EX-99.1 2 jbgs-20220802xex99d1.htm EX-99.1

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Quarterly Investor Package


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JBGS Divider


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Management Letter

August 2, 2022

To Our Fellow Shareholders:

Despite significant volatility in the capital markets, rising interest rates and high inflation, we continue to advance our strategy, and our operating results continue to improve. We are pleased to have substantially completed our entire 2022 recycling goal in the first half of the year. Given the flash freeze unfolding in the credit markets, the timing of our execution was especially fortunate. As urbanites return from their walkabouts and employers struggle to navigate the tension between a tight job market and the desire to convene their people in person, we see strong signs (and results!) of a return to higher-density, in-person living and working. In National Landing, a palpable buzz has returned, reflected in rising daily physical occupancy, as companies continue to bring their employees back to the office. And the recent headquarters relocations by Boeing and Raytheon further highlight the National Landing area’s appeal to tech-oriented, globally scaled corporations, particularly those in the defense sector. We provide detail on highlights from the quarter below.

Amazon closed on land purchase for Phase II of HQ2. In the second quarter, we closed on the sale of Pen Place to Amazon for $198 million. Plans for the 12-acre site call for 3.2 million square feet of office space, including the iconic Helix building, 100,000 square feet of retail, and approximately 2.75 acres of public open space. Phase I, located at the adjacent Metropolitan Park, remains on track for a 2023 delivery, with eight additional local small business retail leases announced over the last three months. To date, Amazon, in partnership with JBG SMITH, has announced 10 retail leasing transactions at Metropolitan Park totaling 38,000 square feet. In the second quarter Amazon also announced 5,000 employees hired at HQ2 with nearly 4,000 current job openings, already surpassing its year-end 2022 hiring commitment to the Commonwealth of Virginia.

Same Store NOI increased 13.8% year-over-year for our operating portfolio. Our multifamily portfolio exhibited quarter-over-quarter occupancy growth, significant rent bumps upon renewals and reduced concession packages. In our commercial portfolio, second quarter renewal leasing remained strong with tenants who renewed retaining 100% of their expiring square footage. Parking income trended upward to 74% of pre-pandemic levels, while physical occupancy increased slightly to 51% on peak days in June.

We have closed on $993 million of capital recycling transactions year-to-date, representing an average capitalization rate of 4.9%. This recycling includes the recent sale of 1900 N Street, a 270,000 square foot trophy office asset located in Washington, DC, for $265 million ($145.8 million at share). We used the proceeds to deleverage our balance sheet and create capacity for accretive investments, including share repurchases. The $198 million from the sale of Pen Place to Amazon in May is not included in these amounts as it was contracted prior to 2021. In light of recent market volatility, we are especially pleased with our transaction volume through the first half of the year.

We upsized our Credit Facility Term Loan by $200 million, with no material change to our spread at SOFR plus 125 basis points. The incremental $200 million includes a one-year delayed draw feature, which was undrawn as of the date of this release. The maturity date of the Term Loan A-2 was also extended by 3.5 years to January 2028.

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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.

68% of our holdings are located directly across the Potomac River from Washington, DC in Northern Virginia’s National Landing submarket, where Amazon’s new 5 million+ square foot headquarters and Virginia Tech’s $1 billion Innovation Campus are under construction.

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 provided in November 2018, 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%. Additionally, in late 2021, Amazon announced its hybrid return-to-the-office policy, requiring employees to 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, our Near-Term Development Pipeline could add as many as 2,150 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, national/international defense and security needs, 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 net asset value per share growth.

Our successful track record and well-established platform position us to maximize the value of our Development Pipeline through development, opportunistic land sales, ground leases, and/or recapitalizations with private investors.

As of the end of the second quarter, we had two multifamily developments under construction in National Landing – 1900 Crystal Drive (808 units) and 2000/2001 South Bell Street (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 100% of our Development Pipeline, over 70% of which is in National Landing. Our 8.6 million square foot Development Pipeline (excluding non-core assets), 84% of

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which is multifamily, includes both a 3.5 million square foot Near-Term Development Pipeline and a 5.1 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 0.5 million square feet and are actively advancing design and entitlement on an additional 4.6 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.

Our capital allocation strategy is to shift the majority of 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 (existing and development) and opportunistically divesting non-core office and land assets. Since our formation, we have sold $2.7 billion of non-core assets and invested $423 million into multifamily acquisitions, $829 million into the development of multifamily assets, and committed an additional $529 million to new assets currently under construction.

Capital Allocation

Our capital allocation strategy is grounded in our primary goal of maximizing long-term net asset value per share. 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 important sources of NAV-priced capital to fund our strategy. Allocating capital away from non-core office and land uses allows us to invest in higher growth opportunities, including multifamily acquisitions and development, and to return capital through share repurchases, especially when our shares trade at a material discount to NAV.

We set a goal to market $1 billion of non-core office and land assets in 2022 and have substantially completed this goal with $993 million closed year-to-date, representing an average capitalization rate of approximately 4.9% and approximately 5.5% on the income-producing office assets (6.0% to 6.5% stabilized). This amount includes the previously announced sale of 1900 N Street, an 11-story, 270,000 square foot trophy office asset in Washington, DC, for $265 million ($145.8 million at share). The $198 million from the sale of Pen Place to Amazon is not included in these amounts as it was contracted prior to 2021. While we are pleased to have accomplished substantially all of our 2022 recycling goal in the first half of the year, volatile market conditions may impact the timing and execution of any additional transactions.

This quarter we invested approximately $40 million in under-construction projects, including 1900 Crystal Drive and 2000/2001 South Bell Street, representing 1,583 new multifamily units being developed to an expected 6% yield on cost. As with all our development projects, these assets have guaranteed maximum price contracts that were priced during the height of the pandemic, which yielded construction costs below 2019 levels and pre-dated recent inflationary cost increases. With costs having increased as much as 20% over the last year, today’s inflated construction pricing is not favorable for new development. With over 3,600 units in our Near-Term Development Pipeline, we continue to monitor construction costs and overall market conditions to ensure that we maintain our disciplined capital allocation standards.

Finally, our capital allocation strategy demands that we seek investment opportunities with the highest potential risk-adjusted returns, including share repurchases. When our shares trade at a material discount to NAV, share

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repurchases are one of the most accretive uses of capital available to us. In the second quarter, our Board of Trustees increased our common share repurchase authorization by $500 million to $1 billion. Accordingly, in the second quarter, we repurchased 8.5 million shares at a weighted average price per share of $25.15, totaling $213.9 million. Since the inception of our share repurchase program in 2020, we have repurchased 22.5 million shares, or 15% of shares outstanding as of December 31, 2019, at a weighted average price per share of $26.90.

Financial and Operating Metrics

For the three months ended June 30, 2022, we reported Core FFO attributable to common shareholders of $37.1 million, or $0.31 per diluted share. Same Store NOI for the quarter increased 13.8% year-over-year to $79.3 million. Our multifamily portfolio ended the quarter at 95.7% leased and 92.3% occupied. Our office portfolio ended the second quarter at 87.3% leased and 86.1% occupied. For second generation leases, the rental rate mark-to-market was negative 16.0%. When we exclude non-core office assets intended for recycling, our mark-to-market in National Landing was negative 2%. As we have previously mentioned, our mark-to-market will vary from quarter-to-quarter depending on the leases signed.

Net Debt/Annualized Adjusted EBITDA would have been 7.6x in Q2 2022 and Net Debt/Total Enterprise Value

would have been 38.1%, after adjusting for sales and recapitalizations. In July, we upsized our Term Loan A-2 to $400 million. The incremental $200 million includes a one-year delayed draw feature, which was undrawn as of the date of this release. The maturity date of the Term Loan A-2 was extended by 3.5 years to January 2028, with no material change in our spread at SOFR plus 125 basis points.

Operating Portfolio

Multifamily Trends

Fundamentals across our multifamily portfolio continued to improve throughout the second quarter. Our portfolio ended the quarter at 95.7% leased and 92.3% occupied, up 160 basis points and 70 basis points quarter-over-quarter. Excluding our newly delivered and acquired assets (8001 Woodmont, West Half, The Wren, and The Batley), our portfolio ended the quarter at 97.7% leased and 94.7% occupied. Strong market rent growth has left us with in-place rents at 11% below asking rents, supporting an embedded growth opportunity from the expiration of several jurisdictional restrictions on rent increases as leases roll to market during our prime summer leasing season. Of note, for second quarter lease expirations, we increased average renewal rents by approximately 8.6% while achieving a 54.8% renewal rate across our portfolio. We expect this trend to continue through the summer months. As for concessions, there is a continued burn-down in pandemic-related concession packages, with zero concessions being offered in many of our key submarkets.

Market-Wide Trends (based on CoStar, UrbanTurf and Apartment List data)

Fundamentals in our multifamily market have improved over the last year. Apartment List reported strong occupancy across the DC metro which drove asking rent growth of 10.8% from June 2021 through June 2022. Rents have now reached their post-pandemic peak of 9.7% above pre-COVID (Q1 2020) levels. Below-average multifamily deliveries are projected over the next three years with approximately 6,300 units expected to be delivered per year from 2022-2024 in our tracked submarkets, based on data from CoStar and UrbanTurf. This amount represents an approximately 30% decrease from the more than 9,000 units per year delivered, on average, from 2010-2019. More recently, rising construction costs and interest rates have impacted developers’ abilities to start new projects. Data show an approximately 44% decrease in the number of new units started in Q2 2022 compared to Q2 2021.

Rising interest rates are expected to contribute to an overall cooling in the multifamily investment sales market which has already resulted in many multifamily deals being pulled from the market or re-priced as local broker commentary suggests an approximately 100 basis points spread in cap rates between seller and buyer pricing

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expectations. Prior to heightened concerns around interest rates among levered buyers, CoStar data showed strong growth in both transaction volume (32%) and $/sf pricing (26%) from 1H 2021 to 1H 2022, largely based on deals negotiated prior to changes in rates, signaling confidence among investors in the underlying fundamentals of multifamily. Re-pricing and a thinning buyer pool in an elevated rate environment could create a buying opportunity for us, particularly if fundamentals remain positive.

Office Trends

Our office portfolio ended the second quarter at 87.3% leased and 86.1% occupied, up 20 basis points and 40 basis points quarter-over-quarter when excluding sold and recapitalized assets. Commercial parking revenue continues to improve as more tenants return to the office, reaching 74% of pre-pandemic levels on an annualized basis. We executed 326,000 square feet of leases, the majority of which comprised renewals, headlined by two sizable leases executed in non-core office assets to facilitate future recycling. These two leases total 226,000 square feet with a weighted average lease term of 10.1 years.

Turning to National Landing, we continue to focus on our new leasing strategy, anchored by four powerful demand catalysts: Amazon HQ2, Virginia Tech’s Innovation Campus, the Pentagon, and our digital infrastructure investments. Tour activity in National Landing gained significant momentum in the second quarter, with the number of tours surpassing any other quarter since the onset of the pandemic. This trend was primarily driven by defense contractors and digital infrastructure-related tenant prospects interested in establishing a presence in National Landing proximate to the Pentagon and the Department of Defense, as well as the digital amenities currently being rolled out in the submarket. We believe that defense will be a robust driver of demand, with preliminary discussions in the Senate Appropriations Committee indicating that spending on defense may rise to $850 billion in the upcoming budget — more than was requested by the White House. This is in addition to robust foreign defense spending with top U.S. contractors, the majority of which have a presence in National Landing.

With the National Landing transformation well underway, we are also fielding significant inbound interest at rising market rental rates for our retail portfolio. We remain on track to open 55 new retailers by year-end 2024.

Market-Wide Trends (based on Kastle Systems, JLL and CoStar Q2 2022 reporting)

While office occupancy relative to pre-pandemic levels has increased over the last year from 27.4% in June 2021 to 40.2% in June 2022, it has essentially remained static at that level for most of the first half of 2022, based on data from Kastle Systems. The modest increase in physical occupancy has reduced the pace of tenant space givebacks, with JLL showing negative 650,000 square feet of net absorption year-to-date compared to negative 5.9 million square feet in the first half of 2021; however, market-wide return to positive absorption territory has yet to be seen. Lingering uncertainty surrounding hybrid and remote work remain a drag on the arrival of new demand as many large occupiers stay on the sidelines or pause new requirements to re-think the design of space. The ultimate result of these changes on utilization of space per job remains unclear but will be crucial to future demand.

As the second quarter progressed, go-forward liquidity in the office investment sales market decreased as levered buyers either sought to avoid interest rate risk prior to closing or could not find positive leverage. Prior to rising interest rate concerns, data from CoStar reported office transaction volume increased 78% from the first half of 2021 to the first half of 2022. This increase suggests that the recent slowdown is less a function of decreasing investor demand and more a function of concerns related to further episodic uncertainty in interest rates.

Environmental, Social, and Governance

In July, JBG SMITH was ranked 7th on LinkedIn’s 2022 Top Companies in Real Estate list. The ranking is based on workplace practices that support the development and advancement of all employees, as well as representation of women. Additionally, in June, JBG SMITH was named one of The Washington Post’s 2022 Top Workplaces. JBG

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SMITH earned four out of five Culture Excellence Awards, including Leadership, Innovation, Compensation & Benefits, and Purpose & Values. Now in its ninth year, The Washington Post’s Top Workplaces highlights the companies that are leaders in the Washington, DC area as chosen by their own employees through an anonymous third-party survey.

In May, the Washington Housing Initiative (WHI) Impact Pool released its Annual Report, outlining its 2021 achievements which can be found here: WHI Impact Report. Since inception in 2018, the WHI Impact Pool has provided a total of $40 million in financing for the creation and preservation of approximately 1,750 affordable workforce housing units, including 825 units with Amazon, at total capitalization of approximately $560 million. This satisfies almost 60% of our goal to finance 3,000 units by 2028. WHI properties now span five jurisdictions and are all managed by JBG SMITH.

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As we head into the second half of 2022, we are fortunate to see nearly all our non-core asset recycling in the rear-view mirror. Having reduced our DC office exposure by 71%, or 2.3 million square feet, since our formation we are well positioned to focus on growth and transformation, especially in National Landing. Before the end of next year, this submarket will see us nearly triple the number of street-level retailers that so many of our customers demand and bring online the first 5G enabled smart city at scale in the country. Our physical and digital placemaking coupled with record increases in defense spending and the exponential growth of players like Amazon and Virginia Tech in our market constitute a compelling set of demand drivers at a time when growth across the economy is increasingly uncertain. The Washington Metro Area’s historical resilience during recessions appears poised for an encore performance and with our strong balance sheet and substantial growth pipeline we are incredibly well-positioned to capitalize on that strength.

We appreciate your strong support of our strategic transformation and are especially thankful to those of you who attended our Investor Day in May.

Thank you for your continued trust and confidence.

Sincerely,

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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 SECOND QUARTER 2022 RESULTS

Bethesda, MD (August 2, 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-Q for the quarter ended June 30, 2022 and reported its financial results.

Additional information regarding our results of operations, properties and tenants can be found in our Second Quarter 2022 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.

Second Quarter 2022 Highlights

For the three and six months ended June 30, 2022, net income (loss), Funds From Operations ("FFO") and Core FFO attributable to common shareholders were:

SECOND QUARTER AND FULL YEAR COMPARISON

in millions, except per share amounts

Three Months Ended

Six Months Ended

June 30, 2022

June 30, 2021

June 30, 2022

June 30, 2021

Amount

Per Diluted Share

Amount

Per Diluted Share

Amount

Per Diluted Share

Amount

Per Diluted Share

Net income (loss)

$

123.3

$

1.02

$

(3.0)

$

(0.03)

$

123.2

$

0.99

$

(23.7)

$

(0.19)

FFO

$

33.6

$

0.28

$

37.9

$

0.29

$

84.9

$

0.68

$

80.2

$

0.61

Core FFO

$

37.1

$

0.31

$

44.8

$

0.34

$

79.8

$

0.64

$

94.5

$

0.72

Annualized Net Operating Income ("NOI") for the three months ended June 30, 2022 was $337.1 million, compared to $370.7 million for the three months ended March 31, 2022, at our share. (Excluding the assets that were sold or recapitalized, Annualized NOI for the three months ended June 30, 2022 was $328.9 million, compared to $320.9 million for the three months ended March 31, 2022, at our share.)
Same Store NOI ("SSNOI") at our share increased 13.8% year-over-year to $79.3 million for the three months ended June 30, 2022. SSNOI at our share increased 13.9% year-over-year to $155.4 million for the six months ended June 30, 2022.

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oThe increase in SSNOI was substantially attributable to (i) higher occupancy and rents, and lower concessions and bad debt reserves in our multifamily portfolio, (ii) higher occupancy and average daily rates at the Crystal City Marriott, (iii) an increase in parking revenue in our commercial portfolio and (iv) the burn-off of rent abatement in our commercial portfolio.

Operating Portfolio

The operating commercial portfolio was 87.3% leased and 86.1% occupied as of June 30, 2022, compared to 85.2% and 83.3% as of March 31, 2022, at our share. (Excluding the assets that were sold or recapitalized, the operating commercial portfolio was 87.1% leased and 85.7% occupied as of March 31, 2022, at our share.)
The operating multifamily portfolio was 95.7% leased and 92.3% occupied as of June 30, 2022, compared to 94.1% and 91.6% as of March 31, 2022, at our share. Our multifamily portfolio in-service assets were 96.6% leased and 93.1% occupied as of June 30, 2022, compared to 95.5% and 92.9% as of March 31, 2022, at our share. (Excluding our newly delivered and acquired assets (8001 Woodmont, West Half, The Wren and The Batley), our portfolio ended the quarter at 97.7% leased and 94.7% occupied.)
Executed approximately 326,000 square feet of office leases at our share during the three months ended June 30, 2022, comprising approximately 28,000 square feet of first-generation leases and approximately 298,000 square feet of second-generation leases, which generated an 18.7% rental rate decrease on a GAAP basis and a 16.0% rental rate decrease on a cash basis. When we exclude non-core office assets intended for recycling, our mark-to-market in National Landing was negative 2.0%.
Executed approximately 536,000 square feet of office leases at our share during the six months ended June 30, 2022, comprising approximately 50,000 square feet of first-generation leases and approximately 486,000 square feet of second-generation leases, which generated a 7.4% rental rate decrease on a GAAP basis and a 9.7% rental rate decrease on a cash basis.

Development Portfolio

Under-Construction

As of June 30, 2022, we had two multifamily assets under construction consisting of 1,583 units at our share.

Near-Term Development Pipeline

As of June 30, 2022, we had eight near-term development pipeline assets consisting of 3.5 million square feet of estimated potential development density at our share.

Future Development Pipeline

As of June 30, 2022, we had 16 future development pipeline assets consisting of 6.3 million square feet of estimated potential development density at our share.

Third-Party Asset Management and Real Estate Services Business

For the three months ended June 30, 2022, revenue from third-party real estate services, including reimbursements, was $22.2 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

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estate services business was $11.9 million, primarily driven by $6.0 million of property and asset management fees, $3.6 million of development fees, $1.3 million of other service revenue and $1.0 million of leasing fees.

Balance Sheet

As of June 30, 2022, our total enterprise value was approximately $5.2 billion, comprising 131.1 million common shares and units valued at $3.1 billion, and debt (net of premium / (discount) and deferred financing costs) at our share of $2.3 billion, less cash and cash equivalents at our share of $181.9 million.
As of June 30, 2022, we had $162.3 million of cash and cash equivalents ($181.9 million of cash and cash equivalents at our share), and $999.5 million of capacity under our credit facility.
Net Debt to annualized Adjusted EBITDA at our share for the three months ended June 30, 2022 was 8.1x and our Net Debt / total enterprise value was 40.4% as of June 30, 2022. Net Debt to annualized Adjusted EBITDA would have been 7.6x for the three months ended June 30, 2022, and Net Debt / total enterprise value would have been 38.1% as of June 30, 2022 after including the net proceeds from the sales and recapitalizations that are held in escrow at a qualified intermediary to facilitate a potential like-kind exchange and removing the Adjusted EBITDA generated during the quarter from assets that were sold or recapitalized.

Investing and Financing Activities

On June 1, 2022, our unconsolidated real estate venture between us (55%) and Canadian Pension Plan Investment Board (45%) sold 1900 N Street, a 270,000 square feet commercial asset in Washington, DC, for $145.8 million at our share.
On May 25, 2022, we sold Pen Place to Amazon for $198.0 million.
On April 29, 2022, we sold a 99-year term leasehold interest in a future development asset located in Reston, VA.
On April 13, 2022, we formed an unconsolidated real estate venture with affiliates of Fortress Investment Group LLC ("Fortress") to recapitalize a 1.6 million square foot office portfolio and land parcels valued at $580.0 million comprising four wholly owned commercial assets (7200 Wisconsin Avenue, 1730 M Street, RTC-West/RTC-West Trophy Office/RTC-West Land and Courthouse Plaza 1 and 2). Fortress contributed $131.0 million for a 66.5% interest in the venture. In connection with the transaction, the venture obtained mortgage loans totaling $458.0 million secured by the properties, of which $402.0 million was drawn at closing. We provide asset management, property management and leasing services to the venture.
On April 1, 2022, we sold the Universal Buildings, commercial assets located in Washington, DC, for $228.0 million.
We repaid the outstanding balance on our revolving credit facility totaling $300.0 million.
We repurchased and retired 8.5 million common shares for $213.9 million, a weighted average purchase price per share of $25.15. In June 2022, our Board of Trustees increased our common share repurchase authorization by $500 million to $1 billion. 

Subsequent to June 30, 2022:

In July 2022, we borrowed $100.0 million under our revolving credit facility.
In July 2022, our Tranche A2 Term Loan was amended to increase its borrowing capacity by $200.0 million. The incremental $200.0 million includes a one-year delayed draw feature, which was undrawn as of the date of

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this release. The amendment extends the maturity date of the term loan from July 2024 to January 2028 and amends the interest rate to SOFR plus 1.25% per annum based on our current leverage level with a resulting all-in interest rate of 2.59%, including our current interest rate swaps, as of the date of this release. We also entered into two forward-starting interest rate swaps with an effective date of July 2024 and a total notional value of $200.0 million, which will effectively fix SOFR at a weighted average interest rate of 2.25% through the maturity date, resulting in an all-in interest rate of 3.50% beginning in July 2024 based on our current leverage level.
On August 1, 2022, we acquired the remaining 36.0% ownership interest in Atlantic Plumbing, a multifamily asset owned by an unconsolidated real estate venture, for $19.7 million.
In July 2022, we repurchased and retired 1.5 million common shares for $36.0 million, a weighted average purchase price per share of $23.92.

Dividends

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

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 15.5 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 9.8 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, financial condition and business 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

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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 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, uncollectible 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 National Landing; 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; 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 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

6


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.

Occupancy, non-GAAP financial measures and leverage metrics presented in our investor package exclude our 10.0% subordinated interest in one commercial building and our 33.5% subordinated interest in four commercial buildings, as well as the associated non-recourse mortgages payable, held through unconsolidated real estate ventures, as our investment in each real estate venture is zero, we do not anticipate receiving any near-term cash flow distributions from the real estate ventures and have not guaranteed their obligations or otherwise committed to providing financial support.

7


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 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 investments, 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

8


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 the 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 investments, 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

9


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 June 30, 2022 multiplied by four. Due to seasonality in the hospitality business, Annualized NOI for Crystal City Marriott represents the trailing 12-month NOI as of June 30, 2022. 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

"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 June 30, 2022. 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.

10


"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.

"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 June 30, 2022.

"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 June 30, 2022.

11


CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

in thousands

June 30, 2022

December 31, 2021

 

 

 

ASSETS

 

Real estate, at cost:

    

  

    

  

Land and improvements

$

1,217,216

$

1,378,218

Buildings and improvements

 

4,004,286

 

4,513,606

Construction in progress, including land

 

385,085

 

344,652

 

5,606,587

 

6,236,476

Less: accumulated depreciation

 

(1,257,871)

 

(1,368,003)

Real estate, net

 

4,348,716

 

4,868,473

Cash and cash equivalents

 

162,270

 

264,356

Restricted cash

 

212,848

 

37,739

Tenant and other receivables

 

46,605

 

44,496

Deferred rent receivable

 

154,487

 

192,265

Investments in unconsolidated real estate ventures

 

414,349

 

462,885

Intangible assets, net

157,819

201,956

Other assets, net

 

82,808

 

240,160

Assets held for sale

 

 

73,876

 

TOTAL ASSETS

$

5,579,902

$

6,386,206

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

 

  

 

  

Liabilities:

 

  

 

  

Mortgages payable, net

$

1,612,169

$

1,777,699

Revolving credit facility

 

 

300,000

Unsecured term loans, net

 

398,500

 

398,664

Accounts payable and accrued expenses

 

112,784

 

106,136

Other liabilities, net

 

111,852

 

342,565

Total liabilities

 

2,235,305

 

2,925,064

Commitments and contingencies

 

  

 

  

Redeemable noncontrolling interests

 

521,392

 

522,725

Total equity

 

2,823,205

 

2,938,417

 

TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

$

5,579,902

$

6,386,206


Note: For complete financial statements, please refer to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

12


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

in thousands, except per share data

Three Months Ended June 30, 

Six Months Ended June 30, 

2022

2021

2022

2021

REVENUE

Property rental

    

$

117,036

    

$

122,819

$

248,634

    

$

245,060

Third-party real estate services, including reimbursements

 

22,157

 

26,745

 

46,127

 

64,852

Other revenue

 

6,312

 

5,080

 

12,709

 

10,021

Total revenue

 

145,505

 

154,644

 

307,470

 

319,933

EXPENSES

 

  

 

  

 

  

 

  

Depreciation and amortization

 

49,479

 

56,678

 

107,541

 

121,404

Property operating

 

35,445

 

35,000

 

76,089

 

69,731

Real estate taxes

 

14,946

 

18,558

 

33,132

 

36,868

General and administrative:

 

  

 

  

 

 

  

Corporate and other

 

14,782

 

13,895

 

30,597

 

26,370

Third-party real estate services

 

24,143

 

25,557

 

51,192

 

54,493

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

 

1,577

 

4,441

 

3,821

 

9,386

Transaction and other costs

 

1,987

 

2,270

 

2,886

 

5,960

Total expenses

 

142,359

 

156,399

 

305,258

 

324,212

OTHER INCOME (EXPENSE)

 

  

 

  

 

  

 

  

Income (loss) from unconsolidated real estate ventures, net

 

(2,107)

 

3,953

 

1,038

 

3,010

Interest and other income (loss), net

 

1,672

 

(38)

 

15,918

 

(29)

Interest expense

 

(16,041)

 

(16,773)

 

(32,319)

 

(33,069)

Gain on the sale of real estate, net

 

158,767

 

11,290

 

158,631

 

11,290

Loss on the extinguishment of debt

 

(1,038)

 

 

(1,629)

 

Total other income (expense)

 

141,253

 

(1,568)

 

141,639

 

(18,798)

INCOME (LOSS) BEFORE INCOME TAX (EXPENSE) BENEFIT

 

144,399

 

(3,323)

 

143,851

 

(23,077)

Income tax (expense) benefit

 

(2,905)

 

5

 

(2,434)

 

(4,310)

NET INCOME (LOSS)

 

141,494

 

(3,318)

 

141,417

 

(27,387)

Net (income) loss attributable to redeemable noncontrolling interests

 

(18,248)

 

345

 

(18,258)

 

2,575

Net loss attributable to noncontrolling interests

29

 

84

1,108

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

$

123,275

$

(2,973)

$

123,243

$

(23,704)

EARNINGS (LOSS) PER COMMON SHARE - BASIC AND DILUTED

$

1.02

$

(0.03)

$

0.99

$

(0.19)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED

 

121,316

 

131,480

 

123,984

 

131,510


Note: For complete financial statements, please refer to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

13


EBITDA, EBITDAre AND ADJUSTED EBITDA RECONCILIATIONS (NON-GAAP)

(Unaudited)

 

dollars in thousands

    

Three Months Ended June 30, 

Six Months Ended June 30, 

 

2022

2021

2022

2021

 

 

EBITDA, EBITDAre and Adjusted EBITDA

 

  

  

Net income (loss)

$

141,494

$

(3,318)

$

141,417

$

(27,387)

Depreciation and amortization expense

49,479

56,678

107,541

121,404

Interest expense

16,041

16,773

32,319

33,069

Income tax expense (benefit)

2,905

(5)

2,434

4,310

Unconsolidated real estate ventures allocated share of above adjustments

9,494

10,581

19,323

20,745

EBITDA attributable to noncontrolling interests

(47)

(41)

(73)

1,030

EBITDA

$

219,366

$

80,668

$

302,961

$

153,171

Gain on the sale of real estate, net

(158,767)

(11,290)

(158,631)

(11,290)

Gain on the sale of unconsolidated real estate assets

(936)

(5,189)

(6,179)

(5,189)

EBITDAre

$

59,663

$

64,189

$

138,151

$

136,692

Transaction and other costs (1)

1,987

2,270

2,852

4,852

Income from investments, net

(1,217)

(15,288)

Loss on the extinguishment of debt

1,038

1,629

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

1,577

4,441

3,821

9,386

Earnings and distributions in excess of our investment in unconsolidated real estate venture

(124)

(92)

(565)

(422)

Unconsolidated real estate ventures allocated share of above adjustments

1,841

9

2,045

40

Adjusted EBITDA

$

64,765

$

70,817

$

132,645

$

150,548

Net Debt to Annualized Adjusted EBITDA (2)

8.1

x

7.6

x

7.9

x

7.2

x

June 30, 2022

June 30, 2021

Net Debt (at JBG SMITH Share)

  

  

Consolidated indebtedness (3)

$

2,000,762

$

1,979,494

Unconsolidated indebtedness (3)

279,534

399,262

Total consolidated and unconsolidated indebtedness

2,280,296

2,378,756

Less: cash and cash equivalents

181,882

217,543

Net Debt (at JBG SMITH Share)

$

2,098,414

$

2,161,213


Note: All EBITDA measures as shown above are attributable to common limited partnership units ("OP Units").

(1)Includes demolition costs, integration and severance costs, pursuit costs related to other completed, potential and pursued transactions, as well as other expenses. For the six months ended June 30, 2022 and 2021, excludes $34,000 and $1.1 million of transaction costs attributable to noncontrolling interests.
(2)Calculated using the Net Debt below. Quarterly Adjusted EBITDA is annualized by multiplying by four. Adjusted EBITDA for the six months ended June 30, 2022 and 2021 is annualized by multiplying by two. Net Debt to annualized Adjusted EBITDA would have been 7.6x and 8.0x for the three and six months ended June 30, 2022, after including the net proceeds from the sales and recapitalizations that are held in escrow at a qualified intermediary to facilitate a potential like-kind exchange and removing the Adjusted EBITDA generated during the quarter from assets that were sold or recapitalized.
(3)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 June 30, 

Six Months Ended June 30, 

 

    

2022

    

2021

XX

2022

    

2021

FFO and Core FFO

Net income (loss) attributable to common shareholders

$

123,275

 

$

(2,973)

$

123,243

 

$

(23,704)

Net income (loss) attributable to redeemable noncontrolling interests

 

18,248

 

(345)

 

18,258

 

(2,575)

Net loss attributable to noncontrolling interests

 

(29)

 

 

(84)

 

(1,108)

Net income (loss)

 

141,494

 

(3,318)

 

141,417

 

(27,387)

Gain on the sale of real estate, net of tax

 

(155,642)

 

(11,290)

 

(155,506)

 

(11,290)

Gain on the sale of unconsolidated real estate assets

 

(936)

 

(5,189)

 

(6,179)

 

(5,189)

Real estate depreciation and amortization

 

47,242

 

54,475

 

102,759

 

116,975

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

 

6,416

 

7,277

 

13,286

 

14,588

FFO attributable to noncontrolling interests

 

(47)

 

(41)

 

(73)

 

1,030

FFO Attributable to OP Units

$

38,527

 

$

41,914

$

95,704

 

$

88,727

FFO attributable to redeemable noncontrolling interests

 

(4,966)

 

(4,054)

 

(10,843)

 

(8,539)

FFO Attributable to Common Shareholders

$

33,561

 

$

37,860

$

84,861

 

$

80,188

FFO attributable to OP Units

$

38,527

 

$

41,914

$

95,704

 

$

88,727

Transaction and other costs, net of tax (1)

 

1,892

 

2,241

 

2,735

 

4,793

Income from investments, net

(957)

(11,495)

(Gain) loss from mark-to-market on derivative instruments

 

(2,027)

 

46

 

(5,394)

 

(87)

Loss on the extinguishment of debt

 

1,038

 

 

1,629

 

Earnings and distributions in excess of our investment in unconsolidated real estate venture

 

(124)

 

(92)

 

(565)

 

(422)

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

 

1,577

 

4,441

 

3,821

 

9,386

Amortization of management contracts intangible, net of tax

 

1,106

 

1,073

 

2,211

 

2,145

Unconsolidated real estate ventures allocated share of above adjustments

 

1,593

 

6

 

1,545

 

(4)

Core FFO Attributable to OP Units

$

42,625

 

$

49,629

$

90,191

 

$

104,538

Core FFO attributable to redeemable noncontrolling interests

 

(5,494)

 

(4,800)

 

(10,383)

 

(10,060)

Core FFO Attributable to Common Shareholders

$

37,131

 

$

44,829

$

79,808

 

$

94,478

FFO per common share - diluted

$

0.28

 

$

0.29

$

0.68

 

$

0.61

Core FFO per common share - diluted

$

0.31

 

$

0.34

$

0.64

 

$

0.72

Weighted average shares - diluted (FFO and Core FFO)

 

121,327

 

131,485

 

123,990

 

131,513

See footnotes on page 16.

15


FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)

(Unaudited)

 

in thousands, except per share data

Three Months Ended June 30, 

Six Months Ended June 30, 

 

    

2022

    

2021

2022

    

2021

FAD

Core FFO attributable to OP Units

    

$

42,625

    

$

49,629

$

90,191

    

$

104,538

Recurring capital expenditures and Second-generation tenant improvements and leasing commissions (2)

 

(13,300)

 

(12,226)

 

(27,002)

 

(22,657)

Straight-line and other rent adjustments (3)

 

(1,978)

 

(4,088)

 

(3,769)

 

(8,853)

Third-party lease liability assumption payments

 

(25)

 

(703)

 

(25)

 

(1,381)

Share-based compensation expense

 

10,171

 

9,045

 

20,664

 

17,115

Amortization of debt issuance costs

 

1,135

 

1,096

 

2,311

 

2,201

Unconsolidated real estate ventures allocated share of above adjustments

 

(289)

 

(1,333)

 

(937)

 

(2,659)

Non-real estate depreciation and amortization

 

760

 

727

 

1,828

 

1,477

FAD available to OP Units (A)

$

39,099

$

42,147

$

83,261

$

89,781

Distributions to common shareholders and unitholders (B)

$

31,768

$

33,511

$

64,371

$

68,946

FAD Payout Ratio (B÷A) (4)

 

81.3

%

 

79.5

%

 

77.3

%

 

76.8

%

Capital Expenditures

Maintenance and recurring capital expenditures

$

6,091

$

4,376

$

10,911

$

8,302

Share of maintenance and recurring capital expenditures from unconsolidated real estate ventures

 

312

 

324

 

394

 

371

Second-generation tenant improvements and leasing commissions

 

6,713

 

7,454

 

15,307

 

13,518

Share of Second-generation tenant improvements and leasing commissions from unconsolidated real estate ventures

 

184

 

72

 

390

 

466

Recurring capital expenditures and Second-generation tenant improvements and leasing commissions

 

13,300

 

12,226

 

27,002

 

22,657

Non-recurring capital expenditures

 

13,552

 

4,352

 

26,362

 

7,188

Share of non-recurring capital expenditures from unconsolidated real estate ventures

 

37

 

56

 

49

 

107

First-generation tenant improvements and leasing commissions

 

4,197

 

1,703

 

8,647

 

2,538

Share of First-generation tenant improvements and leasing commissions from unconsolidated real estate ventures

 

244

 

199

 

717

 

1,391

Non-recurring capital expenditures

 

18,030

 

6,310

 

35,775

 

11,224

Total JBG SMITH Share of Capital Expenditures

$

31,330

$

18,536

$

62,777

$

33,881


(1)Includes demolition costs, integration and severance costs, pursuit costs related to other completed, potential and pursued transactions, as well as other expenses. For the six months ended June 30, 2022 and 2021, excludes $34,000 and $1.1 million of transaction costs attributable to noncontrolling interests.
(2)Includes amounts, at JBG SMITH Share, related to unconsolidated real estate ventures.
(3)Includes straight-line rent, above/below market lease amortization and lease incentive amortization.
(4)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 June 30, 

Six Months Ended June 30, 

 

2022

2021

2022

2021

Net income (loss) attributable to common shareholders

    

$

123,275

    

$

(2,973)

$

123,243

    

$

(23,704)

Add:

 

  

 

  

 

  

 

  

Depreciation and amortization expense

 

49,479

 

56,678

 

107,541

 

121,404

General and administrative expense:

 

  

 

  

 

  

 

  

Corporate and other

 

14,782

 

13,895

 

30,597

 

26,370

Third-party real estate services

 

24,143

 

25,557

 

51,192

 

54,493

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

 

1,577

 

4,441

 

3,821

 

9,386

Transaction and other costs

 

1,987

 

2,270

 

2,886

 

5,960

Interest expense

 

16,041

 

16,773

 

32,319

 

33,069

Loss on the extinguishment of debt

 

1,038

 

 

1,629

 

Income tax expense (benefit)

 

2,905

 

(5)

 

2,434

 

4,310

Net income (loss) attributable to redeemable noncontrolling interests

 

18,248

 

(345)

 

18,258

 

(2,575)

Net loss attributable to noncontrolling interests

(29)

 

(84)

(1,108)

Less:

 

  

 

  

 

  

 

  

Third-party real estate services, including reimbursements revenue

 

22,157

 

26,745

 

46,127

 

64,852

Other revenue

 

1,798

 

1,904

 

3,994

 

4,090

Income (loss) from unconsolidated real estate ventures, net

 

(2,107)

 

3,953

 

1,038

 

3,010

Interest and other income (loss), net

 

1,672

 

(38)

 

15,918

 

(29)

Gain on the sale of real estate, net

 

158,767

 

11,290

 

158,631

 

11,290

Consolidated NOI

 

71,159

 

72,437

 

148,128

 

144,392

NOI attributable to unconsolidated real estate ventures at our share

 

8,321

 

8,109

 

15,268

 

15,613

Non-cash rent adjustments (1)

 

(1,978)

 

(4,088)

 

(3,769)

 

(8,853)

Other adjustments (2)

 

5,695

 

5,191

 

14,443

 

9,933

Total adjustments

 

12,038

 

9,212

 

25,942

 

16,693

NOI

$

83,197

$

81,649

$

174,070

$

161,085

Less: out-of-service NOI loss (3)

 

(2,046)

 

(1,329)

 

(3,498)

 

(2,619)

Operating Portfolio NOI

$

85,243

$

82,978

$

177,568

$

163,704

Non-Same Store NOI (4)

 

5,915

 

13,257

 

22,152

 

27,226

Same Store NOI (5)

$

79,328

$

69,721

$

155,416

$

136,478

Change in Same Store NOI

13.8

%

 

13.9

%

 

Number of properties in Same Store pool

52

 

52

 

  


(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


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SEP

TABLE OF CONTENTS

JUNE 30, 2022

Table of Contents

Page

Overview

Disclosures

3-5

Company Profile

6

Financial Highlights

7

Financial Highlights - Trends

8-9

Portfolio Overview

10

Financial Information

Condensed Consolidated Balance Sheets

11

Condensed Consolidated Statements of Operations

12

Unconsolidated Real Estate Ventures - Balance Sheet and Operating Information

13

Other Tangible Assets and Liabilities

14

EBITDA, EBITDAre and Adjusted EBITDA Reconciliations (Non-GAAP)

15

FFO, Core FFO and FAD Reconciliations (Non-GAAP)

16-17

Third-Party Asset Management and Real Estate Services Business (Non-GAAP)

18

Pro Rata Adjusted General and Administrative Expenses (Non-GAAP)

19

Operating Assets

20

Summary & Same Store NOI (Non-GAAP)

22-22

Summary NOI (Non-GAAP)

23

Summary NOI - Commercial (Non-GAAP)

24

Summary NOI - Multifamily (Non-GAAP)

25

NOI Reconciliations (Non-GAAP)

26

Leasing Activity

Leasing Activity - Office

27

Net Effective Rent - Office

28

Lease Expirations

29

Signed But Not Yet Commenced Leases

30

Tenant Concentration

31

Industry Diversity

32

Property Data

Portfolio Summary

33

Property Tables:

Commercial

34-37

Multifamily

38-40

Under-Construction

41

Near-Term Development

42

Future Development

43

Disposition and Recapitalization Activity

44

Debt

Debt Summary

45

Debt by Instrument

46-47

Real Estate Ventures

Consolidated and Unconsolidated Real Estate Ventures

48-49

Definitions

50-54

Appendices – Transaction and Other Costs, and Reconciliations of Non-GAAP Financial Measures

55-59

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Page 2


DISCLOSURES

JUNE 30, 2022

Disclosures

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, financial condition and business 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 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, uncollectible 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; whether National Landing will benefit economically from its proximity to the Department of Defense and elevated defense spending; the anticipated growth of our target submarkets; 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 National Landing; 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 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; whether the anticipated placemaking in National Landing will be realized; whether Amazon will have a similar growth impact on National Landing as in Seattle; whether Seattle’s South Lake Union region pre-pandemic will prove to be an appropriate comparison to National Landing post-pandemic including respective resident preferences regarding housing, office location and commuting; whether Amazon’s return-to-the-office policy will continue to require that employees live within commuting distance of their office; whether we will be able to successfully shift the majority of our portfolio to multifamily and concentrate our office portfolio in National Landing, and in the case of our Future

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Page 3


DISCLOSURES

JUNE 30, 2022

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.

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.

Occupancy, non-GAAP financial measures and leverage metrics presented in our investor package exclude our 10.0% subordinated interest in one commercial building and our 33.5% subordinated interest in four commercial buildings, as well as the associated non-recourse mortgages payable, held through unconsolidated real estate ventures, as our investment in each real estate venture is zero, we do not anticipate receiving any near-term cash flow distributions from the real estate ventures and have not guaranteed their obligations or otherwise committed to providing financial support.

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Page 4


DISCLOSURES

JUNE 30, 2022

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.

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

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Page 5


COMPANY PROFILE

JUNE 30, 2022
(Unaudited)

Company Profile

Executive Officers

Company Snapshot as of June 30, 2022

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

 

3.8

% 

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

$

23.64

 

Common shares and common limited partnership units ("OP Units")
outstanding (in millions) (1)

 

131.13

 

Total market capitalization

$

3.10

 

Total consolidated and unconsolidated indebtedness at JBG SMITH Share

 

2.28

 

Less: cash and cash equivalents at JBG SMITH Share

 

(0.18)

 

Net Debt

$

2.10

 

Total Enterprise Value

$

5.20

 

  

 

Net Debt / Total Enterprise Value (2)

 

40.4

% 


(1)Includes certain fully-vested incentive equity awards that are convertible into OP Units.
(2)Net Debt to total enterprise value would have been 38.1% as of June 30, 2022 after including the net proceeds from the sales and recapitalizations that are held in escrow at a qualified intermediary to facilitate a potential like-kind exchange.

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Page 6


FINANCIAL HIGHLIGHTS

JUNE 30, 2022
(Unaudited)

Financial Highlights

 

dollars in thousands, except per share data

    

Three Months Ended

Six Months Ended

June 30, 2022

June 30, 2022

 

Summary Financial Results

Total revenue

$

145,505

$

307,470

Net income attributable to common shareholders

$

123,275

$

123,243

Per diluted common share

$

1.02

$

0.99

Operating portfolio NOI

$

85,243

$

177,568

FFO (1)

$

38,527

$

95,704

Per OP Unit

$

0.28

$

0.68

Core FFO (1)

$

42,625

$

90,191

Per OP Unit

$

0.31

$

0.64

FAD (1)

$

39,099

$

83,261

FAD payout ratio

 

81.3

%

 

77.3

%

EBITDA (1)

$

219,366

$

302,961

EBITDAre (1)

$

59,663

$

138,151

Adjusted EBITDA (1)

$

64,765

$

132,645

Net Debt / total enterprise value (2)

 

40.4

% 

 

40.4

% 

Net Debt to annualized Adjusted EBITDA (2)

 

8.1

x

 

7.9

x

June 30, 2022

Debt Summary and Key Ratios (at JBG SMITH Share)

 

  

Total consolidated indebtedness (3)

$

2,000,762

Total consolidated and unconsolidated indebtedness (3)

$

2,280,296

Weighted average interest rates:

 

  

Variable rate debt (4)

 

3.88

Fixed rate debt

 

3.85

Total debt

 

3.86

Cash and cash equivalents

$

181,882


(1)Attributable to OP Units, which include units owned by JBG SMITH.
(2)Net Debt to total enterprise value would have been 38.1% as of June 30, 2022, and Net Debt to annualized Adjusted EBITDA would have been 7.6x and 8.0x for the three and six months ended June 30, 2022, after including net proceeds from the sales and recapitalizations that are held in escrow at a qualified intermediary to facilitate a potential like-kind exchange and removing the Adjusted EBITDA generated during the quarter from assets that were sold or recapitalized.
(3)Net of premium/discount and deferred financing costs.
(4)For floating rate loans with interest rate caps, the weighted average cap strike is 2.51% for consolidated debt, and 2.60% for all debt. The interest rate cap strike is exclusive of the credit spreads associated with the loans.

Graphic

Page 7


FINANCIAL HIGHLIGHTS – TRENDS

JUNE 30, 2022
(Unaudited)

Financial Highlights - Trends

Three Months Ended

 

 

dollars in thousands, except per share data, at JBG SMITH Share

    

Q2 2022

    

Q1 2022

    

Q4 2021

    

Q3 2021

    

Q2 2021

Commercial NOI

$

57,437

$

64,919

$

62,300

$

61,889

$

63,849

Multifamily NOI

 

27,338

 

26,887

 

24,061

 

19,107

 

18,644

Ground Leases and Other NOI

468

547

475

496

485

Operating portfolio NOI

$

85,243

$

92,353

$

86,836

$

81,492

$

82,978

Total Annualized NOI

$

337,093

$

370,691

$

345,763

$

324,001

$

330,682

Net income (loss) attributable to common shareholders

$

123,275

$

(32)

$

(56,446)

$

893

$

(2,973)

Per diluted common share

$

1.02

$

$

(0.45)

$

$

(0.03)

FFO (1)

$

38,527

$

57,177

$

47,924

$

40,734

$

41,914

Per OP Unit

$

0.28

$

0.40

$

0.33

$

0.27

$

0.29

Core FFO (1)

$

42,625

$

47,566

$

44,943

$

48,083

$

49,629

Per OP Unit

$

0.31

$

0.34

$

0.31

$

0.32

$

0.34

FAD (1)

$

39,099

$

44,162

$

30,453

$

39,992

$

42,147

FAD payout ratio

 

81.3

%

 

73.8

%

 

108.8

%

 

84.2

%

 

79.5

% 

EBITDA (1)

$

219,366

$

83,595

$

21,744

$

85,275

$

80,668

EBITDAre (1)

$

59,663

$

78,488

$

70,771

$

63,518

$

64,189

Adjusted EBITDA (1)

$

64,765

$

67,880

$

66,169

$

69,799

$

70,817

Net Debt / total enterprise value (2)

 

40.4

%  

 

39.1

%  

 

38.5

%  

 

34.3

%  

 

32.1

% 

Net Debt to annualized Adjusted EBITDA (2)

 

8.1

x

 

9.6

x

 

9.6

x

 

7.9

x

 

7.6

x

Q2 2022

Q1 2022

Q4 2021

Q3 2021

Q2 2021

Number of Operating Assets

 

  

 

  

 

  

 

  

 

  

Commercial

 

35

 

41

 

41

 

41

 

42

Multifamily

 

19

 

20

 

22

 

21

 

21

Ground Leases and Other

2

1

1

1

1

Total

 

56

 

62

 

64

 

63

 

64

Operating Portfolio % Leased

 

  

 

  

 

  

 

  

 

  

Commercial (3)

 

87.3

%  

 

85.2

%  

 

84.9

%  

 

84.9

%  

 

85.9

% 

Multifamily (4)

 

95.7

%  

 

94.1

%  

 

93.6

%  

 

94.0

%  

 

92.8

% 

Weighted Average

 

90.5

%  

 

88.1

%  

 

87.7

%  

 

87.7

%  

 

88.0

% 

Operating Portfolio % Occupied (5)

 

  

 

  

 

  

 

  

 

  

Commercial (3)

 

86.1

%  

 

83.3

%  

 

82.9

%  

 

82.6

%  

 

84.4

% 

Multifamily (4)

 

92.3

%  

 

91.6

%  

 

91.8

%  

 

92.4

%  

 

88.7

% 

Weighted Average

 

88.4

%  

 

86.0

%  

 

85.8

%  

 

85.7

%  

 

85.7

% 

See footnotes on page 9.

Graphic

Page 8


FINANCIAL HIGHLIGHTS – TRENDS

JUNE 30, 2022
(Unaudited)

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 total enterprise value would have been 38.1% as of June 30, 2022, and Net Debt to annualized Adjusted EBITDA would have been 7.6x for the three months ended June 30, 2022, after including the net proceeds from the sales and recapitalizations that are held in escrow at a qualified intermediary to facilitate a potential like-kind exchange and removing the Adjusted EBITDA generated during the quarter from assets that were sold or recapitalized.
(3)Crystal City Marriott is excluded from the Percent Leased and the Percent Occupied metrics.
(4)Includes Recently Delivered assets. In-Service assets were 96.6% leased and 93.1% occupied as of Q2 2022, 95.5% leased and 92.9% occupied as of Q1 2022, 95.4% leased and 93.4% occupied as of Q4 2021, 96.3% leased and 94.5% occupied as of Q3 2021, and 96.4% leased and 92.7% occupied as of Q2 2021. 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.

Graphic

Page 9


PORTFOLIO OVERVIEW

JUNE 30, 2022
(Unaudited)

Portfolio Overview

100% Share

At JBG SMITH Share

 

Annualized Rent

Annualized

per Square Foot/

 

Number of

Square Feet/

Square Feet/

% 

Rent

Monthly Rent

Annualized NOI (3)

 

Assets

Units

Units

Leased

% Occupied (1)

(in thousands)

Per Unit (2)

(in thousands)

 

Operating

Commercial (4)

National Landing

23

7,337,206

7,061,402

87.2%

87.1%

$

258,753

$

44.66

$

174,777

Other VA

4

1,057,388

398,972

94.5%

95.4%

17,620

49.15

12,096

DC

6

1,629,309

913,383

81.2%

70.3%

36,371

57.01

20,448

MD

2

513,430

513,430

93.4%

93.2%

26,695

53.62

18,548

Commercial - total / weighted average

    

35

    

10,537,333

    

8,887,187

    

87.3%

86.1%

$

339,439

    

$

46.51

    

$

225,869

Multifamily (5)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

National Landing

4

2,856

2,856

98.3%

95.5%

$

65,285

$

2,101

$

43,936

DC

12

3,743

3,041

94.6%

90.3%

86,930

2,363

58,752

MD

2

438

438

99.8%

97.7%

8,343

1,624

5,776

In-Service

 

18

 

7,037

6,335

 

96.6%

93.1%

160,558

2,189

108,464

Recently Delivered

 

1

 

322

 

161

 

71.5%

60.6%

 

4,148

 

3,109

 

888

Multifamily – total / weighted average

 

19

 

7,359

 

6,496

 

95.7%

92.3%

$

164,706

$

2,205

$

109,352

Ground Leases and Other (6)

Other VA

1

(92)

DC

1

1,964

2

1,872

 

Operating - Total / Weighted Average

 

56

 

10,537,333 SF/ 7,359 Units

 

8,887,187 SF/ 6,496 Units

 

90.5%

88.4%

$

504,145

$46.51 per SF/
$2,205 per unit

$

337,093

Development (7)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Under-Construction

 

2

 

1,583 Units

 

1,583 Units

 

  

 

 

 

  

Near-Term Development

 

8

 

3,742,300

 

3,532,700

 

  

 

  

 

  

 

 

  

Future Development

 

16

 

8,799,800

 

6,273,700

 

  

 

  

 

  

 

 

  


(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)Annualized NOI includes $8.2 million from sold or recapitalized commercial assets and $0.1 million from sold multifamily assets.
(4)Crystal City Marriott is excluded from Percent Leased, Percent Occupied, Annualized Rent and Annualized Rent per Square Foot metrics.
(5)2221 S. Clark Street - Residential and 900 W Street are excluded from Percent Leased, Percent Occupied, Annualized Rent and Monthly Rent Per Unit metrics.
(6)1700 M Street and 1831/1861 Wiehle Avenue (for which we are the ground lessor) are excluded from Percent Leased, Percent Occupied, Annualized Rent and Annualized Rent per Square Foot metrics. See footnote (8) on page 23 for more information.
(7)Refer to pages 41- 43 for detail on Under-Construction assets, and Near-Term and Future Development Pipelines.

Graphic

Page 10


CONDENSED CONSOLIDATED BALANCE SHEETS

JUNE 30, 2022
(Unaudited)

Condensed Consolidated Balance Sheets

 

in thousands

June 30, 2022

December 31, 2021

 

 

  

ASSETS

Real estate, at cost:

    

  

    

  

Land and improvements

$

1,217,216

$

1,378,218

Buildings and improvements

 

4,004,286

 

4,513,606

Construction in progress, including land

 

385,085

 

344,652

 

5,606,587

 

6,236,476

Less: accumulated depreciation

 

(1,257,871)

 

(1,368,003)

Real estate, net

 

4,348,716

 

4,868,473

Cash and cash equivalents

 

162,270

 

264,356

Restricted cash

 

212,848

 

37,739

Tenant and other receivables

 

46,605

 

44,496

Deferred rent receivable

 

154,487

 

192,265

Investments in unconsolidated real estate ventures

 

414,349

 

462,885

Intangible assets, net

157,819

201,956

Other assets, net

 

82,808

 

240,160

Assets held for sale

 

 

73,876

TOTAL ASSETS

$

5,579,902

$

6,386,206

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

 

  

 

  

Liabilities:

 

  

 

  

Mortgages payable, net

$

1,612,169

$

1,777,699

Revolving credit facility

 

 

300,000

Unsecured term loans, net

 

398,500

 

398,664

Accounts payable and accrued expenses

 

112,784

 

106,136

Other liabilities, net

 

111,852

 

342,565

Total liabilities

 

2,235,305

 

2,925,064

Commitments and contingencies

 

  

 

  

Redeemable noncontrolling interests

 

521,392

 

522,725

Total equity

 

2,823,205

 

2,938,417

TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

$

5,579,902

$

6,386,206


Note: For complete financial statements, please refer to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

Graphic

Page 11


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

JUNE 30, 2022
(Unaudited)

Condensed Consolidated Statements of Operations

in thousands, except per share data

Three Months Ended June 30, 

Six Months Ended June 30, 

 

2022

2021

2022

2021

 

REVENUE

Property rental

    

$

117,036

    

$

122,819

$

248,634

    

$

245,060

Third-party real estate services, including reimbursements

 

22,157

 

26,745

 

46,127

 

64,852

Other revenue

 

6,312

 

5,080

 

12,709

 

10,021

Total revenue

 

145,505

 

154,644

 

307,470

 

319,933

EXPENSES

 

  

 

  

 

  

 

  

Depreciation and amortization

 

49,479

 

56,678

 

107,541

 

121,404

Property operating

 

35,445

 

35,000

 

76,089

 

69,731

Real estate taxes

 

14,946

 

18,558

 

33,132

 

36,868

General and administrative:

 

 

 

 

Corporate and other

 

14,782

 

13,895

 

30,597

 

26,370

Third-party real estate services

 

24,143

 

25,557

 

51,192

 

54,493

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

 

1,577

 

4,441

 

3,821

 

9,386

Transaction and Other Costs

 

1,987

 

2,270

 

2,886

 

5,960

Total expenses

 

142,359

 

156,399

 

305,258

 

324,212

OTHER INCOME (EXPENSE)

 

  

 

  

 

  

 

  

Income (loss) from unconsolidated real estate ventures, net

 

(2,107)

 

3,953

 

1,038

 

3,010

Interest and other income (loss), net

 

1,672

 

(38)

 

15,918

 

(29)

Interest expense

 

(16,041)

 

(16,773)

 

(32,319)

 

(33,069)

Gain on the sale of real estate, net

 

158,767

 

11,290

 

158,631

 

11,290

Loss on the extinguishment of debt

 

(1,038)

 

 

(1,629)

 

Total other income (expense)

 

141,253

 

(1,568)

 

141,639

 

(18,798)

INCOME (LOSS) BEFORE INCOME TAX (EXPENSE) BENEFIT

 

144,399

 

(3,323)

 

143,851

 

(23,077)

Income tax (expense) benefit

 

(2,905)

 

5

 

(2,434)

 

(4,310)

NET INCOME (LOSS)

 

141,494

 

(3,318)

 

141,417

 

(27,387)

Net (income) loss attributable to redeemable noncontrolling interests

 

(18,248)

 

345

 

(18,258)

 

2,575

Net loss attributable to noncontrolling interests

29

84

 

1,108

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS

$

123,275

$

(2,973)

$

123,243

$

(23,704)

EARNINGS (LOSS) PER COMMON SHARE - BASIC AND DILUTED

$

1.02

$

(0.03)

$

0.99

$

(0.19)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED

 

121,316

 

131,480

 

123,984

 

131,510


Note: For complete financial statements, please refer to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2022.

Graphic

Page 12


UNCONSOLIDATED REAL ESTATE VENTURES

JUNE 30, 2022
(Unaudited)

nconsolidated Real Estate Ventures

 

in thousands, at JBG SMITH Share

    

 

BALANCE SHEET INFORMATION

June 30, 2022

 

Total real estate, at cost

$

684,770

Less: accumulated depreciation

 

(53,384)

Real estate, net

 

631,386

Cash and cash equivalents

 

19,681

Other assets, net

 

66,632

Total assets

$

717,699

Borrowings, net

$

279,534

Other liabilities, net

 

36,463

Total liabilities

$

315,997

    

Three Months Ended

Six Months Ended

 

 

OPERATING INFORMATION

June 30, 2022

June 30, 2022

 

Total revenue

$

15,767

$

30,933

Expenses:

 

  

 

  

Depreciation and amortization

 

6,287

 

13,021

Property operating

 

5,205

 

10,631

Real estate taxes

 

2,556

 

5,060

Total expenses

 

14,048

 

28,712

Other income (expense):

 

  

 

  

Interest expense

 

(3,073)

 

(6,032)

Gain on the sale of real estate

 

936

 

6,179

Loss on the extinguishment of debt

(1,820)

(1,950)

Interest and other income, net

 

11

 

14

Net income (loss)

$

(2,227)

$

432

Earnings and distributions in excess of our investment in unconsolidated real estate venture

 

124

 

565

Other

 

(3)

 

41

Income (loss) from unconsolidated real estate ventures, net

$

(2,107)

$

1,038

Graphic

Page 13


OTHER TANGIBLE ASSETS AND LIABILITIES

JUNE 30, 2022
(Unaudited)

Other Tangible Assets and Liabilities

 

in thousands, at JBG SMITH Share

    

June 30, 2022

 

Other Tangible Assets, Net (1)

Restricted cash (2)

$

221,962

Tenant and other receivables, net

 

49,575

Other assets, net

 

93,257

Total Other Tangible Assets, Net

$

364,794

Other Tangible Liabilities, Net

 

  

Accounts payable and accrued liabilities

$

126,697

Other liabilities, net

 

119,725

Total Other Tangible Liabilities, Net

$

246,422


(1)Excludes cash and cash equivalents
(2)Includes net proceeds from certain sales and recapitalizations that are held in escrow at a qualified intermediary to facilitate a potential like-kind exchange.

Graphic

Page 14


EBITDA, EBITDAre AND ADJUSTED EBITDA RECONCILIATIONS (NON-GAAP)

JUNE 30, 2022
(Unaudited)

EBITDA, EBITDAre and Adjusted EBITDA

dollars in thousands

    

Three Months Ended June 30, 

Six Months Ended June 30, 

 

2022

2021

2022

2021

 

 

EBITDA, EBITDAre and Adjusted EBITDA

 

  

  

Net income (loss)

$

141,494

$

(3,318)

$

141,417

$

(27,387)

Depreciation and amortization expense

49,479

56,678

107,541

121,404

Interest expense

16,041

16,773

32,319

33,069

Income tax expense (benefit)

2,905

(5)

2,434

4,310

Unconsolidated real estate ventures allocated share of above adjustments

9,494

10,581

19,323

20,745

EBITDA attributable to noncontrolling interests

(47)

(41)

(73)

1,030

EBITDA

$

219,366

$

80,668

$

302,961

$

153,171

Gain on the sale of real estate, net

(158,767)

(11,290)

(158,631)

(11,290)

Gain on the sale of unconsolidated real estate assets

(936)

(5,189)

(6,179)

(5,189)

EBITDAre

$

59,663

$

64,189

$

138,151

$

136,692

Transaction and Other Costs (1)

1,987

2,270

2,852

4,852

Income from investments, net

(1,217)

(15,288)

Loss on the extinguishment of debt

1,038

1,629

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

1,577

4,441

3,821

9,386

Earnings and distributions in excess of our investment in unconsolidated real estate venture

(124)

(92)

(565)

(422)

Unconsolidated real estate ventures allocated share of above adjustments

1,841

9

2,045

40

Adjusted EBITDA

$

64,765

$

70,817

$

132,645

$

150,548

Net Debt to Annualized Adjusted EBITDA (2)

8.1

x

7.6

x

7.9

x

7.2

x

Net Debt (at JBG SMITH Share)

June 30, 2022

June 30, 2021

Consolidated indebtedness (3)

$

2,000,762

$

1,979,494

Unconsolidated indebtedness (3)

279,534

399,262

Total consolidated and unconsolidated indebtedness

2,280,296

2,378,756

Less: cash and cash equivalents

181,882

217,543

Net Debt (at JBG SMITH Share)

$

2,098,414

$

2,161,213


Note: All EBITDA measures as shown above are attributable to OP Units.

(1)See page 55 for the components of Transaction and Other Costs. For the six months ended June 30, 2022 and 2021 excludes $34,000 and $1.1 million of transaction costs attributable to noncontrolling interests.
(2)Calculated using the Net Debt below. Quarterly Adjusted EBITDA is annualized by multiplying by four. Adjusted EBITDA for the six months ended June 30, 2022 and 2021 is annualized by multiplying by two. Net Debt to annualized Adjusted EBITDA would have been 7.6x and 8.0x for the three and six months ended June 30, 2022, after including net proceeds from the sales and recapitalizations that are held in escrow at a qualified intermediary to facilitate a potential like-kind exchange and removing the Adjusted EBITDA generated during the quarter from assets that were sold or recapitalized.
(3)Net of premium/discount and deferred financing costs.

Graphic

Page 15


FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)

JUNE 30, 2022
(Unaudited)

FFO, Core FFO and FAD

in thousands, except per share data

Three Months Ended June 30, 

Six Months Ended June 30, 

    

2022

    

2021

2022

    

2021

 

 

FFO and Core FFO

Net income (loss) attributable to common shareholders

$

123,275

 

$

(2,973)

$

123,243

 

$

(23,704)

Net income (loss) attributable to redeemable noncontrolling interests

 

18,248

 

(345)

 

18,258

 

(2,575)

Net loss attributable to noncontrolling interests

 

(29)

 

 

(84)

 

(1,108)

Net income (loss)

 

141,494

 

(3,318)

 

141,417

 

(27,387)

Gain on the sale of real estate, net of tax

 

(155,642)

 

(11,290)

 

(155,506)

 

(11,290)

Gain on the sale of unconsolidated real estate assets

 

(936)

 

(5,189)

 

(6,179)

 

(5,189)

Real estate depreciation and amortization

 

47,242

 

54,475

 

102,759

 

116,975

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

 

6,416

 

7,277

 

13,286

 

14,588

FFO attributable to noncontrolling interests

 

(47)

 

(41)

 

(73)

 

1,030

FFO Attributable to OP Units

$

38,527

 

$

41,914

$

95,704

 

$

88,727

FFO attributable to redeemable noncontrolling interests

 

(4,966)

 

(4,054)

 

(10,843)

 

(8,539)

FFO Attributable to Common Shareholders

$

33,561

 

$

37,860

$

84,861

 

$

80,188

FFO attributable to OP Units

$

38,527

 

$

41,914

$

95,704

 

$

88,727

Transaction and Other Costs, net of tax (1)

 

1,892

 

2,241

 

2,735

 

4,793

Income from investments, net

(957)

 

 

(11,495)

 

(Gain) loss from mark-to-market on derivative instruments

 

(2,027)

 

46

 

(5,394)

 

(87)

Loss on the extinguishment of debt

 

1,038

 

 

1,629

 

Earnings and distributions in excess of our investment in unconsolidated real estate venture

 

(124)

 

(92)

 

(565)

 

(422)

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

 

1,577

 

4,441

 

3,821

 

9,386

Amortization of management contracts intangible, net of tax

 

1,106

 

1,073

 

2,211

 

2,145

Unconsolidated real estate ventures allocated share of above adjustments

 

1,593

 

6

 

1,545

 

(4)

Core FFO Attributable to OP Units

$

42,625

 

$

49,629

$

90,191

 

$

104,538

Core FFO attributable to redeemable noncontrolling interests

 

(5,494)

 

(4,800)

 

(10,383)

 

(10,060)

Core FFO Attributable to Common Shareholders

$

37,131

 

$

44,829

$

79,808

 

$

94,478

FFO per common share - diluted

$

0.28

 

0.29

$

0.68

 

0.61

Core FFO per common share - diluted

$

0.31

 

0.34

$

0.64

 

0.72

Weighted average shares - diluted (FFO and Core FFO)

 

121,327

 

131,485

 

123,990

 

131,513

See footnotes on page 17.

Graphic

Page 16


FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)

JUNE 30, 2022
(Unaudited)

 

in thousands, except per share data

Three Months Ended June 30, 

Six Months Ended June 30, 

 

2022

2021

2022

2021

FAD

Core FFO attributable to OP Units

    

$

42,625

    

$

49,629

$

90,191

    

$

104,538

Recurring capital expenditures and Second-generation tenant improvements and leasing commissions (2)

 

(13,300)

 

(12,226)

 

(27,002)

 

(22,657)

Straight-line and other rent adjustments (3)

 

(1,978)

 

(4,088)

 

(3,769)

 

(8,853)

Third-party lease liability assumption payments

 

(25)

 

(703)

 

(25)

 

(1,381)

Share-based compensation expense

 

10,171

 

9,045

 

20,664

 

17,115

Amortization of debt issuance costs

 

1,135

 

1,096

 

2,311

 

2,201

Unconsolidated real estate ventures allocated share of above adjustments

 

(289)

 

(1,333)

 

(937)

 

(2,659)

Non-real estate depreciation and amortization

 

760

 

727

 

1,828

 

1,477

FAD available to OP Units (A)

$

39,099

$

42,147

$

83,261

$

89,781

Distributions to common shareholders and unitholders (B)

$

31,768

$

33,511

$

64,371

$

68,946

FAD Payout Ratio (B÷A) (4)

 

81.3

%

 

79.5

%

 

77.3

%

 

76.8

%

Capital Expenditures

Maintenance and recurring capital expenditures

$

6,091

$

4,376

$

10,911

$

8,302

Share of maintenance and recurring capital expenditures from unconsolidated real estate ventures

 

312

 

324

 

394

 

371

Second-generation tenant improvements and leasing commissions

 

6,713

 

7,454

 

15,307

 

13,518

Share of Second-generation tenant improvements and leasing commissions from unconsolidated real estate ventures

 

184

 

72

 

390

 

466

Recurring capital expenditures and Second-generation tenant improvements and leasing commissions

 

13,300

 

12,226

 

27,002

 

22,657

Non-recurring capital expenditures

 

13,552

 

4,352

 

26,362

 

7,188

Share of non-recurring capital expenditures from unconsolidated real estate ventures

 

37

 

56

 

49

 

107

First-generation tenant improvements and leasing commissions

 

4,197

 

1,703

 

8,647

 

2,538

Share of First-generation tenant improvements and leasing commissions from unconsolidated real estate ventures

 

244

 

199

 

717

 

1,391

Non-recurring capital expenditures

 

18,030

 

6,310

 

35,775

 

11,224

Total JBG SMITH Share of Capital Expenditures

$

31,330

$

18,536

$

62,777

$

33,881


(1)See page 55 for the components of Transaction and Other Costs. For the six months ended June 30, 2022 and 2021, excludes $34,000 and $1.1 million of transaction costs attributable to noncontrolling interests.
(2)Includes amounts, at JBG SMITH Share, related to unconsolidated real estate ventures.
(3)Includes straight-line rent, above/below market lease amortization and lease incentive amortization.
(4)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.

Graphic

Page 17


THIRD-PARTY ASSET MANAGEMENT AND REAL ESTATE SERVICES BUSINESS (NON-GAAP)

JUNE 30, 2022
(Unaudited)

Third-Party Asset Mgmt and Real Estate Services Business

 

in thousands, at JBG SMITH Share

Three Months Ended June 30, 2022

  

Source of Revenue

 

Third-Party

JBG SMITH

JBG Legacy

 

Management

JV Partner (1)

Funds

Total

 

Service Revenue

Property management fees

    

$

2,669

    

$

1,253

    

$

619

    

$

4,541

Asset management fees

 

 

392

 

1,073

 

1,465

Development fees

 

3,280

 

236

 

70

 

3,586

Leasing fees

 

776

 

177

 

85

 

1,038

Construction management fees

 

29

 

7

 

 

36

Other service revenue

 

554

 

566

 

148

 

1,268

Total Revenue (2)

$

7,308

$

2,631

$

1,995

$

11,934

Pro rata adjusted general and administrative expense: third-party real estate services (3)

 

 

  

 

  

 

(12,000)

Total Services Revenue Less Allocated General and Administrative Expenses (4)

 

 

$

(66)


(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 $10.9 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.

Graphic

Page 18


PRO RATA ADJUSTED GENERAL AND ADMINISTRATIVE EXPENSES
(NON-GAAP)

JUNE 30, 2022
(Unaudited)

Pro Rata Adjusted G&A

 

in thousands

Three Months Ended June 30, 2022

  

Adjustments (1)

 

Per Statement

Pro Rata

 

of Operations

A

B

C

Adjusted

 

General and Administrative Expenses

Corporate and other

    

$

14,782

    

$

    

$

    

$

1,197

    

$

15,979

Third-party real estate services

 

24,143

 

 

(10,946)

 

(1,197)

 

12,000

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

 

1,577

 

(1,577)

 

 

 

Total

$

40,502

$

(1,577)

$

(10,946)

$

$

27,979


(1)Adjustments:

-  Removes share-based compensation related to the Formation Transaction and special equity awards.

-  Removes $10.9 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.

-  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."

Graphic

Page 19


OPERATING ASSETS

JUNE 30, 2022
(Unaudited)

Operating Assets

 

dollars in thousands, at JBG SMITH Share

    

    

    

    

Plus: Signed

    

Plus: Incremental

    

  

Q2 2022

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

87.1

%  

$

44,664

$

174,777

$

5,264

$

332

$

180,373

Other VA

95.4

%  

3,024

12,096

112

-

12,208

DC

 

70.3

%  

5,112

20,448

5,080

25,528

MD

 

93.2

%  

 

4,637

 

18,548

 

364

 

1,604

 

20,516

Total / weighted average

 

86.1

%  

$

57,437

$

225,869

$

10,820

$

1,936

$

238,625

Multifamily (3)

 

  

 

  

 

  

 

  

 

  

 

  

National Landing

 

95.5

%  

$

10,984

$

43,936

$

$

$

43,936

DC

 

90.3

%  

14,688

58,752

1,216

2,225

62,193

MD

 

87.7

%  

 

1,666

 

6,664

 

32

 

2,069

 

8,765

Total / weighted average

 

92.3

%  

$

27,338

$

109,352

$

1,248

$

4,294

$

114,894

Ground Leases and Other (4)

 

  

 

  

 

  

 

  

 

  

 

  

Other VA

$

(23)

$

(92)

$

$

$

(92)

DC

491

1,964

1,964

$

468

$

1,872

$

$

$

1,872

Total / Weighted Average

 

88.4

%  

$

85,243

$

337,093

$

12,068

$

6,230

$

355,391


(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 June 30, 2022 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 June 30, 2022, multiplied by 12, and assumes no rent growth. Excludes potential revenue from vacant retail space in multifamily assets in their initial lease-up. Average in-place rents were 10.9% below asking rents as of June 30, 2022. See page 39 for more detail.
(2)Crystal City Marriott is excluded from the Percent Occupied metric.
(3)2221 S. Clark Street - Residential and 900 W Street are excluded from the Percent Occupied metric.
(4)1700 M Street and 1831/1861 Wiehle Avenue (for which we are the ground lessor) are excluded from the Percent Occupied metric.

Graphic

Page 20


SUMMARY & SAME STORE NOI (NON-GAAP)

JUNE 30, 2022
(Unaudited)

Summary & Same Store NOI

 

dollars in thousands

100% Share

At JBG SMITH Share

NOI for the Three Months Ended June 30, 

 

Number of

Square Feet/

Square Feet/

%

%

Assets

Units

Units

Leased (1)

Occupied (1)

2022

2021

% Change

Same Store (2)

National Landing

27

7,337,206 SF/
2,856 Units

7,061,402 SF/
2,856 Units

90.0

%

89.3

%

$

52,399

$

45,346

15.6

%

Other VA

4

1,057,388 SF

398,972 SF

94.5

%

95.4

%

5,413

6,507

(16.8)

%

DC

    

17

    

1,629,309 SF/
2,878 Units

    

913,383 SF/
2,193 Units

    

90.4

%  

83.7

%  

15,633

    

13,435

    

16.4

%

MD

 

4

 

513,430 SF/
438 Units

 

513,430 SF/
438 Units

 

95.9

%  

95.0

%  

 

5,883

 

4,433

 

32.7

%

Total / weighted average

 

52

 

10,537,333 SF/
6,172 Units

 

8,887,187 SF/
5,487 Units

 

90.6

%  

88.7

%  

$

79,328

$

69,721

 

13.8

%

Non-Same Store

 

  

 

 

 

  

 

  

 

  

 

  

 

  

National Landing

 

 

 

 

$

$

 

Other VA

1

837

4,986

(83.2)

%

DC

 

2

 

865 Units

 

848 Units

 

93.9

%  

90.0

%  

4,658

6,761

 

(31.1)

%

MD

 

1

 

322 Units

 

161 Units

 

71.5

%  

60.6

%  

 

420

 

1,511

 

(72.2)

%

Total / weighted average

 

4

 

1,187 Units

 

1,009 Units

 

88.8

%  

83.2

%  

$

5,915

$

13,258

 

(55.4)

%

Total Operating Portfolio

 

  

 

 

 

  

 

  

 

  

 

  

 

  

National Landing

27

7,337,206 SF/
2,856 Units

7,061,402 SF/
2,856 Units

90.0

%  

89.3

%  

$

52,399

$

45,346

15.6

%

Other VA

5

1,057,388 SF

398,972 SF

94.5

%  

95.4

%  

6,250

11,493

(45.6)

%

DC

 

19

 

1,629,309 SF/
3,743 Units

 

913,383 SF/
3,041 Units

 

91.0

%  

84.9

%  

20,291

20,196

 

0.5

%

MD

 

5

 

513,430 SF/
760 Units

 

513,430 SF/
599 Units

 

91.6

%  

89.1

%  

 

6,303

 

5,944

 

6.0

%

Operating Portfolio -
Total / Weighted Average

 

56

 

10,537,333 SF/
7,359 Units

 

8,887,187 SF/
6,496 Units

 

90.5

%  

88.4

%  

$

85,243

$

82,979

 

2.7

%


(1)Crystal City Marriott, 2221 S. Clark Street - Residential, 900 W Street, and assets for which we are the ground lessor (1700 M Street and 1831/1861 Wiehle Avenue) 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.

Graphic

Page 21


SUMMARY & SAME STORE NOI (NON-GAAP)

JUNE 30, 2022
(Unaudited)

 

dollars in thousands

100% Share

At JBG SMITH Share

NOI for the Six Months Ended June 30, 

 

Number of

Square Feet/

Square Feet/

%

%

Assets

Units

Units

Leased (1)

Occupied (1)

2022

2021

% Change

Same Store (2)

National Landing

27

7,337,206 SF/
2,856 Units

7,061,402 SF/
2,856 Units

90.0

%

89.3

%

$

102,284

$

90,820

12.6

%

Other VA

4

1,057,388 SF

398,972 SF

94.5

%

95.4

%

11,590

12,728

(8.9)

%

DC

    

17

    

1,629,309 SF/
2,878 Units

    

913,383 SF/
2,193 Units

    

90.4

%  

83.7

%  

30,776

    

24,795

    

24.1

%

MD

 

4

 

513,430 SF/
438 Units

 

513,430 SF/
438 Units

 

95.9

%  

95.0

%  

 

10,766

 

8,135

 

32.3

%

Total / weighted average

 

52

 

10,537,333 SF/
6,172 Units

 

8,887,187 SF/
5,487 Units

 

90.6

%  

88.7

%  

$

155,416

$

136,478

 

13.9

%

Non-Same Store

 

  

 

 

 

  

 

  

 

  

 

  

 

  

National Landing

 

 

 

 

$

$

 

Other VA

1

7,338

10,282

(28.6)

%

DC

 

2

 

865 Units

 

848 Units

 

93.9

%  

90.0

%  

13,249

14,132

 

(6.2)

%

MD

 

1

 

322 Units

 

161 Units

 

71.5

%  

60.6

%  

 

1,565

 

2,812

 

(44.3)

%

Total / weighted average

 

4

 

1,187 Units

 

1,009 Units

 

88.8

%  

83.2

%  

$

22,152

$

27,226

 

(18.6)

%

Total Operating Portfolio

 

  

 

 

 

  

 

  

 

  

 

  

 

  

National Landing

27

7,337,206 SF/
2,856 Units

7,061,402 SF/
2,856 Units

90.0

%  

89.3

%  

$

102,284

$

90,820

12.6

%

Other VA

5

1,057,388 SF

398,972 SF

94.5

%  

95.4

%  

18,928

23,010

(17.7)

%

DC

 

19

 

1,629,309 SF/
3,743 Units

 

913,383 SF/
3,041 Units

 

91.0

%  

84.9

%  

44,025

38,927

 

13.1

%

MD

 

5

 

513,430 SF/
760 Units

 

513,430 SF/
599 Units

 

91.6

%  

89.1

%  

 

12,331

 

10,947

 

12.6

%

Operating Portfolio -
Total / Weighted Average

 

56

 

10,537,333 SF/
7,359 Units

 

8,887,187 SF/
6,496 Units

 

90.5

%  

88.4

%  

$

177,568

$

163,704

 

8.5

%

See footnotes on page 21.

Graphic

Page 22


SUMMARY NOI (NON-GAAP)

JUNE 30, 2022
(Unaudited)

Summary NOI

 

dollars in thousands

NOI for the Three Months Ended June 30, 2022 at JBG SMITH Share

 

Consolidated

Unconsolidated

Commercial

Multifamily

Ground Leases and Other (9)

Total

 

Number of operating assets

 

44

 

12

 

35

 

19

 

2

 

56

Property rental (1)

$

104,448

$

12,480

$

75,208

$

41,220

$

500

$

116,928

Tenant expense reimbursement

    

 

6,509

    

 

895

    

 

6,258

    

 

1,037

    

 

109

    

 

7,404

Other revenue (2)

 

11,395

 

1,807

 

8,852

 

4,350

 

 

13,202

Total revenue

 

122,352

 

15,182

 

90,318

 

46,607

 

609

 

137,534

Operating expenses

 

(45,365)

 

(6,641)

 

(32,596)

 

(19,269)

 

(141)

 

(52,006)

Ground rent expense

 

(259)

 

(26)

 

(285)

 

 

 

(285)

Total expenses

 

(45,624)

 

(6,667)

 

(32,881)

 

(19,269)

 

(141)

 

(52,291)

Operating Portfolio NOI (3)

$

76,728

$

8,515

$

57,437

$

27,338

$

468

$

85,243

Annualized NOI (4)

$

303,033

$

34,060

$

225,869

$

109,352

$

1,872

$

337,093

Additional Information

 

  

 

  

 

  

 

  

 

  

 

  

Free Rent (at 100% share)

$

4,355

$

1,753

$

4,825

$

1,283

$

$

6,108

Free Rent (at JBG SMITH Share)

$

4,351

$

678

$

4,027

$

1,002

$

$

5,029

Annualized Free Rent (at JBG SMITH Share) (5)

$

17,404

$

2,712

$

16,108

$

4,008

$

$

20,116

Payments associated with assumed lease liabilities (at 100% share)

$

25

$

$

25

$

$

$

25

Payments associated with assumed lease liabilities (at JBG SMITH Share)

$

25

$

$

25

$

$

$

25

Annualized payments associated with assumed lease liabilities (at JBG SMITH Share) (6)

$

100

$

$

100

$

$

$

100

% occupied (at JBG SMITH Share) (7)

 

89.0

%  

 

82.1

%  

 

86.1

%  

 

92.3

%  

 

 

88.4

% 

Annualized base rent of signed leases, not commenced (at 100% share) (8)

$

11,652

$

1,396

$

11,768

$

1,280

$

$

13,048

Annualized base rent of signed leases, not commenced (at JBG SMITH Share) (8)

$

11,652

$

416

$

10,820

$

1,248

$

$

12,068


(1)Property rental revenue excludes straight-line rent adjustments and other GAAP adjustments, and includes payments associated with assumed lease liabilities.
(2)Includes $6.4 million of parking revenue at JBG SMITH Share.
(3)NOI excludes $3.9 million of related party management fees at JBG SMITH Share. See definition of NOI on page 52.
(4)Annualized NOI includes $8.2 million from sold or recapitalized commercial assets and $0.1 million from sold multifamily assets.
(5)Represents JBG SMITH's share of Free Rent for the three months ended June 30, 2022 multiplied by four.
(6)Represents JBG SMITH's share of payments associated with assumed lease liabilities for the three months ended June 30, 2022 multiplied by four.
(7)Crystal City Marriott, 2221 S. Clark Street - Residential, 900 W Street, and assets for which we are the ground lessor (1700 M Street and 1831/1861 Wiehle Avenue) are excluded from the Percent Leased and Percent Occupied metrics.
(8)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 June 30, 2022.
(9)Includes 1700 M Street and 1831/1861 Wiehle Avenue for which we are the ground lessor. In 2021, the 1700 M Street ground lessee commenced construction on the site and provided us with a completion guarantee. The ground rent is currently $2.0 million per annum payable in equal quarterly installments. The ground rent will increase to $4.95 million per annum upon substantial completion of the ground lessee’s construction but no later than December 4, 2023 and includes market escalations and CPI resets. The ground lease expires on December 4, 2117. In April 2022, we sold the leasehold interest in 1831/1861 Wiehle Avenue. Ground rent commenced on July 1, 2022 and is currently $500,000 per annum payable in equal monthly installments. The ground lease expires on April 29, 2121.

Graphic

Page 23


SUMMARY NOI - COMMERCIAL (NON-GAAP)

JUNE 30, 2022
(Unaudited)

Summary NOI - Commercial

dollars in thousands

NOI for the Three Months Ended June 30, 2022 at JBG SMITH Share

 

 

    

Consolidated

    

Unconsolidated

    

National Landing

Other VA

DC

    

MD

    

Total

  

Number of operating assets

 

26

 

9

 

23

4

6

 

2

 

35

Property rental (1)

$

64,969

$

10,239

$

57,825

$

4,063

$

7,040

$

6,280

$

75,208

Tenant expense reimbursement

 

5,399

 

859

 

3,696

 

844

 

1,484

 

234

 

6,258

Other revenue (2)

 

7,114

 

1,738

 

5,227

 

98

 

2,819

 

708

 

8,852

Total revenue

 

77,482

 

12,836

 

66,748

 

5,005

 

11,343

 

7,222

 

90,318

Operating expenses

 

(27,203)

 

(5,393)

 

(22,084)

 

(1,981)

 

(6,205)

 

(2,326)

 

(32,596)

Ground rent expense

 

(259)

 

(26)

 

 

 

(26)

 

(259)

 

(285)

Total expenses

 

(27,462)

 

(5,419)

 

(22,084)

 

(1,981)

 

(6,231)

 

(2,585)

 

(32,881)

Operating Portfolio NOI (3)

$

50,020

$

7,417

$

44,664

$

3,024

$

5,112

$

4,637

$

57,437

Annualized NOI (4)

$

196,201

$

29,668

$

174,777

$

12,096

$

20,448

$

18,548

$

225,869

Additional Information

 

  

 

  

 

 

 

  

 

  

 

  

Free Rent (at 100% share)

$

3,583

$

1,242

$

2,280

$

573

$

1,509

$

463

$

4,825

Free Rent (at JBG SMITH Share)

$

3,583

$

444

$

2,197

$

417

$

950

$

463

$

4,027

Annualized Free Rent (at JBG SMITH Share) (5)

$

14,332

$

1,776

$

8,788

$

1,668

$

3,800

$

1,852

$

16,108

Payments associated with assumed lease liabilities (at 100% share)

$

25

$

$

25

$

$

$

$

25

Payments associated with assumed lease liabilities (at JBG SMITH Share)

$

25

$

$

25

$

$

$

$

25

Annualized payments associated with assumed lease liabilities (at JBG SMITH Share) (6)

$

100

$

$

100

$

$

$

$

100

% occupied (at JBG SMITH Share) (7)

 

86.4

%  

 

83.0

%  

 

87.1

%

 

95.4

%

70.3

%  

 

93.2

%  

 

86.1

% 

Annualized base rent of signed leases, not commenced (at 100% share) (8)

$

10,436

$

1,332

$

5,264

$

832

$

5,308

$

364

$

11,768

Annualized base rent of signed leases, not commenced (at JBG SMITH Share) (8)

$

10,436

$

384

$

5,264

$

112

$

5,080

$

364

$

10,820


(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 74% of pre-pandemic levels of approximately $25 million annually.
(3)NOI excludes $2.4 million of related party management fees at JBG SMITH Share. See definition of NOI on page 52.
(4)Annualized NOI includes $8.2 million from sold or recapitalized assets.
(5)Represents JBG SMITH's share of Free Rent for the three months ended June 30, 2022 multiplied by four.
(6)Represents JBG SMITH's share of payments associated with assumed lease liabilities for the three months ended June 30, 2022 multiplied by four.
(7)Crystal City Marriott is excluded from the Percent Occupied metric.
(8)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 June 30, 2022.

Graphic

Page 24


SUMMARY NOI - MULTIFAMILY (NON-GAAP)

JUNE 30, 2022
(Unaudited)

Summary NOI - Multifamily

dollars in thousands

NOI for the Three Months Ended June 30, 2022 at JBG SMITH Share

 

    

Consolidated

    

Unconsolidated

National Landing

    

DC

    

MD

    

Total

  

 

Number of operating assets

 

16

 

3

4

 

12

 

3

 

19

Property rental (1)

$

38,979

$

2,241

$

16,912

$

21,546

$

2,762

$

41,220

Tenant expense reimbursement

 

1,001

 

36

 

81

 

940

 

16

 

1,037

Other revenue (2)

 

4,281

 

69

 

1,989

 

2,102

 

259

 

4,350

Total revenue

 

44,261

 

2,346

 

18,982

 

24,588

 

3,037

 

46,607

Operating expenses

 

(18,021)

 

(1,248)

 

(7,998)

 

(9,900)

 

(1,371)

 

(19,269)

Ground rent expense

 

 

 

 

 

 

Total expenses

 

(18,021)

 

(1,248)

 

(7,998)

 

(9,900)

 

(1,371)

 

(19,269)

Operating Portfolio NOI (3)

$

26,240

$

1,098

$

10,984

$

14,688

$

1,666

$

27,338

Annualized NOI (4)

$

104,960

$

4,392

$

43,936

$

58,752

$

6,664

$

109,352

Additional Information

 

  

 

  

 

  

 

  

 

  

 

  

Free Rent (at 100% share)

$

772

$

511

$

269

$

646

$

368

$

1,283

Free Rent (at JBG SMITH Share)

$

768

$

234

$

269

$

551

$

182

$

1,002

Annualized Free Rent (at JBG SMITH Share) (5)

$

3,072

$

936

$

1,076

$

2,204

$

728

$

4,008

% occupied (at JBG SMITH Share) (6)

 

93.1

%  

 

80.1

%

 

95.5

%  

 

90.3

%  

 

87.7

%  

 

92.3

% 

Annualized base rent of signed leases, not commenced (at 100% share) (7)

$

1,216

$

64

$

$

1,216

$

64

$

1,280

Annualized base rent of signed leases, not commenced (at JBG SMITH Share) (7)

$

1,216

$

32

$

$

1,216

$

32

$

1,248


(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 10.9% below asking rents as of June 30, 2022.
(2)Includes $1.6 million of parking revenue at JBG SMITH Share
(3)NOI excludes $1.5 million of related party management fees at JBG SMITH Share. See definition of NOI on page 52.
(4)Annualized NOI includes $0.1 million from sold assets.
(5)Represents JBG SMITH's share of Free Rent for the three months ended June 30, 2022 multiplied by four.
(6)2221 S. Clark Street – Residential and 900 W Street are excluded from the Percent Occupied metric.
(7)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 retail spaces for which rent had not yet commenced as of June 30, 2022.

Graphic

Page 25


NOI RECONCILIATIONS (NON-GAAP)

JUNE 30, 2022
(Unaudited)

NOI Reconciliations

 

dollars in thousands

Three Months Ended June 30, 

Six Months Ended June 30, 

 

    

2022

    

2021

2022

    

2021

Net income (loss) attributable to common shareholders

$

123,275

$

(2,973)

$

123,243

$

(23,704)

Add:

  

  

  

  

Depreciation and amortization expense

49,479

56,678

107,541

121,404

General and administrative expense:

  

  

  

  

Corporate and other

14,782

13,895

30,597

26,370

Third-party real estate services

24,143

25,557

51,192

54,493

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

1,577

4,441

3,821

9,386

Transaction and Other Costs

1,987

2,270

2,886

5,960

Interest expense

16,041

16,773

32,319

33,069

Loss on the extinguishment of debt

1,038

1,629

Income tax expense (benefit)

2,905

(5)

2,434

4,310

Net income (loss) attributable to redeemable noncontrolling interests

18,248

(345)

18,258

(2,575)

Net loss attributable to noncontrolling interests

(29)

(84)

(1,108)

Less:

  

  

  

  

Third-party real estate services, including reimbursements revenue

22,157

26,745

46,127

64,852

Other revenue

1,798

1,904

3,994

4,090

Income (loss) from unconsolidated real estate ventures, net

(2,107)

3,953

1,038

3,010

Interest and other income (loss), net

1,672

(38)

15,918

(29)

Loss on the sale of real estate

158,767

11,290

158,631

11,290

Consolidated NOI

71,159

72,437

148,128

144,392

NOI attributable to unconsolidated real estate ventures at our share

8,321

8,109

15,268

15,613

Non-cash rent adjustments (1)

(1,978)

(4,088)

(3,769)

(8,853)

Other adjustments (2)

5,695

5,191

14,443

9,933

Total adjustments

12,038

9,212

25,942

16,693

NOI

$

83,197

$

81,649

$

174,070

$

161,085

Less: out-of-service NOI loss (3)

(2,046)

(1,329)

(3,498)

(2,619)

Operating Portfolio NOI

$

85,243

$

82,978

$

177,568

$

163,704

Non-Same Store NOI (4)

5,915

13,257

22,152

27,226

Same Store NOI (5)

$

79,328

$

69,721

$

155,416

$

136,478

Change in Same Store NOI

13.8

%

13.9

%

Number of properties in Same Store pool

52

52


(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.

Graphic

Page 26


LEASING ACTIVITY - OFFICE

JUNE 30, 2022
(Unaudited)

Leasing Activity - Office

 

square feet in thousands

    

Three Months Ended

Six Months Ended

 

June 30, 2022

June 30, 2022

 

Square feet leased:

 

  

At 100% share

 

365

590

At JBG SMITH Share

 

326

536

First-generation space: New

28

50

Second-generation space: New

24

95

Second-generation space: Renewal

274

391

Initial rent (1)

$

40.34

$

45.62

Straight-line rent (2)

$

38.43

$

44.34

Weighted average lease term (years)

 

8.0

 

7.1

Weighted average Free Rent period (months)

 

7.1

 

8.2

Second-generation space:

 

 

Square feet

 

298

 

486

Cash basis:

 

  

 

  

Initial rent (1)

$

39.78

$

45.60

Prior escalated rent

$

47.38

$

50.50

% change

 

(16.0)

%

 

(9.7)

%

GAAP basis:

 

  

 

  

Straight-line rent (2)

$

37.11

$

43.81

Prior straight-line rent

$

45.64

$

47.31

% change

 

(18.7)

%

 

(7.4)

%

Tenant improvements:

 

  

 

  

Per square foot

$

34.12

$

45.12

Per square foot per annum

$

4.24

$

6.31

% of initial rent

 

10.5

%

 

13.8

%

Leasing commissions:

 

  

 

  

Per square foot

$

10.94

$

11.77

Per square foot per annum

$

1.36

$

1.65

% of initial rent

 

3.4

%

 

3.6

%


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. When we exclude non-core office assets intended for recycling, our mark-to-market in National Landing was negative 2.0% for the three months ended June 30, 2022.

(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.

Graphic

Page 27


NET EFFECTIVE RENT - OFFICE

JUNE 30, 2022
(Unaudited)

Net Effective Rent - Office

square feet in thousands, dollars per square feet, at JBG SMITH Share

Three Months Ended

 

 

    

Five Quarter 
Weighted Average

    

June 30, 2022

    

March 31, 2022

    

December 31, 2021

    

September 30, 2021

    

June 30, 2021

 

Square feet

 

369

 

326

 

210

 

468

 

126

 

715

Weighted average lease term (years)

 

6.1

 

8.0

 

5.8

 

8.0

 

5.4

 

4.2

Initial rent (1)

$

45.00

$

40.34

$

53.78

$

44.41

$

44.82

$

44.96

Base rent per annum (2)

$

49.16

$

41.22

$

65.64

$

46.32

$

45.78

$

50.38

Tenant improvements per annum

 

(5.23)

 

(4.24)

 

(10.80)

 

(3.00)

 

(4.68)

 

(5.60)

Leasing commissions per annum

 

(1.50)

 

(1.36)

 

(2.27)

 

(1.51)

 

(0.90)

 

(1.43)

Free Rent per annum

 

(4.67)

 

(2.96)

 

(7.31)

 

(4.79)

 

(3.60)

 

(4.79)

Net Effective Rent

$

37.76

$

32.66

$

45.26

$

37.02

$

36.60

$

38.56

National Landing

 

  

 

  

 

  

 

  

 

  

 

  

Square feet

 

250

 

52

 

133

 

337

 

89

 

639

Initial rent (1)

$

44.33

$

48.00

$

48.65

$

43.58

$

44.85

$

43.46

Net effective rent

$

36.13

$

35.01

$

40.06

$

35.64

$

35.36

$

35.77

Other VA

 

  

 

  

 

  

 

  

 

  

 

  

Square feet

 

45

 

123

 

12

 

60

 

16

 

12

Initial rent (1)

$

44.88

$

48.49

$

41.83

$

38.05

$

42.95

$

47.77

Net effective rent

$

36.76

$

38.46

$

31.52

$

33.53

$

40.43

$

35.75

DC

 

  

 

  

 

  

 

  

 

  

 

  

Square feet

 

35

 

24

 

66

 

32

 

9

 

45

Initial rent (1)

$

61.18

$

47.34

$

66.20

$

62.30

$

50.75

$

62.54

Net effective rent

$

49.01

$

41.04

$

49.02

$

52.86

$

43.86

$

51.57

MD

 

  

 

  

 

  

 

  

 

  

 

  

Square feet

 

39

 

127

 

 

38

 

11

 

19

Initial rent (1)

$

34.85

$

27.95

$

$

46.74

$

42.27

$

52.57

Net effective rent

$

30.12

$

26.61

$

$

36.08

$

32.33

$

40.17


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.

Graphic

Page 28


LEASE EXPIRATIONS

JUNE 30, 2022
(Unaudited)

Lease Expirations

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

 

40

 

65,604

 

0.8

%  

$

1,048

 

0.3

%  

$

15.97

$

15.97

2022

 

44

 

387,514

 

5.0

%  

 

16,364

 

4.6

%  

 

42.23

 

42.28

2023

 

108

 

896,765

 

11.5

%  

 

39,406

 

11.2

%  

 

43.94

 

45.08

2024

 

77

 

1,314,748

 

16.9

%  

 

60,222

 

17.1

%  

 

45.81

 

47.06

2025

 

77

 

823,698

 

10.6

%  

 

36,899

 

10.4

%  

 

44.80

 

47.33

2026

 

60

 

251,833

 

3.2

%  

 

12,204

 

3.5

%  

 

48.46

 

52.72

2027

 

43

 

521,470

 

6.7

%  

 

24,660

 

7.0

%  

 

47.29

 

52.35

2028

 

51

 

410,633

 

5.3

%  

 

19,454

 

5.5

%  

 

47.38

 

54.86

2029

 

23

 

143,104

 

1.8

%  

 

6,736

 

1.9

%  

 

47.07

 

54.64

2030

 

26

 

390,075

 

5.0

%  

 

21,681

 

6.1

%  

 

55.58

 

67.38

Thereafter

 

105

 

2,564,993

 

33.2

%  

 

114,429

 

32.4

%  

 

45.30

 

56.42

Total / Weighted Average

 

654

 

7,770,437

 

100.0

%  

$

353,103

 

100.0

%  

$

45.67

$

51.54


Note: Includes all in-place leases as of June 30, 2022 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 5.9 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 June 30, 2022, or management’s estimate thereof, by 2.75% annually through the lease expiration year.

Graphic

Page 29


SIGNED BUT NOT YET COMMENCED LEASES

JUNE 30, 2022
(Unaudited)

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)

    

September 30, 2022

    

December 31, 2022

    

March 31, 2023

    

June 30, 2023

    

September 30, 2023

    

December 31, 2023

 

 

Commercial

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Operating

 

C

$

10,436

$

1,184

$

1,386

$

1,520

$

1,597

$

2,241

$

2,580

Operating

 

U

 

384

 

30

 

84

 

84

 

95

 

96

 

96

Total

$

10,820

$

1,214

$

1,470

$

1,604

$

1,692

$

2,337

$

2,676

Multifamily

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Operating

C

$

1,216

$

117

$

169

$

169

$

265

$

303

$

304

Operating

U

 

32

 

 

3

 

8

 

8

 

8

 

8

Under construction

C

 

436

 

 

 

 

 

 

Total

$

1,684

$

117

$

172

$

177

$

273

$

311

$

312

Total

$

12,504

$

1,331

$

1,642

$

1,781

$

1,965

$

2,648

$

2,988


Note: Includes only leases for office and retail spaces for which rent had not yet commenced as of June 30, 2022.

(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.

Graphic

Page 30


TENANT CONCENTRATION

JUNE 30, 2022
(Unaudited)

Tenant Concentration

 dollars in thousands

    

    

    

At JBG SMITH Share

 

Tenant

Number of Leases

Square Feet

% of Total Square Feet

Annualized 
Rent

% of Total Annualized Rent

 

1

U.S. Government (GSA)

53

2,127,926

27.4

%  

$

86,467

24.5

% 

2

 

Amazon

8

1,035,347

 

13.3

%  

44,807

 

12.7

%

3

 

Gartner, Inc

1

174,424

 

2.2

%  

12,397

 

3.5

%

4

 

Lockheed Martin Corporation

2

232,598

 

3.0

%  

11,616

 

3.3

%

5

 

Booz Allen Hamilton Inc

3

159,610

 

2.1

%  

7,838

 

2.2

%

6

 

Greenberg Traurig LLP

1

101,602

 

1.3

%  

7,196

 

2.0

%

7

 

Accenture LLP

2

116,736

 

1.5

%  

5,987

 

1.7

%

8

 

Public Broadcasting Service

1

120,328

 

1.5

%  

4,737

 

1.3

%

9

 

Evolent Health LLC

1

90,905

 

1.2

%  

4,615

 

1.3

%

10

 

The International Justice Mission

1

74,833

 

1.0

%  

4,329

 

1.2

%

11

 

Host Hotels & Resorts LP

1

55,009

 

0.7

%  

4,127

 

1.2

%

12

 

American Diabetes Association

1

80,998

 

1.0

%  

3,599

 

1.0

%

13

Willis Towers Watson US LLC

1

61,653

0.8

%  

3,152

0.9

%

14

 

National Consumer Cooperative

1

65,736

 

0.8

%  

3,141

 

0.9

%

15

 

WeWork

1

41,647

 

0.5

%  

2,909

 

0.8

%

16

 

Management System Intl Inc

1

50,069

 

0.6

%  

2,816

 

0.8

%

17

 

Whole Foods Market Group Inc

2

79,875

 

1.0

%  

2,620

 

0.7

%

18

 

Cushman & Wakefield U.S. Inc

1

38,008

 

0.5

%  

2,471

 

0.7

%

19

 

The District of Columbia

4

52,134

 

0.7

%  

2,447

 

0.7

%

20

 

Food Marketing Institute

1

44,196

 

0.6

%  

2,318

 

0.7

%

 

Other (1)

567

2,966,803

 

38.3

%  

133,514

 

37.9

%

 

Total

654

7,770,437

 

100.0

%  

$

353,103

 

100.0

%


Note: Includes all leases as of June 30, 2022 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.

Graphic

Page 31


INDUSTRY DIVERSITY

JUNE 30, 2022
(Unaudited)

Industry Diversity

  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

 

61

 

2,187,287

 

28.1

%  

$

89,257

 

25.3

% 

2

 

Business Services

 

90

 

1,842,941

 

23.7

%  

 

88,010

 

24.9

%

3

 

Government Contractors

 

51

 

963,042

 

12.4

%  

 

44,650

 

12.6

%

4

 

Member Organizations

 

41

 

597,261

 

7.7

%  

 

29,491

 

8.4

%

5

 

Real Estate

 

34

 

330,465

 

4.3

%  

 

16,393

 

4.6

%

6

 

Health Services

 

31

 

270,520

 

3.5

%  

 

10,809

 

3.1

%

7

 

Food and Beverage

 

83

 

176,593

 

2.3

%  

 

10,088

 

2.9

%

8

 

Legal Services

 

20

 

149,094

 

1.9

%  

 

10,010

 

2.8

%

9

 

Communications

 

6

 

127,612

 

1.6

%  

 

5,086

 

1.4

%

10

 

Educational Services

 

12

 

81,279

 

1.0

%  

 

3,722

 

1.1

%

 

Other

 

225

 

1,044,343

 

13.5

%  

 

45,587

 

12.9

%

 

Total

 

654

 

7,770,437

 

100.0

%  

$

353,103

 

100.0

%


Note: Includes all in-place leases as of June 30, 2022 for office and retail space within our operating portfolio.

Graphic

Page 32


PORTFOLIO SUMMARY

JUNE 30, 2022
(Unaudited)

Portfolio Summary

Potential

 

Number

Rentable

Number of

Development

 

of Assets

Square Feet

Units (1)

Density (2)

 

 

 

Wholly Owned

    

  

    

  

    

  

    

  

Operating

 

43

 

12,721,599

 

5,691

 

Under-Construction (3)

 

2

 

1,214,951

 

1,583

 

Near-Term Development

6

3,322,900

Future Development

 

8

 

 

 

5,129,200

Total (4)

 

59

 

13,936,550

 

7,274

 

8,452,100

Real Estate Ventures

 

  

 

  

 

  

 

  

Operating

 

13

 

3,968,099

 

1,668

 

Under-Construction

Near-Term Development

 

2

 

 

 

419,400

Future Development

 

8

 

 

 

3,670,600

Total

 

23

 

3,968,099

 

1,668

 

4,090,000

Total Portfolio

82

 

17,904,649

 

8,942

 

12,542,100

Total Portfolio (at JBG SMITH Share)

82

 

15,527,539

 

8,079

 

9,806,400


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 footnotes (3) and (4) on page 41.

Graphic

Page 33


PROPERTY TABLE - COMMERCIAL

JUNE 30, 2022
(Unaudited)

Property Table - Commercial

    

    

    

    

    

    

    

    

    

    

    

    

    

Office

    

 

Annualized

Retail

 

Same Store (2):

Annualized

Rent Per

Annualized

 

%

Q2 20212022 /

Year Built /

Total

Office

Retail

%

Office %

Retail %

Rent

Square

Rent Per

 

Commercial Assets

Submarket

Ownership

C/U (1)

YTD 2021 - 2022

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

 

550,184

 

449,719

100,465

96.6%

96.1%

98.5%

$

22,864

$

42.37

$

45.97

2121 Crystal Drive

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1985 / 2006

 

505,349

 

505,349

71.3%

71.3%

 

17,239

 

47.84

 

2345 Crystal Drive

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1988 / 2019

 

499,663

 

491,771

7,892

87.3%

87.1%

100.0%

 

20,815

 

48.32

 

16.17

2231 Crystal Drive

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1987 / 2009

 

468,906

 

416,979

51,927

88.0%

86.2%

97.4%

 

17,835

 

44.24

 

38.17

2011 Crystal Drive

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1984 / 2006

 

440,996

 

434,234

6,762

58.5%

58.6%

50.3%

 

12,035

 

46.78

 

38.33

2451 Crystal Drive

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1990 / 2019

 

401,902

 

389,845

12,057

76.9%

76.4%

92.6%

 

12,779

 

47.69

 

39.75

1235 S. Clark Street

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1981 / 2007

 

384,777

 

336,431

48,346

96.9%

95.9%

97.2%

 

15,635

 

44.95

 

23.97

241 18th Street S.

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1977 / 2013

 

362,219

 

333,911

28,308

97.4%

97.5%

84.5%

 

13,787

 

40.86

 

19.95

251 18th Street S. (5)

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1975 / 2013

 

337,886

 

293,818

44,068

90.3%

99.0%

32.7%

 

13,478

 

44.00

 

47.50

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%

 

11,379

 

33.84

 

35.42

201 12th Street S.

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1987 / 2014

 

329,607

 

317,394

12,213

98.0%

97.9%

100.0%

 

12,235

 

37.71

 

42.04

2200 Crystal Drive

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1968 / 2006

 

283,608

 

283,608

57.0%

57.0%

 

7,435

 

45.99

 

1225 S. Clark Street

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1982 / 2013

 

276,155

 

263,305

12,850

97.1%

94.1%

100.0%

 

10,255

 

40.15

 

24.12

1901 South Bell Street (5)

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1968 / 2008

 

274,912

 

274,912

92.1%

92.1%

 

10,397

 

41.05

 

1770 Crystal Drive

National Landing

100.0

%  

C

Y / Y

2020 / N/A

273,650

259,651

13,999

98.4%

100.0%

68.5%

11,805

43.29

59.05

Crystal City Marriott (345 Rooms) (6)

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1968 / 2019

 

266,000

 

 

 

 

2100 Crystal Drive

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1968 / 2006

 

253,437

 

253,437

100.0%

100.0%

 

10,785

 

42.55

 

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%

8,402

43.67

4.55

200 12th Street S.

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1985 / 2013

 

202,708

 

202,708

79.5%

79.5%

 

7,734

 

47.97

 

Crystal City Shops at 2100 (5)

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1968 / 2006

 

53,174

 

53,174

81.3%

81.3%

 

519

 

 

12.00

Crystal Drive Retail (5)

 

National Landing

 

100.0

%  

C

 

Y / Y

 

2003 / 2004

 

42,938

 

42,938

100.0%

100.0%

 

2,729

 

 

63.55

2221 S. Clark Street-Office

National Landing

100.0

%  

C

 

Y / Y

1964 / 2016

35,182

26,238

8,944

Central Place Tower (7)

Rosslyn

50.0

%

U

Y / Y

2018 / N/A

551,608

524,330

27,278

99.3%

99.2%

100.0%

37,226

70.00

29.79

 Other VA

 

  

 

  

 

  

 

  

 

 

 

 

 

 

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%

$

15,062

$

50.59

$

47.60

Stonebridge at Potomac Town
Center (8)

 

Prince William County

 

10.0

%  

U

 

Y / Y

 

2012 / N/A

 

504,327

 

504,327

97.1%

96.4%

 

15,936

 

 

32.79

Rosslyn Gateway-North

 

Rosslyn

 

18.0

%  

U

 

Y / Y

 

1996 / 2014

 

146,068

 

133,314

12,754

63.4%

58.5%

72.3%

 

3,600

 

42.12

 

34.29

Rosslyn Gateway-South

 

Rosslyn

 

18.0

%  

U

 

Y / Y

 

1961 / N/A

 

103,349

 

95,765

7,584

67.4%

72.7%

 

1,756

 

25.22

 

Graphic

Page 34


PROPERTY TABLE - COMMERCIAL

JUNE 30, 2022
(Unaudited)

    

    

    

    

    

    

    

    

    

    

    

    

    

Office

    

 

Annualized

Retail

 

Same Store (2):

Annualized

Rent Per

Annualized

 

%

Q2 20212022 /

Year Built /

Total

Office

Retail

%

Office %

Retail %

Rent

Square

Rent Per

 

 Commercial Assets

Submarket

Ownership

C/U (1)

YTD 2021 - 2022

Renovated

Square Feet

Square Feet

Square Feet

Leased

Occupied

Occupied

(in thousands)

Foot (3)

Square Foot (4)

 

 DC

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

2101 L Street

 

CBD

 

100.0

%  

C

 

Y / Y

 

1975 / 2007

 

375,466

 

344,146

31,320

84.6%

63.0%

92.6%

$

16,313

$

67.60

$

56.83

L’Enfant Plaza Office-East (7)

 

Southwest

 

49.0

%  

U

 

Y / Y

 

1972 / 2012

 

399,163

 

399,163

71.1%

63.2%

 

12,706

 

50.34

 

L’Enfant Plaza Office-North

 

Southwest

 

49.0

%  

U

 

Y / Y

 

1969 / 2014

 

298,788

 

277,464

21,324

86.7%

85.2%

87.1%

 

11,734

 

47.93

 

22.07

L’Enfant Plaza Retail (7)

 

Southwest

 

49.0

%  

U

 

Y / Y

 

1968 / 2014

 

119,291

 

16,596

102,695

68.5%

100.0%

63.4%

 

3,737

 

47.91

 

45.16

The Foundry

 

Georgetown

 

9.9

%  

U

 

Y / Y

 

1973 / 2017

 

227,493

 

220,639

6,854

79.4%

78.8%

100.0%

 

9,032

 

50.37

 

40.72

1101 17th Street

 

CBD

 

55.0

%  

U

 

Y / Y

 

1964 / 1999

 

209,108

 

199,354

9,754

87.3%

83.3%

100.0%

 

9,744

 

54.48

 

71.78

 MD

 

  

 

  

 

  

 

  

 

 

 

 

 

 

4747 Bethesda Avenue (9)

Bethesda CBD

100.0

%

C

Y / Y

2019 / N/A

300,508

286,199

14,309

98.0%

97.9%

100.0%

$

20,669

$

67.37

$

125.83

One Democracy Plaza (7) (8)

 

Bethesda- Rock Spring

 

100.0

%  

C

 

Y / Y

 

1987 / 2013

 

212,922

 

210,784

2,138

86.9%

86.8%

100.0%

 

6,026

 

32.57

 

32.16

 Operating - Total / Weighted Average

 

  

 

  

 

  

 

  

 

10,537,333

 

9,042,991

1,228,342

87.0%

85.3%

88.3%

$

403,683

$

47.36

$

37.08

 Total at JBG SMITH Share

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

National Landing

 

  

 

  

 

  

 

  

 

  

 

7,061,402

 

6,320,005

475,397

87.2%

87.1%

85.8%

$

258,753

$

44.66

$

35.96

Other VA

398,972

318,631

80,341

94.5%

95.4%

89.4%

17,620

49.15

37.27

DC

913,383

815,257

98,126

81.2%

70.3%

77.5%

36,371

57.01

48.68

MD

 

  

 

  

 

  

 

  

 

  

 

513,430

 

496,983

16,447

93.4%

93.2%

100.0%

26,695

53.62

113.64

 Operating - Total / Weighted Average

 

  

 

  

 

  

 

  

 

8,887,187

 

7,950,876

670,311

87.3%

86.1%

85.4%

$

339,439

$

46.51

$

40.05

Graphic

Page 35


PROPERTY TABLE - COMMERCIAL

JUNE 30, 2022
(Unaudited)

 

Number of Assets and Total Square Feet Reconciliation

 

    

Number of

    

At 100% Share

    

At JBG SMITH Share

 

Operating Assets

Assets

Square Feet

Square Feet

 

Q1 2022

 

41

 

13,043,081

 

11,273,218

Placed into service

 

 

 

Dispositions/recapitalizations (10)

 

(6)

 

(2,507,518)

 

(2,386,243)

Out-of-service adjustment

 

 

 

Portfolio reclassification

Building re-measurements

 

 

1,770

 

212

Q2 2022

 

35

 

10,537,333

 

8,887,187

See footnotes on page 37.

Graphic

Page 36


PROPERTY TABLE - COMMERCIAL

JUNE 30, 2022
(Unaudited)

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 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

550,184

1,721

251 18th Street S.

337,886

1,480

1901 South Bell Street

274,912

1,924

Crystal City Shops at 2100

53,174

19,041

Crystal Drive Retail

42,938

14,027

(6)Under the current management agreement, JBG SMITH receives 50% of the net cash flows from the hotel. Upon expiration on July 31, 2025, JBG SMITH expects to receive 100% of the cash flows. The Crystal City Marriott generated $1.9 million of Annualized NOI at JBG SMITH’s share for the three months ended June 30, 2022. The Crystal City Marriott generated $1.8 million of NOI at JBG SMITH’s share in 2019 while undergoing a rooms renovation and $3.5 million of NOI at JBG SMITH’s share in 2018 before the renovation began.
(7)The following assets are subject to ground leases:

    

Ground Lease

 

Commercial Asset

Expiration Date

 

Central Place Tower (a)(b)

 

6/2/2102

L'Enfant Plaza Office - East

 

11/23/2064

L'Enfant Plaza Retail

 

11/23/2064

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

(8)Not Metro-Served.
(9)Includes JBG SMITH's share for approximately 84,400 SF.
(10)See "Disposition and Recapitalization Activity" on page 44.

Graphic

Page 37


PROPERTY TABLE - MULTIFAMILY

JUNE 30, 2022
(Unaudited)

Property Table – Multifamily

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

Monthly

Monthly

Same Store (2):

Number

Total

Multifamily

Retail

Multifamily

Retail

Annualized

Rent

Rent Per

%

Q2 20212022 /

Year Built /

of

Square

Square

Square

%

%

Rent

Per

Square

Multifamily Assets

Submarket

Ownership

C/U (1)

YTD 2021 - 2022

Renovated

Units

Feet

Feet

Feet

% Leased

Occupied

Occupied

(in thousands)

Unit (3) (4)

Foot (4) (5)

National Landing

 

  

 

  

 

  

 

  

 

  

 

 

 

 

 

 

 

 

RiverHouse Apartments

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1960 / 2014

 

1,676

 

1,327,551

 

1,324,889

 

2,662

 

98.4%

95.9%

100.0%

$

34,471

$

1,784

$

2.26

The Bartlett

 

National Landing

 

100.0

%  

C

 

Y / Y

 

2016 / N/A

 

699

 

619,372

 

577,295

 

42,077

 

98.0%

94.3%

100.0%

 

22,831

 

2,688

 

3.26

220 20th Street

 

National Landing

 

100.0

%  

C

 

Y / Y

 

2009 / N/A

 

265

 

271,476

 

269,913

 

1,563

 

98.9%

96.6%

100.0%

 

7,983

 

2,581

 

2.54

2221 S. Clark Street-
Residential (6)

 

National Landing

 

100.0

%  

C

 

Y / Y

 

1964 / 2016

 

216

 

96,948

 

96,948

 

 

98.4%

96.4%

 

5,048

 

2,020

 

4.50

DC

  

 

  

 

  

 

  

 

  

 

 

 

 

 

 

 

 

 

West Half

 

Ballpark

 

100.0

%  

C

 

Y / Y

 

2019 / N/A

 

465

 

385,368

 

343,089

 

42,279

 

89.1%

83.7%

84.5%

$

13,415

$

2,368

$

3.38

Fort Totten Square

 

Brookland/Fort Totten

 

100.0

%  

C

 

Y / Y

 

2015 / N/A

 

345

 

384,956

 

254,292

 

130,664

 

97.5%

92.2%

100.0%

9,343

1,821

2.48

The Wren

U Street/Shaw

96.0

%

C

N / N

2020 / N/A

433

332,682

289,686

42,996

92.8%

88.5%

100.0%

11,486

2,221

3.28

The Batley

Union Market/NoMa/H Street

100.0

%  

C

N / N

2019 / N/A

432

300,388

300,388

95.1%

91.4%

11,119

2,346

3.40

WestEnd25

 

West End

 

100.0

%  

C

 

Y / Y

 

2009 / N/A

 

283

 

273,264

 

273,264

 

 

96.5%

89.0%

 

10,274

 

3,397

 

3.54

F1RST Residences

 

Ballpark

 

100.0

%  

C

 

Y / Y

 

2017 / N/A

 

325

 

270,928

 

249,456

 

21,472

 

96.3%

91.7%

100.0%

 

9,775

 

2,300

 

3.00

1221 Van Street

 

Ballpark

 

100.0

%  

C

 

Y / Y

 

2018 / N/A

 

291

 

225,530

 

202,715

 

22,815

 

95.7%

93.5%

100.0%

 

8,468

 

2,203

 

3.18

901 W Street

U Street/Shaw

100.0

%  

C

Y / Y

2019 / N/A

161

154,378

135,499

18,879

94.3%

96.3%

57.9%

5,386

2,528

3.05

900 W Street (6)

U Street/Shaw

100.0

%  

C

Y / Y

2019 / N/A

95

71,050

71,050

100.0%

93.7%

5,039

4,718

6.23

North End Retail

 

U Street/Shaw

 

100.0

%  

C

 

Y / Y

 

2015 / N/A

 

 

27,355

 

 

27,355

 

91.6%

85.3%

 

1,473

 

 

The Gale Eckington

 

Union Market/NoMa/H Street

 

5.0

%  

U

 

Y / Y

 

2013/ N/A

 

603

 

466,716

 

465,516

 

1,200

 

97.7%

91.7%

100.0%

 

13,351

 

2,005

 

2.61

Atlantic Plumbing (7)

 

U Street/Shaw

 

64.0

%  

U

 

Y / Y

 

2015 / N/A

 

310

 

245,527

 

221,788

 

23,739

 

95.5%

94.2%

80.5%

 

9,343

 

2,442

 

3.42

MD

 

  

 

  

 

  

 

  

 

  

 

 

 

 

 

 

 

 

Falkland Chase-South & West

 

Downtown Silver Spring

 

100.0

%  

C

 

Y / Y

 

1938 / 2011

 

268

 

222,754

 

222,754

 

 

99.6%

97.0%

$

5,475

$

1,755

$

2.12

Falkland Chase-North

 

Downtown Silver Spring

 

100.0

%  

C

 

Y / Y

 

1938 / 1986

 

170

 

112,143

 

112,143

 

 

100.0%

98.8%

 

2,869

 

1,423

 

2.16

Total / Weighted Average (6)

 

  

 

  

 

  

 

  

 

  

 

7,037

 

5,788,386

 

5,410,685

 

377,701

 

96.6%

93.0%

93.9%

$

177,062

$

2,178

$

2.81

Recently Delivered

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

  

 

  

 

  

 

  

MD

8001 Woodmont

Bethesda CBD

50.0

%

U

N/N

2021 / N/A

322

363,979

344,405

19,574

71.5%

60.6%

95.1%

$

8,295

$

3,109

$

3.09

Operating - Total / Weighted Average (6)

 

  

 

  

 

  

 

  

 

7,359

 

6,152,365

 

5,755,090

 

397,275

 

95.1%

91.5%

93.9%

$

185,357

$

2,206

$

2.82

Under-Construction

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

National Landing

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

1900 Crystal Drive (8)

 

National Landing

 

C

 

  

 

  

 

808

 

633,985

 

595,315

 

38,670

2000/2001 South Bell Street (8)

National Landing

C

775

580,966

561,961

19,005

Under-Construction - Total

 

  

 

  

 

  

 

  

 

  

 

1,583

 

1,214,951

 

1,157,276

 

57,675

 

  

 

  

 

  

 

  

 

  

 

  

Total

 

  

 

  

 

  

 

  

 

  

 

8,942

 

7,367,316

 

6,912,366

 

454,950

 

  

 

  

 

  

 

  

 

  

 

  

Graphic

Page 38


PROPERTY TABLE - MULTIFAMILY

JUNE 30, 2022
(Unaudited)

    

    

    

    

    

    

    

    

    

    

    

    

    

    

    

Monthly

Monthly

Same Store (2):

Number

Total

Multifamily

Retail

Multifamily

Retail

Annualized

Rent

Rent Per

%

Q2 20212022 /

Year Built /

of

Square

Square

Square

%

%

Rent

Per

Square

Multifamily Assets

Submarket

Ownership

C/U (1)

YTD 2021 - 2022

Renovated

Units

Feet

Feet

Feet

% Leased

Occupied

Occupied

(in thousands)

Unit (3) (4)

Foot (4) (5)

Totals at JBG SMITH Share (6)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

National Landing

2,856

2,315,347

2,269,045

46,302

98.3%

95.5%

100.0%

$

65,285

$

2,101

$

2.56

DC

3,041

2,593,167

2,273,161

320,006

94.6%

90.3%

93.3%

86,930

2,363

3.19

MD

438

334,897

334,897

99.8%

97.7%

8,343

1,624

2.13

In-Service assets

 

  

 

  

 

  

 

  

 

  

 

6,335

 

5,243,411

 

4,877,103

 

366,308

 

96.6%

93.1%

94.1%

$

160,558

$

2,189

$

2.81

Recently Delivered assets

 

  

 

  

 

  

 

  

 

  

 

161

 

181,990

 

172,203

 

9,787

 

71.5%

60.6%

95.1%

 

4,148

 

3,109

 

3.09

Operating - Total/Weighted Average

 

  

 

  

 

  

 

  

 

6,496

 

5,425,401

 

5,049,306

 

376,095

 

95.7%

92.3%

94.2%

$

164,706

$

2,205

$

2.82

In-Service excluding newly developed and acquired assets (9)

4,712

4,070,180

3,787,440

282,739

97.7%

94.7%

94.7%

$

124,995

$

2,157

$

2.69

Under-Construction assets

 

  

 

  

 

  

 

  

 

  

 

1,583

 

1,214,951

 

1,157,276

 

57,675

 

 

  

 

  

 

  

 

  

Number of Assets and Total Square Feet/Units Reconciliation

 

Number of

At 100% Share

At JBG SMITH Share

 

 

Operating Assets

    

Assets

    

Square Feet/Units

    

Square Feet/Units

  

Q1 2022

 

20

 

6,541,275 SF/
7,715 Units

 

5,431,043 SF/
6,502 Units

Acquisitions

 

 

 

Placed into service

 

 

 

Dispositions (10)

(1)

(390,293) SF/
(356) Units

 

(7,025) SF/
(6) Units

Out-of-service adjustment

 

 

Portfolio reclassification

Building re-measurements

 

1,383 SF

 

1,383 SF

Q2 2022

 

19

 

6,152,365 SF/
7,359 Units

 

5,425,401 SF/
6,496 Units

Quarterly Rental Revenue and Occupancy Changes - Same Store Multifamily Assets

 

    

    

    

    

    

Monthly Rent Per Unit (3)

    

Multifamily % Occupied

    

Annualized Rent (in thousands)

 

Number of Assets

Number of Units

Q2 2022

Q2 2021

% Change

Q2 2022

Q2 2021

% Change

Q2 2022

Q2 2021

% Change

 

National Landing

 

3

 

2,640

$

2,101

$

1,978

 

6.2%

95.5%

94.6%

0.9%

$

63,590

$

59,288

 

7.3%

DC

8

 

2,099

2,394

2,311

 

3.6%

90.5%

90.0%

0.5%

54,537

52,365

 

4.1%

MD

 

2

 

438

 

1,624

 

1,542

 

5.3%

97.7%

94.1%

3.6%

 

8,343

 

7,624

 

9.4%

Total / Weighted Average

 

13

 

5,177

$

2,174

$

2,072

 

4.9%

93.7%

92.7%

1.0%

$

126,470

$

119,277

 

6.0%

Note: At JBG SMITH Share. Includes assets placed In-Service prior to April 1, 2021. Excludes North End Retail and 2221 S. Clark Street - Residential and 900 W Street as they are operated as a short-term rental property.

See footnotes on page 40.

Graphic

Page 39


PROPERTY TABLE - MULTIFAMILY

JUNE 30, 2022
(Unaudited)

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)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.
(7)On August 1, 2022, we acquired the remaining 36.0% ownership interest for $19.7 million.
(8)See footnotes (3) and (4) on page 41.
(9)Excludes West Half, The Wren and The Batley.
(10)See "Disposition and Recapitalization Activity" on page 44.

Graphic

Page 40


PROPERTY TABLE – UNDER-CONSTRUCTION

JUNE 30, 2022
(Unaudited)

Property Table – Under Construction

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

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

1900 Crystal Drive (3)

 

National Landing

 

633,985

 

808

 

Q1 2021

 

Q1 2024 - Q3 2024

 

Q1 2026

$

192,122

$

230,069

$

422,191

2000/2001 South Bell Street (4)

National Landing

580,966

775

Q1 2022

Q1 2025 - Q3 2025

Q4 2026

44,979

298,456

343,435

Under-Construction - Total / Weighted Average

1,214,951

 

1,583

 

Under-Construction - Total / Weighted Average at JBG SMITH Share

1,214,951

 

1,583

 

Q3 2021

Q3 2024 - Q1 2025

Q3 2026

$

237,101

$

528,525

$

765,626

Weighted average Projected NOI Yield at JBG SMITH Share:

    

Multifamily

    

Estimated Total Investment (5)

 

5.8

%  

Estimated Incremental Investment

 

8.4

%  

Estimated Stabilized NOI at JBG SMITH Share (dollars in millions)

$

44.2


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 52.
(3)We leased the land underlying 1900 Crystal Drive to a lessee, which is constructing 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 June 30, 2022, 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 sheets. 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)We leased the land underlying 2000/2001 South Bell Street to a lessee, which is constructing 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 2000/2001 South Bell Street, 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 December 2021, the ground lessee entered into a mortgage loan collateralized by the leasehold interest with a maximum principal balance of $208.5 million and an interest rate of LIBOR plus 2.15% per annum. As of June 30, 2022, no proceeds had been received from the mortgage loan. The ground lessee was obligated to invest $16.0 million of equity funding, all of which was funded, and JBG SMITH is obligated to provide additional project funding through a mezzanine loan to the ground lessee. We determined that 2000/2001 South Bell Street is a VIE and that we are the primary beneficiary of the VIE. Accordingly, we consolidated the VIE with the lessee's ownership interest shown as "Noncontrolling interests" in our condensed consolidated balance sheets. The ground lease, the mezzanine loan and the master lease described above are eliminated in consolidation. 2000/2001 South Bell Street's full cost, debt balance and other metrics are included at 100% in the at JBG SMITH Share metrics presented within this Investor Package.
(5)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, Projected NOI Yield on Estimated Total Investment would be 6.0%.

Graphic

Page 41


PROPERTY TABLE – NEAR-TERM DEVELOPMENT

JUNE 30, 2022
(Unaudited)

Property Table – Near-Term Development

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

 

  

 

 

  

 

  

 

  

 

 

  

Potomac Yard Landbay F - Block 15 - 3331 Exchange Avenue

National Landing

50.0%

2022

Fully Entitled

181,300

164,300

17,000

170

$

7,836

Potomac Yard Landbay F - Block 19 - 3330 Exchange Avenue

National Landing

50.0%

2022

Fully Entitled

238,100

214,800

23,300

240

9,494

2250 Crystal Drive

National Landing

100.0%

2023

Entitlement In Process

677,100

677,100

825

23,485

223 23rd Street

National Landing

100.0%

2023

Entitlement In Process

512,800

512,800

620

18,203

2525 Crystal Drive

National Landing

100.0%

2024

Entitlement In Process

370,000

370,000

500

12,556

101 12th Street

National Landing

100.0%

Pre-lease Dependent

Fully Entitled

239,600

234,400

5,200

10,961

DC

 

  

 

  

 

  

 

  

 

  

 

 

5 M Street Southwest

 

Ballpark

100.0%

2022

Fully Entitled

705,400

675,400

30,000

615

28,963

Gallaudet Parcel 1-3 (2)

Union Market/NoMa/H Street

 

100.0%

2023

Fully Entitled

818,000

 

 

756,400

 

61,600

 

840

21,562

Total

 

 

3,742,300

 

234,400

 

3,370,800

 

137,100

 

3,810

$

133,060

Total at JBG SMITH Share

National Landing

2,009,300

234,400

1,749,500

25,400

2,150

$

82,535

DC

1,523,400

1,431,800

91,600

1,455

50,525

3,532,700

234,400

3,181,300

117,000

3,605

$

133,060

Fully Entitled

1,972,800

234,400

1,621,400

117,000

1,660

Entitlement In Process

1,559,900

1,559,900

1,945

3,532,700

234,400

3,181,300

117,000

3,605

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 52.
(2)Controlled through an option to acquire a leasehold interest with estimated stabilized annual ground rent payments totaling approximately $1.8 million. As of June 30, 2022, the weighted average remaining term for the option is 1.6 years.

Graphic

Page 42


PROPERTY TABLE – FUTURE DEVELOPMENT

JUNE 30, 2022
(Unaudited)

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

Replaced (1)

Cost (2)

Cost (3)

Replaced (4)

Payments (5)

Investment (6)

per SF

 

Owned

VA

 

  

 

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

National Landing

 

7

 

4,491,500

 

1,113,000

3,378,500

 

206,186 SF

$

174,901

 

N/A

$

110,533

$

$

285,434

$

63.55

Other VA

 

2

 

145,700

 

89,700

56,000

 

21,776 SF

 

1,430

 

N/A

 

1,832

 

 

3,262

 

22.39

 

9

 

4,637,200

 

1,202,700

 

3,434,500

 

227,962 SF

$

176,331

 

N/A

$

112,365

$

$

288,696

$

62.26

DC

DC

 

5

 

852,900

 

149,600

 

703,300

 

$

71,029

 

N/A

$

$

$

71,029

$

83.28

Total / weighted average

 

14

 

5,490,100

 

1,352,300

 

4,137,800

 

227,962 SF

$

247,360

 

N/A

$

112,365

$

$

359,725

$

65.52

Optioned (7)

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

DC

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

DC

 

2

 

783,600

 

 

783,600

 

$

11,280

$

7,850

$

$

29,434

$

48,564

$

61.98

Total / Weighted Average

 

16

 

6,273,700

 

1,352,300

 

4,921,400

 

227,962 SF

$

258,640

$

7,850

$

112,365

$

29,434

$

408,289

$

65.08

Total / Weighted Average (Fully Entitled and Entitlement In Process)

13

6,051,200

1,335,700

4,715,500

227,962 SF

$

257,023

$

N/A

$

112,365

$

29,434

$

398,822

$

65.91

Entitlement Status

Fully Entitled

7

1,432,500

673,200

759,300

Entitlement In Process

6

4,618,700

662,500

3,956,200

Encumbered / Not Currently Entitling

3

222,500

16,600

205,900

Total

16

6,273,700

1,352,300

4,921,400


(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 52.
(3)Represents management's estimate of remaining deposits, option payments, and option strike prices as of June 30, 2022.
(4)Capitalized value of estimated commercial SF / multifamily units to be replaced, which generated $1.7 million of NOI for the three months ended June 30, 2022 (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 stabilized annual ground rent payments totaling $2.0 million.
(6)Represents Historical Cost plus incremental costs to access the Estimated Potential Development Density, but does not include potential entitlement costs or infrastructure costs.
(7)As of June 30, 2022, the weighted average remaining term for the optioned Future Development Pipeline assets is 2.9 year.

Graphic

Page 43


DISPOSITION AND RECAPITALIZATION ACTIVITY

JUNE 30, 2022
(Unaudited)

Disposition Activity

dollars in thousands, at JBG SMITH Share

 

Total Square Feet/

 

Estimated Potential

 

 

Development

Ownership

Density

Gross Sales

 

Assets

Percentage

Asset Type

Location

Date Disposed

(Square Feet)

Price

 

Q1 2022

The Alaire, The Terano and 12511 Parklawn Drive

 

1.8% to 18.0%

Multifamily / Future Development

 

Rockville, MD

January 27, 2022

 

51,546 / 1,170

$

15,384

Development Parcel

100.0%

Future Development

Arlington, VA

March 28, 2022

3,250

Subtotal

51,546 / 1,170

$

18,634

Q2 2022

Universal Buildings

100.0%

Commercial

Washington, DC

April 1, 2022

659,459

$

228,000

Galvan

1.8%

Multifamily

Rockville, MD

May 10, 2022

7,025

2,745

Pen Place

100.0%

Other

Arlington, VA

May 25, 2022

2,082,000

198,000

1900 N Street

55.0%

Commercial

Washington, DC

June 1, 2022

148,226

145,750

Subtotal

814,710 / 2,082,000

$

574,495

Total

 

  

 

  

 

  

 

  

 

866,256 / 2,083,170

$

593,129

Recapitalization and Other Activity:

In January 2022, we sold investments in equity securities for $17.8 million, resulting in a realized gain of $13.9 million.

On April 13, 2022, we formed an unconsolidated real estate venture with affiliates of Fortress to recapitalize a 1.6 million square foot office portfolio and land parcels valued at $580.0 million comprising four wholly owned commercial assets (7200 Wisconsin Avenue, 1730 M Street, RTC-West/RTC-West Trophy Office/RTC-West Land and Courthouse Plaza 1 and 2). Fortress contributed $131.0 million for a 66.5% interest in the venture. In connection with the transaction, the real estate venture obtained mortgage loans totaling $458.0 million secured by the properties, of which $402.0 million was drawn at closing. We provide asset management, property management and leasing services to the venture. Because our interest in the venture is subordinated to a 15% preferred return to Fortress, we do not anticipate receiving any near-term cash flow distributions from it. As of June 30, 2022, our investment in the venture was zero, and we have discontinued applying the equity method as we have not guaranteed its obligations or otherwise committed to providing financial support. These assets, as well as the associated non-recourse mortgages payable, held through an unconsolidated real estate venture are excluded from the occupancy, non-GAAP financial measures and leverage metrics presented in our investor package.

On April 29, 2022, we sold a 99-year term leasehold interest in a future development asset located in Reston, VA.

Graphic

Page 44


DEBT SUMMARY

JUNE 30, 2022
(Unaudited)

Debt Summary

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) (1)

$

$

$

$

$

$

$

Term loans ($400 million commitment) (2)

 

 

 

200,000

 

200,000

 

 

 

400,000

Total unsecured debt

 

 

 

200,000

 

200,000

 

 

 

400,000

Secured Debt:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Consolidated principal balance

 

 

276,347

 

125,805

 

391,029

 

105,000

 

722,946

 

1,621,127

Unconsolidated principal balance

 

86,550

 

108,127

 

 

33,000

 

 

52,102

 

279,779

Total secured debt

 

86,550

 

384,474

 

125,805

 

424,029

 

105,000

 

775,048

 

1,900,906

Total Consolidated and Unconsolidated Principal Balance

$

86,550

$

384,474

$

325,805

$

624,029

$

105,000

$

775,048

$

2,300,906

% of total debt maturing

 

3.8

%  

 

16.7

%  

 

14.2

%  

 

27.1

%  

 

4.6

%  

 

33.6

%  

 

100.0

% 

% floating rate (3)

 

93.6

%  

 

56.1

%  

 

 

%  

 

100.0

%  

 

83.2

%  

 

45.5

%

% fixed rate (4)

 

6.4

%  

 

43.9

%  

 

100.0

%  

 

100.0

%  

 

 

16.8

%  

 

54.5

%

Weighted Average Interest Rates

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Variable rate (5)

 

3.44

%  

 

4.60

%  

 

 

%

 

3.04

%

 

3.83

%  

 

3.88

%

Fixed rate

 

3.56

%  

 

5.13

%  

 

3.06

%  

 

3.83

%  

 

 

4.29

%  

 

3.85

%

Total Weighted Average Interest Rates

 

3.45

%  

 

4.83

%  

 

3.06

%  

 

3.83

%  

 

3.04

%  

 

3.91

%  

 

3.86

%

Credit Facility

    

Revolving

    

    

    

    

Credit

Tranche A1

Tranche A2

Total/Weighted

Facility (1)

Term Loan (5)

Term Loan (2)

Average

Credit limit

$

1,000,000

$

200,000

$

200,000

$

1,400,000

Outstanding principal balance

$

$

200,000

$

200,000

$

400,000

Letters of credit

$

467

$

$

$

467

Undrawn capacity

$

999,533

$

$

$

999,533

Interest rate spread (6)

 

1.05

%  

 

1.15

%  

 

1.15

%  

 

1.15

%  

All-In interest rate (7)

 

2.84

%  

 

2.61

%  

 

2.49

%  

 

2.55

%  

Initial maturity date

 

Jan‑25

 

Jan‑25

 

Jul‑24

 


(1)In July 2022, we borrowed $100.0 million under our revolving credit facility, and we amended the interest rate of the revolving credit facility to SOFR plus 1.15% per annum based on our current leverage level.
(2)In July 2022, our Tranche A2 Term Loan was amended to increase its borrowing capacity by $200.0 million. The incremental $200.0 million includes a one-year delayed draw feature, which was undrawn as of the date of this release. The amendment extends the maturity date of the term loan from July 2024 to January 2028 and amends the interest rate to SOFR plus 1.25% per annum based on our current leverage level with a resulting all-in interest rate of 2.59%, including our current interest rate swaps, as of the date of this release. We also entered into two forward-starting interest rate swaps with an effective date of July 2024 and a total notional value of $200.0 million, which will effectively fix SOFR at a weighted average interest rate of 2.25% through the maturity date, resulting in an all-in interest rate of 3.50% beginning in July 2024 based on our current leverage level.
(3)Floating rate debt includes floating rate loans with interest rate caps.
(4)Fixed rate debt includes floating rate loans with interest rate swaps.
(5)For floating rate loans with interest rate caps, the weighted average cap strike is 2.51% for consolidated debt, and 2.60% for all debt. The interest rate cap strike is exclusive of the credit spreads associated with the loans.
(6)The interest rate for the revolving credit facility excludes a 0.15% facility fee.
(7)The all-in interest rate is inclusive of interest rate swaps. As of June 30, 2022, we had interest rates swaps for the Tranche A-1 Term Loan and the Tranche A-2 Term Loan.

Graphic

Page 45


DEBT BY INSTRUMENT

JUNE 30, 2022
(Unaudited)

Debt by Instrument

dollars in thousands

Stated

Interest

Current

Initial

Extended

%

Principal

Interest

Rate

Annual

Maturity

Maturity

 

 

Asset

Ownership

Balance

 Rate

Hedge (1)

 

Interest Rate (2)

Date

Date (3)

 

Consolidated

2121 Crystal Drive

 

100.0

%  

$

131,535

 

5.51

%  

Fixed

 

5.51

%  

03/01/23

 

03/01/23

Falkland Chase - South & West

 

100.0

%  

 

37,312

 

3.78

%  

Fixed

 

3.78

%  

06/01/23

 

06/01/23

800 North Glebe Road

 

100.0

%  

 

107,500

 

S + 1.71

%  

 

3.40

%  

06/30/23

 

06/30/25

Credit Facility - Tranche A‑2 Term Loan (4)

 

100.0

%  

 

200,000

 

L + 1.15

%  

Swap

 

2.49

%  

07/18/24

 

07/18/24

2101 L Street

 

100.0

%  

 

125,805

 

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 (5)

 

100.0

%  

 

 

L + 1.05

%  

 

2.84

%  

01/07/25

 

01/07/25

RiverHouse Apartments

 

100.0

%  

 

307,710

 

L + 1.28

%  

Swap

 

3.47

%  

04/01/25

 

04/01/25

1900 Crystal Drive (6)

L + 3.00

%  

4.79

%  

04/25/26

04/25/26

1215 S. Clark Street

100.0

%

105,000

L + 1.25

%

3.04

%  

12/22/26

12/22/26

Credit Facility - Tranche A‑1 Term Loan

 

100.0

%  

200,000

 

S + 1.15

%  

Swap

 

2.61

%  

01/14/25

 

01/14/27

2000/2001 South Bell Street (7)

L + 2.15

%

3.94

%  

01/22/27

01/22/27

4747 Bethesda Avenue

100.0

%  

175,000

S + 1.35

%  

Cap

3.04

%  

02/20/27

02/20/27

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

%  

 

3.39

%  

07/27/28

 

07/27/28

1221 Van Street

100.0

%  

87,253

L + 2.51

%  

Cap

4.30

%  

08/01/30

08/01/30

220 20th Street

100.0

%  

80,240

L + 2.51

%  

Cap

4.30

%  

08/01/30

08/01/30

The Bartlett

100.0

%  

217,453

L + 2.51

%  

Cap

4.30

%  

08/01/30

08/01/30

Total Consolidated Principal Balance

 

 

2,021,127

 

  

 

  

 

  

 

  

 

  

Premium / (discount) recognized as a result of the Formation Transaction

 

 

528

 

  

 

  

 

  

 

  

 

  

Deferred financing costs - mortgage loans (8)

 

 

(15,225)

 

  

 

  

 

  

 

  

Deferred financing costs - credit facility (8)

 

 

(5,668)

 

  

 

  

 

  

 

  

Total Consolidated Indebtedness

$

2,000,762

 

  

 

  

 

  

 

  

Total Consolidated Indebtedness (net of premium / (discount) and deferred financing costs)

 

  

 

  

 

  

 

  

 

  

 

  

Mortgages payable

$

1,612,169

 

  

 

  

 

  

 

  

 

  

Revolving credit facility

 

 

 

  

 

  

 

  

 

  

Deferred financing costs, net (included in other assets) (8)

 

(9,907)

 

  

 

  

 

  

 

  

 

  

Unsecured term loans (4)

 

398,500

 

  

 

  

 

  

 

  

 

  

Total Consolidated Indebtedness

$

2,000,762

 

  

 

  

 

  

 

  

 

  

Graphic

Page 46


DEBT BY INSTRUMENT

JUNE 30, 2022
(Unaudited)

dollars in thousands

Stated

Interest

Current

Initial

Extended

 

%

Principal

Interest

Rate

Annual

Maturity

Maturity

Asset

Ownership

Balance

 Rate

Hedge (1)

 

Interest Rate (2)

Date

Date (3)

 

Unconsolidated

Atlantic Plumbing

64.0

%  

$

100,000

L + 1.50

%  

 

3.29

%  

11/08/22

11/08/22

Stonebridge at Potomac Town Center

10.0

%  

 

84,600

L + 2.50

%  

 

4.29

%  

12/10/22

12/10/22

L’Enfant Plaza Office - North, L’Enfant Plaza Office - East, L’Enfant Plaza Retail

49.0

%  

208,984

L + 3.65

%  

Cap

 

5.94

%  

05/09/23

05/09/24

Rosslyn Gateway - North, Rosslyn Gateway - South

18.0

%  

 

47,492

L + 2.00

%  

Cap

 

3.79

%  

08/29/22

08/29/24

The Foundry

9.9

%  

 

58,000

L + 1.40

%  

Cap

 

3.19

%  

12/12/23

12/12/24

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

%  

12/31/22

12/31/25

8001 Woodmont

50.0

%  

 

104,203

4.82

%  

Fixed

 

4.82

%  

01/15/27

01/15/27

Total Unconsolidated Principal Balance

 

774,092

 

  

 

  

 

  

 

  

Deferred financing costs

 

(597)

 

  

 

  

 

  

 

  

Total Unconsolidated Indebtedness

$

773,495

Principal Balance at JBG SMITH Share

 

 

 

  

 

  

 

  

 

  

 

  

Consolidated principal balance at JBG SMITH Share

 

$

2,021,127

 

  

 

  

 

  

 

  

 

  

Unconsolidated principal balance at JBG SMITH Share

 

279,779

 

 

  

 

 

  

 

  

Total Consolidated and Unconsolidated Principal Balance at JBG SMITH Share

$

2,300,906

 

  

 

  

 

  

 

  

 

  

Indebtedness at JBG SMITH Share (net of premium / (discount) and deferred financing costs)

 

  

 

  

 

  

 

  

 

  

Consolidated indebtedness at JBG SMITH Share

 

$

2,000,762

 

 

  

 

  

 

  

 

  

Unconsolidated indebtedness at JBG SMITH Share

279,534

Total Consolidated and Unconsolidated Indebtedness at JBG SMITH Share

2,280,296


(1)For floating rate loans with interest rate caps, the weighted average cap strike is 2.51% for consolidated debt, and 2.60% for all debt. The interest rate cap strike is exclusive of the credit spreads associated with the loans.
(2)June 30, 2022 one-month LIBOR of 1.79% or SOFR of 1.69%, as applicable, applied to loans, which are denoted as floating (no swap) or floating with a cap, except as otherwise noted.
(3)Represents the maturity date based on execution of all extension options. Many of these extensions are subject to lender covenant tests.
(4)In July 2022, our Tranche A2 Term Loan was amended to increase its borrowing capacity by $200.0 million. The incremental $200.0 million includes a one-year delayed draw feature, which was undrawn as of the date of this release. The amendment extends the maturity date of the term loan from July 2024 to January 2028 and amends the interest rate to SOFR plus 1.25% per annum based on our current leverage level with a resulting all-in interest rate of 2.59%, including our current interest rate swaps, as of the date of this release. We also entered into two forward-starting interest rate swaps with an effective date of July 2024 and a total notional value of $200.0 million, which will effectively fix SOFR at a weighted average interest rate of 2.25% through the maturity date, resulting in an all-in interest rate of 3.50% beginning in July 2024 based on our current leverage level.
(5)In July 2022, we borrowed $100.0 million under our revolving credit facility, and we amended the interest rate of the revolving credit facility to SOFR plus 1.15% per annum based on our current leverage level.
(6)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 41 for additional information.
(7)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 (4) on page 41 for additional information.
(8)As of June 30, 2022, net deferred financing costs related to an unfunded mortgage loan totaling $5.7 million and the revolving credit facility totaling $4.2 million were included in "Other assets, net" in our condensed consolidated balance sheet.

Graphic

Page 47


CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE VENTURES

JUNE 30, 2022
(Unaudited)

Unconsolidated Real

Estate Ventures

    

Asset Type

    

City

    

Submarket

    

% Ownership

    

Total Square Feet

 

Consolidated Real Estate Ventures

MRP Realty

The Wren

 

Multifamily

 

Washington, DC

 

U Street/Shaw

 

96.0

%

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

%  

399,163

L’Enfant Plaza Office - North

 

Commercial

 

Washington, DC

 

Southwest

 

49.0

%  

298,788

L’Enfant Plaza Retail

 

Commercial

 

Washington, DC

 

Southwest

 

49.0

%  

119,291

Rosslyn Gateway - North

 

Commercial

 

Arlington, VA

 

Rosslyn

 

18.0

%  

146,068

Rosslyn Gateway - South

 

Commercial

 

Arlington, VA

 

Rosslyn

 

18.0

%  

103,349

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

1,876,159

J.P. Morgan Global Alternatives (1)

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

%  

227,493

The Gale Eckington

 

Multifamily

 

Washington, DC

 

Union Market / NoMa / H Street

 

5.0

%  

466,716

Atlantic Plumbing (2)

 

Multifamily

 

Washington, DC

 

U Street/Shaw

 

64.0

%  

245,527

 

1,444,063

Graphic

Page 48


CONSOLIDATED AND UNCONSOLIDATED REAL ESTATE VENTURES

JUNE 30, 2022
(Unaudited)

Asset Type

    

City

    

Submarket

    

% Ownership

    

Total Square Feet

Canadian Pension Plan Investment Board

 

  

 

  

 

  

 

  

 

  

1101 17th Street

 

Commercial

 

Washington, DC

 

CBD

 

55.0

%  

209,108

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

%  

551,608

Berkshire Group

 

  

 

  

 

  

 

  

 

  

8001 Woodmont

 

Multifamily

 

Bethesda, MD

 

Bethesda CBD

 

50.0

%  

363,979

Total Unconsolidated Real Estate Ventures

 

 

  

 

  

 

  

 

7,725,417


Note:  Total SF at 100% share.

(1)J.P. Morgan Global Alternatives is the advisor for an institutional investor.
(2)On August 1, 2022, we acquired the remaining 36.0% interest for $19.7 million.

Graphic

Page 49


DEFINITIONS

JUNE 30, 2022

Definitions

"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 June 30, 2022, 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 June 30, 2022, 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 investments, 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 June 30, 2022, 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 June 30, 2022. 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.

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Page 50


DEFINITIONS

JUNE 30, 2022

"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. For Future Development assets, Estimated Total Investment represents Historical Cost plus incremental costs to access the Estimated Potential Development Density, but does not include potential entitlement costs or infrastructure costs.

"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 the 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 investments, 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.

Graphic

Page 51


DEFINITIONS

JUNE 30, 2022

"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 June 30, 2022.

"In-Service" refers to commercial or multifamily operating assets that are at or above 90% leased or have been operating and collecting rent for more than 12 months as of June 30, 2022.

"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 June 30, 2022 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 June 30, 2022 multiplied by four. Due to seasonality in the hospitality business, Annualized NOI for Crystal City Marriott represents the trailing 12-month NOI as of June 30, 2022. 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

Graphic

Page 52


DEFINITIONS

JUNE 30, 2022

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.

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 June 30, 2022, 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 June 30, 2022, 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 June 30, 2022.

"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 June 30, 2022, have been executed but for which rent has not commenced.

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Page 53


DEFINITIONS

JUNE 30, 2022

"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 assets, management's estimate of approximate rentable square feet based on current design plans as of June 30, 2022, 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 June 30, 2022.

"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 June 30, 2022.

.

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Page 54


APPENDIX – TRANSACTION AND OTHER COSTS

JUNE 30, 2022

  

Three Months Ended

dollars in thousands

    

Q2 2022

    

Q1 2022

    

Q4 2021

    

Q3 2021

    

Q2 2021

 

Transaction and Other Costs

 

  

 

  

  

  

  

Demolition costs

$

406

$

22

$

704

$

1,422

$

439

Integration and severance costs

 

727

 

145

 

422

 

154

 

222

Completed, potential and pursued transaction expenses

 

854

 

732

 

392

 

1,375

 

1,609

Total (1)

$

1,987

$

899

$

1,518

$

2,951

$

2,270


(1)For Q1 2022 and Q4 2021, excludes $34,000 and $0.6 million of transaction costs attributable to noncontrolling interests.

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Page 55


APPENDIX - EBITDA, EBITDAre AND ADJUSTED EBITDA RECONCILIATIONS (NON-GAAP)

JUNE 30, 2022
(Unaudited)

Are Appendix – EBITDAAre and Adjusted EBITDA

Three Months Ended

dollars in thousands

    

Q2 2022

    

Q1 2022

    

Q4 2021

    

Q3 2021

    

Q2 2021

 

 

EBITDA, EBITDAre and Adjusted EBITDA

 

  

 

  

  

  

  

Net income (loss)

$

141,494

$

(77)

$

(63,334)

$

996

$

(3,318)

Depreciation and amortization expense

 

49,479

 

58,062

 

58,173

 

56,726

 

56,678

Interest expense

 

16,041

 

16,278

 

17,649

 

17,243

 

16,773

Income tax expense (benefit)

 

2,905

 

(471)

 

(986)

 

217

 

(5)

Unconsolidated real estate ventures allocated share of above adjustments

 

9,494

 

9,829

 

9,696

 

10,147

 

10,581

EBITDA attributable to noncontrolling interests

 

(47)

 

(26)

 

546

 

(54)

 

(41)

EBITDA

$

219,366

$

83,595

$

21,744

$

85,275

$

80,668

(Gain) loss on the sale of real estate

 

(158,767)

 

136

 

 

 

(11,290)

Gain on the sale of unconsolidated real estate assets

 

(936)

 

(5,243)

 

 

(23,137)

 

(5,189)

Real estate impairment loss (1)

25,144

Impairment related to unconsolidated real estate ventures (2)

23,883

1,380

EBITDAre

$

59,663

$

78,488

$

70,771

$

63,518

$

64,189

Transaction and Other Costs (3)

 

1,987

 

865

 

888

 

2,951

 

2,270

Business interruption insurance proceeds

(4,517)

Income from investments, net

(1,217)

(14,071)

(3,620)

Loss on the extinguishment of debt

 

1,038

 

591

 

 

 

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

 

1,577

 

2,244

 

3,459

 

3,480

 

4,441

Earnings and distributions in excess of our investment in unconsolidated real estate venture

 

(124)

 

(441)

 

(181)

 

(280)

 

(92)

Lease liability adjustments

(134)

Unconsolidated real estate ventures allocated share of above adjustments

 

1,841

 

204

 

(497)

 

130

 

9

Adjusted EBITDA

$

64,765

$

67,880

$

66,169

$

69,799

$

70,817

Net Debt to Annualized Adjusted EBITDA (4)

8.1

x

 

9.6

x

 

9.6

x

 

7.9

x

 

7.6

x

Net Debt (at JBG SMITH Share)

    

June 30, 2022

    

March 31, 2022

    

December 31, 2021

    

September 30, 2021

    

June 30, 2021

 

Consolidated indebtedness (5)

$

2,000,762

$

2,464,640

$

2,464,927

$

2,063,426

$

1,979,494

Unconsolidated indebtedness (5)

 

279,534

 

362,861

 

370,743

 

362,698

 

399,262

Total consolidated and unconsolidated indebtedness

 

2,280,296

 

2,827,501

 

2,835,670

 

2,426,124

 

2,378,756

Less: cash and cash equivalents

 

181,882

 

207,568

 

282,097

 

213,612

 

217,543

Net Debt (at JBG SMITH Share)

$

2,098,414

$

2,619,933

$

2,553,573

$

2,212,512

$

2,161,213


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 totaling $25.1 million.
(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 Q1 2022 and Q4 2021, excludes $34,000 and $0.6 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.

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Page 56


APPENDIX - FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)

JUNE 30, 2022
(Unaudited)

Appendix – FFO, Core FFO and FAD

    

Three Months Ended

 

 

in thousands, except per share data

    

Q2 2022

    

Q1 2022

    

Q4 2021

    

Q3 2021

    

Q2 2021

 

FFO and Core FFO

  

 

  

 

  

 

  

 

  

Net income (loss) attributable to common shareholders

$

123,275

$

(32)

$

(56,446)

$

893

$

(2,973)

Net income (loss) attributable to redeemable noncontrolling interests

 

18,248

 

10

 

(6,256)

 

103

 

(345)

Net loss attributable to noncontrolling interests

 

(29)

 

(55)

 

(632)

 

 

Net income (loss)

 

141,494

 

(77)

 

(63,334)

 

996

 

(3,318)

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

 

(155,642)

 

136

 

 

 

(11,290)

Gain on the sale of unconsolidated real estate assets

 

(936)

 

(5,243)

 

 

(23,137)

 

(5,189)

Real estate depreciation and amortization

 

47,242

 

55,517

 

55,902

 

54,547

 

54,475

Real estate impairment loss, net of tax (1)

24,301

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

 

6,416

 

6,870

 

6,626

 

7,002

 

7,277

FFO attributable to noncontrolling interests

 

(47)

 

(26)

 

546

 

(54)

 

(41)

FFO Attributable to OP Units

$

38,527

$

57,177

$

47,924

$

40,734

$

41,914

FFO attributable to redeemable noncontrolling interests

 

(4,966)

 

(5,877)

 

(4,792)

 

(4,703)

 

(4,054)

FFO Attributable to Common Shareholders

$

33,561

$

51,300

$

43,132

$

36,031

$

37,860

FFO attributable to OP Units

$

38,527

$

57,177

$

47,924

$

40,734

$

41,914

Transaction and Other Costs, net of tax (3)

 

1,892

 

843

 

865

 

2,928

 

2,241

Business interruption insurance proceeds

(4,517)

Income from investments, net

(957)

(10,538)

(2,711)

(Gain) loss from mark-to-market on derivative instruments

 

(2,027)

 

(3,367)

 

(292)

 

37

 

46

Loss on the extinguishment of debt

 

1,038

 

591

 

 

 

Earnings and distributions in excess of our investment in unconsolidated real estate venture

 

(124)

 

(441)

 

(181)

 

(280)

 

(92)

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

 

1,577

 

2,244

 

3,459

 

3,480

 

4,441

Lease liability adjustments

 

 

 

(134)

 

 

Amortization of management contracts intangible, net of tax

 

1,106

 

1,105

 

1,073

 

1,072

 

1,073

Unconsolidated real estate ventures allocated share of above adjustments

 

1,593

 

(48)

 

(543)

 

112

 

6

Core FFO Attributable to OP Units

$

42,625

$

47,566

$

44,943

$

48,083

$

49,629

Core FFO attributable to redeemable noncontrolling interests

 

(5,494)

 

(4,889)

 

(4,494)

 

(5,552)

 

(4,800)

Core FFO Attributable to Common Shareholders

$

37,131

$

42,677

$

40,449

$

42,531

$

44,829

FFO per diluted common share

$

0.28

$

0.40

$

0.33

$

0.27

$

0.29

Core FFO per diluted common share

$

0.31

$

0.34

$

0.31

$

0.32

$

0.34

Weighted average shares - diluted (FFO and Core FFO)

 

121,327

 

126,688

 

129,009

 

131,351

 

131,485

See footnotes on page 58.

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Page 57


APPENDIX - FFO, CORE FFO AND FAD RECONCILIATIONS (NON-GAAP)

JUNE 30, 2022
(Unaudited)

in thousands, except per share data

    

Three Months Ended

 

    

Q2 2022

    

Q1 2022

    

Q4 2021

    

Q3 2021

    

Q2 2021

 

 

FAD

  

 

  

 

  

 

  

 

  

Core FFO attributable to OP Units

$

42,625

$

47,566

$

44,943

$

48,083

$

49,629

Recurring capital expenditures and Second-generation tenant improvements and leasing commissions (4)

 

(13,300)

 

(13,702)

 

(21,773)

 

(12,124)

 

(12,226)

Straight-line and other rent adjustments (5)

 

(1,978)

 

(1,791)

 

(2,985)

 

(3,701)

 

(4,088)

Third-party lease liability assumption payments

 

(25)

 

 

 

(422)

 

(703)

Share-based compensation expense

 

10,171

 

10,493

 

9,663

 

7,805

 

9,045

Amortization of debt issuance costs

 

1,135

 

1,176

 

1,142

 

1,126

 

1,096

Unconsolidated real estate ventures allocated share of above adjustments

 

(289)

 

(648)

 

(1,332)

 

(1,478)

 

(1,333)

Non-real estate depreciation and amortization

 

760

 

1,068

 

795

 

703

 

727

FAD available to OP Units (A)

$

39,099

$

44,162

$

30,453

$

39,992

$

42,147

Distributions to common shareholders and unitholders (B)

$

31,768

$

32,603

$

33,137

$

33,688

$

33,511

FAD Payout Ratio (B÷A) (6)

81.3

%

 

73.8

%  

 

108.8

%  

 

84.2

%  

 

79.5

% 

Capital Expenditures

 

  

 

  

 

  

 

  

 

  

Maintenance and recurring capital expenditures

$

6,091

$

4,820

$

8,121

$

7,404

$

4,376

Share of maintenance and recurring capital expenditures from unconsolidated real estate ventures

 

312

 

82

 

168

 

265

 

324

Second-generation tenant improvements and leasing commissions

 

6,713

 

8,594

 

12,815

 

3,762

 

7,454

Share of Second-generation tenant improvements and leasing commissions from unconsolidated real estate ventures

 

184

 

206

 

669

 

693

 

72

Recurring capital expenditures and Second-generation tenant improvements and leasing commissions

 

13,300

 

13,702

 

21,773

 

12,124

 

12,226

Non-recurring capital expenditures

 

13,552

 

12,810

 

15,008

 

5,885

 

4,352

Share of non-recurring capital expenditures from unconsolidated real estate ventures

 

37

 

12

 

145

 

177

 

56

First-generation tenant improvements and leasing commissions

 

4,197

 

4,450

 

6,229

 

2,603

 

1,703

Share of First-generation tenant improvements and leasing commissions from unconsolidated real estate ventures

 

244

 

473

 

987

 

93

 

199

Non-recurring capital expenditures

 

18,030

 

17,745

 

22,369

 

8,758

 

6,310

Total JBG SMITH Share of Capital Expenditures

$

31,330

$

31,447

$

44,142

$

20,882

$

18,536


(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 totaling $25.1 million ($24.3 million after tax).
(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 Q1 2022 and Q4 2021, excludes $34,000 and $0.6 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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Page 58


APPENDIX - NOI RECONCILIATIONS (NON-GAAP)

JUNE 30, 2022
(Unaudited)

Appendix – NOI Reconciliations

in thousands

    

Three Months Ended

 

    

Q2 2022

    

Q1 2022

    

Q4 2021

    

Q3 2021

    

Q2 2021

 

 

Net income (loss) attributable to common shareholders

$

123,275

$

(32)

$

(56,446)

$

893

$

(2,973)

Add:

 

  

 

  

 

  

 

  

 

  

Depreciation and amortization expense

 

49,479

 

58,062

 

58,173

 

56,726

 

56,678

General and administrative expense:

 

  

 

  

 

  

 

  

 

  

Corporate and other

 

14,782

 

15,815

 

15,344

 

12,105

 

13,895

Third-party real estate services

 

24,143

 

27,049

 

27,124

 

25,542

 

25,557

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

 

1,577

 

2,244

 

3,459

 

3,480

 

4,441

Transaction and Other Costs

 

1,987

 

899

 

1,518

 

2,951

 

2,270

Interest expense

 

16,041

 

16,278

 

17,649

 

17,243

 

16,773

Loss on the extinguishment of debt

 

1,038

 

591

 

 

 

Impairment loss

25,144

Income tax expense (benefit)

 

2,905

 

(471)

 

(986)

 

217

 

(5)

Net income (loss) attributable to redeemable noncontrolling interests

 

18,248

 

10

 

(6,256)

 

103

 

(345)

Net loss attributable to noncontrolling interests

(29)

(55)

(632)

Less:

 

  

 

  

 

  

 

  

 

  

Third-party real estate services, including reimbursements revenue

 

22,157

 

23,970

 

23,309

 

25,842

 

26,745

Other income

 

1,798

 

2,196

 

2,013

 

1,568

 

1,904

Income (loss) from unconsolidated real estate ventures, net

 

(2,107)

 

3,145

 

(25,583)

 

20,503

 

3,953

Interest and other income (loss), net

 

1,672

 

14,246

 

8,672

 

192

 

(38)

Gain (loss) on the sale of real estate

 

158,767

 

(136)

 

 

 

11,290

Consolidated NOI

 

71,159

 

76,969

 

75,680

 

71,155

 

72,437

NOI attributable to unconsolidated real estate ventures at our share

 

8,321

 

6,967

 

6,289

 

7,336

 

8,109

Non-cash rent adjustments (1)

 

(1,978)

 

(1,791)

 

(2,985)

 

(3,701)

 

(4,088)

Other adjustments (2)

 

5,695

 

8,760

 

6,107

 

4,683

 

5,191

Total adjustments

 

12,038

 

13,936

 

9,411

 

8,318

 

9,212

NOI

$

83,197

$

90,905

$

85,091

$

79,473

$

81,649

Less: out-of-service NOI loss (3)

 

(2,046)

 

(1,448)

(1,745)

(2,019)

(1,329)

Operating portfolio NOI

$

85,243

$

92,353

$

86,836

$

81,492

$

82,978


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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Page 59


Graphic

JBGS Divider