JBGS JBG SMITH Properties

JBG SMITH (NYSE: JBGS), a leading owner, operator, and developer of high-quality, mixed-use properties in the Washington, DC market, today filed its Form 10-K for the year ended December 31, 2024 and reported its financial results.

Additional information regarding our results of operations, properties, and tenants can be found in our Fourth Quarter 2024 Investor Package, which is posted in the Investor Relations section of our website at www.jbgsmith.com. We encourage investors to consider the information presented here with the information in that document.

Fourth Quarter 2024 Highlights

• Net loss, Funds From Operations ("FFO") and Core FFO attributable to common shareholders were:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FOURTH QUARTER AND FULL YEAR COMPARISON

in millions, except per share amounts

 

Three Months Ended

 

Year Ended

 

 

December 31, 2024

 

December 31, 2023

 

December 31, 2024

 

December 31, 2023

Amount

Per Diluted Share

Amount

Per Diluted Share

Amount

Per Diluted Share

Amount

Per Diluted Share

Net loss (1) (2)

 

$

(59.9

)

$

(0.72

)

 

$

(32.6

)

$

(0.35

)

 

$

(143.5

)

$

(1.65

)

 

$

(80.0

)

$

(0.78

)

FFO (2)

 

$

11.1

 

$

0.13

 

 

$

33.9

 

$

0.35

 

 

$

55.6

 

$

0.63

 

 

$

140.4

 

$

1.33

 

Core FFO

 

$

11.6

 

$

0.14

 

 

$

36.1

 

$

0.38

 

 

$

73.9

 

$

0.83

 

 

$

154.1

 

$

1.46

 

_____________

(1)

Includes gain (loss) on the sale of real estate of $2.3 million and $(2.8) million for the three months and the year ended December 31, 2024. Includes gain on the sale of real estate of $37.7 million and $79.3 million for the three months and the year ended December 31, 2023. Includes impairment losses of $43.9 million and $62.2 million related to real estate assets for the three months and the year ended December 31, 2024. Includes impairment losses of $30.9 million and $90.2 million related to real estate assets for the three months and the year ended December 31, 2023.

(2)

Includes impairment losses of $6.7 million and $25.0 million related to non-depreciable real estate assets for the three months and year ended December 31, 2024.

• Annualized Net Operating Income ("NOI") for the three months ended December 31, 2024 was $272.6 million, compared to $282.4 million for the three months ended September 30, 2024, at our share. Excluding the assets that were sold or taken out of service, Annualized NOI for the three months ended December 31, 2024 was $267.6 million, compared to $266.5 million for the three months ended September 30, 2024, at our share.
  • The slight increase in Annualized NOI excluding the assets that were sold or taken out of service was substantially attributable to (i) lower concessions in line with the seasonality of leasing in our multifamily portfolio as well as the continued lease-up of The Grace and Reva; almost entirely offset by (ii) lower occupancy in our commercial portfolio.
• Same Store NOI ("SSNOI") at our share decreased 6.5% quarter-over-quarter to $64.1 million for the three months ended December 31, 2024.
  • The decrease in SSNOI was substantially attributable to (i) lower occupancy in our commercial portfolio, and (ii) higher repair and maintenance expenses and lower occupancy, partially offset by higher rents in our multifamily portfolio.

Operating Portfolio

• The operating multifamily portfolio was 92.9% leased and 91.0% occupied as of December 31, 2024, compared to 92.7% and 90.6% as of September 30, 2024. Our operating In-Service multifamily portfolio was 96.2% leased and 94.8% occupied as of December 31, 2024, compared to 97.0% and 95.7% as of September 30, 2024.
• In our Same Store multifamily portfolio, we increased effective rents by 0.8% for new leases and 4.6% upon renewal for fourth quarter lease expirations while achieving a 60.0% renewal rate.
• The operating commercial portfolio was 78.6% leased and 76.5% occupied as of December 31, 2024, compared to 80.7% and 79.1% as of September 30, 2024, at our share.
• Executed approximately 118,000 square feet of office leases at our share during the three months ended December 31, 2024, including approximately 83,000 square feet of new leases. Second-generation leases generated a 3.0% rental rate decrease on a cash basis and a 10.9% rental rate increase on a GAAP basis.
• Executed approximately 614,000 square feet of office leases at our share during the year ended December 31, 2024, including approximately 324,000 square feet of new leases. Second-generation leases generated a 1.0% rental rate increase on a cash basis and a 9.8% rental rate increase on a GAAP basis.

Development Portfolio

Under-Construction

• As of December 31, 2024, we had one multifamily asset under construction consisting of 775 units at our share.

Development Pipeline

• As of December 31, 2024, we had 19 assets in the development pipeline consisting of 8.9 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 December 31, 2024, revenue from third-party real estate services, including reimbursements, was $17.1 million. Excluding reimbursements and service revenue from our interests in real estate ventures, revenue from our third-party asset management and real estate services business was $8.7 million, primarily driven by $5.0 million of property and asset management fees, $1.6 million of development fees and $1.2 million of other service revenue.

Balance Sheet

• As of December 31, 2024, our total enterprise value was approximately $4.0 billion, comprising 98.2 million common shares and units valued at $1.5 billion, and debt (net of premium / (discount) and deferred financing costs) at our share of $2.6 billion, less cash and cash equivalents at our share of $150.8 million.
• As of December 31, 2024, we had $145.8 million of cash and cash equivalents ($150.8 million of cash and cash equivalents at our share), and $649.8 million of availability under our revolving credit facility.
• Net Debt to annualized Adjusted EBITDA at our share for the three months ended December 31, 2024 was 11.7x, and our Net Debt / total enterprise value was 62.1% as of December 31, 2024.

Investing and Financing Activities

• In November 2024, the mortgage loan collateralized by The Grace and Reva was refinanced with a five-year interest-only $273.6 million mortgage loan with a fixed interest rate of 5.19%.
• In December 2024, we sold 2101 L Street, a commercial asset with 375,493 square feet in Washington, DC, for $110.1 million. In connection with the disposition, the lender of the related $120.9 million mortgage loan accepted the proceeds from the sale as repayment of the mortgage loan.
• During the fourth quarter of 2024, we repurchased and retired 153,843 common shares for $2.4 million, a weighted average purchase price per share of $15.58.

Subsequent to December 31, 2024

• Through February 14, 2025, we repurchased and retired 2.1 million common shares for $32.3 million, a weighted average purchase price per share of $15.15, pursuant to a repurchase plan under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended.

Dividends

• On December 16, 2024, our Board of Trustees declared a quarterly dividend of $0.175 per common share, paid on January 14, 2025 to shareholders of record as of December 30, 2024.

About JBG SMITH

JBG SMITH owns, operates and develops mixed-use properties concentrated in amenity-rich, Metro-served submarkets in and around Washington, DC, most notably National Landing, that we believe have long-term growth potential and appeal to residential, office and retail tenants. Through an intense focus on placemaking, JBG SMITH cultivates vibrant, highly amenitized, walkable neighborhoods throughout the Washington, DC metropolitan area. Approximately 75.0% of JBG SMITH's holdings are in the National Landing submarket in Northern Virginia, which is anchored by four key demand drivers: Amazon's headquarters; Virginia Tech's $1 billion Innovation Campus; proximity to the Pentagon; and our placemaking initiatives and public infrastructure improvements. JBG SMITH's dynamic portfolio currently comprises 12.5 million square feet of multifamily, office and retail assets at share, 98% of which are Metro-served. It also maintains a development pipeline encompassing 8.9 million square feet of mixed-use, primarily multifamily, 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. We also note the following forward-looking statements: whether in the case of our under-construction assets and assets in the development pipeline, estimated square feet, estimated number of units and estimated potential development density are accurate; expected timing, completion, modifications and delivery dates for the projects we are developing; the ability of any or all of our demand drivers to materialize and their effect on economic impact, job growth, expansion of public transportation and related demand in the National Landing submarket; planned infrastructure and educational improvements related to Amazon's headquarters and the Virginia Tech Innovation Campus; our development plans related to National Landing; and our plans to maintain carbon neutral operations annually.

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, 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, 2024 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.

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 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 consolidated financial statements as reported under GAAP.

Occupancy, non-GAAP financial measures, leverage metrics, operating assets and operating 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 mortgage loans, 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 we have not guaranteed their obligations or otherwise committed to providing financial support.

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 caps) and certain non-cash expenses (primarily depreciation and amortization expense 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 expense, gains (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 for 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 non-depreciable real estate, 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, litigation settlement 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 expense related to real estate, gains (losses) from the sale of certain real estate assets, gains (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 which we believe are not representative of ongoing operating results, such as Transaction and Other Costs, impairment write-downs of non-depreciable real estate, gain (loss) 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, litigation settlement 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 adjusted for recurring tenant improvements, leasing commissions and other capital expenditures, net deferred rent activity, third-party lease liability assumption (payments) refunds, 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, which implicitly assumes that the value of real estate diminishes predictably over time rather than fluctuating based on market conditions, and other non-comparable income and expenses. FFO, 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"), "Same Store NOI" and "Annualized NOI" are non-GAAP financial measures management uses to assess an asset's performance. The most directly comparable GAAP measure is net income (loss) attributable to common shareholders. We use NOI internally as a performance measure and believe NOI, Same Store NOI and Annualized NOI provide 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 excludes deferred (straight-line) rent, commercial lease termination revenue, 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, which includes our proportionate share of revenue and expenses attributable to real estate ventures, as a supplemental performance measure and believes it provides useful information to investors because it reflects only those revenue and expense items that are incurred at the asset level, excluding non-cash items. In addition, NOI is considered by many in the real estate industry to be a useful starting point for determining the value of a real estate asset or group of assets. However, because NOI excludes depreciation and amortization expense and captures neither the changes in the value of our assets that result from use or market conditions, nor the level of capital expenditures and capitalized leasing commissions necessary to maintain the operating performance of our assets, all of which have real economic effect and could materially impact the financial performance of our assets, the utility of NOI as a measure of the operating performance of our assets is limited. NOI presented by us may not be comparable to NOI reported by other REITs that define these measures differently. We believe to facilitate a clear understanding of our operating results, NOI should be examined in conjunction with net income (loss) attributable to common shareholders as presented in our consolidated financial statements. NOI should not be considered as an alternative to net income (loss) attributable to common shareholders as an indication of our performance or to cash flows as a measure of liquidity or our ability to make distributions. Annualized NOI represents NOI for the three months ended December 31, 2024 multiplied by four. 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.

Definitions

"Development Pipeline" refers to assets that have the potential to commence construction subject to receipt of full entitlements, completion of design and/or market conditions 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.

"Estimated Potential Development Density" reflects management's estimate of developable gross square feet based on our current business plans with respect to real estate owned or controlled as of December 31, 2024. 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.

"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).

"GAAP" means accounting principles generally accepted in the United States of America.

"In-Service" refers to multifamily or commercial operating assets that are at or above 90% leased or have been operating and collecting rent for more than 12 months as of December 31, 2024.

"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, excluding 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.

"Transaction and Other Costs" include costs related to completed, potential and pursued transactions, demolition costs, and severance and other costs.

"Under-Construction" refers to assets that were under construction during the three months ended December 31, 2024.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

 

 

 

 

in thousands

 

December 31, 2024

 

December 31, 2023

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Real estate, at cost:

 

 

 

 

 

 

Land and improvements

 

$

1,109,172

 

 

$

1,194,737

 

Buildings and improvements

 

 

4,083,937

 

 

 

4,021,322

 

Construction in progress, including land

 

 

338,333

 

 

 

659,103

 

 

 

 

5,531,442

 

 

 

5,875,162

 

Less: accumulated depreciation

 

 

(1,419,983

)

 

 

(1,338,403

)

Real estate, net

 

 

4,111,459

 

 

 

4,536,759

 

Cash and cash equivalents

 

 

145,804

 

 

 

164,773

 

Restricted cash

 

 

37,388

 

 

 

35,668

 

Tenant and other receivables

 

 

23,478

 

 

 

44,231

 

Deferred rent receivable

 

 

170,153

 

 

 

171,229

 

Investments in unconsolidated real estate ventures

 

 

93,654

 

 

 

264,281

 

Deferred leasing costs, net

 

 

69,821

 

 

 

81,477

 

Intangible assets, net

 

 

47,000

 

 

 

56,616

 

Other assets, net

 

 

131,318

 

 

 

163,481

 

Assets held for sale

 

 

190,465

 

 

 

—

 

TOTAL ASSETS

 

$

5,020,540

 

 

$

5,518,515

 

 

 

 

 

 

 

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Mortgage loans, net

 

$

1,767,173

 

 

$

1,783,014

 

Revolving credit facility

 

 

85,000

 

 

 

62,000

 

Term loans, net

 

 

717,853

 

 

 

717,172

 

Accounts payable and accrued expenses

 

 

101,096

 

 

 

124,874

 

Other liabilities, net

 

 

115,827

 

 

 

138,869

 

Liabilities related to assets held for sale

 

 

901

 

 

 

—

 

Total liabilities

 

 

2,787,850

 

 

 

2,825,929

 

Commitments and contingencies

 

 

 

 

 

 

Redeemable noncontrolling interests

 

 

423,632

 

 

 

440,737

 

Total equity

 

 

1,809,058

 

 

 

2,251,849

 

TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY

 

$

5,020,540

 

 

$

5,518,515

 

Note: For complete financial statements, please refer to our Annual Report on Form 10-K for the year ended December 31, 2024.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in thousands, except per share data

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

Property rental

 

$

108,429

 

 

$

118,240

 

 

$

456,950

 

 

$

483,159

 

Third-party real estate services, including reimbursements

 

 

17,139

 

 

 

22,463

 

 

 

69,465

 

 

 

92,051

 

Other revenue

 

 

5,214

 

 

 

6,876

 

 

 

20,897

 

 

 

28,988

 

Total revenue

 

 

130,782

 

 

 

147,579

 

 

 

547,312

 

 

 

604,198

 

EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

49,969

 

 

 

57,281

 

 

 

208,180

 

 

 

210,195

 

Property operating

 

 

35,818

 

 

 

34,937

 

 

 

146,609

 

 

 

144,049

 

Real estate taxes

 

 

12,600

 

 

 

13,607

 

 

 

52,606

 

 

 

57,668

 

General and administrative:

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 

14,935

 

 

 

12,376

 

 

 

58,790

 

 

 

54,838

 

Third-party real estate services

 

 

17,199

 

 

 

21,615

 

 

 

74,264

 

 

 

88,948

 

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

 

 

—

 

 

 

152

 

 

 

—

 

 

 

549

 

Transaction and other costs

 

 

2,312

 

 

 

943

 

 

 

5,317

 

 

 

8,737

 

Total expenses

 

 

132,833

 

 

 

140,911

 

 

 

545,766

 

 

 

564,984

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

 

 

 

Loss from unconsolidated real estate ventures, net

 

 

(7,126

)

 

 

(25,679

)

 

 

(7,122

)

 

 

(26,999

)

Interest and other income, net

 

 

1,493

 

 

 

1,649

 

 

 

11,598

 

 

 

15,781

 

Interest expense

 

 

(36,668

)

 

 

(28,080

)

 

 

(134,068

)

 

 

(108,660

)

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

 

 

2,313

 

 

 

37,729

 

 

 

(2,753

)

 

 

79,335

 

Gain (loss) on the extinguishment of debt

 

 

9,192

 

 

 

—

 

 

 

9,235

 

 

 

(450

)

Impairment loss

 

 

(37,191

)

 

 

(30,919

)

 

 

(55,427

)

 

 

(90,226

)

Total other income (expense)

 

 

(67,987

)

 

 

(45,300

)

 

 

(178,537

)

 

 

(131,219

)

LOSS BEFORE INCOME TAX (EXPENSE) BENEFIT

 

 

(70,038

)

 

 

(38,632

)

 

 

(176,991

)

 

 

(92,005

)

Income tax (expense) benefit

 

 

(802

)

 

 

968

 

 

 

(762

)

 

 

296

 

NET LOSS

 

 

(70,840

)

 

 

(37,664

)

 

 

(177,753

)

 

 

(91,709

)

Net loss attributable to redeemable noncontrolling interests

 

 

9,849

 

 

 

4,635

 

 

 

22,202

 

 

 

10,596

 

Net loss attributable to noncontrolling interests

 

 

1,094

 

 

 

432

 

 

 

12,025

 

 

 

1,135

 

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

 

$

(59,897

)

 

$

(32,597

)

 

$

(143,526

)

 

$

(79,978

)

LOSS PER COMMON SHARE - BASIC AND DILUTED

 

$

(0.72

)

 

$

(0.35

)

 

$

(1.65

)

 

$

(0.78

)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED

 

 

84,441

 

 

 

95,434

 

 

 

88,330

 

 

 

105,095

 

 

Note: For complete financial statements, please refer to our Annual Report on Form 10-K for the year ended December 31, 2024.

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

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

dollars in thousands

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA, EBITDAre and Adjusted EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(70,840

)

 

$

(37,664

)

 

$

(177,753

)

 

$

(91,709

)

 

Depreciation and amortization expense

 

 

49,969

 

 

 

57,281

 

 

 

208,180

 

 

 

210,195

 

 

Interest expense

 

 

36,668

 

 

 

28,080

 

 

 

134,068

 

 

 

108,660

 

 

Income tax expense (benefit)

 

 

802

 

 

 

(968

)

 

 

762

 

 

 

(296

)

 

Unconsolidated real estate ventures allocated share of above adjustments

 

 

1,947

 

 

 

3,892

 

 

 

8,166

 

 

 

16,673

 

 

EBITDA attributable to noncontrolling interests

 

 

—

 

 

 

32

 

 

 

—

 

 

 

28

 

 

EBITDA

 

$

18,546

 

 

$

50,653

 

 

$

173,423

 

 

$

243,551

 

 

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

 

 

(2,313

)

 

 

(37,729

)

 

 

2,753

 

 

 

(79,335

)

 

(Gain) loss on the sale of unconsolidated real estate assets

 

 

—

 

 

 

230

 

 

 

(480

)

 

 

(411

)

 

Real estate impairment loss

 

 

37,191

 

 

 

30,919

 

 

 

37,191

 

 

 

90,226

 

 

Impairment loss related to unconsolidated real estate ventures (1)

 

 

—

 

 

 

25,279

 

 

 

—

 

 

 

28,598

 

 

EBITDAre

 

$

53,424

 

 

$

69,352

 

 

$

212,887

 

 

$

282,629

 

 

Transaction and other costs, net of noncontrolling interests (2)

 

 

2,312

 

 

 

943

 

 

 

5,317

 

 

 

8,737

 

 

Litigation settlement proceeds, net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(3,455

)

 

(Income) loss from investments, net

 

 

(64

)

 

 

182

 

 

 

(3,270

)

 

 

(932

)

 

Impairment loss related to non-depreciable real estate (3)

 

 

6,748

 

 

 

—

 

 

 

24,984

 

 

 

—

 

 

(Gain) loss on the extinguishment of debt

 

 

(9,192

)

 

 

—

 

 

 

(9,235

)

 

 

450

 

 

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

 

 

—

 

 

 

152

 

 

 

—

 

 

 

549

 

 

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

 

 

(309

)

 

 

(118

)

 

 

(1,315

)

 

 

(706

)

 

Lease liability adjustments

 

 

—

 

 

 

6

 

 

 

—

 

 

 

(148

)

 

Unconsolidated real estate ventures allocated share of above adjustments

 

 

—

 

 

 

27

 

 

 

227

 

 

 

60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

52,919

 

 

$

70,544

 

 

$

229,595

 

 

$

287,184

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Debt to Annualized Adjusted EBITDA (4)

 

 

11.7

 

 

8.7

 

 

10.8

 

 

8.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2024

 

December 31, 2023

 

Net Debt (at JBG SMITH Share)

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated indebtedness (5)

 

 

 

 

 

 

 

$

2,562,746

 

 

$

2,551,987

 

 

Unconsolidated indebtedness (5)

 

 

 

 

 

 

 

 

66,834

 

 

 

66,271

 

 

Total consolidated and unconsolidated indebtedness

 

 

 

 

 

 

 

 

2,629,580

 

 

 

2,618,258

 

 

Less: cash and cash equivalents

 

 

 

 

 

 

 

 

150,813

 

 

 

171,631

 

 

Net Debt (at JBG SMITH Share)

 

 

 

 

 

 

 

$

2,478,767

 

 

$

2,446,627

 

 

Note: All EBITDA measures as shown above are attributable to common limited partnership units ("OP Units") and certain fully vested incentive equity awards that may be convertible into OP Units.

(1)

Related to decreases in the value of the underlying real estate assets.

(2)

Includes costs related to completed, potential and pursued transactions, demolition costs, severance and other costs.

(3)

Includes our proportionate share of impairment losses of $6.7 million related to unconsolidated real estate ventures for the three months and year ended December 31, 2024.

(4)

Quarterly Adjusted EBITDA is annualized by multiplying by four.

(5)

Net of premium/discount and deferred financing costs.

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

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

in thousands, except per share data

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO and Core FFO

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to common shareholders

$

(59,897

)

 

$

(32,597

)

 

$

(143,526

)

 

$

(79,978

)

 

Net loss attributable to redeemable noncontrolling interests

 

(9,849

)

 

 

(4,635

)

 

 

(22,202

)

 

 

(10,596

)

 

Net loss attributable to noncontrolling interests

 

(1,094

)

 

 

(432

)

 

 

(12,025

)

 

 

(1,135

)

 

Net loss

 

(70,840

)

 

 

(37,664

)

 

 

(177,753

)

 

 

(91,709

)

 

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

 

(2,313

)

 

 

(37,729

)

 

 

1,541

 

 

 

(79,335

)

 

(Gain) loss on the sale of unconsolidated real estate assets

 

—

 

 

 

230

 

 

 

(480

)

 

 

(411

)

 

Real estate depreciation and amortization

 

48,307

 

 

 

55,588

 

 

 

201,510

 

 

 

203,269

 

 

Real estate impairment loss

 

37,191

 

 

 

30,919

 

 

 

37,191

 

 

 

90,226

 

 

Impairment loss related to unconsolidated real estate ventures (1)

 

—

 

 

 

25,279

 

 

 

—

 

 

 

28,598

 

 

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

 

892

 

 

 

2,690

 

 

 

3,978

 

 

 

11,545

 

 

FFO attributable to noncontrolling interests

 

—

 

 

 

321

 

 

 

—

 

 

 

1,024

 

 

FFO Attributable to OP Units

$

13,237

 

 

$

39,634

 

 

$

65,987

 

 

$

163,207

 

 

FFO attributable to redeemable noncontrolling interests

 

(2,123

)

 

 

(5,770

)

 

 

(10,361

)

 

 

(22,820

)

 

FFO Attributable to Common Shareholders

$

11,114

 

 

$

33,864

 

 

$

55,626

 

 

$

140,387

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFO attributable to OP Units

$

13,237

 

 

$

39,634

 

 

$

65,987

 

 

$

163,207

 

 

Transaction and other costs, net of tax and noncontrolling interests (2)

 

2,306

 

 

 

969

 

 

 

5,044

 

 

 

8,434

 

 

Litigation settlement proceeds, net

 

—

 

 

 

—

 

 

 

—

 

 

 

(3,455

)

 

(Income) loss from investments, net of tax

 

(48

)

 

 

137

 

 

 

(2,476

)

 

 

(699

)

 

Impairment loss related to non-depreciable real estate (3)

 

6,748

 

 

 

—

 

 

 

24,984

 

 

 

—

 

 

Loss from mark-to-market on derivative instruments, net of noncontrolling interests

 

6

 

 

 

439

 

 

 

83

 

 

 

7,153

 

 

(Gain) loss on the extinguishment of debt

 

(9,192

)

 

 

—

 

 

 

(9,235

)

 

 

450

 

 

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

 

(309

)

 

 

(118

)

 

 

(1,315

)

 

 

(706

)

 

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

 

—

 

 

 

152

 

 

 

—

 

 

 

549

 

 

Lease liability adjustments

 

—

 

 

 

6

 

 

 

—

 

 

 

(148

)

 

Amortization of management contracts intangible, net of tax

 

1,058

 

 

 

1,032

 

 

 

4,236

 

 

 

4,193

 

 

Unconsolidated real estate ventures allocated share of above adjustments

 

(3

)

 

 

26

 

 

 

227

 

 

 

130

 

 

Core FFO Attributable to OP Units

$

13,803

 

 

$

42,277

 

 

$

87,535

 

 

$

179,108

 

 

Core FFO attributable to redeemable noncontrolling interests

 

(2,214

)

 

 

(6,155

)

 

 

(13,652

)

 

 

(25,013

)

 

Core FFO Attributable to Common Shareholders

$

11,589

 

 

$

36,122

 

 

$

73,883

 

 

$

154,095

 

 

FFO per common share - diluted

$

0.13

 

 

$

0.35

 

 

$

0.63

 

 

$

1.33

 

 

Core FFO per common share - diluted

$

0.14

 

 

$

0.38

 

 

$

0.83

 

 

$

1.46

 

 

Weighted average shares - diluted (FFO and Core FFO)

 

84,594

 

 

 

95,545

 

 

 

88,500

 

 

 

105,195

 

 

 

See footnotes on page 15.

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

(Unaudited)

 

 

 

 

 

 

 

 

 

 

in thousands, except per share data

Three Months Ended December 31,

Year Ended December 31,

 

2024

 

2023

 

2024

 

2023

 

 

 

 

 

 

 

 

 

 

FAD

 

 

 

 

 

 

 

 

Core FFO attributable to OP Units

$

13,803

 

$

42,277

 

$

87,535

 

$

179,108

 

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

 

(12,527

)

 

(12,055

)

 

(43,878

)

 

(40,676

)

Straight-line and other rent adjustments (5)

 

(1,726

)

 

(3,568

)

 

(9,482

)

 

(23,482

)

Third-party lease liability assumption (payments) refunds

 

—

 

 

—

 

 

(25

)

 

70

 

Share-based compensation expense

 

3,261

 

 

4,887

 

 

28,314

 

 

29,367

 

Amortization of debt issuance costs

 

4,182

 

 

3,755

 

 

16,145

 

 

9,777

 

Unconsolidated real estate ventures allocated share of above adjustments

 

209

 

 

932

 

 

1,250

 

 

2,850

 

Non-real estate depreciation and amortization

 

287

 

 

318

 

 

1,170

 

 

1,337

 

FAD available to OP Units (A)

$

7,489

 

$

36,546

 

$

81,029

 

$

158,351

 

Distributions to common shareholders and unitholders (B)

$

35,281

 

$

25,216

 

$

91,182

 

$

109,320

 

FAD Payout Ratio (B÷A) (6)

 

471.1

%

 

69.0

%

 

112.5

%

 

69.0

%

 

 

 

 

 

 

 

 

 

Capital Expenditures

 

 

 

 

 

 

 

 

Maintenance and recurring capital expenditures

$

5,965

 

$

7,151

 

$

16,330

 

$

18,795

 

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

 

5

 

 

17

 

 

21

 

 

62

 

Second-generation tenant improvements and leasing commissions

 

6,367

 

 

4,747

 

 

27,316

 

 

21,516

 

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

 

190

 

 

140

 

 

211

 

 

303

 

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

 

12,527

 

 

12,055

 

 

43,878

 

 

40,676

 

Non-recurring capital expenditures

 

6,965

 

 

2,595

 

 

15,473

 

 

33,614

 

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

 

—

 

 

5

 

 

28

 

 

10

 

First-generation tenant improvements and leasing commissions

 

3,530

 

 

3,046

 

 

10,114

 

 

17,633

 

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

 

40

 

 

479

 

 

145

 

 

1,126

 

Non-recurring capital expenditures

 

10,535

 

 

6,125

 

 

25,760

 

 

52,383

 

Total JBG SMITH Share of Capital Expenditures

$

23,062

 

$

18,180

 

$

69,638

 

$

93,059

 

(1)

Related to decreases in the value of the underlying real estate assets.

(2)

Includes costs related to completed, potential and pursued transactions, demolition costs, severance and other costs.

(3)

Includes our proportionate share of impairment losses of $6.7 million related to unconsolidated real estate ventures for the three months and year ended December 31, 2024.

(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.

NOI RECONCILIATIONS (NON-GAAP)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

dollars in thousands

 

Three Months Ended December 31,

 

Year Ended December 31,

 

 

2024

 

2023

 

 

2024

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to common shareholders

 

$

(59,897

)

$

(32,597

)

 

$

(143,526

)

$

(79,978

)

Net loss attributable to redeemable noncontrolling interests

 

 

(9,849

)

 

(4,635

)

 

 

(22,202

)

 

(10,596

)

Net loss attributable to noncontrolling interests

 

 

(1,094

)

 

(432

)

 

 

(12,025

)

 

(1,135

)

Net loss

 

 

(70,840

)

 

(37,664

)

 

 

(177,753

)

 

(91,709

)

Add:

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

49,969

 

 

57,281

 

 

 

208,180

 

 

210,195

 

General and administrative expense:

 

 

 

 

 

 

 

 

 

 

Corporate and other

 

 

14,935

 

 

12,376

 

 

 

58,790

 

 

54,838

 

Third-party real estate services

 

 

17,199

 

 

21,615

 

 

 

74,264

 

 

88,948

 

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

 

 

—

 

 

152

 

 

 

—

 

 

549

 

Transaction and other costs

 

 

2,312

 

 

943

 

 

 

5,317

 

 

8,737

 

Interest expense

 

 

36,668

 

 

28,080

 

 

 

134,068

 

 

108,660

 

(Gain) loss on the extinguishment of debt

 

 

(9,192

)

 

—

 

 

 

(9,235

)

 

450

 

Impairment loss

 

 

37,191

 

 

30,919

 

 

 

55,427

 

 

90,226

 

Income tax expense (benefit)

 

 

802

 

 

(968

)

 

 

762

 

 

(296

)

Less:

 

 

 

 

 

 

 

 

 

 

Third-party real estate services, including reimbursements revenue

 

 

17,139

 

 

22,463

 

 

 

69,465

 

 

92,051

 

Loss from unconsolidated real estate ventures, net

 

 

(7,126

)

 

(25,679

)

 

 

(7,122

)

 

(26,999

)

Interest and other income, net

 

 

1,493

 

 

1,649

 

 

 

11,598

 

 

15,781

 

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

 

 

2,313

 

 

37,729

 

 

 

(2,753

)

 

79,335

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

NOI attributable to unconsolidated real estate ventures at our share

 

 

1,302

 

 

4,475

 

 

 

6,808

 

 

19,452

 

Non-cash rent adjustments (1)

 

 

(1,726

)

 

(3,568

)

 

 

(9,482

)

 

(23,482

)

Other adjustments (2)

 

 

1,053

 

 

2,550

 

 

 

1,321

 

 

12,092

 

Total adjustments

 

 

629

 

 

3,457

 

 

 

(1,353

)

 

8,062

 

NOI

 

$

65,854

 

$

80,029

 

 

$

277,279

 

$

318,492

 

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

 

 

(2,289

)

 

(905

)

 

 

(9,922

)

 

(3,512

)

Operating Portfolio NOI

 

$

68,143

 

$

80,934

 

 

$

287,201

 

$

322,004

 

Non-Same Store NOI (4)

 

 

4,073

 

 

12,424

 

 

 

19,537

 

 

57,799

 

Same Store NOI (5)

 

$

64,070

 

$

68,510

 

 

$

267,664

 

$

264,205

 

 

 

 

 

 

 

 

 

 

 

 

Change in Same Store NOI

 

 

(6.5

)%

 

 

 

 

1.3

%

 

 

Number of properties in Same Store pool

 

 

36

 

 

 

 

 

36

 

 

 

(1)

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

(2)

Adjustment to exclude commercial lease termination revenue, related party management fees and corporate entity activity.

(3)

Includes the results of our Under-Construction assets and assets in the Development Pipeline.

(4)

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

(5)

Includes the results of the properties that are owned, operated and In-Service for the entirety of both periods being compared.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250218378403/en/

Kevin Connolly Executive Vice President, Portfolio Management & Investor Relations (240) 333‑3837 kconnolly@jbgsmith.com