Evercore ISI lowered the firm’s price target on JBG Smith (JBGS) to $19 from $20 and keeps an Underperform rating on the shares. The firm made several model adjustments following a recent REIT conference, reflecting insights from company meetings and broader market conditions. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Published first on TheFly – the ulti ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the transition period from ___________ to ___________ Commission file number 001-37994 JBG SMITH PROPERTIES ________________________________________________________________________________ (Exact name of Registrant as specified in its charter) FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐TRANSITION REPORT PURSUAN ...

Q2 2025 SUPPLEMENTAL INFORMATION SECTION THREE Management Letter July 29, 2025 Our Fellow Shareholders: As we close the second quarter of 2025, we remain steadfast in our commitment to long-term NAV per share growth, even as macroeconomic and political uncertainties persist. The evolving federal landscape continues to shape the DC real estate market. Notably, the adverse impact of federal spending cuts and headcount reductions appears to be materializing. We continue to expect uncertain economic growth and ...

Core Insights - Office REITs experienced significant losses during the recent REIT earnings season, as reported by Hoya Capital, a leading source for sector-level REIT analysis [1] - Following a strong performance in Q4, office leasing volumes for Q1 2025 were disappointing, indicating a potential downturn in the sector [1] Summary by Category Industry Performance - Office REITs were identified as one of the main losers in the REIT earnings season, highlighting challenges within the sector [1] Leasing Activity - The office leasing volumes for Q1 2025 fell short of expectations after a robust Q4, suggesting a decline in demand for office space [1]

Portfolio Overview - As of March 31, 2025, the operating portfolio consisted of 37 assets, including 15 multifamily assets totaling 6,459 units and 20 commercial assets totaling 6.5 million square feet[142]. - The company delivered The Grace and Reva with 808 multifamily units and approximately 38,000 square feet of retail space in 2024[143]. - The company expects to deliver Valen, a 355-unit multifamily tower, later in 2025[143]. Financial Performance - The net loss attributable to common shareholders for Q1 2025 was $45.7 million, or $0.56 per diluted common share, compared to a net loss of $32.3 million, or $0.36 per diluted common share in Q1 2024[150]. - Same store net operating income (NOI) decreased by 5.5% to $63.1 million for Q1 2025 compared to $66.8 million in Q1 2024[150]. - Property rental revenue decreased by approximately $21.1 million, or 17.2%, to $101.5 million in Q1 2025 from $122.6 million in Q1 2024, primarily due to a $25.0 million decrease in revenue from commercial assets[158]. - Third-party real estate services revenue decreased by approximately $3.0 million, or 16.5%, to $14.9 million in Q1 2025 from $17.9 million in Q1 2024[159]. - Same store NOI decreased by $3.7 million, or 5.5%, to $63.1 million for Q1 2025 from $66.8 million for Q1 2024, attributed to lower occupancy and higher utilities expense[173]. - Net loss attributable to common shareholders increased to $45.72 million in Q1 2025 from $32.28 million in Q1 2024, representing a 41.7% increase[175]. - Multifamily property revenue increased by $2.8 million, or 5.3%, to $55.2 million in Q1 2025 from $52.4 million in Q1 2024[181]. - Commercial property revenue decreased by $13.9 million, or 20.7%, to $53.5 million in Q1 2025 from $67.4 million in Q1 2024[182]. Occupancy Rates - The in-service multifamily portfolio was 94.3% occupied as of March 31, 2025, a decrease of 50 basis points from December 31, 2024[147]. - The office portfolio occupancy was 76.4% as of March 31, 2025, a decrease of 10 basis points from December 31, 2024[148]. Expenses and Costs - Depreciation and amortization expense decreased by approximately $9.3 million, or 16.3%, to $47.6 million in Q1 2025 from $56.9 million in Q1 2024[160]. - Interest expense increased by approximately $5.0 million, or 16.7%, to $35.2 million in Q1 2025 from $30.2 million in Q1 2024[165]. - Total property expenses for multifamily and commercial segments increased to $21.71 million and $20.62 million respectively in Q1 2025[180]. - Impairment loss was $8.5 million in Q1 2025, down from $17.2 million in Q1 2024, related to a development parcel[166]. Shareholder Actions - The company has a share repurchase plan with a capacity of $684.1 million as of March 31, 2025[146]. - The company repurchased and retired 12.2 million common shares for $187.5 million, at a weighted average purchase price of $15.43 per share[156]. - The Board of Trustees increased the common share repurchase authorization to $2.0 billion, with 12.2 million shares repurchased for $187.5 million at an average price of $15.43 during Q1 2025[198]. - The company paid dividends totaling $14.8 million and distributions to redeemable noncontrolling interests of $2.8 million[156]. Cash Flow and Debt - Net cash provided by operating activities was $12.9 million for Q1 2025, down from $37.0 million in Q1 2024[203]. - Cash and cash equivalents decreased by $62.9 million to $120.3 million as of March 31, 2025, primarily due to $237.1 million used in financing activities[204]. - Net cash provided by investing activities was $161.3 million, mainly from $188.8 million in real estate sales[206]. - Outstanding debt was $2.5 billion as of March 31, 2025, down from $2.6 billion at the end of 2024[204]. - The company’s mortgage loans totaled $1.64 billion as of March 31, 2025, down from $1.78 billion at the end of 2024[186]. - The company anticipates that cash flows from continuing operations will be adequate to fund business operations and debt service[185]. - As of March 31, 2025, the company had material cash requirements totaling $338.0 million due in 2025 and 2026 for debt service obligations[200]. Interest Rate Management - The effective interest rate for the revolving credit facility was 5.90% as of March 31, 2025[195]. - The company had variable rate mortgage loans totaling $535,457 thousand with a weighted average effective interest rate of 5.55% as of March 31, 2025[225]. - Interest rate swap and cap agreements had an aggregate notional value of $1.4 billion as of March 31, 2025, down from $2.0 billion as of December 31, 2024[230]. - The fair value of interest rate swaps and caps designated as effective hedges was $14.5 million in assets and $4.3 million in liabilities as of March 31, 2025[230]. - The company follows established risk management policies to hedge interest rate risk using derivative financial instruments[228]. - The company assesses the effectiveness of its hedges both at inception and on an ongoing basis, impacting expenses and net income[229].

Financial Performance - JBG SMITH reported a net loss of $45.7 million for Q1 2025, compared to a net loss of $32.3 million in Q1 2024, representing an increase in loss of 41.9% year-over-year [45]. - Funds From Operations (FFO) for Q1 2025 was $(6.2) million, down from $10.7 million in Q1 2024, indicating a significant decline in operational profitability [45]. - Core FFO for Q1 2025 was $7.2 million, down from $26.9 million in Q1 2024, reflecting a decrease of 73.3% year-over-year [45]. - Total revenue for Q1 2025 was $120,686, a decrease of 17.0% from $145,184 in Q1 2024 [93]. - EBITDA for Q1 2025 was $30,671, down 33.2% from $45,909 in Q1 2024 [96]. - Adjusted EBITDA decreased to $45,356 in Q1 2025, a decline of 28.5% from $63,686 in Q1 2024 [99]. - The FAD Payout Ratio for Q1 2025 was 169.4%, significantly higher than 53.7% in Q1 2024 [103]. - Net loss attributable to common shareholders was $45,720 in Q1 2025, compared to a net loss of $32,276 in Q1 2024, representing a 41.7% increase in losses [100]. Portfolio Performance - The multifamily portfolio ended the quarter at 95.7% leased and 94.3% occupied, with Same Store multifamily portfolio effective rents increasing by 1.5% for new leases and 5.6% upon renewal [11][23]. - The office portfolio ended the quarter at 78.3% leased and 76.4% occupied, with a negative 5.5% Same Store NOI growth for the three months ended March 31, 2025 [20][28]. - The operating multifamily portfolio was 93.0% leased and 91.3% occupied as of March 31, 2025, showing slight improvements from 92.9% and 91.0% respectively in Q4 2024 [55]. - Same Store NOI decreased by 5.5% quarter-over-quarter to $63.1 million for Q1 2025, primarily due to lower occupancy and higher utilities expenses [55]. - The total annualized rent across all leases as of March 31, 2025, is $223,874 million, with a weighted average rent per square foot of $45.37 [185]. - The total annualized estimated rent for multifamily operating assets is projected to reach $1,068 million by June 30, 2026, with a steady increase from $768 million as of March 31, 2025 [174]. Debt and Liquidity - A total of 12.2 million shares were repurchased at an average price of $15.43 per share, totaling $187.5 million in 2025, with a cumulative repurchase of 69.0 million shares since 2020 [16]. - The company refinanced RiverHouse Apartments with a $258.9 million loan at a favorable 5.03% rate, enhancing balance sheet flexibility [13]. - The floating rate exposure remains low, with 88.3% of debt fixed or hedged, and only $33.0 million of debt maturing this year, representing 1.3% of total debt [22]. - The company reported a decrease in total equity from $1,809,058 thousand to $1,570,992 thousand, a decline of approximately 13.2% [90]. - The company has a revolving credit facility that increased from $85,000 thousand to $162,000 thousand, indicating a strategic move to enhance liquidity [90]. Market Trends and Outlook - The DC metro area saw year-over-year rent growth of 3.2%, with vacancy rates at 5.5%, indicating resilience despite economic disruptions [25][26]. - The company anticipates continued decreases in earnings and increases in Net Debt to Annualized Adjusted EBITDA through mid-2025, but expects stabilization from newly constructed multifamily assets [21]. - Future growth is anticipated to be influenced by economic factors, including job growth and public transportation expansion in the Washington, DC metropolitan area [114]. - The company is positioned to capitalize on land sales, ground leases, and joint ventures to enhance its portfolio [114]. Development and Construction - JBG SMITH has a development pipeline of 19 assets, representing 8.9 million square feet of estimated potential development density [51]. - The company has 775 units under construction, totaling 580,966 square feet, which will contribute to future revenue growth [191]. - The company has a multifamily project under construction at 2000/2001 South Bell Street, with an estimated total investment of $343.435 million and projected NOI yield of 6.2% [199]. - The completed construction of The Zoe, a 420-unit tower, contributes to the multifamily segment's growth [200]. Asset Management - The company is actively involved in third-party asset management and real estate services, providing fee-based services [117]. - Approximately 75.0% of JBG SMITH's holdings are located in the National Landing submarket, which is driven by key demand factors including Amazon's headquarters and Virginia Tech's $1 billion Innovation Campus [117]. - The company emphasizes the importance of non-GAAP measures like EBITDA and Adjusted EBITDA for evaluating operating performance, although specific figures were not provided in the extracted content [69][70].

Group 1 - The article discusses the author's journey into investing, starting in high school in 2011, focusing on REITs, preferred stocks, and high-yield bonds, indicating a long-standing interest in markets and the economy [1] - The author has recently adopted a strategy that combines long stock positions with covered calls and cash secured puts, emphasizing a fundamental long-term investment approach [1] - The author primarily covers REITs and financials on Seeking Alpha, with occasional articles on ETFs and other stocks influenced by macro trade ideas [1]

Debt and Financial Instruments - As of December 31, 2024, the total debt balance was $1.78 billion, with a weighted average interest rate of 5.58% for variable rate debt and 4.79% for fixed rate debt [378]. - The estimated fair value of consolidated debt was $2.6 billion as of December 31, 2024, compared to $2.5 billion in 2023 [381]. - The company had interest rate swap and cap agreements with an aggregate notional value of $2.0 billion designated as effective hedges as of December 31, 2024 [384]. - The company reported a variable rate mortgage loan balance of $587.25 million with an effective interest rate of 5.58% as of December 31, 2024 [378]. - The fair value of non-designated derivatives, specifically interest rate cap agreements, was $2.3 million in assets and $2.3 million in liabilities as of December 31, 2024 [385]. - The company’s revolving credit facility had an outstanding balance of $85 million with an effective interest rate of 5.98% as of December 31, 2024 [378]. - The Tranche A-1 Term Loan had a balance of $200 million with a fixed interest rate of 5.34% as of December 31, 2024 [378]. - The company’s interest rate swaps fixed SOFR at a weighted average interest rate of 4.00% for the Tranche A-1 Term Loan as of December 31, 2024 [386]. - The company’s variable rate mortgage loans included interest rate cap agreements with a weighted average interest rate cap strike of 3.36% [378]. - The company’s pro rata share of debt of unconsolidated real estate ventures was $68 million, with a variable rate of 5.68% [378]. Revenue and Income - Total revenue for 2024 was $547.3 million, a decrease of 9.4% from $604.2 million in 2023 [406]. - Property rental revenue decreased to $457.0 million in 2024, down 5.2% from $483.2 million in 2023 [406]. - Net loss attributable to common shareholders for 2024 was $143.5 million, compared to a net loss of $80.0 million in 2023 [406]. - Net income for 2024 was $(177,753) thousand, a decline from $(91,709) thousand in 2023, compared to a profit of $98,986 thousand in 2022 [407]. - Comprehensive loss attributable to JBG Smith Properties was $(148,476) thousand in 2024, compared to $(105,580) thousand in 2023, and a profit of $146,965 thousand in 2022 [407]. - Total revenue from U.S. federal government leases increased to $64.958 million in 2024, accounting for 11.9% of total revenue, up from 10.7% in 2023 [422][423]. Assets and Liabilities - Total assets decreased to $5.02 billion in 2024 from $5.52 billion in 2023, a decline of 9.1% [403]. - Total liabilities decreased slightly to $2.79 billion in 2024 from $2.83 billion in 2023 [404]. - The company’s total shareholders' equity decreased to $1.81 billion in 2024 from $2.22 billion in 2023, a decline of 18.6% [404]. - Cash and cash equivalents decreased to $145.8 million in 2024 from $164.8 million in 2023 [403]. - The balance of common shares as of December 31, 2024, was 84,500 thousand, a decrease from 94,309 thousand in 2023 [410]. - The total assets of unconsolidated real estate ventures decreased to $488.6 million from $867.6 million in 2023, a decline of approximately 43.6% [513]. - The total equity of unconsolidated real estate ventures decreased to $232.4 million in 2024 from $593.8 million in 2023, a decline of approximately 60.8% [513]. Impairment and Losses - The company reported an impairment loss of $55.4 million in 2024, compared to $90.2 million in 2023 [406]. - The company recorded impairment losses of $6.7 million related to development parcels in its unconsolidated real estate ventures for the year ended December 31, 2024 [499]. - The company recognized an impairment loss of $3.3 million related to The Foundry, included in "Loss from unconsolidated real estate ventures, net" for the year ended December 31, 2023 [507]. Cash Flow and Financing Activities - Net cash provided by operating activities decreased to $129.393 million in 2024 from $183.372 million in 2023, reflecting a decline of approximately 29.4% [412]. - The company reported a net cash used in financing activities of $290.797 million in 2024, compared to $158.825 million in 2023, indicating a significant increase in cash outflows [412]. - The company had a net cash provided by investing activities of $144.155 million in 2024, contrasting with a net cash used of $98.179 million in 2023 [412]. - The company repurchased common shares worth $(170,770) thousand in 2024, compared to $(335,313) thousand in 2023 [410]. Shareholder Information - Dividends declared on common shares were $0.875 per share in 2024, compared to $0.675 per share in 2023 [410]. - The weighted average number of common shares outstanding decreased to 88.3 million in 2024 from 105.1 million in 2023 [406]. Real Estate and Development - Development costs and real estate additions amounted to $218.029 million in 2024, a decrease from $333.744 million in 2023 [412]. - The total investments in unconsolidated real estate ventures decreased to $93.7 million in 2024 from $264.3 million in 2023, a decline of 64.6% [498]. - The company recognized revenue of $16.3 million for leasing and property management services provided to unconsolidated real estate ventures in 2024 [503]. - The company acquired a 50% ownership interest in 8001 Woodmont for $115.0 million, including the assumption of a $51.9 million mortgage loan [489]. Accounting and Reporting - The company has adopted ASU 2023-07 for segment reporting, enhancing disclosures of significant segment expenses without impacting consolidated financial statements [482]. - The SEC's new climate-related disclosure rules, effective for annual reports starting December 31, 2025, will require disclosures on climate-related risks and governance [484]. - The fair value hierarchy prioritizes Level 1 inputs (quoted prices in active markets) over Level 3 inputs (unobservable inputs), ensuring a robust valuation process [466]. - Derivative financial instruments are recognized at fair value, with cash flows classified as operating cash flows unless they contain a financing element [457]. Miscellaneous - The company formed an unconsolidated real estate venture with Fortress in April 2022, contributing $66.1 million for a 33.5% interest [509]. - The company acquired the ground lessee's interest in 1900 Crystal Drive for $26.6 million in June 2024 [517].

QUARTERLY INVESTOR PACKAGE | Q3 2024 B JBG SMITH B JBG SMITH | --- | --- | --- | --- | |------------------------------------------------|-------|-------|----------------------------| | TABLE OF | | | Valen (under construction) | | CONTENTS | | | | | LETTER TO SHAREHOLDERS SECTION ONE | | | | | Q3 2024 EARNINGS RELEASE SECTION TWO | | | | | Q3 2024 SUPPLEMENTAL INFORMATION SECTION THREE | | | | Management Letter 1 October 29, 2024 Our Fellow Shareholders: The first rate cut in four years has finally landed a ...

William_Potter Introduction JBG SMITH Properties (NYSE:JBGS) has marginally underperformed the Vanguard Real Estate Index Fund ETF (VNQ) so far in 2024, delivering an almost 6% loss against the circa 2% total return in the benchmark ETF: JBGS vs VNQ in 2024 (Seeking Alpha) This is quite a decent performance for an office REIT and is largely the result of a changed focus on multifamily properties. I expect the shares to outperform going forward, largely due to: A debt-heavy capital structure that will benefi ...