JBG SMITH Announces Fourth Quarter and Full Year 2022 Results

JBG SMITH (NYSE: JBGS), a leading owner and developer of high-quality, mixed-use properties in the Washington, DC market, today filed its Form 10-K for the year ended December 31, 2022 and reported its financial results.

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

Fourth Quarter 2022 Highlights

• For the three months and year ended December 31, 2022, net income (loss), Funds From Operations ("FFO") and Core FFO attributable to common shareholders were:

• Annualized Net Operating Income ("NOI") for the three months ended December 31, 2022 was $322.3 million, compared to $322.0 million for the three months ended September 30, 2022, at our share.
  • The slight increase in Annualized NOI was substantially attributable to (i) additional NOI resulting from the purchase of our partners’ ownership interests in Atlantic Plumbing and 8001 Woodmont, (ii) real estate tax refunds received during the quarter, (iii) higher parking revenue in our commercial portfolio, and (iv) lower utilities due to seasonality, offset by (v) an increase in abatements as a result of certain previously executed lease renewals and (vi) the exclusion of our interest in L’Enfant Plaza.
• Same Store NOI ("SSNOI") at our share increased 7.4% year-over-year to $77.2 million for the three months ended December 31, 2022. SSNOI at our share increased 12.1% year-over-year to $302.3 million for the year ended December 31, 2022.
  • The increase in SSNOI was substantially attributable to (i) higher occupancy and rents, and lower concessions 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) abatement burn-off at certain assets, partially offset by (v) higher utilities and cleaning expenses.

Operating Portfolio

• The operating commercial portfolio was 88.5% leased and 85.1% occupied as of December 31, 2022, compared to 88.3% and 85.9% as of September 30, 2022, at our share.
• The operating multifamily portfolio was 94.5% leased and 93.6% occupied as of December 31, 2022, compared to 95.5% and 93.7% as of September 30, 2022, at our share. (Excluding 8001 Woodmont, which is in lease-up, our multifamily portfolio ended the quarter at 95.3% leased and 94.2% occupied.)
• Executed approximately 193,000 square feet of office leases at our share during the three months ended December 31, 2022, comprising approximately 72,000 square feet of first-generation leases and approximately 121,000 square feet of second-generation leases, which generated a 3.9% rental rate increase on a GAAP basis and a 0.1% rental rate decrease on a cash basis.
• Executed approximately 936,000 square feet of office leases at our share during the year ended December 31, 2022, comprising approximately 238,000 square feet of first-generation leases and approximately 698,000 square feet of second-generation leases, which generated a 3.9% rental rate decrease on a GAAP basis and a 7.2% rental rate decrease on a cash basis.

Development Portfolio

Under-Construction

• As of December 31, 2022, we had two multifamily assets under construction consisting of 1,583 units at our share.

Development Pipeline

• As of December 31, 2022, we had 20 assets in the development pipeline consisting of 9.7 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, 2022, revenue from third-party real estate services, including reimbursements, was $21.1 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 $10.1 million, primarily driven by $6.1 million of property and asset management fees, $1.4 million of leasing fees, $1.3 million of other service revenue and $1.2 million of development fees.

Balance Sheet

• As of December 31, 2022, our total enterprise value was approximately $4.7 billion, comprising 129.1 million common shares and units valued at $2.4 billion, and debt (net of premium / (discount) and deferred financing costs) at our share of $2.5 billion, less cash and cash equivalents at our share of $253.7 million.
• As of December 31, 2022, we had $241.1 million of cash and cash equivalents ($253.7 million of cash and cash equivalents at our share), and $1.0 billion of capacity under our credit facility inclusive of our capacity under the term loan.
• Net Debt to annualized Adjusted EBITDA at our share for the three months ended December 31, 2022 was 8.6x and our Net Debt / total enterprise value was 47.7% as of December 31, 2022.

Investing and Financing Activities

• In October 2022, we repaid the $100.0 million outstanding balance under our revolving credit facility.
• As previously announced, in October 2022, we acquired an additional 3.7% ownership interest in The Wren, a multifamily asset owned by a consolidated real estate venture, for $9.5 million, increasing our ownership interest to 99.7%.
• As previously announced, in October 2022, we acquired the remaining 50.0% ownership interest in 8001 Woodmont, a multifamily asset owned by an unconsolidated real estate venture, for $115.0 million, including the assumption of $51.9 million of debt at our share. The asset was encumbered by a $103.8 million mortgage loan, which was consolidated as of the date of acquisition.
• In December 2022, one of our unconsolidated real estate ventures sold The Gale Eckington for $10.8 million at our share.
• In December 2022, we sold a land option for $6.2 million.

Subsequent to December 31, 2022:

• In January 2023, we entered into a $187.6 million loan facility, collateralized by The Wren and F1RST Residences. The loan has a seven-year term and a fixed interest rate of 5.13%. This loan is the initial advance under a Fannie Mae multifamily credit facility, which provides flexibility for collateral substitutions, future advances tied to performance, ability to mix fixed and floating rates, as well as stagger maturities. Proceeds from the loan were used to repay the mortgage loan on 2121 Crystal Drive, which had a fixed interest rate of 5.51%.
• In February 2023, we purchased the remaining 0.3% ownership interest in The Wren, a multifamily asset that was owned by a consolidated real estate venture, for $0.6 million, increasing our ownership interest to 100.0%.

Dividends

• On December 15, 2022, our Board of Trustees declared a quarterly dividend of $0.225 per common share, which was paid on January 12, 2023 to shareholders of record as of December 29, 2022.

View JBG Smith >>