | |
| Corporate and other | |
| 15,344 | |
| 9,156 | |
| 53,819 | |
| 46,634 | |
| Third-party real estate services | |
| 27,124 | |
| 28,569 | |
| 107,159 | |
| 114,829 | |
| Share-based compensation related to Formation Transaction and special equity awards | |
| 3,459 | |
| 6,246 | |
| 16,325 | |
| 31,678 | |
| Transaction and Other Costs | |
| 1,518 | |
| 1,144 | |
| 10,429 | |
| 8,670 | |
| Total expenses | |
| 162,023 | |
| 166,579 | |
| 645,496 | |
| 640,150 | |
| OTHER INCOME (EXPENSE) | |
|
| |
|
| |
|
| |
|
| |
| Loss from unconsolidated real estate ventures, net | |
| (25,583) | |
| (3,194) | |
| (2,070) | |
| (20,336) | |
| Interest and other income (loss), net | |
| 8,672 | |
| (1,646) | |
| 8,835 | |
| (625) | |
| Interest expense | |
| (17,649) | |
| (17,661) | |
| (67,961) | |
| (62,321) | |
| Gain on sale of real estate | |
| — | |
| — | |
| 11,290 | |
| 59,477 | |
| Loss on extinguishment of debt | |
| — | |
| (29) | |
| — | |
| (62) | |
| Impairment loss | | | (25,144) | |
| (10,232) | |
| (25,144) | |
| (10,232) | |
| Total other income (expense) | |
| (59,704) | |
| (32,762) | |
| (75,050) | |
| (34,099) | |
| LOSS BEFORE INCOME TAX (EXPENSE) BENEFIT | |
| (64,320) | |
| (50,712) | |
| (86,184) | |
| (71,526) | |
| Income tax (expense) benefit | |
| 986 | |
| 544 | |
| (3,541) | |
| 4,265 | |
| NET LOSS | |
| (63,334) | |
| (50,168) | |
| (89,725) | |
| (67,261) | |
| Net loss attributable to redeemable noncontrolling interests | |
| 6,256 | |
| 4,513 | |
| 8,728 | |
| 4,958 | |
| Net loss attributable to noncontrolling interests | | | 632 | | | — | | | 1,740 | |
| — | |
| NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | | $ | (56,446) | | $ | (45,655) | | $ | (79,257) | | $ | (62,303) | |
| LOSS PER COMMON SHARE - BASIC AND DILUTED | | $ | (0.45) | | $ | (0.36) | | $ | (0.63) | | $ | (0.49) | |
| WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED | |
| 129,009 | |
| 132,042 | |
| 130,839 | |
| 133,451 | |
Note: For complete financial statements, please refer to our Annual Report on Form 10-K for the year ended December 31, 2021.
| | |
| | Page 12 |
nconsolidated Real Estate Ventures
| | | | | |
| in thousands, at JBG SMITH Share |
| | |
|
| BALANCE SHEET INFORMATION | | December 31, 2021 |
| |
| | | | | |
| Total real estate, at cost | | $ | 810,314 | |
| Less: accumulated depreciation | |
| (52,570) | |
| Real estate, net | |
| 757,744 | |
| Cash and cash equivalents | |
| 17,815 | |
| Other assets, net | |
| 86,078 | |
| Total assets | | $ | 861,637 | |
| Borrowings, net | | $ | 370,743 | |
| Other liabilities, net | |
| 46,569 | |
| Total liabilities | | $ | 417,312 | |
| | | | | | | | |
| |
| Three Months Ended | | Year Ended |
| ||
| OPERATING INFORMATION | | December 31, 2021 | | December 31, 2021 |
| ||
| Total revenue | | $ | 15,704 | | $ | 65,174 | |
| Expenses: | |
|
| |
|
| |
| Depreciation and amortization | |
| 6,538 | |
| 28,141 | |
| Property operating | |
| 29,526 | |
| 44,821 | |
| Real estate taxes | |
| 2,653 | |
| 10,379 | |
| Total expenses | |
| 38,717 | |
| 83,341 | |
| Other income (expense): | |
|
| |
|
| |
| Interest expense | |
| (3,067) | |
| (12,367) | |
| Gain on the sale of real estate | |
| — | |
| 28,387 | |
| Loss on extinguishment of debt | | | — | | | (124) | |
| Interest and other income, net | |
| 484 | |
| 698 | |
| | | | | | | | |
| Net loss | | $ | (25,596) | | $ | (1,573) | |
| Earnings and distributions in excess of our investment in unconsolidated real estate venture | |
| 181 | |
| 883 | |
| Impairment of investment in unconsolidated real estate venture | | | — | | | (1,380) | |
| Other | |
| (168) | |
| — | |
| Loss from unconsolidated real estate ventures, net | | $ | (25,583) | | $ | (2,070) | |
| | |
| | Page 13 |
| |
OTHER TANGIBLE ASSETS AND LIABILITIES | DECEMBER 31, 2021 |
Other Tangible Assets and Liabilities
| | | | | |
| in thousands, at JBG SMITH Share |
| December 31, 2021 |
| |
| | | | | |
| Other Tangible Assets, Net (1) (2) | | | | |
| Restricted cash | | $ | 46,833 | |
| Tenant and other receivables, net | |
| 46,333 | |
| Other assets, net | |
| 68,792 | |
| Total Other Tangible Assets, Net | | $ | 161,958 | |
| | | | | |
| Other Tangible Liabilities, Net (2) (3) | |
|
| |
| Accounts payable and accrued liabilities | | $ | 120,271 | |
| Other liabilities, net | |
| 188,330 | |
| Total Other Tangible Liabilities, Net | | $ | 308,601 | |
| (1) | Excludes cash and cash equivalents. |
| (2) | Excludes assets held for sale. |
| (3) | Excludes debt. |
| | |
| | Page 14 |
| |
EBITDA, EBITDAre AND ADJUSTED EBITDA RECONCILIATIONS (NON-GAAP) | DECEMBER 31, 2021 |
EBITDA, EBITDAre and Adjusted EBITDA
| | | | | | | | | | | | | | |
| dollars in thousands |
| Three Months Ended December 31, | | Year Ended December 31, |
| ||||||||
| | | 2021 | | 2020 | | 2021 | | 2020 |
| ||||
| | | | | | | | | | | | | |
|
| EBITDA, EBITDAre and Adjusted EBITDA |
| | | | | | | |
| | |
| |
| Net loss | | $ | (63,334) | | $ | (50,168) | | $ | (89,725) | | $ | (67,261) | |
| Depreciation and amortization expense | | | 58,173 | | | 64,170 | | | 236,303 | | | 221,756 | |
| Interest expense | | | 17,649 | | | 17,661 | | | 67,961 | | | 62,321 | |
| Income tax expense (benefit) | | | (986) | | | (544) | | | 3,541 | | | (4,265) | |
| Unconsolidated real estate ventures allocated share of above adjustments | | | 9,696 | | | 10,072 | | | 40,588 | | | 41,588 | |
| EBITDA attributable to noncontrolling interests | | | 546 | | | (2) | | | 1,522 | | | (9) | |
| EBITDA | | $ | 21,744 | | $ | 41,189 | | $ | 260,190 | | $ | 254,130 | |
| Gain on sale of real estate | | | — | | | — | | | (11,290) | | | (59,477) | |
| (Gain) loss on sale of unconsolidated real estate assets | | | — | | | (826) | | | (28,326) | | | 2,126 | |
| Real estate impairment loss (1) | | | 25,144 | | | 7,805 | | | 25,144 | | | 7,805 | |
| Impairment related to unconsolidated real estate ventures (2) | | | 23,883 | | | — | | | 25,263 | | | 6,522 | |
| | | | | | | | | | | | | | |
| EBITDAre | | $ | 70,771 | | $ | 48,168 | | $ | 270,981 | | $ | 211,106 | |
| Transaction and Other Costs (3) | | | 888 | | | 1,144 | | | 8,691 | | | 8,670 | |
| Business interruption insurance proceeds | | | (4,517) | | | — | | | (4,517) | | | — | |
| Income from investment funds, net | | | (3,620) | | | — | | | (3,620) | | | — | |
| Impairment loss related to right-of-use asset (1) | | | — | | | 2,427 | | | — | | | 2,427 | |
| Loss on extinguishment of debt | | | — | | | 29 | | | — | | | 62 | |
| Share-based compensation related to Formation Transaction and special equity awards | | | 3,459 | | | 6,246 | | | 16,325 | | | 31,678 | |
| Losses and distributions in excess of our investment in unconsolidated real estate venture | | | (181) | | | (152) | | | (883) | | | (459) | |
| Lease liability adjustments | | | (134) | | | — | | | (134) | | | — | |
| Unconsolidated real estate ventures allocated share of above adjustments | | | (497) | | | 90 | | | (327) | | | 1,555 | |
| | | | | | | | | | | | | | |
| Adjusted EBITDA | | $ | 66,169 | | $ | 57,952 | | $ | 286,516 | | $ | 255,039 | |
| | | | | | | | | | | | | | |
| Net Debt to Annualized Adjusted EBITDA (4) | | | 9.6 | x | | 9.2 | x | | 8.9 | x | | 8.4 | x |
| | | | | | | | | | | | | | |
| Net Debt (at JBG SMITH Share) | | | | | | | | December 31, 2021 | | December 31, 2020 | | ||
| Consolidated indebtedness (5) | | | | | | | | $ | 2,464,927 | | $ | 1,985,061 | |
| Unconsolidated indebtedness (5) | | | | | | | | | 370,743 | | | 395,550 | |
| Total consolidated and unconsolidated indebtedness | | | | | | | | | 2,835,670 | | | 2,380,611 | |
| Less: cash and cash equivalents | | | | | | | | | 282,097 | | | 241,066 | |
| Net Debt (at JBG SMITH Share) | | | | | | | | $ | 2,553,573 | | $ | 2,139,545 | |
Note: All EBITDA measures as shown above are attributable to OP Units.
| (1) | In connection with the preparation and review of our annual financial statements, we determined that certain assets were impaired and recorded impairment losses in the three months and year ended December 31, 2021 and 2020 totaling $25.1 million and $10.2 million ($7.8 million related to real estate and $2.4 million related to the right-of-use asset associated with a ground lease). |
| (2) | Includes an impairment on real estate assets taken by an unconsolidated real estate venture and impairments of our investment in unconsolidated real estate ventures related to decreases in the value of the underlying assets. |
| (3) | See page 55 for the components of Transaction and Other Costs. For the three months and year ended December 31, 2021, excludes $0.6 million and $1.7 million of transaction costs attributable to noncontrolling interests. |
| (4) | Calculated using the Net Debt below. Quarterly Adjusted EBITDA is annualized by multiplying by four. Net Debt to Annualized Adjusted EBITDA would have been 8.9x and 8.2x for the three months and year ended December 31, 2021, after adjusting for $198.0 million of gross proceeds from the sale of Pen Place that is expected to close in the second quarter of 2022. |
| (5) | Net of premium/discount and deferred financing costs. |
| | |
| | Page 15 |
| |
FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP) | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | |
| in thousands, except per share data | | Three Months Ended December 31, | | Year Ended December 31, | | ||||||||
| |
| 2021 |
| 2020 | | 2021 |
| 2020 | | ||||
| | | | | | | | | | | | | |
|
| FFO and Core FFO | | | | | | | | | | | | | |
| Net loss attributable to common shareholders | | $ | (56,446) |
| $ | (45,655) | | $ | (79,257) |
| $ | (62,303) | |
| Net loss attributable to redeemable noncontrolling interests | |
| (6,256) |
| | (4,513) | |
| (8,728) |
| | (4,958) | |
| Net loss attributable to noncontrolling interests | |
| (632) |
| | — | |
| (1,740) |
| | — | |
| Net loss | |
| (63,334) |
| | (50,168) | |
| (89,725) |
| | (67,261) | |
| Gain on sale of real estate | |
| — |
| | — | |
| (11,290) |
| | (59,477) | |
| (Gain) loss on sale of unconsolidated real estate assets | |
| — |
| | (826) | |
| (28,326) |
| | 2,126 | |
| Real estate depreciation and amortization | |
| 55,902 |
| | 61,865 | |
| 227,424 |
| | 211,455 | |
| Real estate impairment loss, net of tax (1) | | | 24,301 |
| | 7,805 | |
| 24,301 |
| | 7,805 | |
| Impairment related to unconsolidated real estate ventures (2) | | | 23,883 |
| | — | |
| 25,263 |
| | 6,522 | |
| Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures | |
| 6,626 |
| | 7,219 | |
| 28,216 |
| | 28,949 | |
| FFO attributable to noncontrolling interests | |
| 546 |
| | (2) | |
| 1,522 |
| | (9) | |
| FFO Attributable to OP Units | | $ | 47,924 |
| $ | 25,893 | | $ | 177,385 |
| $ | 130,110 | |
| FFO attributable to redeemable noncontrolling interests | |
| (4,792) |
| | (2,810) | |
| (18,034) |
| | (14,163) | |
| FFO Attributable to Common Shareholders | | $ | 43,132 |
| $ | 23,083 | | $ | 159,351 |
| $ | 115,947 | |
| | | | | | | | | | | | | | |
| FFO attributable to OP Units | | $ | 47,924 |
| $ | 25,893 | | $ | 177,385 |
| $ | 130,110 | |
| Transaction and Other Costs, net of tax (3) | |
| 865 |
| | 1,071 | |
| 8,586 |
| | 8,247 | |
| Business interruption insurance proceeds | | | (4,517) |
| | — | |
| (4,517) |
| | — | |
| Income from investment funds, net | | | (2,711) |
| | — | |
| (2,711) |
| | — | |
| Impairment loss related to right-of-use asset (1) | | | — | | | 2,427 | | | — | | | 2,427 | |
| (Gain) loss from mark-to-market on derivative instruments | |
| (292) |
| | 11 | |
| (342) |
| | 184 | |
| Loss on extinguishment of debt | |
| — |
| | 29 | |
| — |
| | 62 | |
| Losses and distributions in excess of our investment in unconsolidated real estate venture | |
| (181) |
| | (152) | |
| (883) |
| | (459) | |
| Share-based compensation related to Formation Transaction and special equity awards | |
| 3,459 |
| | 6,246 | |
| 16,325 |
| | 31,678 | |
| Lease liability adjustments | |
| (134) |
| | — | |
| (134) |
| | — | |
| Amortization of management contracts intangible, net of tax | |
| 1,073 |
| | 1,073 | |
| 4,290 |
| | 4,360 | |
| Unconsolidated real estate ventures allocated share of above adjustments | |
| (543) |
| | 36 | |
| (435) |
| | 1,884 | |
| Core FFO Attributable to OP Units | | $ | 44,943 |
| $ | 36,634 | | $ | 197,564 |
| $ | 178,493 | |
| Core FFO attributable to redeemable noncontrolling interests | |
| (4,494) |
| | (3,976) | |
| (20,106) |
| | (19,433) | |
| Core FFO Attributable to Common Shareholders | | $ | 40,449 |
| $ | 32,658 | | $ | 177,458 |
| $ | 159,060 | |
| FFO per common share - diluted | | $ | 0.33 |
| | 0.17 | | $ | 1.22 |
| | 0.87 | |
| Core FFO per common share - diluted | | $ | 0.31 |
| | 0.25 | | $ | 1.36 |
| | 1.19 | |
| Weighted average shares - diluted (FFO and Core FFO) | |
| 129,009 |
| | 132,628 | |
| 130,839 |
| | 134,022 | |
See footnotes on page 17.
| | |
| | Page 16 |
| |
FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP) | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | |
| in thousands, except per share data | | Three Months Ended December 31, | | Year Ended December 31, |
| ||||||||
| | | 2021 | | 2020 | | 2021 | | 2020 | | ||||
| | | | | | | | | | | | | | |
| FAD | | | | | | | | | | | | | |
| Core FFO attributable to OP Units |
| $ | 44,943 |
| $ | 36,634 | | $ | 197,564 |
| $ | 178,493 | |
| Recurring capital expenditures and second-generation tenant improvements and leasing commissions (4) | |
| (21,773) | |
| (15,284) | |
| (56,554) | |
| (49,373) | |
| Straight-line and other rent adjustments (5) | |
| (2,985) | |
| 15,433 | |
| (15,539) | |
| 5,535 | |
| Third-party lease liability assumption payments | |
| — | |
| (836) | |
| (1,803) | |
| (3,860) | |
| Share-based compensation expense | |
| 9,663 | |
| 6,496 | |
| 34,583 | |
| 33,625 | |
| Amortization of debt issuance costs | |
| 1,142 | |
| 1,059 | |
| 4,469 | |
| 3,183 | |
| Unconsolidated real estate ventures allocated share of above adjustments | |
| (1,332) | |
| 1,265 | |
| (5,469) | |
| (2,615) | |
| Non-real estate depreciation and amortization | |
| 795 | |
| 829 | |
| 2,975 | |
| 4,300 | |
| FAD available to OP Units (A) | | $ | 30,453 | | $ | 45,596 | | $ | 160,226 | | $ | 169,288 | |
| Distributions to common shareholders and unitholders (B) | | $ | 33,137 | | $ | 33,362 | | $ | 135,771 | | $ | 135,086 | |
| FAD Payout Ratio (B÷A) (6) | |
| 108.8 | % |
| 73.2 | % |
| 84.7 | % |
| 79.8 | % |
| | | | | | | | | | | | | | |
| Capital Expenditures | | | | | | | | | | | | | |
| Maintenance and recurring capital expenditures | | $ | 8,121 | | $ | 6,325 | | $ | 23,827 | | $ | 18,520 | |
| Share of maintenance and recurring capital expenditures from unconsolidated real estate ventures | |
| 168 | |
| 186 | |
| 804 | |
| 1,022 | |
| Second-generation tenant improvements and leasing commissions | |
| 12,815 | |
| 8,773 | |
| 30,095 | |
| 28,108 | |
| Share of second-generation tenant improvements and leasing commissions from unconsolidated real estate ventures | |
| 669 | |
| — | |
| 1,828 | |
| 1,723 | |
| Recurring capital expenditures and second-generation tenant improvements and leasing commissions | |
| 21,773 | |
| 15,284 | |
| 56,554 | |
| 49,373 | |
| Non-recurring capital expenditures | |
| 15,008 | |
| 6,380 | |
| 28,081 | |
| 23,647 | |
| Share of non-recurring capital expenditures from unconsolidated real estate ventures | |
| 145 | |
| 160 | |
| 429 | |
| 554 | |
| First-generation tenant improvements and leasing commissions | |
| 6,229 | |
| 8,910 | |
| 11,370 | |
| 36,643 | |
| Share of First-generation tenant improvements and leasing commissions from unconsolidated real estate ventures | |
| 987 | |
| 747 | |
| 2,471 | |
| 2,408 | |
| Non-recurring capital expenditures | |
| 22,369 | |
| 16,197 | |
| 42,351 | |
| 63,252 | |
| Total JBG SMITH Share of Capital Expenditures | | $ | 44,142 | | $ | 31,481 | | $ | 98,905 | | $ | 112,625 | |
| (1) | In connection with the preparation and review of our annual financial statements, we determined that certain assets were impaired and recorded impairment losses in the three months and year ended December 31, 2021 and 2020 totaling $25.1 million ($24.3 million after tax) and $10.2 million ($7.8 million related to real estate and $2.4 million related to the right-of-use asset associated with a ground lease). |
| (2) | Includes an impairment on real estate assets taken by an unconsolidated real estate venture and impairments of our investment in unconsolidated real estate ventures related to decreases in the value of the underlying assets. |
| (3) | See page 55 for the components of Transaction and Other Costs. For the three months and year ended December 31, 2021, excludes $0.6 million and $1.7 million of transaction costs attributable to noncontrolling interests. |
| (4) | Includes amounts, at JBG SMITH Share, related to unconsolidated real estate ventures. |
| (5) | Includes straight-line rent, above/below market lease amortization and lease incentive amortization. |
| (6) | The quarterly FAD payout ratio is not necessarily indicative of an amount for the full year due to fluctuation in the timing of capital expenditures, the commencement of new leases and the seasonality of our operations. |
| | |
| | Page 17 |
| |
THIRD-PARTY ASSET MANAGEMENT AND REAL ESTATE SERVICES BUSINESS (NON-GAAP) | DECEMBER 31, 2021 |
Third-Party Asset Mgmt and Real Estate Services Business
| | | | | | | | | | | | | | |
| in thousands, at JBG SMITH Share | | Three Months Ended December 31, 2021 |
| ||||||||||
| | | Source of Revenue | | | |
| |||||||
| | | Third-Party | | JBG SMITH | | JBG Legacy | | | |
| |||
| | | Management | | JV Partner (1) | | Funds | | Total |
| ||||
| | | | | | | | | | | | | | |
| Service Revenue | | | | | | | | | | | | | |
| Property management fees |
| $ | 2,766 |
| $ | 1,008 |
| $ | 645 |
| $ | 4,419 | |
| Asset management fees | |
| — | |
| 420 | |
| 1,383 | |
| 1,803 | |
| Development fees | |
| 2,459 | |
| 201 | |
| 127 | |
| 2,787 | |
| Leasing fees | |
| 1,072 | |
| 469 | |
| 186 | |
| 1,727 | |
| Construction management fees | |
| 30 | |
| 64 | |
| 44 | |
| 138 | |
| Other service revenue | |
| 617 | |
| 375 | |
| 173 | |
| 1,165 | |
| Total Revenue (2) | | $ | 6,944 | | $ | 2,537 | | $ | 2,558 | | $ | 12,039 | |
| Pro rata adjusted general and administrative expense: third-party real estate services (3) | |
| | |
|
| |
|
| |
| (15,290) | |
| Total Services Revenue Less Allocated General and Administrative Expenses (4) | | | | |
| | |
| | | $ | (3,251) | |
| (1) | Service revenues from joint ventures are calculated on an asset-by-asset basis by applying our real estate venture partners' respective economic interests to the fees we earned from each consolidated and unconsolidated real estate venture. |
| (2) | Included in "Third-party real estate services, including reimbursements" in our consolidated statement of operations are $10.6 million of reimbursement revenue and $0.7 million of service revenue from our economic interest in consolidated and unconsolidated real estate ventures that are excluded from this table. |
| (3) | Our personnel perform services for wholly owned properties and properties we manage on behalf of third parties, real estate ventures and JBG Legacy Funds. |
We allocate personnel and other costs to wholly owned properties (included in "Property operating expenses" and "General and administrative expense: corporate and other" in our consolidated statement of operations) and to properties owned by the third parties, real estate ventures and JBG Legacy Funds (included in "General and administrative expense: third-party real estate services" in our consolidated statement of operations) using estimates of the time spent performing services related to properties in the respective portfolios and other allocation methodologies.
Allocated general and administrative expenses related to real estate ventures are calculated on an asset-by-asset basis by applying our real estate venture partners' respective economic interests to the total general and administrative expenses allocated to each asset. See "Pro Rata Adjusted General and Administrative Expenses" on the next page for a reconciliation of "General and administrative expenses: third-party real estate services" to "Pro Rata Adjusted General and Administrative Expenses."
| (4) | Services revenue, excluding reimbursement revenue and service revenue from our economic interest in consolidated and unconsolidated real estate ventures, less allocated general and administrative expenses. Management uses this measure as a supplemental performance measure for its third-party asset management and real estate services business and believes it provides useful information to investors because it reflects only those revenue and expense items incurred by us and can be used to assess the profitability of the third-party asset management and real estate services business. |
| | |
| | Page 18 |
| |
PRO RATA ADJUSTED GENERAL AND ADMINISTRATIVE EXPENSES | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | |
| in thousands | | Three Months Ended December 31, 2021 |
| |||||||||||||
| | | | | | Adjustments (1) | | | |
| |||||||
| | | Per Statement | | | | | | | | | | | Pro Rata |
| ||
| | | of Operations | | A | | B | | C | | Adjusted |
| |||||
| | | | | | | | | | | | | | | | | |
| General and Administrative Expenses | | | | | | | | | | | | | | | | |
| Corporate and other |
| $ | 15,344 |
| $ | — |
| $ | — |
| $ | 1,283 |
| $ | 16,627 | |
| Third-party real estate services | |
| 27,124 | |
| — | |
| (10,551) | |
| (1,283) | |
| 15,290 | |
| Share-based compensation related to Formation Transaction and special equity awards | |
| 3,459 | |
| (3,459) | |
| — | |
| — | |
| — | |
| | | | | | | | | | | | | | | | | |
| Total | | $ | 45,927 | | $ | (3,459) | | $ | (10,551) | | $ | — | | $ | 31,917 | |
| (1) | Adjustments: |
A - Removes share-based compensation related to the Formation Transaction and special equity awards.
B - Removes $10.6 million of general and administrative expenses reimbursed by third-party owners of real estate we manage related to revenue which has been excluded from Service Revenue on page 18. Revenue from reimbursements is included in "Third-party real estate services, including reimbursements" in our consolidated statement of operations.
C - Reflects an adjustment to allocate our share of general and administrative expenses of unconsolidated real estate ventures from "Third-party real estate services" to "Corporate and other" and our consolidated real estate venture partners' share of general and administrative expenses from "Corporate and other" to "Third-party real estate services."
| | |
| | Page 19 |
| |
OPERATING ASSETS | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | | | | |
| dollars in thousands, at JBG SMITH Share |
| |
| | | |
| | |
| Plus: Signed |
| Plus: Incremental |
| | |
| ||
| | | | | | Q4 2021 | | | | | But Not Yet | | NOI from Assets | | Adjusted |
| ||||
| | | | | | Operating | | Annualized | | Commenced | | in Initial | | Annualized |
| |||||
| | | % Occupied | | | Portfolio NOI | | NOI | | Leases | | Lease-up (1) | | NOI |
| |||||
| | | | | | | | | | | | | | | | | | | | |
| Commercial (2) | | | | | | | | | | | | | | | | | | | |
| National Landing | | 85.5 | % | | $ | 37,313 | | $ | 147,671 | | $ | 12,812 | | $ | - | | $ | 160,483 | |
| Other VA | | 88.1 | % | | | 13,516 | | | 54,064 | | | 276 | | | 340 | | | 54,680 | |
| DC |
| 70.5 | % | | | 8,180 | | | 32,720 | | | 4,648 | | | 2,336 | | | 39,704 | |
| MD |
| 79.9 | % | |
| 3,766 | |
| 15,064 | |
| 2,512 | |
| 4,576 | |
| 22,152 | |
| Total / weighted average |
| 82.9 | % | | $ | 62,775 | | $ | 249,519 | | $ | 20,248 | | $ | 7,252 | | $ | 277,019 | |
| | | | | | | | | | | | | | | | | | | | |
| Multifamily (3) |
|
| | |
|
| |
|
| |
|
| |
|
| |
|
| |
| National Landing |
| 94.6 | % | | $ | 9,518 | | $ | 38,072 | | $ | — | | $ | — | | $ | 38,072 | |
| DC |
| 91.6 | % | | | 13,088 | | | 52,352 | | | 496 | | | 2,078 | | | 54,926 | |
| MD |
| 81.8 | % | |
| 1,455 | |
| 5,820 | |
| 484 | |
| 3,298 | |
| 9,602 | |
| Total / weighted average |
| 91.8 | % | | $ | 24,061 | | $ | 96,244 | | $ | 980 | | $ | 5,376 | | $ | 102,600 | |
| | | | | | | | | | | | | | | | | | | | |
| Total / Weighted Average |
| 85.8 | % | | $ | 86,836 | | $ | 345,763 | | $ | 21,228 | | $ | 12,628 | | $ | 379,619 | |
| (1) | Incremental revenue from commercial assets represents the burn-off of Free Rent and is calculated as Free Rent incurred at assets in their initial lease-up for the three months ended December 31, 2021 multiplied by four. Incremental revenue from multifamily assets in their initial lease-up is calculated as the product of units available for occupancy up to 95.0% occupancy and the weighted average monthly in-place rent per unit as of December 31, 2021, multiplied by 12, and assumes no rent growth. Excludes potential revenue from vacant retail space in multifamily assets in their initial lease-up and 900 W Street. We believe the monthly in-place rents per unit for the In-Service multifamily assets continue to be negatively impacted by the COVID-19 pandemic. See page 38 for more detail. |
| (2) | Crystal City Marriott and 1700 M Street (for which we are the ground lessor) are excluded from the Percent Occupied metric. |
| (3) | 2221 S. Clark Street - Residential and 900 W Street are excluded from the Percent Occupied metric. |
| | |
| | Page 20 |
| |
SUMMARY & SAME STORE NOI (NON-GAAP) | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | | | | |
| dollars in thousands | | | | 100% Share | | At JBG SMITH Share | | ||||||||||||
| | | | | | | | | | | | | NOI for the Three Months Ended December 31, |
| ||||||
| | | Number of | | Square Feet/ | | Square Feet/ | | % | | % | | | | | | | | | |
| | | Assets | | Units | | Units | | Leased (1) | | Occupied (1) | | 2021 | | 2020 | | % Change | | ||
| Same Store (2) | | | | | | | | | | | | | | | | | | | |
| National Landing | | 25 | | 6,519,928 SF/ | | 6,519,928 SF/ | | 88.5 | % | 87.5 | % | $ | 44,715 | | $ | 40,479 | | 10.5 | % |
| Other VA | | 7 | | 2,708,439 SF | | 1,774,912 SF | | 89.0 | % | 88.1 | % | | 13,516 | | | 10,876 | | 24.3 | % |
| DC |
| 17 |
| 2,527,249 SF/ |
| 1,813,831 SF/ |
| 85.4 | % | 81.3 | % | | 17,099 |
| | 17,179 |
| (0.5) | % |
| MD |
| 7 |
| 483,739 SF/ |
| 483,739 SF/ |
| 87.6 | % | 82.4 | % |
| 3,051 | |
| 3,063 |
| (0.4) | % |
| Total / weighted average |
| 56 |
| 12,239,355 SF/ |
| 10,592,410 SF/ |
| 87.7 | % | 85.8 | % | $ | 78,381 | | $ | 71,597 |
| 9.5 | % |
| | | | | | | | | | | | | | | | | | | | |
| Non-Same Store |
|
|
| |
| |
|
|
|
| |
|
| |
|
|
|
| |
| National Landing |
| 1 |
| 273,650 SF |
| 273,650 SF |
| 98.4 | % | 100.0 | % | $ | 2,120 | | $ | 657 |
| 222.7 | % |
| Other VA | | — | | — | | — | | — | | — | | | (4) | | | 123 | | (103.3) | % |
| DC |
| 5 |
| 269,581 SF/ |
| 148,270 SF/ |
| 90.4 | % | 86.9 | % | | 4,169 | | | (48) |
| N/A | |
| MD |
| 2 |
| 300,508 SF/ |
| 300,508 SF/ |
| 76.5 | % | 72.5 | % |
| 2,170 | |
| 107 |
| 1,928.0 | % |
| Total / weighted average |
| 8 |
| 843,739 SF/ |
| 722,428 SF/ |
| 87.7 | % | 84.9 | % | $ | 8,455 | | $ | 839 |
| 907.7 | % |
| | | | | | | | | | | | | | | | | | | | |
| Total Operating Portfolio |
|
|
| |
| |
|
|
|
| |
|
| |
|
|
|
| |
| National Landing | | 26 | | 6,793,578 SF/ | | 6,793,578 SF/ | | 88.8 | % | 87.9 | % | $ | 46,835 | | $ | 41,136 | | 13.9 | % |
| Other VA | | 7 | | 2,708,439 SF | | 1,774,912 SF | | 89.0 | % | 88.1 | % | | 13,512 | | | 10,999 | | 22.8 | % |
| DC |
| 22 |
| 2,796,830 SF/ |
| 1,962,101 SF/ |
| 86.4 | % | 82.5 | % | | 21,268 | | | 17,131 |
| 24.1 | % |
| MD |
| 9 |
| 784,247 SF/ |
| 784,247 SF/ |
| 83.6 | % | 78.9 | % |
| 5,221 | |
| 3,170 |
| 64.7 | % |
| Operating Portfolio - |
| 64 |
| 13,083,094 SF/ |
| 11,314,838 SF/ |
| 87.7 | % | 85.8 | % | $ | 86,836 | | $ | 72,436 |
| 19.9 | % |
| (1) | Crystal City Marriott, 1700 M Street (for which we are the ground lessor), 2221 S. Clark Street - Residential and 900 W Street are excluded from the Percent Leased and Percent Occupied metrics. |
| (2) | Same Store refers to the pool of assets that were In-Service for the entirety of both periods being compared, which excludes assets for which significant redevelopment, renovation, or repositioning occurred during either of the periods being compared. The Crystal City Marriott generated $0.4 million of NOI for the three months ended December 31, 2021 compared to a $0.7 million loss for the three months ended December 31, 2020. The Crystal City Marriott generated $3.5 million and $1.8 million of NOI in 2018 and 2019. |
| | |
| | Page 21 |
| |
SUMMARY & SAME STORE NOI (NON-GAAP) | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | | | | |
| dollars in thousands | | | | 100% Share | | At JBG SMITH Share | | ||||||||||||
| | | | | | | | | | | | | NOI for the Year Ended December 31, |
| ||||||
| | | Number of | | Square Feet/ | | Square Feet/ | | % | | % | | | | | | | | | |
| | | Assets | | Units | | Units | | Leased (1) | | Occupied (1) | | 2021 | | 2020 | | % Change | | ||
| Same Store (2) | | | | | | | | | | | | | | | | | | | |
| National Landing | | 25 | | 6,519,928 SF/ | | 6,519,928 SF/ | | 88.5 | % | 87.5 | % | $ | 174,910 | | $ | 169,818 | | 3.0 | % |
| Other VA | | 7 | | 2,708,439 SF | | 1,774,912 SF | | 89.0 | % | 88.1 | % | | 47,854 | | | 44,645 | | 7.2 | % |
| DC |
| 16 |
| 2,527,249 SF/ |
| 1,813,831 SF/ |
| 84.7 | % | 80.4 | % | | 63,516 |
| | 73,182 |
| (13.2) | % |
| MD |
| 7 |
| 483,739 SF/ |
| 483,739 SF/ |
| 87.6 | % | 82.4 | % |
| 13,428 | |
| 14,686 |
| (8.6) | % |
| Total / weighted average |
| 55 |
| 12,239,355 SF/ |
| 10,592,410 SF/ |
| 87.7 | % | 85.7 | % | $ | 299,708 | | $ | 302,331 |
| (0.9) | % |
| | | | | | | | | | | | | | | | | | | | |
| Non-Same Store |
|
|
| |
| |
|
|
|
| |
|
| |
|
|
|
| |
| National Landing |
| 1 |
| 273,650 SF |
| 273,650 SF |
| 98.4 | % | 100.0 | % | $ | 8,708 | | $ | 400 |
| N/A | |
| Other VA | | — | | — | | — | | — | | — | | | 145 | | | 620 | | (76.6) | % |
| DC |
| 6 |
| 269,581 SF/ |
| 148,270 SF/ |
| 90.5 | % | 87.4 | % | | 15,366 | | | 527 |
| N/A | |
| MD |
| 2 |
| 300,508 SF/ |
| 300,508 SF/ |
| 76.5 | % | 72.5 | % |
| 8,107 | |
| (1,628) |
| 598.0 | % |
| Total / weighted average |
| 9 |
| 843,739 SF/ |
| 722,428 SF/ |
| 88.3 | % | 85.5 | % | $ | 32,326 | | $ | (81) |
| N/A | |
| | | | | | | | | | | | | | | | | | | | |
| Total Operating Portfolio |
|
|
| |
| |
|
|
|
| |
|
| |
|
|
|
| |
| National Landing | | 26 | | 6,793,578 SF/ | | 6,793,578 SF/ | | 88.8 | % | 87.9 | % | $ | 183,618 | | $ | 170,218 | | 7.9 | % |
| Other VA | | 7 | | 2,708,439 SF | | 1,774,912 SF | | 89.0 | % | 88.1 | % | | 47,999 | | | 45,265 | | 6.0 | % |
| DC |
| 22 |
| 2,796,830 SF/ |
| 1,962,101 SF/ |
| 86.4 | % | 82.5 | % | | 78,882 | | | 73,709 |
| 7.0 | % |
| MD |
| 9 |
| 784,247 SF/ |
| 784,247 SF/ |
| 83.6 | % | 78.9 | % |
| 21,535 | |
| 13,058 |
| 64.9 | % |
| Operating Portfolio - |
| 64 |
| 13,083,094 SF/ |
| 11,314,838 SF/ |
| 87.7 | % | 85.8 | % | $ | 332,034 | | $ | 302,250 |
| 9.9 | % |
| | |
| | Page 22 |
| |
SUMMARY NOI (NON-GAAP) | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | |
| dollars in thousands | | NOI for the Three Months Ended December 31, 2021 at JBG SMITH Share |
| |||||||||||||
| | | Consolidated | | Unconsolidated | | Commercial | | Multifamily | | Total |
| |||||
| Number of operating assets |
| | 48 |
| | 16 |
| | 42 |
| | 22 |
| | 64 | |
| Property rental (1) | | $ | 114,381 | | $ | 12,047 | | $ | 88,804 | | $ | 37,624 | | $ | 126,428 | |
| Tenant expense reimbursement |
|
| 7,046 |
|
| 743 |
|
| 6,460 |
|
| 1,329 |
|
| 7,789 | |
| Other revenue (2) | |
| 10,457 | |
| 1,061 | |
| 7,580 | |
| 3,938 | |
| 11,518 | |
| Total revenue | |
| 131,884 | |
| 13,851 | |
| 102,844 | |
| 42,891 | |
| 145,735 | |
| | | | | | | | | | | | | | | | | |
| Operating expenses | |
| (50,433) | |
| (7,398) | |
| (39,006) | |
| (18,825) | |
| (57,831) | |
| Ground rent expense | |
| (1,024) | |
| (44) | |
| (1,063) | |
| (5) | |
| (1,068) | |
| Total expenses | |
| (51,457) | |
| (7,442) | |
| (40,069) | |
| (18,830) | |
| (58,899) | |
| | | | | | | | | | | | | | | | | |
| Operating Portfolio NOI (3) | | $ | 80,427 | | $ | 6,409 | | $ | 62,775 | | $ | 24,061 | | $ | 86,836 | |
| | | | | | | | | | | | | | | | | |
| Annualized NOI | | $ | 320,127 | | $ | 25,636 | | $ | 249,519 | | $ | 96,244 | | $ | 345,763 | |
| Additional Information | |
|
| |
|
| |
|
| |
|
| |
|
| |
| Free Rent (at 100% share) | | $ | 6,510 | | $ | 3,132 | | $ | 8,140 | | $ | 1,502 | | $ | 9,642 | |
| Free Rent (at JBG SMITH Share) | | $ | 6,508 | | $ | 1,411 | | $ | 6,644 | | $ | 1,275 | | $ | 7,919 | |
| Annualized Free Rent (at JBG SMITH Share) (4) | | $ | 26,032 | | $ | 5,644 | | $ | 26,576 | | $ | 5,100 | | $ | 31,676 | |
| % occupied (at JBG SMITH Share) (5) | |
| 86.4 | % |
| 79.4 | % |
| 82.9 | % |
| 91.8 | % |
| 85.8 | % |
| Annualized base rent of signed leases, not commenced (at 100% share) (6) | | $ | 19,696 | | $ | 3,400 | | $ | 21,604 | | $ | 1,492 | | $ | 23,096 | |
| Annualized base rent of signed leases, not commenced (at JBG SMITH Share) (6) | | $ | 19,696 | | $ | 1,532 | | $ | 20,248 | | $ | 980 | | $ | 21,228 | |
| (1) | Property rental revenue excludes straight-line rent adjustments and other GAAP adjustments, and includes payments associated with assumed lease liabilities. |
| (2) | Includes $6.3 million of parking revenue at JBG SMITH Share. |
| (3) | NOI excludes $4.6 million of related party management fees at JBG SMITH Share. NOI excludes $1.3 million of rent that was reserved or deferred during the quarter, net of rent recaptured during the quarter. See definition of NOI on page 52. |
| (4) | Represents JBG SMITH's share of Free Rent for the three months ended December 31, 2021 multiplied by four. |
| (5) | Crystal City Marriott, 1700 M Street (for which we are the ground lessor), 2221 S. Clark Street - Residential and 900 W Street are excluded from the Percent Occupied metric. |
| (6) | Represents monthly base rent before Free Rent and straight-line rent adjustments, plus estimated tenant reimbursements for the month in which the lease commences, multiplied by 12. Includes only leases for office and retail spaces for which rent had not yet commenced as of December 31, 2021. |
| | |
| | Page 23 |
| |
SUMMARY NOI - COMMERCIAL (NON-GAAP) | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | | | | | | | |
| dollars in thousands | | NOI for the Three Months Ended December 31, 2021 at JBG SMITH Share |
| |||||||||||||||||||
| |
| Consolidated |
| Unconsolidated |
| National Landing | | Other VA | | DC |
| MD |
| Total |
| |||||||
| Number of operating assets |
| | 32 |
| | 10 |
| | 22 | | | 7 | | | 10 |
| | 3 |
| | 42 | |
| Property rental (1) | | $ | 78,902 | | $ | 9,902 | | $ | 50,158 | | $ | 16,643 | | $ | 15,489 | | $ | 6,514 | | $ | 88,804 | |
| Tenant expense reimbursement | |
| 5,782 | |
| 678 | |
| 2,735 | |
| 1,069 | |
| 2,609 | |
| 47 | |
| 6,460 | |
| Other revenue (2) | |
| 6,678 | |
| 902 | |
| 5,164 | |
| 1,401 | |
| 703 | |
| 312 | |
| 7,580 | |
| Total revenue | |
| 91,362 | |
| 11,482 | |
| 58,057 | |
| 19,113 | |
| 18,801 | |
| 6,873 | |
| 102,844 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Operating expenses | |
| (32,908) | |
| (6,098) | |
| (20,744) | |
| (4,827) | |
| (10,582) | |
| (2,853) | |
| (39,006) | |
| Ground rent expense | |
| (1,024) | |
| (39) | |
| — | |
| (770) | |
| (39) | |
| (254) | |
| (1,063) | |
| Total expenses | |
| (33,932) | |
| (6,137) | |
| (20,744) | |
| (5,597) | |
| (10,621) | |
| (3,107) | |
| (40,069) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Operating Portfolio NOI (3) | | $ | 57,430 | | $ | 5,345 | | $ | 37,313 | | $ | 13,516 | | $ | 8,180 | | $ | 3,766 | | $ | 62,775 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Annualized NOI | | $ | 228,139 | | $ | 21,380 | | $ | 147,671 | | $ | 54,064 | | $ | 32,720 | | $ | 15,064 | | $ | 249,519 | |
| Additional Information | |
|
| |
|
| |
| | |
| | |
|
| |
|
| |
|
| |
| Free Rent (at 100% share) | | $ | 5,399 | | $ | 2,741 | | $ | 2,926 | | $ | 784 | | $ | 3,306 | | $ | 1,124 | | $ | 8,140 | |
| Free Rent (at JBG SMITH Share) | | $ | 5,399 | | $ | 1,245 | | $ | 2,926 | | $ | 381 | | $ | 2,213 | | $ | 1,124 | | $ | 6,644 | |
| Annualized Free Rent (at JBG SMITH Share) (4) | | $ | 21,596 | | $ | 4,980 | | $ | 11,704 | | $ | 1,524 | | $ | 8,852 | | $ | 4,496 | | $ | 26,576 | |
| % occupied (at JBG SMITH Share) (5) | |
| 82.9 | % |
| 83.1 | % |
| 85.5 | % |
| 88.1 | % | | 70.5 | % |
| 79.9 | % |
| 82.9 | % |
| Annualized base rent of signed leases, not commenced (at 100% share) (6) | | $ | 19,200 | | $ | 2,404 | | $ | 12,812 | | $ | 824 | | $ | 5,456 | | $ | 2,512 | | $ | 21,604 | |
| Annualized base rent of signed leases, not commenced (at JBG SMITH Share) (6) | | $ | 19,200 | | $ | 1,048 | | $ | 12,812 | | $ | 276 | | $ | 4,648 | | $ | 2,512 | | $ | 20,248 | |
| (1) | Property rental revenue excludes straight-line rent adjustments and other GAAP adjustments, and includes payments associated with assumed lease liabilities. |
| (2) | Includes $4.8 million of parking revenue at JBG SMITH Share. Parking revenue in our commercial portfolio during the quarter was approximately 65% of pre-pandemic levels of approximately $30 million annually. |
| (3) | NOI excludes $3.2 million of related party management fees at JBG SMITH Share. NOI excludes $1.0 million of rent that was reserved or deferred during the quarter, net of rent recaptured during the quarter. See definition of NOI on page 52. |
| (4) | Represents JBG SMITH's share of Free Rent for the three months ended December 31, 2021 multiplied by four. |
| (5) | Crystal City Marriott and 1700 M Street (for which we are the ground lessor) are excluded from the Percent Occupied metric. |
| (6) | Represents monthly base rent before Free Rent and straight-line rent adjustments, plus estimated tenant reimbursements for the month in which the lease commences, multiplied by 12. Includes only leases for office and retail spaces for which rent had not yet commenced as of December 31, 2021. |
| | |
| | Page 24 |
| |
SUMMARY NOI - MULTIFAMILY (NON-GAAP) | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | | | | |
| dollars in thousands | | NOI for the Three Months Ended December 31, 2021 at JBG SMITH Share |
| ||||||||||||||||
| |
| Consolidated |
| Unconsolidated | | National Landing |
| DC |
| MD |
| Total |
| ||||||
| Number of operating assets |
| | 16 |
| | 6 | | | 4 |
| | 12 |
| | 6 |
| | 22 | |
| Property rental (1) | | $ | 35,479 | | $ | 2,145 | | $ | 15,458 | | $ | 19,499 | | $ | 2,667 | | $ | 37,624 | |
| Tenant expense reimbursement | |
| 1,264 | |
| 65 | |
| 91 | |
| 1,229 | |
| 9 | |
| 1,329 | |
| Other revenue (2) | |
| 3,779 | |
| 159 | |
| 1,852 | |
| 1,869 | |
| 217 | |
| 3,938 | |
| Total revenue | |
| 40,522 | |
| 2,369 | |
| 17,401 | |
| 22,597 | |
| 2,893 | |
| 42,891 | |
| | | | | | | | | | | | | | | | | | | | |
| Operating expenses | |
| (17,525) | |
| (1,300) | |
| (7,883) | |
| (9,509) | |
| (1,433) | |
| (18,825) | |
| Ground rent expense | |
| — | |
| (5) | |
| — | |
| — | |
| (5) | |
| (5) | |
| Total expenses | |
| (17,525) | |
| (1,305) | |
| (7,883) | |
| (9,509) | |
| (1,438) | |
| (18,830) | |
| | | | | | | | | | | | | | | | | | | | |
| Operating Portfolio NOI (3) | | $ | 22,997 | | $ | 1,064 | | $ | 9,518 | | $ | 13,088 | | $ | 1,455 | | $ | 24,061 | |
| | | | | | | | | | | | | | | | | | | | |
| Annualized NOI | | $ | 91,988 | | $ | 4,256 | | $ | 38,072 | | $ | 52,352 | | $ | 5,820 | | $ | 96,244 | |
| Additional Information | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Free Rent (at 100% share) | | $ | 1,111 | | $ | 391 | | $ | 671 | | $ | 576 | | $ | 255 | | $ | 1,502 | |
| Free Rent (at JBG SMITH Share) | | $ | 1,109 | | $ | 166 | | $ | 671 | | $ | 484 | | $ | 120 | | $ | 1,275 | |
| Annualized Free Rent (at JBG SMITH Share) (4) | | $ | 4,436 | | $ | 664 | | $ | 2,684 | | $ | 1,936 | | $ | 480 | | $ | 5,100 | |
| % occupied (at JBG SMITH Share) (5) | |
| 93.5 | % |
| 70.7 | % |
| 94.6 | % |
| 91.6 | % |
| 81.8 | % |
| 91.8 | % |
| Annualized base rent of signed leases, not commenced (at 100% share) (6) | | $ | 496 | | $ | 996 | | $ | — | | $ | 496 | | $ | 996 | | $ | 1,492 | |
| Annualized base rent of signed leases, not commenced (at JBG SMITH Share) (6) | | $ | 496 | | $ | 484 | | $ | — | | $ | 496 | | $ | 484 | | $ | 980 | |
| (1) | Property rental revenue excludes straight-line rent adjustments and other GAAP adjustments, and includes payments associated with assumed lease liabilities. Average in-place rents were approximately 9% below asking rents as of December 31, 2021. |
| (2) | Includes $1.5 million of parking revenue at JBG SMITH Share |
| (3) | NOI excludes $1.4 million of related party management fees at JBG SMITH Share. NOI excludes $0.3 million of rent that was reserved or deferred during the quarter, net of rent recaptured during the quarter. See definition of NOI on page 52. |
| (4) | Represents JBG SMITH's share of Free Rent for the three months ended December 31, 2021 multiplied by four. |
| (5) | 2221 S. Clark Street - Residential and 900 W Street are excluded from the Percent Occupied metric. |
| (6) | Represents monthly base rent before Free Rent and straight-line rent adjustments, plus estimated tenant reimbursements for the month in which the lease commences, multiplied by 12. Includes only leases for office and retail spaces for which rent had not yet commenced as of December 31, 2021. |
| | |
| | Page 25 |
| |
NOI RECONCILIATIONS (NON-GAAP) | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | |
| dollars in thousands | | Three Months Ended December 31, | | Year Ended December 31, |
| ||||||||
| |
| 2021 |
| 2020 | | 2021 |
| 2020 | | ||||
| Net loss attributable to common shareholders | | $ | (56,446) | | $ | (45,655) | | $ | (79,257) | | $ | (62,303) | |
| Add: | | |
| | |
| | |
| | |
| |
| Depreciation and amortization expense | | | 58,173 | | | 64,170 | | | 236,303 | | | 221,756 | |
| General and administrative expense: | | |
| | |
| | |
| | |
| |
| Corporate and other | | | 15,344 | | | 9,156 | | | 53,819 | | | 46,634 | |
| Third-party real estate services | | | 27,124 | | | 28,569 | | | 107,159 | | | 114,829 | |
| Share-based compensation related to Formation Transaction and special equity awards | | | 3,459 | | | 6,246 | | | 16,325 | | | 31,678 | |
| Transaction and Other Costs | | | 1,518 | | | 1,144 | | | 10,429 | | | 8,670 | |
| Interest expense | | | 17,649 | | | 17,661 | | | 67,961 | | | 62,321 | |
| Loss on extinguishment of debt | | | — | | | 29 | | | — | | | 62 | |
| Impairment loss | | | 25,144 | | | 10,232 | | | 25,144 | | | 10,232 | |
| Income tax expense (benefit) | | | (986) | | | (544) | | | 3,541 | | | (4,265) | |
| Net loss attributable to redeemable noncontrolling interests | | | (6,256) | | | (4,513) | | | (8,728) | | | (4,958) | |
| Net loss attributable to noncontrolling interests | | | (632) | | | — | | | (1,740) | | | — | |
| Less: | | |
| | |
| | |
| | |
| |
| Third-party real estate services, including reimbursements revenue | | | 23,309 | | | 30,069 | | | 114,003 | | | 113,939 | |
| Other revenue | | | 2,013 | | | 9,934 | | | 7,671 | | | 15,372 | |
| Loss from unconsolidated real estate ventures, net | | | (25,583) | | | (3,194) | | | (2,070) | | | (20,336) | |
| Interest and other income (loss), net | | | 8,672 | | | (1,646) | | | 8,835 | | | (625) | |
| Gain on sale of real estate | | | — | | | — | | | 11,290 | | | 59,477 | |
| Consolidated NOI | | | 75,680 | | | 51,332 | | | 291,227 | | | 256,829 | |
| NOI attributable to unconsolidated real estate ventures at our share | | | 6,289 | | | 7,521 | | | 29,232 | | | 27,693 | |
| Non-cash rent adjustments (1) | | | (2,985) | | | 15,433 | | | (15,539) | | | 5,535 | |
| Other adjustments (2) | | | 6,107 | | | (3,284) | | | 20,732 | | | 6,058 | |
| Total adjustments | | | 9,411 | | | 19,670 | | | 34,425 | | | 39,286 | |
| NOI | | $ | 85,091 | | $ | 71,002 | | $ | 325,652 | | $ | 296,115 | |
| Less: out-of-service NOI loss (3) | | | (1,745) | | | (801) | | | (6,382) | | | (5,789) | |
| Operating Portfolio NOI | | $ | 86,836 | | $ | 71,803 | | $ | 332,034 | | $ | 301,904 | |
| Non-Same Store NOI (4) | | | 8,455 | | | 206 | | | 32,326 | | | (427) | |
| Same Store NOI (5) | | $ | 78,381 | | $ | 71,597 | | $ | 299,708 | | $ | 302,331 | |
| | | | | | | | | | | | | | |
| Change in Same Store NOI | | | 9.5 | % | | | | | (0.9) | % | | | |
| Number of properties in Same Store pool | | | 56 | | | | | | 55 | | | | |
| (1) | Adjustment to exclude straight-line rent, above/below market lease amortization and lease incentive amortization. |
| (2) | Adjustment to include other revenue and payments associated with assumed lease liabilities related to operating properties and to exclude commercial lease termination revenue and allocated corporate general and administrative expenses to operating properties. |
| (3) | Includes the results of our Under-Construction assets, and Near-Term and Future Development Pipelines. |
| (4) | Includes the results of properties that were not In-Service for the entirety of both periods being compared and properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared. |
| (5) | Includes the results of the assets that are owned, operated and In-Service for the entirety of both periods being compared. |
| | |
| | Page 26 |
| |
LEASING ACTIVITY - OFFICE | DECEMBER 31, 2021 |
| | | | | | | | | |
| square feet in thousands |
| Three Months Ended | | | Year Ended |
| ||
| | | December 31, 2021 | | | December 31, 2021 |
| ||
| Square feet leased: |
| | | | | |
| |
| At 100% share |
| | 533 | | | | 1,780 | |
| At JBG SMITH Share |
| | 467 | | | | 1,651 | |
| First-generation space: New | | | 117 | | | | 291 | |
| Second-generation space: New | | | 31 | | | | 195 | |
| Second-generation space: Renewal | | | 319 | | | | 1,165 | |
| Initial rent (1) | | $ | 44.41 | | | $ | 45.58 | |
| Straight-line rent (2) | | $ | 42.41 | | | $ | 44.58 | |
| Weighted average lease term (years) | |
| 8.0 | | |
| 5.4 | |
| Weighted average Free Rent period (months) | |
| 10.3 | | |
| 6.8 | |
| Second-generation space: | |
| | | |
| | |
| Square feet | |
| 350 | | |
| 1,360 | |
| Cash basis: | |
|
| | |
|
| |
| Initial rent (1) | | $ | 43.11 | | | $ | 45.02 | |
| Prior escalated rent | | $ | 42.26 | | | $ | 44.73 | |
| % change | |
| 2.0 | % | |
| 0.6 | % |
| GAAP basis: | |
|
| | |
|
| |
| Straight-line rent (2) | | $ | 40.41 | | | $ | 43.59 | |
| Prior straight-line rent | | $ | 40.38 | | | $ | 42.39 | |
| % change | |
| 0.1 | % | |
| 2.8 | % |
| Tenant improvements: | |
|
| | |
|
| |
| Per square foot | | $ | 23.95 | | | $ | 22.77 | |
| Per square foot per annum | | $ | 3.00 | | | $ | 4.22 | |
| % of initial rent | |
| 6.7 | % | |
| 9.3 | % |
| Leasing commissions: | |
|
| | |
|
| |
| Per square foot | | $ | 12.06 | | | $ | 8.04 | |
| Per square foot per annum | | $ | 1.51 | | | $ | 1.49 | |
| % of initial rent | |
| 3.4 | % | |
| 3.3 | % |
Note: At JBG SMITH Share, unless otherwise indicated. The leasing activity and related statistics are based on leases signed during the period and are not intended to coincide with the commencement of property rental revenue in accordance with GAAP. Second-generation space represents square footage that was vacant for less than nine months. Weighted average lease term is weighted by SF and weighted average Free Rent period is weighted by Annualized Rent.
| (1) | Represents the cash basis weighted average starting rent per square foot, which is generally indicative of market rents. Triple net leases are converted to a gross basis by adding estimated tenant reimbursements to monthly base rent. Most leases include Free Rent and periodic step-ups in rent which are not included in the initial cash basis rent per square foot but are included in the GAAP basis rent per square foot. |
| (2) | Represents the GAAP basis weighted average rent per square foot that is recognized over the term of the respective leases, including the effect of Free Rent and fixed step-ups in rent. |
| | |
| | Page 27 |
| |
NET EFFECTIVE RENT - OFFICE | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | | | | |
| square feet in thousands, dollars per square feet, at JBG SMITH Share | | Three Months Ended |
| ||||||||||||||||
| |
| Five Quarter |
| December 31, 2021 |
| September 30, 2021 |
| June 30, 2021 |
| March 31, 2021 |
| December 31, 2020 |
| ||||||
| Square feet |
| | 372 |
| | 468 |
| | 126 |
| | 715 |
| | 344 |
| | 209 | |
| Weighted average lease term (years) |
| | 5.3 |
| | 8.0 |
| | 5.4 |
| | 4.2 |
| | 4.3 |
| | 4.2 | |
| Initial rent (1) | | $ | 45.46 | | $ | 44.41 | | $ | 44.82 | | $ | 44.96 | | $ | 48.73 | | $ | 44.50 | |
| Base rent per annum (2) | | $ | 49.08 | | $ | 46.32 | | $ | 45.78 | | $ | 50.38 | | $ | 53.75 | | $ | 45.09 | |
| Tenant improvements per annum | |
| (4.47) | |
| (3.00) | |
| (4.68) | |
| (5.60) | |
| (4.26) | |
| (4.14) | |
| Leasing commissions per annum | |
| (1.50) | |
| (1.51) | |
| (0.90) | |
| (1.43) | |
| (1.82) | |
| (1.59) | |
| Free Rent per annum | |
| (4.50) | |
| (4.79) | |
| (3.60) | |
| (4.79) | |
| (5.24) | |
| (2.18) | |
| Net Effective Rent | | $ | 38.60 | | $ | 37.02 | | $ | 36.60 | | $ | 38.56 | | $ | 42.43 | | $ | 37.18 | |
| | | | | | | | | | | | | | | | | | | | |
| National Landing | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Square feet | |
| 301 | |
| 337 | |
| 89 | |
| 639 | |
| 282 | |
| 160 | |
| Initial rent (1) | | $ | 44.42 | | $ | 43.58 | | $ | 44.85 | | $ | 43.46 | | $ | 47.20 | | $ | 44.92 | |
| Net effective rent | | $ | 36.75 | | $ | 35.64 | | $ | 35.36 | | $ | 35.77 | | $ | 39.57 | | $ | 38.75 | |
| | | | | | | | | | | | | | | | | | | | |
| Other VA | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Square feet | |
| 26 | |
| 60 | |
| 16 | |
| 12 | |
| 2 | |
| 38 | |
| Initial rent (1) | | $ | 40.03 | | $ | 38.05 | | $ | 42.95 | | $ | 47.77 | | $ | 61.00 | | $ | 38.71 | |
| Net effective rent | | $ | 33.79 | | $ | 33.53 | | $ | 40.43 | | $ | 35.75 | | $ | 42.01 | | $ | 30.48 | |
| | | | | | | | | | | | | | | | | | | | |
| DC | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Square feet | |
| 24 | |
| 32 | |
| 9 | |
| 45 | |
| 22 | |
| 11 | |
| Initial rent (1) | | $ | 60.72 | | $ | 62.30 | | $ | 50.75 | | $ | 62.54 | | $ | 60.21 | | $ | 58.34 | |
| Net effective rent | | $ | 51.98 | | $ | 52.86 | | $ | 43.86 | | $ | 51.57 | | $ | 54.77 | | $ | 52.44 | |
| | | | | | | | | | | | | | | | | | | | |
| MD | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Square feet | |
| 21 | |
| 38 | |
| 11 | |
| 19 | |
| 38 | |
| — | |
| Initial rent (1) | | $ | 49.52 | | $ | 46.74 | | $ | 42.27 | | $ | 52.57 | | $ | 52.96 | | $ | — | |
| Net effective rent | | $ | 41.15 | | $ | 36.08 | | $ | 32.33 | | $ | 40.17 | | $ | 49.40 | | $ | — | |
Note: Leasing activity and related statistics are based on leases signed during the period and are not intended to coincide with the recognition of property rental revenue in accordance with GAAP. Weighted average lease term is weighted by SF and weighted average Free Rent period is weighted by Annualized Rent.
| (1) | Represents the cash basis weighted average starting rent per square foot, which is generally indicative of market rents. Triple net leases are converted to a gross basis by adding estimated tenant reimbursements to monthly base rent. Most leases include Free Rent and periodic step-ups in rent which are not included in the initial cash basis rent per square foot. |
| (2) | Represents the weighted average base rent before Free Rent, plus estimated tenant reimbursements recognized over the term of the respective leases, including the effect of fixed step-ups in rent, divided by SF, and divided by years of lease term. Triple net leases are converted to a gross basis by adding estimated tenant reimbursements to base rent. Tenant reimbursements are estimated by escalating tenant reimbursements as of the respective reporting period, or management's estimate thereof, by 2.75% annually through the lease expiration year. |
| | |
| | Page 28 |
| |
LEASE EXPIRATIONS | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | | | |
| | | | | At JBG SMITH Share | | |||||||||||||
| |
| |
| |
| |
| | |
| |
| | |
| Estimated |
| |
| | | | | | | | | | | | % of | | | | | Annualized |
| |
| | | | | | | % of | | Annualized | | Total | | Annualized | | Rent Per |
| |||
| | | Number | | | | Total | | Rent (1) | | Annualized | | Rent Per | | Square Foot at |
| |||
| Year of Lease Expiration | | of Leases | | Square Feet | | Square Feet | | (in thousands) | | Rent | | Square Foot (1) | | Expiration (1) (2) |
| |||
| Month-to-Month |
| 56 |
| 84,578 |
| 0.9 | % | $ | 1,828 |
| 0.4 | % | $ | 21.62 | | $ | 21.95 | |
| 2022 |
| 105 |
| 827,415 |
| 8.7 | % |
| 38,001 |
| 8.7 | % |
| 45.93 | |
| 46.24 | |
| 2023 |
| 130 |
| 1,020,318 |
| 10.7 | % |
| 44,696 |
| 10.2 | % |
| 43.81 | |
| 45.18 | |
| 2024 |
| 105 |
| 1,525,246 |
| 16.0 | % |
| 71,559 |
| 16.4 | % |
| 46.92 | |
| 49.00 | |
| 2025 |
| 95 |
| 952,266 |
| 10.0 | % |
| 41,569 |
| 9.5 | % |
| 43.65 | |
| 46.69 | |
| 2026 |
| 79 |
| 458,021 |
| 4.8 | % |
| 19,585 |
| 4.5 | % |
| 47.02 | |
| 51.86 | |
| 2027 |
| 56 |
| 623,423 |
| 6.5 | % |
| 29,359 |
| 6.7 | % |
| 47.09 | |
| 52.58 | |
| 2028 |
| 52 |
| 435,237 |
| 4.6 | % |
| 20,830 |
| 4.8 | % |
| 47.86 | |
| 55.39 | |
| 2029 |
| 40 |
| 444,526 |
| 4.7 | % |
| 23,171 |
| 5.3 | % |
| 52.13 | |
| 60.96 | |
| 2030 |
| 36 |
| 470,364 |
| 4.9 | % |
| 25,674 |
| 5.9 | % |
| 54.58 | |
| 66.28 | |
| Thereafter |
| 104 |
| 2,682,244 |
| 28.2 | % |
| 119,874 |
| 27.6 | % |
| 45.35 | |
| 58.13 | |
| Total / Weighted Average |
| 858 |
| 9,523,638 |
| 100.0 | % | $ | 436,146 |
| 100.0 | % | $ | 46.19 | | $ | 52.51 | |
Note: Includes all in-place leases as of December 31, 2021 for office and retail space within our operating portfolio and assuming no exercise of renewal options or early termination rights. The weighted average remaining lease term for the entire portfolio is 6.0 years.
| (1) | Annualized Rent and Annualized Rent per Square Foot exclude percentage rent and the square footage of tenants that only pay percentage rent. |
| (2) | Represents monthly base rent before Free Rent, plus tenant reimbursements, as of lease expiration multiplied by 12 and divided by SF. Triple net leases are converted to a gross basis by adding tenant reimbursements to monthly base rent. Tenant reimbursements at lease expiration are estimated by escalating tenant reimbursements as of December 31, 2021, or management’s estimate thereof, by 2.75% annually through the lease expiration year. |
| | |
| | Page 29 |
| |
SIGNED BUT NOT YET COMMENCED LEASES | DECEMBER 31, 2021 |
Signed But Not Yet Commenced Leases
| | | | | | | | | | | | | | | | | | | | | | | | | |
| in thousands, at JBG SMITH Share | | Total | | | | | | | | | | | | | | | | | | |
| |||
| | | | | Annualized | | | | | | | | | | | | | | | | | | | | |
| | | | | Estimated | | Estimated Rent (1) for the Quarter Ending | | |||||||||||||||||
| Assets |
| C/U (2) |
| Rent (3) |
| March 31, 2022 |
| June 30, 2022 |
| September 30, 2022 |
| December 31, 2022 |
| March 31, 2023 |
| June 30, 2023 |
| |||||||
| | | | | | | | | | | | | | | | | | | | | | | | |
|
| Commercial |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| |
| Operating |
| C | | $ | 19,200 | | $ | 989 | | $ | 2,828 | | $ | 4,412 | | $ | 4,641 | | $ | 4,723 | | $ | 4,800 | |
| Operating |
| U | |
| 1,048 | |
| 5 | |
| 18 | |
| 188 | |
| 189 | |
| 209 | |
| 261 | |
| Total | | | | $ | 20,248 | | $ | 994 | | $ | 2,846 | | $ | 4,600 | | $ | 4,830 | | $ | 4,932 | | $ | 5,061 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Multifamily | |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Operating | | C | | $ | 496 | | $ | 13 | | $ | 40 | | $ | 123 | | $ | 124 | | $ | 124 | | $ | 124 | |
| Operating | | U | |
| 484 | |
| 70 | |
| 121 | |
| 121 | |
| 121 | |
| 121 | |
| 121 | |
| Total | | | | $ | 980 | | $ | 83 | | $ | 161 | | $ | 244 | | $ | 245 | | $ | 245 | | $ | 245 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Total | | | | $ | 21,228 | | $ | 1,077 | | $ | 3,007 | | $ | 4,844 | | $ | 5,075 | | $ | 5,177 | | $ | 5,306 | |
Note: Includes only leases for office and retail spaces for which rent had not yet commenced as of December 31, 2021.
| (1) | Represents contractual monthly base rent before Free Rent, plus estimated tenant reimbursements for the month in which the lease is estimated to commence, multiplied by the applicable number of months for each quarter based on the lease's estimated commencement date. |
| (2) | "C" denotes a consolidated interest. "U" denotes an unconsolidated interest. |
| (3) | Represents contractual monthly base rent before Free Rent, plus estimated tenant reimbursements for the month in which the lease is expected to commence, multiplied by 12. |
| | |
| | Page 30 |
| |
TENANT CONCENTRATION | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | |
dollars in thousands |
|
|
| At JBG SMITH Share |
| |||||||||
| | Tenant | | Number of Leases | | Square Feet | | % of Total Square Feet | | Annualized | | % of Total Annualized Rent |
| |
1 | | U.S. Government (GSA) | | 57 | | 2,197,989 | | 23.1 | % | $ | 88,372 | | 20.3 | % |
2 |
| Amazon | | 7 | | 1,025,463 |
| 10.8 | % | | 44,058 |
| 10.1 | % |
3 |
| Gartner, Inc | | 1 | | 174,424 |
| 1.8 | % | | 12,331 |
| 2.8 | % |
4 |
| Family Health International | | 3 | | 220,670 |
| 2.3 | % | | 12,265 |
| 2.8 | % |
5 |
| Lockheed Martin Corporation | | 2 | | 232,598 |
| 2.4 | % | | 11,420 |
| 2.6 | % |
6 |
| Arlington County | | 2 | | 235,779 |
| 2.5 | % | | 10,536 |
| 2.4 | % |
7 |
| Booz Allen Hamilton Inc | | 3 | | 159,610 |
| 1.7 | % | | 7,787 |
| 1.8 | % |
8 |
| Greenberg Traurig LLP | | 1 | | 101,602 |
| 1.1 | % | | 7,348 |
| 1.7 | % |
9 |
| Accenture LLP | | 2 | | 116,736 |
| 1.2 | % | | 7,188 |
| 1.6 | % |
10 |
| Public Broadcasting Service | | 1 | | 125,533 |
| 1.3 | % | | 4,700 |
| 1.1 | % |
11 |
| Evolent Health LLC | | 1 | | 90,905 |
| 1.0 | % | | 4,623 |
| 1.1 | % |
12 |
| Goodwin Procter LLP | | 1 | | 51,296 |
| 0.5 | % | | 4,267 |
| 1.0 | % |
13 | | The International Justice Mission | | 1 | | 74,833 | | 0.8 | % | | 4,189 | | 1.0 | % |
14 |
| Cushman & Wakefield U.S. Inc | | 1 | | 58,641 |
| 0.6 | % | | 4,043 |
| 0.9 | % |
15 |
| Host Hotels & Resorts LP | | 1 | | 55,009 |
| 0.6 | % | | 3,959 |
| 0.9 | % |
16 |
| American Diabetes Association | | 1 | | 80,998 |
| 0.9 | % | | 3,557 |
| 0.8 | % |
17 |
| Willis Towers Watson US LLC | | 1 | | 61,653 |
| 0.6 | % | | 3,151 |
| 0.7 | % |
18 |
| National Consumer Cooperative | | 1 | | 65,736 |
| 0.7 | % | | 3,044 |
| 0.7 | % |
19 |
| WeWork | | 1 | | 41,647 |
| 0.4 | % | | 2,819 |
| 0.6 | % |
20 |
| Management System Intl Inc | | 1 | | 50,069 |
| 0.5 | % | | 2,787 |
| 0.6 | % |
|
| Other (1) | | 769 | | 4,302,447 |
| 45.2 | % | | 193,703 |
| 44.5 | % |
|
| Total | | 858 | | 9,523,638 |
| 100.0 | % | $ | 436,146 |
| 100.0 | % |
Note: Includes all leases as of December 31, 2021 for which a tenant has taken occupancy for office and retail space within our operating portfolio.
| (1) | Includes JBG SMITH's lease for approximately 84,400 SF at 4747 Bethesda Avenue. |
| | |
| | Page 31 |
| |
INDUSTRY DIVERSITY | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | |
dollars in thousands | | | | At JBG SMITH Share |
| |||||||||
|
| |
| Number of |
| |
| % of Total |
| Annualized |
| % of Total |
| |
| | Industry | | Leases | | Square Feet | | Square Feet | | Rent | | Annualized Rent |
| |
1 |
| Government |
| 69 |
| 2,504,894 |
| 26.3 | % | $ | 102,299 |
| 23.5 | % |
2 |
| Business Services |
| 120 |
| 2,017,401 |
| 21.2 | % |
| 96,651 |
| 22.2 | % |
3 |
| Government Contractors |
| 63 |
| 1,291,719 |
| 13.6 | % |
| 62,498 |
| 14.3 | % |
4 |
| Member Organizations |
| 70 |
| 803,551 |
| 8.4 | % |
| 39,992 |
| 9.2 | % |
5 |
| Real Estate |
| 50 |
| 537,127 |
| 5.6 | % |
| 23,626 |
| 5.4 | % |
6 |
| Legal Services |
| 35 |
| 312,008 |
| 3.3 | % |
| 20,357 |
| 4.7 | % |
7 |
| Health Services |
| 44 |
| 381,027 |
| 4.0 | % |
| 16,320 |
| 3.7 | % |
8 |
| Food and Beverage |
| 112 |
| 243,892 |
| 2.6 | % |
| 14,130 |
| 3.2 | % |
9 |
| Communications |
| 9 |
| 157,707 |
| 1.7 | % |
| 6,093 |
| 1.4 | % |
10 |
| Educational Services |
| 12 |
| 86,510 |
| 0.9 | % |
| 3,906 |
| 0.9 | % |
|
| Other |
| 274 |
| 1,187,802 |
| 12.4 | % |
| 50,274 |
| 11.5 | % |
|
| Total |
| 858 |
| 9,523,638 |
| 100.0 | % | $ | 436,146 |
| 100.0 | % |
Note: Includes all in-place leases as of December 31, 2021 for office and retail space within our operating portfolio.
| | |
| | Page 32 |
| |
PORTFOLIO SUMMARY | DECEMBER 31, 2021 |
| | | | | | | | | | |
| | | | | | | | | Potential |
|
| | | Number | | Rentable | | Number of | | Development |
|
| | | of Assets | | Square Feet | | Units (1) | | Density (2) |
|
| | | | | | | | | | |
| Wholly Owned |
|
|
|
|
|
|
|
| |
| Operating |
| 47 |
| 15,000,736 |
| 5,691 |
| — | |
| Under-Construction (3) |
| 1 |
| 633,985 |
| 808 |
| — | |
| Near-Term Development | | 9 | | — | | — | | 4,839,900 | |
| Future Development |
| 14 |
| — |
| — |
| 10,278,100 | |
| Total |
| 71 |
| 15,634,721 |
| 6,499 |
| 15,118,000 | |
| | | | | | | | | | |
| Real Estate Ventures |
|
|
|
|
|
|
|
| |
| Operating |
| 17 |
| 5,087,227 |
| 2,517 |
| — | |
| Near-Term Development |
| 2 |
| — |
| — |
| 419,400 | |
| Future Development |
| 11 |
| — |
| — |
| 4,050,000 | |
| Total |
| 30 |
| 5,087,227 |
| 2,517 |
| 4,469,400 | |
| | | | | | | | | | |
| Total Portfolio | | 101 |
| 20,721,948 |
| 9,016 |
| 19,587,400 | |
| | | | | | | | | | |
| Total Portfolio (at JBG SMITH Share) | | 101 |
| 17,431,775 |
| 7,365 |
| 16,647,300 | |
Note: At 100% share, unless otherwise indicated.
| (1) | For Under-Construction assets, represents estimated number of units based on current design plans. |
| (2) | Includes estimated potential office, multifamily and retail development density. |
| (3) | See footnote (3) on page 40. |
| | |
| | Page 33 |
| |
PROPERTY TABLE - COMMERCIAL | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| | |
| Office |
| | |
| |
| | | | | | | | | | | | | | | | | | | | | | | | | | | Annualized | | Retail |
| ||
| | | | | | | | Same Store (2): | | | | | | | | | | | | | | | | Annualized | | Rent Per | | Annualized |
| |||
| | | | % | | | Q4 2020‑2021 / | | Year Built / | | Total | | Office | | Retail | | % | | Office % | | Retail % | | Rent | | Square | | Rent Per |
| ||||
Commercial Assets | | Submarket | | Ownership | | C/U (1) | | YTD 2020 - 2021 | | Renovated | | Square Feet | | Square Feet | | Square Feet | | Leased | | Occupied | | Occupied | | (in thousands) | | Foot (3) | | Square Foot (4) |
| |||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
National Landing |
|
|
|
|
|
|
|
|
| |
| |
| | | | | | | | | | |
| | |
| | |
| | |
1550 Crystal Drive (5) | | National Landing |
| 100.0 | % | C |
| Y / Y |
| 1980 / 2020 |
| 550,179 |
| 449,714 | | 100,465 | | 94.6% | | 92.0% | | 86.0% | | $ | 21,376 | | $ | 41.85 | | $ | 46.94 | |
2121 Crystal Drive |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1985 / 2006 |
| 505,349 |
| 505,349 | | — | | 71.3% | | 71.3% | | — | |
| 16,973 | |
| 47.11 | |
| — | |
2345 Crystal Drive |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1988 / 2019 |
| 499,663 |
| 491,771 | | 7,892 | | 87.3% | | 87.1% | | 100.0% | |
| 20,734 | |
| 48.13 | |
| 16.17 | |
2231 Crystal Drive |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1987 / 2009 |
| 468,238 |
| 416,311 | | 51,927 | | 86.9% | | 80.3% | | 97.4% | |
| 17,316 | |
| 46.08 | |
| 37.94 | |
2011 Crystal Drive |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1984 / 2006 |
| 440,996 |
| 434,234 | | 6,762 | | 57.5% | | 52.7% | | 100.0% | |
| 11,053 | |
| 47.77 | |
| 19.23 | |
2451 Crystal Drive |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1990 / 2019 |
| 401,902 |
| 389,845 | | 12,057 | | 76.9% | | 76.4% | | 92.6% | |
| 12,658 | |
| 47.25 | |
| 39.17 | |
1235 S. Clark Street |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1981 / 2007 |
| 384,753 |
| 336,407 | | 48,346 | | 97.5% | | 95.9% | | 97.2% | |
| 15,084 | |
| 43.29 | |
| 23.76 | |
241 18th Street S. |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1977 / 2013 |
| 363,356 |
| 333,853 | | 29,503 | | 96.5% | | 97.6% | | 84.0% | |
| 13,748 | |
| 40.80 | |
| 18.54 | |
251 18th Street S. (5) |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1975 / 2013 |
| 337,961 |
| 293,893 | | 44,068 | | 89.7% | | 97.9% | | 34.6% | |
| 13,371 | |
| 43.97 | |
| 46.90 | |
1215 S. Clark Street |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1983 / 2016 |
| 336,159 |
| 333,546 | | 2,613 | | 100.0% | | 100.0% | | 100.0% | |
| 11,158 | |
| 33.18 | |
| 35.11 | |
201 12th Street S. |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1987 / 2014 |
| 329,607 |
| 317,394 | | 12,213 | | 98.5% | | 98.5% | | 100.0% | |
| 11,903 | |
| 36.45 | |
| 41.90 | |
2200 Crystal Drive |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1968 / 2006 |
| 283,608 |
| 283,608 | | — | | 57.0% | | 57.0% | | — | |
| 7,426 | |
| 45.93 | |
| — | |
1225 S. Clark Street |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1982 / 2013 |
| 276,594 |
| 263,744 | | 12,850 | | 96.2% | | 96.0% | | 100.0% | |
| 10,081 | |
| 38.66 | |
| 22.53 | |
1901 South Bell Street (5) |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1968 / 2008 |
| 275,037 |
| 275,037 | | — | | 92.1% | | 92.1% | | — | |
| 10,259 | |
| 40.49 | |
| — | |
1770 Crystal Drive | | National Landing | | 100.0 | % | C | | N / N | | 2020 / N/A | | 273,650 | | 259,651 | | 13,999 | | 98.4% | | 100.0% | | 68.5% | | | 11,247 | | | 41.09 | | | 60.36 | |
Crystal City Marriott (345 Rooms) |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1968 / 2013 |
| 266,000 |
| — | | — | | — | | — | | — | |
| — | |
| — | |
| — | |
2100 Crystal Drive |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1968 / 2006 |
| 253,437 |
| 253,437 | | — | | 100.0% | | 100.0% | | — | |
| 11,404 | |
| 45.00 | |
| — | |
1800 South Bell Street |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1969 / 2019 |
| 206,186 |
| 190,984 | | 15,202 | | 99.2% | | 100.0% | | 88.8% | | | 8,215 | | | 42.69 | | | 4.51 | |
200 12th Street S. |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1985 / 2013 |
| 202,708 |
| 202,708 | | — | | 79.5% | | 79.5% | | — | |
| 7,671 | |
| 47.57 | |
| — | |
Crystal City Shops at 2100 (5) |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1968 / 2006 |
| 53,174 |
| — | | 53,174 | | 81.3% | | — | | 81.3% | |
| 522 | |
| — | |
| 12.07 | |
Crystal Drive Retail (5) |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 2003 / 2004 |
| 49,839 |
| — | | 49,839 | | 86.2% | | — | | 86.2% | |
| 2,686 | |
| — | |
| 62.54 | |
2221 S. Clark Street-Office | | National Landing | | 100.0 | % | C |
| Y / Y | | 1964 / 2016 | | 35,182 | | 26,238 | | 8,944 | | — | | — | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Other VA |
|
|
|
|
|
|
|
|
| |
| |
| | | | | | | | | | |
| | |
| | |
| | |
Courthouse Plaza 1 and 2 (6) |
| Clarendon/Courthouse |
| 100.0 | % | C |
| Y / Y |
| 1989 / 2013 |
| 630,135 |
| 572,942 | | 57,193 | | 82.0% | | 80.8% | | 94.3% | | $ | 22,846 | | $ | 45.57 | | $ | 32.59 | |
RTC-West (5) |
| Reston |
| 100.0 | % | C |
| Y / Y |
| 1988 / 2014 |
| 470,095 |
| 430,622 | | 39,473 | | 87.4% | | 85.7% | | 93.3% | |
| 16,060 | |
| 41.58 | |
| 66.20 | |
800 North Glebe Road |
| Ballston |
| 100.0 | % | C |
| Y / Y |
| 2012 / N/A |
| 303,644 |
| 277,397 | | 26,247 | | 98.5% | | 100.0% | | 82.3% | |
| 16,261 | |
| 54.95 | |
| 47.21 | |
Central Place Tower (6) |
| Rosslyn |
| 50.0 | % | U |
| Y / Y |
| 2018 / N/A |
| 551,758 |
| 524,480 | | 27,278 | | 98.4% | | 98.3% | | 100.0% | |
| 36,452 | |
| 69.19 | |
| 29.02 | |
Stonebridge at Potomac Town |
| Prince William County |
| 10.0 | % | U |
| Y / Y |
| 2012 / N/A |
| 504,327 |
| — | | 504,327 | | 97.8% | | — | | 95.2% | |
| 15,714 | |
| — | |
| 32.75 | |
Rosslyn Gateway-North |
| Rosslyn |
| 18.0 | % | U |
| Y / Y |
| 1996 / 2014 |
| 145,601 |
| 132,847 | | 12,754 | | 67.4% | | 62.9% | | 72.3% | |
| 3,838 | |
| 42.23 | |
| 33.80 | |
Rosslyn Gateway-South |
| Rosslyn |
| 18.0 | % | U |
| Y / Y |
| 1961 / N/A |
| 102,879 |
| 95,295 | | 7,584 | | 75.9% | | 78.8% | | 40.4% | |
| 2,070 | |
| 25.71 | |
| 45.63 | |
| | |
| | Page 34 |
| |
PROPERTY TABLE - COMMERCIAL | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| | |
| | Office |
| | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Annualized | | | Retail |
|
| | | | | | | | Same Store (2): | | | | | | | | | | | | | | | | | Annualized | | | Rent Per | | | Annualized |
|
| | | | % | | | | Q4 2020‑2021 / | | Year Built / | | Total | | Office | | Retail | | % | | Office % | | Retail % | | | Rent | | | Square | | | Rent Per |
|
Commercial Assets | | Submarket | | Ownership | | C/U (1) | | YTD 2020 - 2021 | | Renovated | | Square Feet | | Square Feet | | Square Feet | | Leased | | Occupied | | Occupied | | | (in thousands) | | | Foot (3) | | | Square Foot (4) |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
DC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| |
|
| |
| |
Universal Buildings |
| Uptown |
| 100.0 | % | C |
| Y / Y |
| 1956 / 1999 |
| 659,459 |
| 568,351 | | 91,108 | | 64.1% | | 58.4% | | 99.6% | | $ | 23,410 | | $ | 54.32 | | $ | 59.14 | |
2101 L Street |
| CBD |
| 100.0 | % | C |
| Y / Y |
| 1975 / 2007 |
| 378,660 |
| 347,340 | | 31,320 | | 85.6% | | 70.5% | | 92.6% | |
| 18,459 | |
| 68.51 | |
| 57.93 | |
1730 M Street (6) |
| CBD |
| 100.0 | % | C |
| Y / Y |
| 1964 / 1998 |
| 204,840 |
| 196,822 | | 8,018 | | 90.4% | | 83.8% | | 100.0% | |
| 8,810 | |
| 50.90 | |
| 51.59 | |
1700 M Street |
| CBD |
| 100.0 | % | C |
| Y / Y |
| N/A |
| 34,000 |
| — | | — | | — | | — | | — | |
| — | |
| — | |
| — | |
L’Enfant Plaza Office-East (6) |
| Southwest |
| 49.0 | % | U |
| Y / Y |
| 1972 / 2012 |
| 397,855 |
| 397,855 | | — | | 63.4% | | 63.4% | | — | |
| 12,697 | |
| 50.30 | |
| — | |
L’Enfant Plaza Office-North |
| Southwest |
| 49.0 | % | U |
| Y / Y |
| 1969 / 2014 |
| 298,567 |
| 277,243 | | 21,324 | | 90.5% | | 90.2% | | 87.1% | |
| 12,514 | |
| 48.40 | |
| 22.23 | |
L’Enfant Plaza Retail (6) |
| Southwest |
| 49.0 | % | U |
| Y / Y |
| 1968 / 2014 |
| 119,291 |
| 16,596 | | 102,695 | | 71.0% | | 100.0% | | 66.3% | |
| 4,504 | |
| 47.91 | |
| 54.45 | |
1900 N Street (6) | | CBD | | 55.0 | % | U | | N / N | | 2019 / N/A | | 269,581 | | 260,778 | | 8,803 | | 82.7% | | 76.4% | | 21.3% | | | 15,232 | | | 75.70 | | | 77.30 | |
The Foundry |
| Georgetown |
| 9.9 | % | U |
| Y / Y |
| 1973 / 2017 |
| 225,683 |
| 218,829 | | 6,854 | | 88.2% | | 87.9% | | 100.0% | |
| 10,018 | |
| 50.63 | |
| 41.29 | |
1101 17th Street |
| CBD |
| 55.0 | % | U |
| Y / Y |
| 1964 / 1999 |
| 208,894 |
| 199,140 | | 9,754 | | 85.0% | | 84.2% | | 100.0% | |
| 9,851 | |
| 54.53 | |
| 72.03 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
MD |
|
|
|
|
|
|
|
|
| |
| |
| | | | | | | | | | |
| | |
| | |
| | |
4747 Bethesda Avenue (8) | | Bethesda CBD | | 100.0 | % | C | | N / N | | 2019 / N/A | | 300,508 | | 286,199 | | 14,309 | | 98.0% | | 96.2% | | 100.0% | | $ | 19,927 | | $ | 65.88 | | $ | 124.94 | |
7200 Wisconsin Avenue |
| Bethesda CBD |
| 100.0 | % | C |
| Y / Y |
| 1986 / 2015 |
| 270,817 |
| 259,851 | | 10,966 | | 72.5% | | 56.3% | | 100.0% | | | 6,485 | | | 39.16 | | | 69.28 | |
One Democracy Plaza (6) (7) |
| Bethesda- Rock Spring |
| 100.0 | % | C |
| Y / Y |
| 1987 / 2013 |
| 212,922 |
| 210,784 | | 2,138 | | 86.9% | | 86.8% | | 100.0% | |
| 6,034 | |
| 32.61 | |
| 32.21 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating - Total / Weighted Average |
|
|
|
|
|
|
|
|
| 13,083,094 |
| 11,331,095 |
| 1,451,999 |
| 85.1% | | 82.8% | | 88.1% | | $ | 496,067 | | $ | 47.80 | | $ | 40.40 | | ||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Totals at JBG SMITH Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
| |
|
| |
| |
National Landing |
|
|
|
|
|
|
|
|
|
|
| 6,793,578 |
| 6,057,724 | | 469,854 | | 86.3% | | 85.5% | | 82.3% | | $ | 234,884 | | $ | 43.03 | | $ | 35.42 | |
Other VA | | | | | | | | | | | | 1,774,912 | | 1,584,267 | | 190,646 | | 89.0% | | 88.1% | | 92.4% | | | 76,028 | | | 50.79 | | | 41.22 | |
DC | | | | | | | | | | | | 1,962,101 | | 1,726,006 | | 202,094 | | 76.2% | | 70.5% | | 87.8% | | | 80,025 | | | 57.55 | | | 56.25 | |
MD |
|
|
|
|
|
|
|
|
|
|
| 784,247 |
| 756,834 | | 27,413 | | 86.2% | | 79.9% | | 100.0% | | | 32,445 | | | 49.35 | | | 95.43 | |
Operating - Total / Weighted Average |
|
|
|
|
|
|
|
|
| 11,314,838 |
| 10,124,831 | | 890,007 | | 84.9% | | 82.9% | | 86.3% | | $ | 423,382 | | $ | 46.88 | | $ | 43.71 | | ||
| | | | | | | | |
| Number of Assets and Total Square Feet Reconciliation | | | | |
| ||
| |
| Number of |
| At 100% Share |
| At JBG SMITH Share |
|
| Operating Assets | | Assets | | Square Feet | | Square Feet |
|
| Q3 2021 |
| 42 |
| 13,084,288 |
| 11,316,721 | |
| Placed into service |
| — |
| — |
| — | |
| Dispositions |
| — |
| — |
| — | |
| Out-of-service adjustment |
| — |
| (7,126) |
| (7,126) | |
| Portfolio reclassification | | — | | — | | — | |
| Building re-measurements |
| — |
| 5,932 |
| 5,243 | |
| | | | | | | | |
| Q4 2021 |
| 42 |
| 13,083,094 |
| 11,314,838 | |
See footnotes on page 36.
| | |
| | Page 35 |
| |
PROPERTY TABLE - COMMERCIAL | DECEMBER 31, 2021 |
Footnotes
Note: At 100% share, unless otherwise noted. Excludes our 10% subordinated interest in one commercial building held through a real estate venture in which we have no economic interest.
| (1) | "C" denotes a consolidated interest. "U" denotes an unconsolidated interest. |
| (2) | "Y" denotes an asset as Same Store and "N" denotes an asset as Non-Same Store. |
| (3) | Represents annualized office rent divided by occupied office SF; annualized retail rent and retail SF are excluded from this metric. Annualized Rent and Annualized Rent per Square Foot exclude percentage rent and the square footage of tenants that only pay percentage rent. Occupied office square footage may differ from leased office square footage because leased office square footage includes space for leases that have been signed but the tenant has not yet taken occupancy (not yet included in Percent Occupied metrics). |
| (4) | Represents annualized retail rent divided by occupied retail SF. Occupied retail square footage may differ from leased retail square footage because leased retail square footage includes space for leases that have been signed but the tenant has not yet taken occupancy (not yet included in Percent Occupied metrics). |
| (5) | The following assets contain space that is held for development or not otherwise available for lease. This out-of-service square footage is excluded from Square Feet, leased and occupancy metrics. |
| | | | | | |
| | | | | Not Available | |
| Commercial Asset |
| In-Service |
| for Lease |
|
| 1550 Crystal Drive | | 550,179 | | 1,721 | |
| 251 18th Street S. | | 337,961 | | 1,480 | |
| 1901 South Bell Street | | 275,037 | | 1,924 | |
| Crystal City Shops at 2100 | | 53,174 | | 19,041 | |
| Crystal Drive Retail | | 49,839 | | 7,126 | |
| RTC - West | | 470,095 | | 17,988 | |
| (6) | The following assets are subject to ground leases: |
| | | | |
| |
| Ground Lease | |
| Commercial Asset | | Expiration Date |
|
| Courthouse Plaza 1 and 2 (a) |
| 1/19/2062 | |
| Central Place Tower (a)(b) |
| 6/2/2102 | |
| 1730 M Street (a) |
| 12/31/2118 | |
| L'Enfant Plaza Office - East |
| 11/23/2064 | |
| L'Enfant Plaza Retail |
| 11/23/2064 | |
| 1900 N Street (c) |
| 5/31/2106 | |
| One Democracy Plaza |
| 11/17/2084 | |
| (a) | The ground lease is recorded as a financing lease for accounting purposes; therefore, any expense is recorded as interest expense and excluded from NOI. |
| (b) | We have an option to purchase the ground lease at a fixed price |
| (c) | Only a portion of the asset is subject to a ground lease. |
| (7) | Not Metro-Served. |
| (8) | Includes JBG SMITH's share for approximately 84,400 SF. |
| | |
| | Page 36 |
| |
PROPERTY TABLE - MULTIFAMILY | DECEMBER 31, 2021 |
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| | | | | | | | Same Store (2): | | | | Number | | Total | | Multifamily | | Retail | | | | Multifamily | | Retail | | | Annualized | | | Rent | | | Rent Per |
| | | | % | | | | Q4 2020‑2021 / | | Year Built / | | of | | Square | | Square | | Square | | | | % | | % | | | Rent | | | Per | | | Square |
Multifamily Assets | | Submarket | | Ownership | | C/U (1) | | YTD 2020 - 2021 | | Renovated | | Units | | Feet | | Feet | | Feet | | % Leased | | Occupied | | Occupied | | | (in thousands) | | | Unit (3) (4) | | | Foot (4) (5) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
National Landing |
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RiverHouse Apartments |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1960 / 2014 |
| 1,676 |
| 1,327,551 |
| 1,324,889 |
| 2,662 |
| 96.3% | | 95.1% | | 100.0% | | $ | 32,570 | | $ | 1,699 | | $ | 2.16 |
The Bartlett |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 2016 / N/A |
| 699 |
| 619,372 |
| 577,295 |
| 42,077 |
| 95.7% | | 93.6% | | 100.0% | |
| 21,892 | |
| 2,590 | |
| 3.12 |
220 20th Street |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 2009 / N/A |
| 265 |
| 271,476 |
| 269,913 |
| 1,563 |
| 97.0% | | 94.0% | | 100.0% | |
| 7,618 | |
| 2,531 | |
| 2.48 |
2221 S. Clark Street- |
| National Landing |
| 100.0 | % | C |
| Y / Y |
| 1964 / 2016 |
| 216 |
| 96,948 |
| 96,948 |
| — |
| 72.5% | | 60.1% | | — | |
| 3,225 | |
| 2,069 | |
| 4.41 |
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DC | |
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West Half |
| Ballpark |
| 100.0 | % | C |
| Y / N |
| 2019 / N/A |
| 465 |
| 385,368 |
| 343,089 |
| 42,279 |
| 91.0% | | 88.6% | | 72.6% | | $ | 12,986 | | $ | 2,304 | | $ | 3.34 |
Fort Totten Square |
| Brookland/Fort Totten |
| 100.0 | % | C |
| Y / Y |
| 2015 / N/A |
| 345 |
| 384,956 |
| 254,292 |
| 130,664 |
| 98.1% | | 96.5% | | 100.0% | | | 8,974 | | | 1,780 | | | 2.41 |
The Wren (6) | | U Street/Shaw | | 96.1 | % | C | | N / N | | 2020 / N/A | | 433 | | 332,682 | | 289,686 | | 42,996 | | 90.7% | | 83.8% | | 100.0% | | | 11,079 | | | 2,250 | | | 3.35 |
The Batley (7) | | Union Market/NoMa/H Street | | 100.0 | % | C | | N / N | | 2019 / N/A | | 432 | | 300,388 | | 300,388 | | — | | 91.4% | | 89.6% | | — | | | 10,656 | | | 2,295 | | | 3.33 |
WestEnd25 |
| West End |
| 100.0 | % | C |
| Y / Y |
| 2009 / N/A |
| 283 |
| 273,264 |
| 273,264 |
| — |
| 97.2% | | 95.4% | | — | |
| 10,775 | |
| 3,326 | |
| 3.42 |
F1RST Residences |
| Ballpark |
| 100.0 | % | C |
| Y / Y |
| 2017 / N/A |
| 325 |
| 270,928 |
| 249,456 |
| 21,472 |
| 97.2% | | 94.8% | | 100.0% | |
| 9,863 | |
| 2,248 | |
| 2.92 |
1221 Van Street |
| Ballpark |
| 100.0 | % | C |
| Y / Y |
| 2018 / N/A |
| 291 |
| 225,530 |
| 202,715 |
| 22,815 |
| 95.7% | | 94.5% | | 100.0% | |
| 8,268 | |
| 2,133 | |
| 3.08 |
901 W Street | | U Street/Shaw | | 100.0 | % | C | | N / N | | 2019 / N/A | | 161 | | 154,862 | | 135,499 | | 19,363 | | 94.7% | | 98.1% | | 70.8% | | | 5,565 | | | 2,458 | | | 2.95 |
900 W Street (9) | | U Street/Shaw | | 100.0 | % | C | | N / N | | 2019 / N/A | | 95 | | 69,183 | | 69,183 | | — | | 53.7% | | 51.6% | | — | | | 2,428 | | | 4,129 | | | 5.97 |
North End Retail |
| U Street/Shaw |
| 100.0 | % | C |
| Y / Y |
| 2015 / N/A |
| — |
| 27,355 |
| — |
| 27,355 |
| 92.7% | | — | | 92.7% | |
| 1,368 | |
| — | |
| — |
The Gale Eckington |
| Union Market/NoMa/H Street |
| 5.0 | % | U |
| Y / Y |
| 2013/ N/A |
| 603 |
| 466,716 |
| 465,516 |
| 1,200 |
| 92.4% | | 86.7% | | 100.0% | |
| 12,339 | |
| 1,959 | |
| 2.54 |
Atlantic Plumbing |
| U Street/Shaw |
| 64.0 | % | U |
| Y / Y |
| 2015 / N/A |
| 310 |
| 245,527 |
| 221,788 |
| 23,739 |
| 93.3% | | 91.6% | | 97.4% | |
| 9,320 | |
| 2,384 | |
| 3.34 |
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MD |
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Falkland Chase-South & West |
| Downtown Silver Spring |
| 100.0 | % | C |
| Y / Y |
| 1938 / 2011 |
| 268 |
| 222,754 |
| 222,754 |
| — |
| 98.9% | | 98.1% | | — | | $ | 5,288 | | $ | 1,676 | | $ | 2.01 |
Falkland Chase-North |
| Downtown Silver Spring |
| 100.0 | % | C |
| Y / Y |
| 1938 / 1986 |
| 170 |
| 112,143 |
| 112,143 |
| — |
| 98.8% | | 97.6% | | — | |
| 2,789 | |
| 1,400 | |
| 2.12 |
Galvan |
| Rockville Pike Corridor |
| 1.8 | % | U |
| Y / Y |
| 2015 / N/A |
| 356 |
| 390,293 |
| 295,033 |
| 95,260 |
| 97.8% | | 96.9% | | 97.1% | |
| 11,226 | |
| 1,806 | |
| 2.18 |
The Alaire (8) |
| Rockville Pike Corridor |
| 18.0 | % | U |
| Y / Y |
| 2010 / N/A |
| 279 |
| 266,673 |
| 251,691 |
| 14,982 |
| 94.6% | | 93.5% | | 78.4% | |
| 6,064 | |
| 1,794 | |
| 1.98 |
The Terano (8) |
| Rockville Pike Corridor |
| 1.8 | % | U |
| Y / Y |
| 2015 / N/A |
| 214 |
| 196,921 |
| 183,496 |
| 13,425 |
| 95.8% | | 94.9% | | 88.8% | |
| 4,654 | |
| 1,751 | |
| 2.03 |
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Total / Weighted Average (9) |
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| 7,886 |
| 6,640,890 |
| 6,139,038 |
| 501,852 |
| 95.3% | | 93.0% | | 94.6% | | $ | 193,294 | | $ | 2,081 | | $ | 2.65 |
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Recently Delivered |
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MD | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
8001 Woodmont | | Bethesda CBD | | 50.0 | % | U | | N/N | | 2021 / N/A | | 322 | | 363,979 | | 344,405 | | 19,574 | | 41.0% | | 33.2% | | 74.7% | | $ | 4,369 | | $ | 2,763 | | $ | 2.86 |
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Operating - Total / Weighted Average (9) |
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| 8,208 |
| 7,004,869 |
| 6,483,443 |
| 521,426 |
| 92.4% | | 90.6% | | 93.8% | | $ | 197,663 | | $ | 2,091 | | $ | 2.65 | ||
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Under-Construction |
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National Landing |
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1900 Crystal Drive (10) |
| National Landing |
| — | | C |
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| 808 |
| 633,985 |
| 595,315 |
| 38,670 | | | | | | | | | | | | | | | |
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Total |
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| 9,016 |
| 7,638,854 |
| 7,078,758 |
| 560,096 |
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| | Page 37 |
| |
PROPERTY TABLE - MULTIFAMILY | DECEMBER 31, 2021 |
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| | | | | | | | Same Store (2): | | | | Number | | Total | | Multifamily | | Retail | | | | Multifamily | | Retail | | Annualized | | Rent | | Rent Per | |||
| | | | % | | | | Q4 2020‑2021 / | | Year Built / | | of | | Square | | Square | | Square | | | | % | | % | | Rent | | Per | | Square | |||
Multifamily Assets | | Submarket | | Ownership | | C/U (1) | | YTD 2020 - 2021 | | Renovated | | Units | | Feet | | Feet | | Feet | | % Leased | | Occupied | | Occupied | | (in thousands) | | Unit (3) (4) | | Foot (4) (5) | |||
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Totals at JBG SMITH Share (9) |
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National Landing | | | | | | | | | | | | 2,856 | | 2,315,347 | | 2,269,045 | | 46,302 | | 96.2% | | 94.6% | | 100.0% | | $ | 62,081 | | $ | 2,015 | | $ | 2.45 |
DC | | | | | | | | | | | | 3,042 | | 2,592,147 | | 2,271,610 | | 320,537 | | 94.3% | | 91.6% | | 93.9% | | | 85,688 | | | 2,320 | | | 3.13 |
MD | | | | | | | | | | | | 498 | | 393,468 | | 388,815 | | 4,653 | | 98.3% | | 97.5% | | 85.9% | | | 9,455 | | | 1,595 | | | 2.04 |
In-Service assets |
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| 6,396 |
| 5,300,962 |
| 4,929,470 |
| 371,492 |
| 95.4% | | 93.4% | | 94.5% | | $ | 157,224 | | $ | 2,124 | | $ | 2.72 |
Recently Delivered assets |
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| 161 |
| 181,990 |
| 172,203 |
| 9,787 |
| 41.0% | | 33.2% | | 74.7% | |
| 2,184 | |
| 2,763 | |
| 2.86 |
Operating - Total/Weighted Average |
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| 6,557 |
| 5,482,952 |
| 5,101,673 |
| 381,279 |
| 93.6% | | 91.8% | | 94.0% | | $ | 159,408 | | $ | 2,130 | | $ | 2.73 | ||
In-Service excluding newly developed and acquired assets (11) | | | | | | | | | | 4,611 | | 3,974,373 | | 3,705,859 | | 268,514 | | 96.6% | | 94.9% | | 98.9% | | $ | 117,365 | | $ | 2,070 | | $ | 2.58 | ||
Under-Construction assets |
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| 808 |
| 633,985 |
| 595,315 |
| 38,670 |
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| Number of Assets and Total Square Feet/Units Reconciliation |
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| | | Number of | | At 100% Share | | At JBG SMITH Share |
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| Operating Assets |
| Assets |
| Square Feet/Units |
| Square Feet/Units |
|
| Q3 2021 |
| 21 |
| 6,702,076 SF/ |
| 5,182,866 SF/ | |
| Acquisitions (7) |
| 1 |
| 300,388 SF/ |
| 300,388 SF/ | |
| Placed into service |
| — |
| — |
| — | |
| Dispositions | | — | | — | | — | |
| Out-of-service adjustment | | — |
| — |
| — | |
| Portfolio reclassification | | — | | — | | — | |
| Building re-measurements | | — |
| 2,405 SF |
| (302) SF | |
| | | | | | | | |
| Q4 2021 |
| 22 |
| 7,004,869 SF/ |
| 5,482,952 SF/ | |
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Quarterly Rental Revenue and Occupancy Changes - Same Store Multifamily Assets | | | | | | | | | | | | | | | | | | |
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| Monthly Rent Per Unit (3) |
| Multifamily % Occupied |
| Annualized Rent (in thousands) |
| ||||||||||||||||
| | Number of Assets | | Number of Units | | | Q4 2021 | | | Q4 2020 | | % Change | | Q4 2021 | | Q4 2020 | | % Change | | | Q4 2021 | | | Q4 2020 | | % Change |
|
National Landing |
| 3 |
| 2,640 | | $ | 2,015 | | $ | 2,046 |
| (1.5)% | | 94.6% | | 91.1% | | 3.5% | | $ | 60,390 | | $ | 59,046 |
| 2.3% | |
DC | | 7 |
| 1,938 | | | 2,328 | | | 2,401 |
| (3.0)% | | 93.2% | | 89.9% | | 3.3% | | | 50,440 | | | 38,136 |
| 32.3% | |
MD |
| 5 |
| 498 | |
| 1,595 | |
| 1,599 |
| (0.3)% | | 97.5% | | 94.5% | | 3.0% | |
| 9,300 | |
| 9,036 |
| 2.9% | |
Total / Weighted Average |
| 15 |
| 5,076 | | $ | 2,091 | | $ | 2,108 |
| (0.8)% | | 94.3% | | 82.7% | | 11.6% | | $ | 120,130 | | $ | 106,218 |
| 13.1% | |
Note: At JBG SMITH Share. Includes assets placed In-Service prior to October 1, 2020. Excludes North End Retail and 2221 S. Clark Street-Residential as it is operated as a short-term rental property.
See footnotes on page 39.
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| | Page 38 |
| |
PROPERTY TABLE - MULTIFAMILY | DECEMBER 31, 2021 |
Footnotes
Note: At 100% share, unless otherwise noted.
| (1) | "C" denotes a consolidated interest. "U" denotes an unconsolidated interest. |
| (2) | "Y" denotes an asset as Same Store and "N" denotes an asset as Non-Same Store. |
| (3) | Represents multifamily rent divided by occupied multifamily units; retail rent is excluded from this metric. Occupied units may differ from leased units because leased units include leases that have been signed but the tenant has not yet taken occupancy (not yet included in Percent Occupied metrics). |
| (4) | Excludes North End Retail. |
| (5) | Represents multifamily rent divided by occupied multifamily SF; retail rent and retail SF are excluded from this metric. Occupied multifamily square footage may differ from leased multifamily square footage because leased multifamily square footage includes space for leases that have been signed but the tenant has not yet taken occupancy (not yet included in Percent Occupied metrics). |
| (6) | Ownership percentage reflects expected dilution of JBG SMITH's real estate venture partner as contributions are funded. As of December 31, 2021, our ownership interest was 96.0%. |
| (7) | In November 2021, we acquired The Batley for $205.3 million. |
| (8) | The following assets are subject to ground leases: |
| | |
|
| Ground Lease |
Multifamily Asset | | Expiration Date |
The Alaire |
| 3/27/2107 |
The Terano |
| 8/5/2112 |
In January 2022, The Alaire and The Terano were sold by our unconsolidated real estate venture.
| (9) | 2221 S. Clark Street - Residential and 900 W Street are excluded from Percent Leased, Percent Occupied, Annualized Rent, Monthly Rent Per Unit and Monthly Rent per Square Foot metrics as they are operated as short-term rental properties. |
| (10) | See footnote (3) on page 40. |
| (11) | Excludes West Half, The Wren, The Batley and 901 W Street. |
| | |
| | Page 39 |
| |
PROPERTY TABLE – UNDER-CONSTRUCTION | DECEMBER 31, 2021 |
Property Table – Under Construction
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| dollars in thousands, except per square foot data | | | | | | | | | | | | | | | | | | | | |
| ||||
| | | | | | | | | | | Schedule (1) | | At JBG SMITH Share | | ||||||||||||
| | | | | | | Estimated | | Estimated | | | | Estimated | | | | | | | Estimated | | Estimated |
| |||
| | | | | % | | Square | | Number of | | Construction | | Completion | | Estimated | | Historical | | Incremental | | Total |
| ||||
| Asset |
| Submarket |
| Ownership | | Feet | | Units | | Start Date | | Date | | Stabilization Date |
| Cost (2) | | Investment | | Investment | | ||||
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Multifamily | | | | | | | | | | | | | | | | | | | | | | | | | |
| National Landing |
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| 1900 Crystal Drive (3) |
| National Landing |
| — | | 633,985 |
| 808 |
| Q1 2021 |
| | Q1 2024 - Q3 2024 |
| Q1 2026 | | $ | 130,751 | | $ | 291,440 | | $ | 422,191 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Under-Construction - Total / Weighted Average at JBG SMITH Share | 633,985 |
| 808 |
| Q1 2021 | | | Q1 2024 - Q3 2024 | | Q1 2026 | | $ | 130,751 | | $ | 291,440 | | $ | 422,191 | | |||||
| | | | |
Weighted average Projected NOI Yield at JBG SMITH Share: |
| Multifamily |
| |
Estimated Total Investment (4) |
| | 5.5 | % |
Estimated Incremental Investment |
| | 7.9 | % |
Estimated Stabilized NOI at JBG SMITH Share (dollars in millions) | | $ | 23.1 | |
Note: At 100% share, unless otherwise noted.
| (1) | Average dates are weighted by JBG SMITH Share of estimated SF. |
| (2) | Historical Cost excludes certain GAAP adjustments, interest and ground lease costs. See definition of Historical Cost on page 51. |
| (3) | We leased the land underlying 1900 Crystal Drive to a lessee, which plans to construct a multifamily asset comprising two towers with ground floor retail. The ground lessee has engaged us to be the development manager for the construction of 1900 Crystal Drive, and separately, we are the lessee in a master lease of the asset. We have an option to acquire the asset until a specified period after completion. In March 2021, the ground lessee entered into a mortgage loan collateralized by the leasehold interest with a maximum principal balance of $227.0 million and an interest rate of LIBOR plus 3.0% per annum. As of December 31, 2021, no proceeds had been received from the mortgage loan. The ground lessee was obligated to invest $17.5 million of equity funding, all of which was funded, and JBG SMITH is obligated to provide the additional project funding through a mezzanine loan to the ground lessee. We determined that 1900 Crystal Drive is a variable interest entity ("VIE") and that we are the primary beneficiary of the VIE. Accordingly, we consolidated the VIE with the lessee's ownership interest shown as "Noncontrolling interests" in our condensed consolidated balance sheet. The ground lease, the mezzanine loan and the master lease described above are eliminated in consolidation. 1900 Crystal Drive’s full cost, debt balance and other metrics are included at 100% in the at JBG SMITH Share metrics presented within this Investor Package. |
| (4) | Historical Cost of 1900 Crystal Drive includes $22.6 million of design costs, the majority of which were incurred prior to the Formation Transaction, that are not related to the current planned development. Excluding these costs, 1900 Crystal Drive’s Projected NOI Yield on Estimated Total Investment would be 5.8%. |
| | |
| | Page 40 |
Property Table – Near-Term Development
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| dollars in thousands, except per square foot data | | | | | | | | | |
| ||||||||||||
| | | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | Earliest | | | | | | | | | | | | | | | |
|
| | | | | | | Potential | | | | | | | | | | | | Estimated | | At JBG SMITH Share | | |
| | | | | % | | Construction | | Entitlement | | Estimated Potential Development Density (SF) | | Number of | | Historical | | |||||||
| Asset |
| Submarket | | Ownership | | Start Date | | Status | | Total |
| Office |
| Multifamily |
| Retail | | Units | | Cost (1) |
| |
| | | | | | | | | | | | | | | | | | | | | | | |
| National Landing |
|
|
| | | | | | | |
|
|
|
|
|
|
| | |
|
| |
| 2000 South Bell Street (2) |
| National Landing |
| — | | 2022 | | Fully Entitled | | 389,600 |
| — |
| 374,400 |
| 15,200 |
| 355 | | $ | 16,806 | |
| 2001 South Bell Street (2) | | National Landing | | — | | 2022 | | Fully Entitled | | 351,400 | | — | | 339,800 | | 11,600 | | 420 | | | 15,055 | |
| Potomac Yard Landbay F - Block 15 - 3331 Exchange Avenue | | National Landing | | 50.0% | | 2022 | | Fully Entitled | | 181,300 | | — | | 164,300 | | 17,000 | | 210 | | | 6,538 | |
| Potomac Yard Landbay F - Block 19 - 3330 Exchange Avenue | | National Landing | | 50.0% | | 2022 | | Fully Entitled | | 238,100 | | — | | 214,800 | | 23,300 | | 260 | | | 7,941 | |
| 2250 Crystal Drive | | National Landing | | 100.0% | | 2023 | | Entitlement In Process | | 677,100 | | — | | 677,100 | | — | | 825 | | | 21,140 | |
| 223 23rd Street | | National Landing | | 100.0% | | 2023 | | Entitlement In Process | | 512,800 | | — | | 512,800 | | — | | 700 | | | 16,603 | |
| 2525 Crystal Drive (3) | | National Landing | | 100.0% | | Pre-lease Dependent | | Entitlement In Process | | 750,000 | | 750,000 | | — | | — | | — | | | 12,170 | |
| 101 12th Street | | National Landing | | 100.0% | | Pre-lease Dependent | | Fully Entitled | | 239,600 | | 234,400 | | — | | 5,200 | | — | | | 10,811 | |
| Other VA | | | | | | | | | | | | | | | | | | | | | | |
| RTC - West Trophy Office | | Reston | | 100.0% | | Pre-lease Dependent | | Fully Entitled | | 396,000 | | 380,000 | | — | | 16,000 | | — | | | 8,645 | |
| DC |
|
|
| | | | | | |
|
|
|
|
|
|
|
| | |
| | |
| 5 M Street Southwest |
| Ballpark | | 100.0% | | 2022 | | Fully Entitled | | 705,400 | | — | | 675,400 | | 30,000 | | 615 | | | 26,523 | |
| Gallaudet Parcel 1-3 (4) | | Union Market/NoMa/H Street |
| 100.0% | | 2023 | | Entitlement In Process | | 818,000 |
| — |
| 756,400 |
| 61,600 |
| 840 | | | 17,459 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total |
| |
| | | | | | | 5,259,300 |
| 1,364,400 |
| 3,715,000 |
| 179,900 |
| 4,225 | | $ | 159,691 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Totals at JBG SMITH Share | | | | | | | | | | | | | | | | | | | | | | |
| National Landing | | | | | | | | | | 3,130,300 | | 984,400 | | 2,093,700 | | 52,200 | | 2,535 | | $ | 107,064 | |
| Other VA | | | | | | | | | | 396,000 | | 380,000 | | — | | 16,000 | | — | | | 8,645 | |
| DC | | | | | | | | | | 1,523,400 | | — | | 1,431,800 | | 91,600 | | 1,455 | | | 43,982 | |
| | | | | | | | | | | 5,049,700 | | 1,364,400 | | 3,525,500 | | 159,800 | | 3,990 | | $ | 159,691 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Fully Entitled | | 2,291,800 | | 614,400 | | 1,579,200 | | 98,200 | | 1,625 | | | | |
| | | | | | | | | Entitlement In Process | | 2,757,900 | | 750,000 | | 1,946,300 | | 61,600 | | 2,365 | | | | |
| | | | | | | | | | | 5,049,700 | | 1,364,400 | | 3,525,500 | | 159,800 | | 3,990 | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
See footnotes on page 42.
| | |
| | Page 41 |
Footnotes
Note: Represents select assets that have the potential to commence construction over the next three years, subject to receipt of full entitlements, completion of design and market conditions.
| (1) | Historical Cost includes certain intangible assets, such as option and transferable density rights values recorded as part of the Formation Transaction; and excludes certain GAAP adjustments, such as capitalized interest and ground lease costs. See definition of Historical Cost on page 51. |
| (3) | Estimated Potential Development Density (SF) use is subject to change based on market demand and entitlement. |
| (4) | Controlled through an option to acquire a leasehold interest. As of December 31, 2021, the weighted average remaining term for the option is 2.1 years. |
| | |
| | Page 42 |
| |
PROPERTY TABLE – FUTURE DEVELOPMENT | DECEMBER 31, 2021 |
Property Table – Future Development
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| dollars in thousands, except per square foot data, at JBG SMITH Share | | | | | | Estimated | | | | | | | | Estimated | | Estimated | | | | | | |
| ||||||||
| | | | | | | | | | | | | Commercial | | | | | Estimated | | Capitalized | | Capitalized | | | | | Estimated |
| ||||
| | | | | | | | | | | | | SF / Multifamily | | | | | Remaining | | Cost of SF / | | Cost of | | Estimated | | Total | | |||||
��� | | | Number of | | Estimated Potential Development Density (SF) | | Units to be | | Historical | | Acquisition | | Units to Be | | Ground Rent | | Total | | Investment | | ||||||||||||
| Region |
| Assets | | Total |
| Office |
| Multifamily |
| Retail | | Replaced (1) | | Cost (2) | | Cost (3) | | Replaced (4) | | Payments (5) | | Investment | | per SF |
| ||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Owned | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| VA |
|
|
| |
|
|
|
|
|
|
|
| |
|
|
| |
| |
|
| |
|
| |
|
| |
|
| |
| National Landing |
| 8 |
| 4,141,500 |
| 1,610,800 | | 2,433,000 | | 97,700 |
| 206,186 SF | | $ | 176,496 |
| | N/A | | $ | 105,267 | | $ | — | | $ | 281,763 | | $ | 68.03 | |
| Reston |
| 3 |
| 2,140,600 |
| 544,800 | | 1,409,800 | | 186,000 |
| — | |
| 60,258 |
| | N/A | |
| — | |
| — | |
| 60,258 | |
| 28.15 | |
| Other VA |
| 3 |
| 148,000 |
| 88,200 | | 54,000 | | 5,800 |
| 21,691 SF | |
| 1,532 |
| | N/A | |
| 2,226 | |
| — | |
| 3,758 | |
| 25.39 | |
| |
| 14 |
| 6,430,100 |
| 2,243,800 |
| 3,896,800 |
| 289,500 |
| 227,877 SF | |
| 238,286 |
| | N/A | |
| 107,493 | |
| — | |
| 345,779 | |
| 53.78 | |
| DC | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| DC |
| 6 |
| 1,024,400 |
| 312,100 |
| 703,300 |
| 9,000 |
| — | | | 79,536 |
| | N/A | | | — | | | — | | | 79,536 | | | 77.64 | |
| MD |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
| |
|
| |
|
| |
|
| |
|
| |
| Silver Spring |
| 1 |
| 1,276,300 |
| — |
| 1,156,300 |
| 120,000 |
| 170 units | |
| 15,128 |
| | N/A | |
| 31,800 | |
| — | |
| 46,928 | |
| 36.77 | |
| Greater Rockville |
| 1 |
| 1,200 |
| — |
| — |
| 1,200 |
| — | |
| 19 |
| | N/A | |
| — | |
| — | |
| 19 | |
| 15.83 | |
| |
| 2 |
| 1,277,500 |
| — |
| 1,156,300 |
| 121,200 |
| 170 units | |
| 15,147 |
| | N/A | |
| 31,800 | |
| — | |
| 46,947 | |
| 36.75 | |
| Total / weighted average |
| 22 |
| 8,732,000 |
| 2,555,900 |
| 5,756,400 |
| 419,700 |
| 227,877 SF / 170 units | | $ | 332,969 |
| | N/A | | $ | 139,293 | | $ | — | | $ | 472,262 | | $ | 54.08 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Optioned (6) |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
| |
|
| |
|
| |
|
| |
|
| |
| DC |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| |
| |
|
| |
|
| |
|
| |
|
| |
| DC |
| 2 |
| 783,600 |
| — |
| 678,900 |
| 104,700 |
| — | | $ | 10,101 | | $ | 8,250 | | $ | — | | $ | 29,434 | | $ | 47,785 | | $ | 60.98 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Held for Sale |
|
|
|
|
|
|
|
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| VA |
|
|
|
|
|
|
|
|
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| National Landing (7) |
| 1 |
| 2,082,000 |
| 2,082,000 |
| — |
| — |
| — | | $ | 76,686 | | | N/A | | $ | — | | $ | — | | $ | 76,686 | | $ | 36.83 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total / Weighted Average |
| 25 |
| 11,597,600 |
| 4,637,900 |
| 6,435,300 |
| 524,400 |
| 227,877 SF / 170 units | | $ | 419,756 | | $ | 8,250 | | $ | 139,293 | | $ | 29,434 | | $ | 596,733 | | $ | 51.45 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Entitlement Status | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Fully Entitled | | 11 | | 3,575,400 | | 1,181,600 | | 2,167,100 | | 226,700 | | | | | | | | | | | | | | | | | | | | | |
| Entitlement In Process | | 7 | | 4,268,700 | | 1,187,500 | | 2,947,800 | | 133,400 | | | | | | | | | | | | | | | | | | | | | |
| Encumbered / Not Currently Entitling | | 6 | | 1,671,500 | | 186,800 | | 1,320,400 | | 164,300 | | | | | | | | | | | | | | | | | | | | | |
| Held for sale | | 1 | | 2,082,000 | | 2,082,000 | | - | | - | | | | | | | | | | | | | | | | | | | | | |
| Total | | 25 | | 11,597,600 | | 4,637,900 | | 6,435,300 | | 524,400 | | | | | | | | | | | | | | | | | | | | | |
| (1) | Represents management's estimate of the total office and/or retail rentable SF and multifamily units currently included in our operating portfolio that would need to be redeveloped to access some of the Estimated Potential Development Density. |
| (2) | Historical Cost includes certain intangible assets, such as option and transferable density rights values recorded as part of the Formation Transaction; and excludes certain GAAP adjustments, such as capitalized interest and ground lease costs. See definition of Historical Cost on page 51. |
| (3) | Represents management's estimate of remaining deposits, option payments, and option strike prices as of December 31, 2021. |
| (4) | Capitalized value of estimated commercial SF / multifamily units to be replaced, which generated $2.1 million of NOI for the three months ended December 31, 2021 (included in the NOI of the applicable operating segment), at a 6.0% capitalization rate. |
| (5) | Capitalized value of stabilized annual ground rent payments associated with leasehold assets at a 5.0% capitalization rate. One optioned parcel is a leasehold interest with estimated annual stabilized ground rent payments totaling $1.5 million. |
| (6) | As of December 31, 2021, the weighted average remaining term for the optioned Future Development Pipeline assets is 3.4 years. |
| (7) | Represents the Estimated Potential Development Density that we have under contract for sale to Amazon pursuant to an executed purchase and sale agreement. In March 2019, we entered into an agreement for the sale of Pen Place, a land site with an Estimated Potential Development Density of 2.1 million SF. In December 2021, we finalized the agreement for the sale of Pen Place for $198.0 million, which represents a $48.1 million increase over the previously estimated contract value. The sale of Pen Place is expected to close in Q2 2022. |
| | |
| | Page 43 |
| |
DISPOSITION ACTIVITY | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | | | | | | |
| dollars in thousands, at JBG SMITH Share | | | | | | | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | Total Square Feet/ | | | | | | | | | |
|
| | | | | | | | | | | | Estimated Potential | | | | | | | | | |
|
| | | | | | | | | | |
| Development | | | | | | | | | | |
| | | Ownership | | | | | | | | | Density | | Gross Sales | | Net Cash | | | | | ||
| Assets | | Percentage | | Asset Type | | Location | | Date Disposed | | (Square Feet) | | Price | | Proceeds | | Book Gain |
| ||||
| | | | | | | | | | | | | | | | | | | | | | |
| Q1 2021 | | | | | | | | | | | | | | | | | | | | | |
| None |
| | | |
| | | | |
| | | $ | — | | $ | — | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | |
| Q2 2021 | | | | | | | | | | | | | | | | | | | | | |
| Fairway Apartments/Fairway Land | | 10.0% | | Multifamily / Future Development | | Reston, VA | | | May 3, 2021 | | 37,085 / 52,620 | | $ | 9,300 | | $ | 4,583 | | $ | 2,094 | |
| Courthouse Metro Land/Courthouse Metro Land – Option | | 18.0% | | Future Development | | Arlington, VA | | | May 19, 2021 | | 62,820 | | | 540 | | | 624 | | | 2,352 | |
| 5615 Fishers Lane | | 18.0% | | Future Development | | Rockville, MD | | | May 27, 2021 | | 19,170 | | | 1,170 | | | 1,099 | | | 743 | |
| Subtotal | | | | | | | | | | | 37,085 / 134,610 | | $ | 11,010 | | $ | 6,306 | | $ | 5,189 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Q3 2021 | | | | | | | | | | | | | | | | | | | | | |
| 500 L'Enfant Plaza | | 49.0% | | Commercial | | Washington, DC | | | September 17, 2021 | | 105,447 | | $ | 81,577 | | $ | 39,220 | | $ | 23,137 | |
| | | | | | | | | | | | | | | | | | | | | | |
| Q4 2021 | | | | | | | | | | | | | | | | | | | | | |
| None | | | | | | | | | | | | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | | | | | |
| Total |
|
|
|
|
|
| |
|
|
| 142,532 / 134,610 | | $ | 92,587 | | $ | 45,526 | | $ | 28,326 | |
Note: As of December 31, 2021, Pen Place was classified as held for sale in our condensed consolidated balance sheet. In March 2019, we entered into an agreement for the sale of Pen Place, a land site with an Estimated Potential Development Density of 2.1 million SF. In December 2021, we finalized the agreement for the sale of Pen Place for $198.0 million, which represents a $48.1 million increase over the previously estimated contract value. The sale of Pen Place is expected to close in Q2 2022.
| | |
| | Page 44 |
| |
DEBT SUMMARY | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | | | | | | | |
| dollars in thousands, at JBG SMITH Share |
| 2022 |
| 2023 |
| 2024 |
| 2025 |
| 2026 |
| Thereafter |
| Total |
| |||||||
| | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated and Unconsolidated Principal Balance | | | | | | | | | | | | | | | | | | | | | | |
| Unsecured Debt: | | | | | | | | | | | | | | | | | | | | | | |
| Revolving credit facility ($1 billion commitment) | | $ | — | | $ | — | | $ | — | | $ | 300,000 | | $ | — | | $ | — | | $ | 300,000 | |
| Term loans ($400 million commitment) | |
| — | |
| 200,000 | |
| 200,000 | |
| — | |
| — | |
| — | |
| 400,000 | |
| Total unsecured debt | |
| — | |
| 200,000 | |
| 200,000 | |
| 300,000 | |
| — | |
| — | |
| 700,000 | |
| Secured Debt: | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Consolidated principal balance | |
| 107,500 | |
| 169,408 | |
| 127,576 | |
| 555,829 | |
| 105,000 | |
| 722,946 | |
| 1,788,259 | |
| Unconsolidated principal balance | |
| 86,728 | |
| 109,738 | |
| — | |
| 124,295 | |
| — | |
| 52,500 | |
| 373,261 | |
| Total secured debt | |
| 194,228 | |
| 279,146 | |
| 127,576 | |
| 680,124 | |
| 105,000 | |
| 775,446 | |
| 2,161,520 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total Consolidated and Unconsolidated Principal Balance | | $ | 194,228 | | $ | 479,146 | | $ | 327,576 | | $ | 980,124 | | $ | 105,000 | | $ | 775,446 | | $ | 2,861,520 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| % of total debt maturing | |
| 6.8 | % |
| 16.7 | % |
| 11.4 | % |
| 34.3 | % |
| 3.7 | % |
| 27.1 | % |
| 100.0 | % |
| % floating rate (1) | |
| 41.8 | % |
| 22.9 | % |
| — | |
| 51.8 | % |
| 100.0 | % |
| 83.2 | % |
| 50.6 | % |
| % fixed rate (2) | |
| 58.2 | % |
| 77.1 | % |
| 100.0 | % |
| 48.2 | % |
| — | |
| 16.8 | % |
| 49.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
| Weighted Average Interest Rates | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| Variable rate | |
| 1.77 | % |
| 3.75 | % |
| — | |
| 1.38 | % |
| 1.35 | % |
| 2.18 | % |
| 1.94 | % |
| Fixed rate | |
| 3.60 | % |
| 3.75 | % |
| 3.06 | % |
| 4.35 | % |
| — | |
| 4.29 | % |
| 3.83 | % |
| Total Weighted Average Interest Rates | |
| 2.83 | % |
| 3.75 | % |
| 3.06 | % |
| 2.81 | % |
| 1.35 | % |
| 2.53 | % |
| 2.87 | % |
| | | | | | | | | | | | | |
| | Credit Facility | |||||||||||
|
| Revolving |
| | |
| | |
| | |
| |
| | Credit | | Tranche A‑1 | | Tranche A‑2 | | Total/Weighted | | ||||
| | Facility | | Term Loan (5) | | Term Loan | | Average | | ||||
Credit limit | | $ | 1,000,000 | | $ | 200,000 | | $ | 200,000 | | $ | 1,400,000 | |
Outstanding principal balance | | $ | 300,000 | | $ | 200,000 | | $ | 200,000 | | $ | 700,000 | |
Letters of credit | | $ | 911 | | $ | — | | $ | — | | $ | 911 | |
Undrawn capacity | | $ | 699,089 | | $ | — | | $ | — | | $ | 699,089 | |
Interest rate spread (3) | |
| 1.05 | % |
| 1.20 | % |
| 1.15 | % |
| 1.12 | % |
All-In interest rate (4) | |
| 1.15 | % |
| 2.59 | % |
| 2.49 | % |
| 1.94 | % |
Initial maturity date | |
| Jan‑25 | |
| Jan‑23 | |
| Jul‑24 | |
| — | |
| (1) | Floating rate debt includes floating rate loans with interest rate caps. |
| (2) | Fixed rate debt includes floating rate loans with interest rate swaps. |
| (3) | The interest rate for the revolving credit facility excludes a 0.15% facility fee. |
| (4) | The all-in interest rate is inclusive of interest rate swaps. As of December 31, 2021, we had interest rates swaps for the Tranche A-1 Term Loan and the Tranche A-2 Term Loan. |
| (5) | Effective as of January 14, 2022, the Tranche A-1 Term Loan was amended to extend the maturity date to January 2025 with two one-year extension options and to amend the leverage-based pricing grid, reducing the interest rate 15 basis points to Secured Overnight Financing Rate ("SOFR") (including a credit spread adjustment) plus 1.05%, based upon our current leverage level. |
| | |
| | Page 45 |
| |
DEBT BY INSTRUMENT | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | |
| dollars in thousands | | | | | | | Stated | | Interest | | Current | | Initial | | Extended | |
| | | | | Principal | | Interest | | Rate | | Annual | | Maturity | | Maturity |
| |
| Asset | | % Ownership | | Balance | | Rate | | Hedge |
| Interest Rate (1) | | Date | | Date (2) | | |
| | | | | | | | | | | | | | | | |
|
| Consolidated | | | | | | | | | | | | | | | | |
| Credit Facility - Tranche A‑1 Term Loan (3) |
| 100.0 | % | $ | 200,000 |
| L + 1.20 | % | Swap |
| 2.59 | % | 01/18/23 |
| 01/18/23 | |
| 2121 Crystal Drive |
| 100.0 | % |
| 131,535 |
| 5.51 | % | Fixed |
| 5.51 | % | 03/01/23 |
| 03/01/23 | |
| Falkland Chase - South & West |
| 100.0 | % |
| 37,873 |
| 3.78 | % | Fixed |
| 3.78 | % | 06/01/23 |
| 06/01/23 | |
| 800 North Glebe Road |
| 100.0 | % |
| 107,500 |
| L + 1.60 | % | Swap |
| 3.60 | % | 06/30/22 |
| 06/30/24 | |
| Credit Facility - Tranche A‑2 Term Loan |
| 100.0 | % |
| 200,000 |
| L + 1.15 | % | Swap |
| 2.49 | % | 07/18/24 |
| 07/18/24 | |
| 2101 L Street |
| 100.0 | % |
| 127,576 |
| 3.97 | % | Fixed |
| 3.97 | % | 08/15/24 |
| 08/15/24 | |
| 201 12th Street S., 200 12th Street S., and 251 18th Street S. |
| 100.0 | % |
| 83,319 |
| 7.94 | % | Fixed |
| 7.94 | % | 01/01/25 |
| 01/01/25 | |
| Credit Facility - Revolving Credit Facility |
| 100.0 | % |
| 300,000 |
| L + 1.05 | % | — |
| 1.15 | % | 01/07/25 |
| 01/07/25 | |
| RiverHouse Apartments |
| 100.0 | % |
| 307,710 |
| L + 1.28 | % | Swap |
| 3.47 | % | 04/01/25 |
| 04/01/25 | |
| 1730 M Street |
| 100.0 | % |
| 47,500 |
| L + 1.25 | % | Swap |
| 3.92 | % | 12/21/25 |
| 12/21/25 | |
| 1900 Crystal Drive (4) (5) | | — | | | — | | L + 3.00 | % | — | | 3.25 | % | 04/25/26 | | 04/25/26 | |
| 1215 S. Clark Street | | 100.0 | % | | 105,000 | | L + 1.25 | % | — | | 1.35 | % | 12/22/26 | | 12/22/26 | |
| 2000/2001 South Bell Street (6) | | — | | | — | | L + 2.15 | % | — | | 2.25 | % | 01/22/27 | | 01/22/27 | |
| 4747 Bethesda Avenue | | 100.0 | % | | 175,000 | | L + 1.35 | % | Cap | | 1.45 | % | 02/20/27 | | 02/20/27 | |
| RTC - West (4) | | 100.0 | % | | 117,300 | | L + 1.40 | % | — | | 1.65 | % | 04/22/25 | | 04/22/27 | |
| 1235 S. Clark Street |
| 100.0 | % |
| 78,000 |
| 3.94 | % | Fixed |
| 3.94 | % | 11/01/27 |
| 11/01/27 | |
| 1225 S. Clark Street |
| 100.0 | % |
| 85,000 |
| L + 1.60 | % | — |
| 1.70 | % | 07/27/28 |
| 07/27/28 | |
| 1221 Van Street | | 100.0 | % | | 87,253 | | L + 2.51 | % | Cap | | 2.61 | % | 08/01/30 | | 08/01/30 | |
| 220 20th Street | | 100.0 | % | | 80,240 | | L + 2.51 | % | Cap | | 2.61 | % | 08/01/30 | | 08/01/30 | |
| The Bartlett | | 100.0 | % | | 217,453 | | L + 2.51 | % | Cap | | 2.61 | % | 08/01/30 | | 08/01/30 | |
| Total Consolidated Principal Balance |
| | |
| 2,488,259 |
|
|
|
|
|
|
|
|
|
| |
| Premium / (discount) recognized as a result of the Formation Transaction |
| | |
| 634 |
|
|
|
|
|
|
|
|
|
| |
| Deferred financing costs - mortgage loans (7) |
| | |
| (17,634) | | |
|
|
|
|
|
|
|
| |
| Deferred financing costs - credit facility (7) |
| | |
| (6,332) | | |
|
|
|
|
|
|
|
| |
| Total Consolidated Indebtedness | | | | $ | 2,464,927 | | |
|
|
|
|
|
|
|
| |
| | | | | | | | | | | | | | | | | |
| Total Consolidated Indebtedness (net of premium / (discount) and deferred financing costs) | |
|
|
|
|
|
|
|
|
|
|
|
| | ||
| Mortgages payable | | | | $ | 1,777,699 |
|
|
|
|
|
|
|
|
|
| |
| Revolving credit facility | | | |
| 300,000 |
| |
|
|
|
|
|
|
|
| |
| Deferred financing costs, net (included in other assets) (7) | | | |
| (11,436) |
|
|
|
|
|
|
|
|
|
| |
| Unsecured term loan | | | |
| 398,664 |
|
|
|
|
|
|
|
|
|
| |
| Total Consolidated Indebtedness | | | | $ | 2,464,927 |
|
|
|
|
|
|
|
|
|
| |
| | |
| | Page 46 |
| |
DEBT BY INSTRUMENT | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | |
| dollars in thousands | | | | | | | Stated | | Interest | | Current | | Initial | | Extended | |
| | | | | Principal | | Interest | | Rate | | Annual | | Maturity | | Maturity | | |
| Asset | | % Ownership | | Balance | | Rate | | Hedge |
| Interest Rate (1) | | Date | | Date (2) |
| |
| | | | | | | | | | | | | | | | | |
| Unconsolidated | | | | | | | | | | | | | | | | |
| Atlantic Plumbing | | 64.0 | % | $ | 100,000 | | L + 1.50 | % | — |
| 1.60 | % | 11/08/22 | | 11/08/22 | |
| Stonebridge at Potomac Town Center (5) | | 10.0 | % |
| 84,600 | | L + 2.50 | % | — |
| 2.75 | % | 12/10/22 | | 12/10/22 | |
| Galvan | | 1.8 | % |
| 89,500 | | L + 2.20 | % | — |
| 2.30 | % | 03/03/23 | | 03/03/23 | |
| L’Enfant Plaza Office - North, L’Enfant Plaza Office - East, L’Enfant Plaza Retail (5) | | 49.0 | % | | 208,984 | | L + 3.65 | % | Cap |
| 3.90 | % | 05/09/23 | | 05/09/24 | |
| Rosslyn Gateway - North, Rosslyn Gateway - South | | 18.0 | % |
| 48,486 | | L + 2.00 | % | Cap |
| 2.10 | % | 08/29/22 | | 08/29/24 | |
| The Foundry | | 9.9 | % |
| 58,000 | | L + 1.40 | % | Cap |
| 1.50 | % | 12/12/23 | | 12/12/24 | |
| The Alaire (8) | | 18.0 | % |
| 45,964 | | L + 1.82 | % | Cap |
| 1.92 | % | 03/01/25 | | 03/01/25 | |
| 1101 17th Street | | 55.0 | % |
| 60,000 | | L + 1.25 | % | Swap |
| 4.13 | % | 06/13/25 | | 06/13/25 | |
| The Gale Eckington | | 5.0 | % |
| 110,813 | | L + 1.60 | % | Swap |
| 3.56 | % | 07/31/22 | | 07/31/25 | |
| The Terano (8) | | 1.8 | % |
| 34,000 | | L + 1.35 | % | Swap |
| 4.45 | % | 11/09/25 | | 11/09/25 | |
| 8001 Woodmont | | 50.0 | % |
| 105,000 | | 4.82 | % | Fixed |
| 4.82 | % | 01/15/27 | | 01/15/27 | |
| 1900 N Street | | 55.0 | % | | 149,835 | | L + 1.70 | % | Cap | | 1.80 | % | 04/30/25 | | 04/30/27 | |
| Total Unconsolidated Principal Balance | | | |
| 1,095,182 | | |
|
|
|
|
|
|
|
| |
| Deferred financing costs |
| | | | (5,239) | | |
|
|
|
|
|
|
|
| |
| Total Unconsolidated Indebtedness | | | | $ | 1,089,943 | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Principal Balance at JBG SMITH Share | | | |
|
|
|
|
|
|
|
|
|
|
|
| |
| Consolidated principal balance at JBG SMITH Share |
| | | $ | 2,488,259 |
|
|
|
|
|
|
|
|
|
| |
| Unconsolidated principal balance at JBG SMITH Share | | | |
| 373,261 |
| |
|
|
| |
|
|
|
| |
| Total Consolidated and Unconsolidated Principal Balance at JBG SMITH Share | | | | $ | 2,861,520 |
|
|
|
|
|
|
|
|
|
| |
| | | | | | | | | | | | | | | | | |
| Indebtedness at JBG SMITH Share (net of premium / (discount) and deferred financing costs) |
|
|
|
|
|
|
|
|
|
| | |||||
| Consolidated indebtedness at JBG SMITH Share |
| | | $ | 2,464,927 |
|
|
|
|
|
|
|
|
|
| |
| Unconsolidated indebtedness at JBG SMITH Share | | | | | 370,743 | | | | | | | | | | | |
| Total Consolidated and Unconsolidated Indebtedness at JBG SMITH Share | | | | $ | 2,835,670 | | | | | | | | | | | |
| (1) | December 31, 2021 one-month LIBOR of 0.10% applied to loans, which are denoted as floating (no swap) or floating with a cap, except as otherwise noted. |
| (2) | Represents the maturity date based on execution of all extension options. Many of these extensions are subject to lender covenant tests. |
| (3) | Effective as of January 14, 2022, the Tranche A-1 Term Loan was amended to extend the maturity date to January 2025 with two one-year extension options and to amend the leverage-based pricing grid, reducing the interest rate 15 basis points to SOFR (including a credit spread adjustment) plus 1.05%, based upon our current leverage level. |
| (4) | In March 2021, we leased the land associated with 1900 Crystal Drive to a lessee which will construct the asset. In March 2021, the ground lessee entered into a mortgage loan collateralized by the asset with a maximum principal balance of $227.0 million. See footnote (3) on page 40 for additional information. |
| (5) | The base rate for this loan was 0.25% as of December 31, 2021. |
| (6) | In December 2021, we leased the land associated with 2000/2001 South Bell Street to a lessee which will construct the asset. In December 2021, the ground lessee entered into a mortgage loan collateralized by the asset with a maximum principal balance of $208.5 million. See footnote (2) on page 42 for additional information. |
| (7) | As of December 31, 2021, net deferred financing costs related to an unfunded mortgage loan totaling $6.4 million and the revolving credit facility totaling $5.0 million were included in "Other assets, net" in our condensed consolidated balance sheet. |
| (8) | In January 2022, The Alaire and The Terano were sold by our unconsolidated real estate venture and the venture repaid the mortgages payable. |
| | |
| | Page 47 |
| |
CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE VENTURES | DECEMBER 31, 2021 |
Estate Ventures
| | | | | | | | | | | | |
| |
| Asset Type |
| City |
| Submarket |
| % Ownership |
| Total Square Feet |
|
| | | | | | | | | | | | |
| Consolidated Real Estate Ventures | | | | | | | | | | | |
| MRP Realty | | | | | | | | | | | |
| The Wren (1) |
| Multifamily |
| Washington, DC |
| U Street/Shaw |
| 96.1 | % | 332,682 | |
| | | | | | | | | | | | |
| Total Consolidated Real Estate Ventures | | | | | | | | |
| 332,682 | |
| | | | | | | | | | | | |
| Unconsolidated Real Estate Ventures | | | | | | | | | | | |
| Landmark |
|
|
|
|
|
|
|
|
|
| |
| L’Enfant Plaza Office - East |
| Commercial |
| Washington, DC |
| Southwest |
| 49.0 | % | 397,855 | |
| L’Enfant Plaza Office - North |
| Commercial |
| Washington, DC |
| Southwest |
| 49.0 | % | 298,567 | |
| L’Enfant Plaza Retail |
| Commercial |
| Washington, DC |
| Southwest |
| 49.0 | % | 119,291 | |
| Rosslyn Gateway - North |
| Commercial |
| Arlington, VA |
| Rosslyn |
| 18.0 | % | 145,601 | |
| Rosslyn Gateway - South |
| Commercial |
| Arlington, VA |
| Rosslyn |
| 18.0 | % | 102,879 | |
| Galvan |
| Multifamily |
| Rockville, MD |
| Rockville Pike Corridor |
| 1.8 | % | 390,293 | |
| The Alaire (2) |
| Multifamily |
| Rockville, MD |
| Rockville Pike Corridor |
| 18.0 | % | 266,673 | |
| The Terano (2) |
| Multifamily |
| Rockville, MD |
| Rockville Pike Corridor |
| 1.8 | % | 196,921 | |
| Rosslyn Gateway - South Land |
| Future Development |
| Arlington, VA |
| Rosslyn |
| 18.0 | % | 498,500 | |
| Rosslyn Gateway - North Land |
| Future Development |
| Arlington, VA |
| Rosslyn |
| 18.0 | % | 311,000 | |
| L’Enfant Plaza Office - Center |
| Future Development |
| Washington, DC |
| Southwest |
| 49.0 | % | 350,000 | |
| 12511 Parklawn Drive (2) |
| Future Development |
| Rockville, MD |
| Rockville Pike Corridor |
| 18.0 | % | 6,500 | |
| | | | | | | | | | | 3,084,080 | |
| | | | | | | | | | | | |
| J.P. Morgan Global Alternatives (3) | | | | | | | | | | | |
| Potomac Yard Landbay F - Block 15 - 3331 Exchange Avenue | | Multifamily | | Alexandria, VA | | National Landing | | 50.0 | % | 181,300 | |
| Potomac Yard Landbay F - Block 19 - 3330 Exchange Avenue | | Multifamily | | Alexandria, VA | | National Landing | | 50.0 | % | 238,100 | |
| Potomac Yard Landbay G | | Future Development | | Alexandria, VA | | National Landing | | 50.0 | % | 712,000 | |
| Potomac Yard Landbay F | | Future Development | | Alexandria, VA | | National Landing | | 50.0 | % | 901,000 | |
| |
| | | | | | | | | 2,032,400 | |
| | | | | | | | | | | | |
| CBREI Venture |
|
|
|
|
|
|
|
|
|
| |
| Stonebridge at Potomac Town Center |
| Commercial |
| Woodbridge, VA |
| Prince William County |
| 10.0 | % | 504,327 | |
| The Foundry |
| Commercial |
| Washington, DC |
| Georgetown |
| 9.9 | % | 225,683 | |
| The Gale Eckington |
| Multifamily |
| Washington, DC |
| Union Market / NoMa / H Street |
| 5.0 | % | 466,716 | |
| Atlantic Plumbing |
| Multifamily |
| Washington, DC |
| U Street/Shaw |
| 64.0 | % | 245,527 | |
| Stonebridge at Potomac Town Center - Land |
| Future Development |
| Woodbridge, VA |
| Prince William County |
| 10.0 | % | 22,900 | |
| |
| | | | | | | | | 1,465,153 | |
| | |
| | Page 48 |
| |
CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE VENTURES | DECEMBER 31, 2021 |
| | | | | | | | | | |
| | Asset Type |
| City |
| Submarket |
| % Ownership |
| Total Square Feet |
| | | | | | | | | | |
Canadian Pension Plan Investment Board |
|
|
|
|
|
|
|
|
|
|
1900 N Street |
| Commercial |
| Washington, DC |
| CBD |
| 55.0 | % | 269,581 |
1101 17th Street |
| Commercial |
| Washington, DC |
| CBD |
| 55.0 | % | 208,894 |
|
| | | | | | | | | 478,475 |
| | | | | | | | | | |
Bresler / Brookfield |
|
|
|
|
|
|
|
|
|
|
Waterfront Station |
| Future Development |
| Washington, DC |
| Southwest |
| 2.5 | % | 662,600 |
| | | | | | | | | | |
Brandywine |
|
|
|
|
|
|
|
|
|
|
1250 1st Street |
| Future Development |
| Washington, DC |
| Union Market / NoMa / H Street |
| 30.0 | % | 265,800 |
51 N Street |
| Future Development |
| Washington, DC |
| Union Market / NoMa / H Street |
| 30.0 | % | 177,500 |
50 Patterson Street |
| Future Development |
| Washington, DC |
| Union Market / NoMa / H Street |
| 30.0 | % | 142,200 |
|
| | | | | | | | | 585,500 |
| | | | | | | | | | |
Prudential Global Investment Management |
|
|
|
|
|
|
|
|
|
|
Central Place Tower |
| Commercial |
| Arlington, VA |
| Rosslyn |
| 50.0 | % | 551,758 |
| | | | | | | | | | |
Berkshire Group |
|
|
|
|
|
|
|
|
|
|
8001 Woodmont |
| Multifamily |
| Bethesda, MD |
| Bethesda CBD |
| 50.0 | % | 363,979 |
| | | | | | | | | | |
Total Unconsolidated Real Estate Ventures |
| |
|
|
|
|
|
|
| 9,223,945 |
| (1) | Ownership percentage reflects expected dilution of JBG SMITH's real estate venture partner as contributions are funded. As of December 31, 2021, JBG SMITH's ownership interest was 96.0%. |
| (2) | In January 2022, The Alaire, The Terano and 12511 Parklawn Drive were sold by our unconsolidated real estate venture. |
| (3) | J.P. Morgan Global Alternatives is the advisor for an institutional investor. |
| | |
| | Page 49 |
| |
DEFINITIONS | DECEMBER 31, 2021 |
"Annualized Rent" is defined as (i) for commercial assets, or the retail component of a mixed-use asset, the in-place monthly base rent before Free Rent, plus tenant reimbursements as of December 31, 2021, multiplied by 12, and (ii) for multifamily assets, or the multifamily component of a mixed-use asset, the in-place monthly base rent before Free Rent as of December 31, 2021, multiplied by 12. Annualized Rent excludes rent from leases that have been signed but the tenant has not yet taken occupancy (not yet included in Percent Occupied metrics). The in-place monthly base rent does not take into consideration temporary rent relief arrangements.
"Annualized Rent per Square Foot" is defined as (i) for commercial assets, annualized office rent divided by occupied office square feet and annualized retail rent divided by occupied retail square feet; and (ii) for multifamily assets, monthly multifamily rent divided by occupied multifamily square feet; annualized retail rent and retail square feet are excluded from this metric. Occupied square footage may differ from leased square footage because leased square footage includes leases that have been signed but the tenant has not yet taken occupancy (not yet included in Percent Occupied metrics).
"Development Pipeline" refers to the Near-Term Development and Future Development Pipelines.
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), EBITDA for Real Estate ("EBITDAre") and "Adjusted EBITDA" are non-GAAP financial measures. EBITDA and EBITDAre are used by management as supplemental operating performance measures, which we believe help investors and lenders meaningfully evaluate and compare our operating performance from period-to-period by removing from our operating results the impact of our capital structure (primarily interest charges from our outstanding debt and the impact of our interest rate swaps) and certain non-cash expenses (primarily depreciation and amortization on our assets). EBITDAre is computed in accordance with the definition established by Nareit. Nareit defines EBITDAre as GAAP net income (loss) adjusted to exclude interest expense, income taxes, depreciation and amortization expenses, gains and losses on sales of real estate 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 of unconsolidated real estate ventures. These supplemental measures may help investors and lenders understand our ability to incur and service debt and to make capital expenditures. EBITDA and EBITDAre are not substitutes for net income (loss) (computed in accordance with GAAP) and may not be comparable to similarly titled measures used by other companies.
Adjusted EBITDA represents EBITDAre adjusted for items we believe are not representative of ongoing operating results, such as Transaction and Other Costs, impairment write-downs of right-of-use assets associated with leases in which we are a lessee, gain (loss) on the extinguishment of debt, earnings (losses) and distributions in excess of our investment in unconsolidated real estate ventures, lease liability adjustments, income from investment funds, business interruption insurance proceeds and share-based compensation expense related to the Formation Transaction and special equity awards. We believe that adjusting such items not considered part of our comparable operations, provides a meaningful measure to evaluate and compare our performance from period-to-period.
Because EBITDA, EBITDAre and Adjusted EBITDA have limitations as analytical tools, we use EBITDA, EBITDAre and Adjusted EBITDA to supplement GAAP financial measures. Additionally, we believe that users of these measures should consider EBITDA, EBITDAre and Adjusted EBITDA in conjunction with net income (loss) and other GAAP measures in understanding our operating results. A reconciliation of net income (loss) to EBITDA, EBITDAre and Adjusted EBITDA is presented on page 15.
"Estimated Incremental Investment" means management's estimate of the remaining cost to be incurred in connection with the development of an asset as of December 31, 2021, including all remaining acquisition costs, hard costs, soft costs, tenant improvements (excluding Free Rent converted to tenant improvement allowances), leasing costs and other similar costs to develop and stabilize the asset but excluding any financing costs and ground rent expenses. Actual incremental investment may differ substantially from our estimates due to numerous factors, including unanticipated expenses, delays in the estimated start and/or completion date, changes in design and other contingencies.
"Estimated Potential Development Density" reflects management's estimate of developable gross square feet based on our current business plans with respect to real estate owned or controlled as of December 31, 2021. Our current business plans may contemplate development of less than the maximum potential development density for individual assets. As market conditions change, our business plans, and therefore, the Estimated Potential Development Density, could change accordingly. Given timing, zoning requirements and other factors, we make no assurance that Estimated Potential Development Density amounts will become actual density to the extent we complete development of assets for which we have made such estimates.
| | |
| | Page 50 |
| ��� |
DEFINITIONS | DECEMBER 31, 2021 |
"Estimated Total Investment" means, with respect to the development of an asset, the sum of the Historical Cost in such asset and the Estimated Incremental Investment for such asset. Actual total investment may differ substantially from our estimates due to numerous factors, including unanticipated expenses, delays in the estimated start and/or completion date, changes in design and other contingencies.
“First-generation” is a lease on space that had been vacant for at least nine months or a lease on newly delivered space.
"Formation Transaction" refers collectively to the spin-off on July 17, 2017 of substantially all of the assets and liabilities of Vornado Realty Trust's Washington, DC segment, which operated as Vornado / Charles E. Smith, and the acquisition of the management business and certain assets and liabilities of The JBG Companies.
"Free Rent" means the amount of base rent and tenant reimbursements that are abated according to the applicable lease agreement(s).
Funds from Operations ("FFO"), "Core FFO" and Funds Available for Distribution ("FAD") are non-GAAP financial measures. FFO is computed in accordance with the definition established by 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 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.
Core FFO represents FFO adjusted to exclude items (net of tax) which we believe are not representative of ongoing operating results, such as Transaction and Other Costs, impairment write-downs of right-of-use assets associated with leases in which we are a lessee, gains (or losses) on extinguishment of debt, earnings (losses) and distributions in excess of our investment in unconsolidated real estate ventures, share-based compensation expense related to the Formation Transaction and special equity awards, lease liability adjustments, income from investment funds, business interruption insurance proceeds, amortization of the management contracts intangible and the mark-to-market of derivative instruments, including our share of such adjustments for unconsolidated real estate ventures.
FAD represents Core FFO less recurring tenant improvements, leasing commissions and other capital expenditures, net deferred rent activity, third-party lease liability assumption payments, recurring share-based compensation expense, accretion of acquired below-market leases, net of amortization of acquired above-market leases, amortization of debt issuance costs and other non-cash income and charges, including our share of such adjustments for unconsolidated real estate ventures. FAD is presented solely as a supplemental disclosure that management believes provides useful information as it relates to our ability to fund dividends.
We believe FFO, Core FFO and FAD are meaningful non-GAAP financial measures useful in comparing our levered operating performance from period-to-period and as compared to similar real estate companies because these non-GAAP measures exclude real estate depreciation and amortization expense and other non-comparable income and expenses, which implicitly assumes that the value of real estate diminishes predictably over time rather than fluctuating based on market conditions. FFO, Core FFO and FAD do not represent cash generated from operating activities and are 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, Core FFO and FAD may not be comparable to similarly titled measures used by other companies. A reconciliation of net income (loss) to FFO, Core FFO and FAD is presented on pages 16-17.
"Future Development Pipeline" refers to assets that are development opportunities on which we do not intend to commence construction within the next three years where we (i) own land or control the land through a ground lease or (ii) are under a long-term conditional contract to purchase, or enter into, a leasehold interest with respect to land.
"GAAP" means accounting principles generally accepted in the United States.
"Historical Cost" is a non-GAAP measure which includes the total Historical Cost incurred by JBG SMITH with respect to the development of an asset, including any acquisition costs, hard costs, soft costs, tenant improvements (excluding Free Rent converted to tenant improvement allowances), leasing costs and other similar costs, but excluding any financing costs and ground rent expenses incurred as of December 31, 2021.
| | |
| | Page 51 |
| |
DEFINITIONS | DECEMBER 31, 2021 |
"In-Service" refers to commercial or multifamily assets that are at or above 90% leased or have been operating and collecting rent for more than 12 months as of December 31, 2021.
"JBG SMITH Share" or "our share" refers to our ownership percentage of consolidated and unconsolidated assets in real estate ventures.
"Metro-Served" means locations, submarkets or assets that are within 0.5 miles of an existing or planned Metro station.
"Monthly Rent Per Unit" represents multifamily rent for the month ended December 31, 2021 divided by occupied units; retail rent is excluded from this metric.
"Near-Term Development Pipeline" refers to select assets that have the potential to commence construction over the next three years, subject to receipt of full entitlements, completion of design and market conditions.
"Net Debt" is a non-GAAP financial measurement. Net Debt represents our total consolidated and unconsolidated indebtedness less cash and cash equivalents at our share. Net Debt is an important component in the calculations of Net Debt to Annualized Adjusted EBITDA and Net Debt / total enterprise value. We believe that Net Debt is a meaningful non-GAAP financial measure useful to investors because we review Net Debt as part of the management of our overall financial flexibility, capital structure and leverage. We may utilize a considerable portion of our cash and cash equivalents at any given time for purposes other than debt reduction. In addition, cash and cash equivalents at our share may not be solely controlled by us. The deduction of cash and cash equivalents at our share from consolidated and unconsolidated indebtedness in the calculation of Net Debt, therefore, should not be understood to mean that it is available exclusively for debt reduction at any given time.
Net Operating Income ("NOI"), "Annualized NOI", "Estimated Stabilized NOI" and "Projected NOI Yield" are non-GAAP financial measures management uses to assess a segment's performance. The most directly comparable GAAP measure is net income (loss) attributable to common shareholders. We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only property related revenue (which includes base rent, tenant reimbursements and other operating revenue, net of Free Rent and payments associated with assumed lease liabilities) less operating expenses and ground rent for operating leases, if applicable. NOI also excludes deferred rent, related party management fees, interest expense, and certain other non-cash adjustments, including the accretion of acquired below-market leases and the amortization of acquired above-market leases and below-market ground lease intangibles. Management uses NOI as a supplemental performance measure of our assets and believes it provides useful information to investors because it reflects only those revenue and expense items that are incurred at the asset level, excluding non-cash items. In addition, NOI is considered by many in the real estate industry to be a useful starting point for determining the value of a real estate asset or group of assets. However, because NOI excludes depreciation and amortization and captures neither the changes in the value of our assets that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our assets, all of which have real economic effect and could materially impact the financial performance of our assets, the utility of NOI as a measure of the operating performance of our assets is limited. NOI presented by us may not be comparable to NOI reported by other REITs that define these measures differently. We believe to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) attributable to common shareholders as presented in our 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. Annualized NOI, for all assets except Crystal City Marriott, represents NOI for the three months ended December 31, 2021 multiplied by four. Due to seasonality in the hospitality business, Annualized NOI for Crystal City Marriott represents the trailing 12-month NOI as of December 31, 2021. Management believes Annualized NOI provides useful information in understanding our financial performance over a 12-month period, however, investors and other users are cautioned against attributing undue certainty to our calculation of Annualized NOI. Actual NOI for any 12-month period will depend on a number of factors beyond our ability to control or predict, including general capital markets and economic conditions, any bankruptcy, insolvency, default or other failure to pay rent by one or more of our tenants and the destruction of one or more of our assets due to terrorist attack, natural disaster or other casualty, among others. We do not undertake any obligation to update our calculation to reflect events or circumstances occurring after the date of this earnings release. There can be no assurance that the Annualized NOI shown will reflect our actual results of operations over any 12-month period.
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| | Page 52 |
| |
DEFINITIONS | DECEMBER 31, 2021 |
This Investor Package also contains management's estimate of stabilized NOI and projections of NOI yield for Under-Construction and Near-Term Development Pipeline assets, which are based on management's estimates of property-related revenue and operating expenses for each asset. These estimates are inherently uncertain and represent management's plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. The property-related revenues and operating expenses for our assets may differ materially from the estimates included in this Investor Package. Management's projections of NOI yield are not projections of our overall financial performance or cash flow, and there can be no assurance that the Projected NOI Yield set forth in this Investor Package will be achieved.
Projected NOI Yield means our Estimated Stabilized NOI reported as a percentage of (i) Estimated Total Investment and (ii) Estimated Incremental Investment. Actual initial full year stabilized NOI yield may vary from the Projected NOI Yield based on the actual incremental investment to complete the asset and its actual initial full year stabilized NOI, and there can be no assurance that we will achieve the Projected NOI Yields described in this Investor Package.
We do not provide reconciliations for non-GAAP estimates on a future basis, including Estimated Stabilized NOI and expected annualized NOI because we are unable to provide a meaningful or accurate calculation or estimate of reconciling items and the information is not available without unreasonable effort. This inability is due to the inherent difficulty of forecasting the timing and/or amounts of various items that would impact net income (loss). Additionally, no reconciliation of Projected NOI Yield to the most directly comparable GAAP measure is included in this Investor Package because we are unable to quantify certain amounts that would be required to be included in the comparable GAAP financial measures without unreasonable efforts because such data is not currently available or cannot be currently estimated with confidence. Accordingly, we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors.
"Non-Same Store" refers to all operating assets excluded from the Same Store pool.
"Percent Leased" is based on leases signed as of December 31, 2021, and is calculated as total rentable square feet less rentable square feet available for lease divided by total rentable square feet expressed as a percentage. Out-of-service square feet are excluded from this calculation.
"Percent Occupied" is based on occupied rentable square feet/units as of December 31, 2021, and is calculated as (i) for office and retail space, total rentable square feet less unoccupied square feet divided by total rentable square feet, (ii) for multifamily space, total units less unoccupied units divided by total units, expressed as a percentage. Out-of-service square feet and units are excluded from this calculation.
"Pro Rata Adjusted General and Administrative Expenses", a non-GAAP financial measure, represents general and administrative expenses adjusted for share-based compensation expense related to the Formation Transaction and special equity awards and the general and administrative expenses of our third-party asset management and real estate services business that are directly reimbursed. We believe that adjusting such items not considered part of our comparable operations provides a meaningful measure to assess our general and administrative expenses as compared to similar real estate companies and in general.
"Recently Delivered" refers to commercial and multifamily assets that are below 90% leased and have been delivered within the 12 months ended December 31, 2021.
"Same Store" refers to the pool of assets that were In-Service for the entirety of both periods being compared, except for assets for which significant redevelopment, renovation, or repositioning occurred during either of the periods being compared.
"Second-Generation" is a lease on space that had been vacant for less than nine months.
"Signed But Not Yet Commenced Leases" means leases that, as of December 31, 2021, have been executed but for which rent has not commenced.
"Square Feet" or "SF" refers to the area that can be rented to tenants, defined as (i) for commercial assets, rentable square footage defined in the current lease and for vacant space the rentable square footage defined in the previous lease for that space, (ii) for multifamily assets, management's estimate of approximate rentable square feet, (iii) for Under-Construction
| | |
| | Page 53 |
| |
DEFINITIONS | DECEMBER 31, 2021 |
assets, management's estimate of approximate rentable square feet based on current design plans as of December 31, 2021, and (iv) for Near-Term and Future Development Pipeline assets, management's estimate of developable gross square feet based on current business plans with respect to real estate owned or controlled as of December 31, 2021.
"Transaction and Other Costs" include demolition costs, integration and severance costs, pursuit costs related to other completed, potential and pursued transactions, as well as other expenses.
"Under-Construction" refers to assets that were under construction during the three months ended December 31, 2021.
.
| | |
| | Page 54 |
| |
APPENDIX – TRANSACTION AND OTHER COSTS | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | |||||||||||||
| dollars in thousands |
| Q4 2021 |
| Q3 2021 |
| Q2 2021 |
| Q1 2021 |
| Q4 2020 | | |||||
| | | | | | | | | | | | | | | | | |
| Transaction and Other Costs |
| |
|
| |
| | |
| | |
| | |
| |
| Demolition costs | | $ | 704 | | $ | 1,422 | | $ | 439 | | $ | 1,008 | | $ | 503 | |
| Integration and severance costs | |
| 422 | |
| 154 | |
| 222 | |
| 240 | |
| 628 | |
| Completed, potential and pursued transaction expenses | |
| 392 | |
| 1,375 | |
| 1,609 | |
| 2,442 | |
| 13 | |
| Total (1) | | $ | 1,518 | | $ | 2,951 | | $ | 2,270 | | $ | 3,690 | | $ | 1,144 | |
| (1) | For Q4 2021 and Q1 2021, includes $0.6 million and $1.1 million of transaction costs attributable to noncontrolling interests. |
| | |
| | Page 55 |
| |
APPENDIX - EBITDA, EBITDAre AND ADJUSTED EBITDA RECONCILIATIONS (NON-GAAP) | DECEMBER 31, 2021 |
Are Appendix – EBITDAAre and Adjusted EBITDA
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | |||||||||||||
| dollars in thousands |
| Q4 2021 |
| Q3 2021 |
| Q2 2021 |
| Q1 2021 |
| Q4 2020 |
| |||||
| | | | | | | | | | | | | | | | | |
| EBITDA, EBITDAre and Adjusted EBITDA |
| |
|
| |
| | |
| | |
| | |
| |
| Net income (loss) | | $ | (63,334) | | $ | 996 | | $ | (3,318) | | $ | (24,069) | | $ | (50,168) | |
| Depreciation and amortization expense | |
| 58,173 | |
| 56,726 | |
| 56,678 | |
| 64,726 | |
| 64,170 | |
| Interest expense | |
| 17,649 | |
| 17,243 | |
| 16,773 | |
| 16,296 | |
| 17,661 | |
| Income tax expense (benefit) | |
| (986) | |
| 217 | |
| (5) | |
| 4,315 | |
| (544) | |
| Unconsolidated real estate ventures allocated share of above adjustments | |
| 9,696 | |
| 10,147 | |
| 10,581 | |
| 10,164 | |
| 10,072 | |
| EBITDA attributable to noncontrolling interests | |
| 546 | |
| (54) | |
| (41) | |
| 1,071 | |
| (2) | |
| EBITDA | | $ | 21,744 | | $ | 85,275 | | $ | 80,668 | | $ | 72,503 | | $ | 41,189 | |
| Gain on sale of real estate | |
| — | |
| — | |
| (11,290) | |
| — | |
| — | |
| (Gain) loss on sale of unconsolidated real estate assets | |
| — | |
| (23,137) | |
| (5,189) | |
| — | |
| (826) | |
| Real estate impairment loss (1) | | | 25,144 | | | — | | | — | | | — | | | 7,805 | |
| Impairment related to unconsolidated real estate ventures (2) | | | 23,883 | | | 1,380 | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | |
| EBITDAre | | $ | 70,771 | | $ | 63,518 | | $ | 64,189 | | $ | 72,503 | | $ | 48,168 | |
| Transaction and Other Costs (3) | |
| 888 | |
| 2,951 | |
| 2,270 | |
| 2,582 | |
| 1,144 | |
| Business interruption insurance proceeds | | | (4,517) | | | — | | | — | | | — | | | — | |
| Income from investment funds, net | | | (3,620) | | | — | | | — | | | — | | | — | |
| Impairment loss related to right-of-use asset (1) | | | — | | | — | | | — | | | — | | | 2,427 | |
| Loss on extinguishment of debt | |
| — | |
| — | |
| — | |
| — | |
| 29 | |
| Share-based compensation related to Formation Transaction and special equity awards | |
| 3,459 | |
| 3,480 | |
| 4,441 | |
| 4,945 | |
| 6,246 | |
| Losses and distributions in excess of our investment in unconsolidated real estate venture | |
| (181) | |
| (280) | |
| (92) | |
| (330) | |
| (152) | |
| Lease liability adjustments | | | (134) | | | — | | | — | | | — | | | — | |
| Unconsolidated real estate ventures allocated share of above adjustments | |
| (497) | |
| 130 | |
| 9 | |
| 31 | |
| 90 | |
| | | | | | | | | | | | | | | | | |
| Adjusted EBITDA | | $ | 66,169 | | $ | 69,799 | | $ | 70,817 | | $ | 79,731 | | $ | 57,952 | |
| | | | | | | | | | | | | | | | | |
| Net Debt to Annualized Adjusted EBITDA (4) | | | 9.6 | x |
| 7.9 | x |
| 7.6 | x |
| 6.8 | x |
| 9.2 | x |
| | | | | | | | | | | | | | | | | |
| Net Debt (at JBG SMITH Share) |
| December 31, 2021 |
| September 30, 2021 |
| June 30, 2021 |
| March 31, 2021 |
| December 31, 2020 |
| |||||
| Consolidated indebtedness (5) | | $ | 2,464,927 | | $ | 2,063,426 | | $ | 1,979,494 | | $ | 1,979,208 | | $ | 1,985,061 | |
| Unconsolidated indebtedness (5) | |
| 370,743 | |
| 362,698 | |
| 399,262 | |
| 401,389 | |
| 395,550 | |
| Total consolidated and unconsolidated indebtedness | |
| 2,835,670 | |
| 2,426,124 | |
| 2,378,756 | |
| 2,380,597 | |
| 2,380,611 | |
| Less: cash and cash equivalents | |
| 282,097 | |
| 213,612 | |
| 217,543 | |
| 223,142 | |
| 241,066 | |
| Net Debt (at JBG SMITH Share) | | $ | 2,553,573 | | $ | 2,212,512 | | $ | 2,161,213 | | $ | 2,157,455 | | $ | 2,139,545 | |
Note: All EBITDA measures as shown above are attributable to OP Units.
| (1) | In connection with the preparation and review of our annual financial statements, we determined that certain assets were impaired and recorded impairment losses in Q4 2021 and Q4 2020 totaling $25.1 million and $10.2 million ($7.8 million related to real estate and $2.4 million related to the right-of-use asset associated with a ground lease). |
| (2) | Includes an impairment on real estate assets taken by an unconsolidated real estate venture and an impairment of our investment in an unconsolidated real estate venture related to a decrease in the value of the underlying asset. |
| (3) | See page 55 for the components of Transaction and Other Costs. For Q4 2021 and Q1 2021, excludes $0.6 million and $1.1 million of transaction costs attributable to noncontrolling interests. |
| (4) | Calculated using the Net Debt below. Adjusted EBITDA is annualized by multiplying by four. |
| (5) | Net of premium/discount and deferred financing costs. |
| | |
| | Page 56 |
| |
APPENDIX - FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP) | DECEMBER 31, 2021 |
Appendix – FFO, Core FFO and FAD
| | | | | | | | | | | | | | | | | |
| |
| Three Months Ended |
| |||||||||||||
| in thousands, except per share data |
| Q4 2021 |
| Q3 2021 |
| Q2 2021 |
| Q1 2021 |
| Q4 2020 |
| |||||
| | | | | | | | | | | | | | | | | |
| FFO and Core FFO | | |
|
| |
|
| |
|
| |
|
| |
| |
| Net income (loss) attributable to common shareholders | | $ | (56,446) | | $ | 893 | | $ | (2,973) | | $ | (20,731) | | $ | (45,655) | |
| Net income (loss) attributable to redeemable noncontrolling interests | |
| (6,256) | |
| 103 | |
| (345) | |
| (2,230) | |
| (4,513) | |
| Net loss attributable to noncontrolling interests | |
| (632) | |
| — | |
| — | |
| (1,108) | |
| — | |
| Net income (loss) | |
| (63,334) | |
| 996 | |
| (3,318) | |
| (24,069) | |
| (50,168) | |
| Gain on sale of real estate | |
| — | |
| — | |
| (11,290) | |
| — | |
| — | |
| Gain on sale of unconsolidated real estate assets | |
| — | |
| (23,137) | |
| (5,189) | |
| — | |
| (826) | |
| Real estate depreciation and amortization | |
| 55,902 | |
| 54,547 | |
| 54,475 | |
| 62,500 | |
| 61,865 | |
| Real estate impairment loss, net of tax (1) | | | 24,301 | | | — | | | — | | | — | | | 7,805 | |
| Impairment related to unconsolidated real estate ventures (2) | | | 23,883 | | | 1,380 | | | — | | | — | | | — | |
| Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures | |
| 6,626 | |
| 7,002 | |
| 7,277 | |
| 7,311 | |
| 7,219 | |
| FFO attributable to noncontrolling interests | |
| 546 | |
| (54) | |
| (41) | |
| 1,071 | |
| (2) | |
| FFO Attributable to OP Units | | $ | 47,924 | | $ | 40,734 | | $ | 41,914 | | $ | 46,813 | | $ | 25,893 | |
| FFO attributable to redeemable noncontrolling interests | |
| (4,792) | |
| (4,703) | |
| (4,054) | |
| (4,485) | |
| (2,810) | |
| FFO Attributable to Common Shareholders | | $ | 43,132 | | $ | 36,031 | | $ | 37,860 | | $ | 42,328 | | $ | 23,083 | |
| | | | | | | | | | | | | | | | | |
| FFO attributable to OP Units | | $ | 47,924 | | $ | 40,734 | | $ | 41,914 | | $ | 46,813 | | $ | 25,893 | |
| Transaction and Other Costs, net of tax (3) | |
| 865 | |
| 2,928 | |
| 2,241 | |
| 2,552 | |
| 1,071 | |
| Business interruption insurance proceeds | | | (4,517) | | | — | | | — | | | — | | | — | |
| Income from investment funds, net | | | (2,711) | | | — | | | — | | | — | | | — | |
| Impairment loss related to right-of-use asset (1) | | | — | | | — | | | — | | | — | | | 2,427 | |
| (Gain) loss from mark-to-market on derivative instruments | |
| (292) | |
| 37 | |
| 46 | |
| (133) | |
| 11 | |
| Loss on extinguishment of debt | |
| — | |
| — | |
| — | |
| — | |
| 29 | |
| Losses and distributions in excess of our investment in unconsolidated real estate venture | |
| (181) | |
| (280) | |
| (92) | |
| (330) | |
| (152) | |
| Share-based compensation related to Formation Transaction and special equity awards | |
| 3,459 | |
| 3,480 | |
| 4,441 | |
| 4,945 | |
| 6,246 | |
| Lease liability adjustments | |
| (134) | |
| — | |
| — | |
| — | |
| — | |
| Amortization of management contracts intangible, net of tax | |
| 1,073 | |
| 1,072 | |
| 1,073 | |
| 1,072 | |
| 1,073 | |
| Unconsolidated real estate ventures allocated share of above adjustments | |
| (543) | |
| 112 | |
| 6 | |
| (10) | |
| 36 | |
| Core FFO Attributable to OP Units | | $ | 44,943 | | $ | 48,083 | | $ | 49,629 | | $ | 54,909 | | $ | 36,634 | |
| Core FFO attributable to redeemable noncontrolling interests | |
| (4,494) | |
| (5,552) | |
| (4,800) | |
| (5,260) | |
| (3,976) | |
| Core FFO Attributable to Common Shareholders | | $ | 40,449 | | $ | 42,531 | | $ | 44,829 | | $ | 49,649 | | $ | 32,658 | |
| FFO per diluted common share | | $ | 0.33 | | $ | 0.27 | | $ | 0.29 | | $ | 0.32 | | $ | 0.17 | |
| Core FFO per diluted common share | | $ | 0.31 | | $ | 0.32 | | $ | 0.34 | | $ | 0.38 | | $ | 0.25 | |
| Weighted average shares - diluted (FFO and Core FFO) | |
| 129,009 | |
| 131,351 | |
| 131,485 | |
| 131,542 | |
| 132,628 | |
See footnotes on page 58.
| | |
| | Page 57 |
| |
APPENDIX - FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP) | DECEMBER 31, 2021 |
| | | | | | | | | | | | | | | | | |
| in thousands, except per share data |
| Three Months Ended |
| |||||||||||||
| |
| Q4 2021 |
| Q3 2021 |
| Q2 2021 |
| Q1 2021 |
| Q4 2020 |
| |||||
| | | | | | | | | | | | | | | | | |
| FAD | | |
|
| |
|
| |
|
| |
|
| |
| |
| Core FFO attributable to OP Units | | $ | 44,943 | | $ | 48,083 | | $ | 49,629 | | $ | 54,909 | | $ | 36,634 | |
| Recurring capital expenditures and second-generation tenant improvements and leasing commissions (4) | |
| (21,773) | |
| (12,124) | |
| (12,226) | |
| (10,431) | |
| (15,284) | |
| Straight-line and other rent adjustments (5) | |
| (2,985) | |
| (3,701) | |
| (4,088) | |
| (4,765) | |
| 15,433 | |
| Third-party lease liability assumption payments | |
| — | |
| (422) | |
| (703) | |
| (678) | |
| (836) | |
| Share-based compensation expense | |
| 9,663 | |
| 7,805 | |
| 9,045 | |
| 8,070 | |
| 6,496 | |
| Amortization of debt issuance costs | |
| 1,142 | |
| 1,126 | |
| 1,096 | |
| 1,105 | |
| 1,059 | |
| Unconsolidated real estate ventures allocated share of above adjustments | |
| (1,332) | |
| (1,478) | |
| (1,333) | |
| (1,326) | |
| 1,265 | |
| Non-real estate depreciation and amortization | |
| 795 | |
| 703 | |
| 727 | |
| 750 | |
| 829 | |
| FAD available to OP Units (A) | | $ | 30,453 | | $ | 39,992 | | $ | 42,147 | | $ | 47,634 | | $ | 45,596 | |
| Distributions to common shareholders and unitholders (B) | | $ | 33,137 | | $ | 33,688 | | $ | 33,511 | | $ | 35,435 | | $ | 33,362 | |
| FAD Payout Ratio (B÷A) (6) | | | 108.8 | % |
| 84.2 | % |
| 79.5 | % |
| 74.4 | % |
| 73.2 | % |
| | | | | | | | | | | | | | | | | |
| Capital Expenditures | |
|
| |
|
| |
|
| |
|
| |
|
| |
| Maintenance and recurring capital expenditures | | $ | 8,121 | | $ | 7,404 | | $ | 4,376 | | $ | 3,926 | | $ | 6,325 | |
| Share of maintenance and recurring capital expenditures from unconsolidated real estate ventures | |
| 168 | |
| 265 | |
| 324 | |
| 47 | |
| 186 | |
| Second-generation tenant improvements and leasing commissions | |
| 12,815 | |
| 3,762 | |
| 7,454 | |
| 6,064 | |
| 8,773 | |
| Share of second-generation tenant improvements and leasing commissions from unconsolidated real estate ventures | |
| 669 | |
| 693 | |
| 72 | |
| 394 | |
| — | |
| Recurring capital expenditures and second-generation tenant improvements and leasing commissions | |
| 21,773 | |
| 12,124 | |
| 12,226 | |
| 10,431 | |
| 15,284 | |
| Non-recurring capital expenditures | |
| 15,008 | |
| 5,885 | |
| 4,352 | |
| 2,836 | |
| 6,380 | |
| Share of non-recurring capital expenditures from unconsolidated real estate ventures | |
| 145 | |
| 177 | |
| 56 | |
| 51 | |
| 160 | |
| First-generation tenant improvements and leasing commissions | |
| 6,229 | |
| 2,603 | |
| 1,703 | |
| 835 | |
| 8,910 | |
| Share of First-generation tenant improvements and leasing commissions from unconsolidated real estate ventures | |
| 987 | |
| 93 | |
| 199 | |
| 1,192 | |
| 747 | |
| Non-recurring capital expenditures | |
| 22,369 | |
| 8,758 | |
| 6,310 | |
| 4,914 | |
| 16,197 | |
| Total JBG SMITH Share of Capital Expenditures | | $ | 44,142 | | $ | 20,882 | | $ | 18,536 | | $ | 15,345 | | $ | 31,481 | |
| (1) | In connection with the preparation and review of our annual financial statements, we determined that certain assets were impaired and recorded impairment losses in Q4 2021 and Q4 2020 totaling $25.1 million ($24.3 million after tax) and $10.2 million ($7.8 million related to real estate and $2.4 million related to the right-of-use asset associated with a ground lease). |
| (2) | Includes an impairment on real estate assets taken by an unconsolidated real estate venture and an impairment of our investment in an unconsolidated real estate venture related to a decrease in the value of the underlying asset. |
| (3) | See page 55 for the components of Transaction and Other Costs. For Q4 2021 and Q1 2021, excludes $0.6 million and $1.1 million of transaction costs attributable to noncontrolling interests. |
| (4) | Includes amounts, at JBG SMITH Share, related to unconsolidated real estate ventures. |
| (5) | Includes straight-line rent, above/below market lease amortization and lease incentive amortization. |
| (6) | The quarterly FAD payout ratio is not necessarily indicative of an amount for the full year due to fluctuation in the timing of capital expenditures, the commencement of new leases and the seasonality of our operations. |
| | |
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APPENDIX - NOI RECONCILIATIONS (NON-GAAP) | DECEMBER 31, 2021 |
Appendix – NOI Reconciliations
| | | | | | | | | | | | | | | | | |
| in thousands |
| Three Months Ended |
| |||||||||||||
| |
| Q4 2021 |
| Q3 2021 |
| Q2 2021 |
| Q1 2021 |
| Q4 2020 |
| |||||
| Net income (loss) attributable to common shareholders | | $ | (56,446) | | $ | 893 | | $ | (2,973) | | $ | (20,731) | | $ | (45,655) | |
| Add: | |
|
| |
|
| |
|
| |
|
| |
|
| |
| Depreciation and amortization expense | |
| 58,173 | |
| 56,726 | |
| 56,678 | |
| 64,726 | |
| 64,170 | |
| General and administrative expense: | |
|
| |
|
| |
|
| |
|
| |
|
| |
| Corporate and other | |
| 15,344 | |
| 12,105 | |
| 13,895 | |
| 12,475 | |
| 9,156 | |
| Third-party real estate services | |
| 27,124 | |
| 25,542 | |
| 25,557 | |
| 28,936 | |
| 28,569 | |
| Share-based compensation related to Formation Transaction and special equity awards | |
| 3,459 | |
| 3,480 | |
| 4,441 | |
| 4,945 | |
| 6,246 | |
| Transaction and Other Costs | |
| 1,518 | |
| 2,951 | |
| 2,270 | |
| 3,690 | |
| 1,144 | |
| Interest expense | |
| 17,649 | |
| 17,243 | |
| 16,773 | |
| 16,296 | |
| 17,661 | |
| Loss on extinguishment of debt | |
| — | |
| — | |
| — | |
| — | |
| 29 | |
| Impairment loss | | | 25,144 | | | — | | | — | | | — | | | 10,232 | |
| Income tax expense (benefit) | |
| (986) | |
| 217 | |
| (5) | |
| 4,315 | |
| (544) | |
| Net income (loss) attributable to redeemable noncontrolling interests | |
| (6,256) | |
| 103 | |
| (345) | |
| (2,230) | |
| (4,513) | |
| Net loss attributable to noncontrolling interests | | | (632) | | | — | | | — | | | (1,108) | | | — | |
| Less: | |
|
| |
|
| |
|
| |
|
| |
|
| |
| Third-party real estate services, including reimbursements revenue | |
| 23,309 | |
| 25,842 | |
| 26,745 | |
| 38,107 | |
| 30,069 | |
| Other income | |
| 2,013 | |
| 1,568 | |
| 1,904 | |
| 2,186 | |
| 9,934 | |
| Income (loss) from unconsolidated real estate ventures, net | |
| (25,583) | |
| 20,503 | |
| 3,953 | |
| (943) | |
| (3,194) | |
| Interest and other income (loss), net | |
| 8,672 | |
| 192 | |
| (38) | |
| 9 | |
| (1,646) | |
| Gain on sale of real estate | |
| — | |
| — | |
| 11,290 | |
| — | |
| — | |
| | | | | | | | | | | | | | | | | |
| Consolidated NOI | |
| 75,680 | |
| 71,155 | |
| 72,437 | |
| 71,955 | |
| 51,332 | |
| NOI attributable to unconsolidated real estate ventures at our share | |
| 6,289 | |
| 7,336 | |
| 8,109 | |
| 7,512 | |
| 7,521 | |
| Non-cash rent adjustments (1) | |
| (2,985) | |
| (3,701) | |
| (4,088) | |
| (4,765) | |
| 15,433 | |
| Other adjustments (2) | |
| 6,107 | |
| 4,683 | |
| 5,191 | |
| 4,738 | |
| (3,284) | |
| Total adjustments | |
| 9,411 | |
| 8,318 | |
| 9,212 | |
| 7,485 | |
| 19,670 | |
| NOI | | $ | 85,091 | | $ | 79,473 | | $ | 81,649 | | $ | 79,440 | | $ | 71,002 | |
| Less: out-of-service NOI loss (3) | |
| (1,745) | |
| (2,019) | | | (1,329) | | | (1,361) | | | (801) | |
| Operating portfolio NOI | | $ | 86,836 | | $ | 81,492 | | $ | 82,978 | | $ | 80,801 | | $ | 71,803 | |
Note: NOI, Non-Same Store NOI and Same Store NOI are presented as originally reported in the respective quarter.
| (1) | Adjustment to exclude straight-line rent, above/below market lease amortization and lease incentive amortization. |
| (2) | Adjustment to include other revenue and payments associated with assumed lease liabilities related to operating properties and to exclude commercial lease termination revenue and allocated corporate general and administrative expenses to operating properties. |
| (3) | Includes the results of our Under-Construction assets and Near-Term and Future Development Pipelines. |
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