JBG SMITH Properties Form 10-Q Quarterly Report Filed 2021-08-03

SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q Quarterly report pursuant to sections 13 or 15(d)

Filing Date: 2021-08-03 | Period of Report: 2021-06-30 SEC Accession No. 0001558370-21-009994

(HTML Version on secdatabase.com)

FILER JBG SMITH Properties Mailing Address Business Address 4747 BETHESDA AVENUE 4747 BETHESDA AVENUE CIK:1689796| IRS No.: 814307010 | State of Incorp.:MD | Fiscal Year End: 1231 SUITE 200 SUITE 200 Type: 10-Q | Act: 34 | File No.: 001-37994 | Film No.: 211140238 BETHESDA MD 20814 BETHESDA MD 20814 SIC: 6798 Real estate investment trusts 240-333-3600

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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, 2021 OR

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______to ______Commission file number 001-37994

JBG SMITH PROPERTIES ______(Exact name of Registrant as specified in its charter)

(State or other jurisdictionMaryland of incorporation or 81-4307010 organization) (I.R.S. Employer Identification No.) 4747 Bethesda Avenue Suite 200 Bethesda MD 20814 (Address of Principal Executive Offices) (Zip Code)

Registrant's telephone number, including area code: (240) 333-3600 ______Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on which Title of each class Trading Symbol(s) registered Common Shares, par value $0.01 per share JBGS New York Stock Exchange

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes ☐ No ☒ As of July 30, 2021, JBG SMITH Properties had 131,940,903 common shares outstanding.

JBG SMITH PROPERTIES QUARTERLY REPORT ON FORM 10-Q QUARTER ENDED JUNE 30, 2021

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements Page Condensed Consolidated Balance Sheets (unaudited) as of June 30, 2021 and December 31, 2020 3 Condensed Consolidated Statements of Operations (unaudited) for the three and six months ended June 30, 2021 and 2020 4 Condensed Consolidated Statements of Comprehensive Loss (unaudited) for the three and six months ended June 30, 2021 and 2020 5 Condensed Consolidated Statements of Equity (unaudited) for the three and six months ended June 30, 2021 and 2020 6 Condensed Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2021 and 2020 8 Notes to Condensed Consolidated Financial Statements (unaudited) 10

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 30 Item 3. Quantitative and Qualitative Disclosures about Market Risk 49 Item 4. Controls and Procedures 50

PART II – OTHER INFORMATION

Item 1. Legal Proceedings 50 Item 1A. Risk Factors 50 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 50 Item 3. Defaults Upon Senior Securities 51 Item 4. Mine Safety Disclosures 51 Item 5. Other Information 51 Item 6. Exhibits 53 Signatures 54

PART I - FINANCIAL INFORMATION

ITEM 1. Financial Statements

JBG SMITH PROPERTIES

Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except par value amounts)

June 30, 2021 December 31, 2020 ASSETS Real estate, at cost: Land and improvements $ 1,357,904 $ 1,391,472 Buildings and improvements 4,355,187 4,341,103 Construction in progress, including land 273,542 268,056 5,986,633 6,000,631 Less accumulated depreciation (1,297,406) (1,232,690) Real estate, net 4,689,227 4,767,941 Cash and cash equivalents 201,150 225,600 Restricted cash 37,543 37,736 Tenant and other receivables 43,724 55,903 Deferred rent receivable 182,565 170,547 Investments in unconsolidated real estate ventures 497,770 461,369 Other assets, net 282,356 286,575 Assets held for sale 73,876 73,876 TOTAL ASSETS $ 6,008,211 $ 6,079,547

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY Liabilities: Mortgages payable, net $ 1,591,143 $ 1,593,738 Revolving credit facility — — Unsecured term loans, net 398,322 397,979 Accounts payable and accrued expenses 99,310 103,102 Other liabilities, net 201,556 247,774 Total liabilities 2,290,331 2,342,593 Commitments and contingencies Redeemable noncontrolling interests 544,639 530,748 Shareholders' equity: Preferred shares, $0.01 par value - 200,000 shares authorized; none issued — — Common shares, $0.01 par value - 500,000 shares authorized; 131,841 and 131,778 shares issued and outstanding as of June 30, 2021 and December 31, 2020 1,319 1,319 Additional paid-in capital 3,650,217 3,657,643 Accumulated deficit (466,230) (412,944) Accumulated other comprehensive loss (28,605) (39,979) Total shareholders' equity of JBG SMITH Properties 3,156,701 3,206,039 Noncontrolling interests 16,540 167 Total equity 3,173,241 3,206,206 TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY $ 6,008,211 $ 6,079,547

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document See accompanying notes to the condensed consolidated financial statements (unaudited).

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except per share data)

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 REVENUE Property rental $ 122,819 $ 115,459 $ 245,060 $ 235,839 Third-party real estate services, including reimbursements 26,745 27,167 64,852 56,883 Other revenue 5,080 2,326 10,021 10,337 Total revenue 154,644 144,952 319,933 303,059 EXPENSES Depreciation and amortization 56,678 52,616 121,404 101,105 Property operating 35,000 33,792 69,731 68,295 Real estate taxes 18,558 17,869 36,868 36,068 General and administrative: Corporate and other 13,895 13,216 26,370 26,392 Third-party real estate services 25,557 29,239 54,493 58,053 Share-based compensation related to Formation Transaction and special equity awards 4,441 8,858 9,386 18,299 Transaction and other costs 2,270 1,372 5,960 6,681 Total expenses 156,399 156,962 324,212 314,893 OTHER INCOME (EXPENSE) Income (loss) from unconsolidated real estate ventures, net 3,953 (13,485) 3,010 (16,177) Interest and other income (loss), net (38) 114 (29) 1,021 Interest expense (16,773) (15,770) (33,069) (27,775) Gain on sale of real estate 11,290 — 11,290 59,477 Loss on extinguishment of debt — — — (33) Total other income (expense) (1,568) (29,141) (18,798) 16,513 INCOME (LOSS) BEFORE INCOME TAX (EXPENSE) BENEFIT (3,323) (41,151) (23,077) 4,679 Income tax (expense) benefit 5 888 (4,310) 3,233 NET INCOME (LOSS) (3,318) (40,263) (27,387) 7,912 Net (income) loss attributable to redeemable noncontrolling interests 345 3,483 2,575 (1,767) Net loss attributable to noncontrolling interests — — 1,108 — NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS $ (2,973) $ (36,780) $ (23,704) $ 6,145 EARNINGS (LOSS) PER COMMON SHARE - BASIC AND DILUTED $ (0.03) $ (0.28) $ (0.19) $ 0.04 WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED 131,480 133,613 131,510 134,078

See accompanying notes to the condensed consolidated financial statements (unaudited).

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) (In thousands)

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 NET INCOME (LOSS) $ (3,318) $ (40,263) $ (27,387) $ 7,912 OTHER COMPREHENSIVE INCOME (LOSS): Change in fair value of derivative financial instruments (1,404) (5,283) 5,007 (39,211) Reclassification of net loss on derivative financial instruments from accumulated other comprehensive loss into interest expense 3,834 3,156 7,575 4,314 Other comprehensive income (loss) 2,430 (2,127) 12,582 (34,897) COMPREHENSIVE LOSS (888) (42,390) (14,805) (26,985) Net (income) loss attributable to redeemable noncontrolling interests 345 3,483 2,575 (1,767) Net loss attributable to noncontrolling interests — — 1,108 — Other comprehensive (income) loss attributable to redeemable noncontrolling interests (235) 182 (1,208) 3,755 COMPREHENSIVE LOSS ATTRIBUTABLE TO JBG SMITH PROPERTIES $ (778) $ (38,725) $ (12,330) $ (24,997)

See accompanying notes to the condensed consolidated financial statements (unaudited).

JBG SMITH PROPERTIES Condensed Consolidated Statements of Equity (Unaudited) (In thousands)

Accumulated Additional Other Common Shares Paid-In Accumulated Comprehensive Noncontrolling Total Shares Amount Capital Deficit Loss Interests Equity BALANCE AS OF MARCH 31, 2021 131,277 $ 1,314 $3,631,277 $ (433,675) $ (30,800) $ 8,730 $3,176,846 Net loss attributable to common shareholders and noncontrolling interests — — — (2,973) — — (2,973) Conversion of common limited partnership units to common shares 530 5 17,756 — — — 17,761 Common shares repurchased — — — — — — — Common shares issued pursuant to employee incentive compensation plan and Employee Share Purchase Plan ("ESPP") 34 — 1,090 — — — 1,090 Dividends declared on common shares ($0.225 per common share) — — — (29,582) — — (29,582) Contributions from (distributions to) noncontrolling interests — — — — — 7,810 7,810 Redeemable noncontrolling interests redemption value adjustment and other comprehensive income allocation — — 94 — (235) — (141) Other comprehensive income — — — — 2,430 — 2,430 BALANCE AS OF JUNE 30, 2021 131,841 $ 1,319 $3,650,217 $ (466,230) $ (28,605) $ 16,540 $3,173,241

BALANCE AS OF MARCH 31, 2020 133,517 $ 1,336 $3,723,795 $ (188,239) $ (45,941) $ 203 $3,491,154 Net loss attributable to common shareholders and noncontrolling interests — — — (36,780) — — (36,780) Conversion of common limited partnership units to common shares 156 2 4,750 — — — 4,752 Common shares repurchased — — (15) — — — (15) Common shares issued pursuant to ESPP 35 — 1,002 — — — 1,002 Dividends declared on common shares ($0.225 per common share) — — — (30,143) — — (30,143) Distributions to noncontrolling interests — — — — — (12) (12) Redeemable noncontrolling interests redemption value adjustment and other comprehensive loss allocation — — 12,673 — 182 — 12,855 Other comprehensive loss — — — — (2,127) — (2,127) BALANCE AS OF JUNE 30, 2020 133,708 $ 1,338 $3,742,205 $ (255,162) $ (47,886) $ 191 $3,440,686

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Equity (Unaudited) (In thousands)

Accumulated Additional Other Common Shares Paid-In Accumulated Comprehensive Noncontrolling Total Shares Amount Capital Deficit Loss Interests Equity BALANCE AS OF DECEMBER 31, 2020 131,778 $ 1,319 $3,657,643 $ (412,944) $ (39,979) $ 167 $3,206,206 Net loss attributable to common shareholders and noncontrolling interests — — — (23,704) — (1,108) (24,812) Conversion of common limited partnership units to common shares 649 6 21,674 — — — 21,680 Common shares repurchased (620) (6) (19,197) — — — (19,203) Common shares issued pursuant to employee incentive compensation plan and ESPP 34 — 1,339 — — — 1,339 Dividends declared on common shares ($0.225 per common share) — — — (29,582) — — (29,582) Contributions from noncontrolling interests — — — — — 17,481 17,481 Redeemable noncontrolling interests redemption value adjustment and other comprehensive income allocation — — (11,242) — (1,208) — (12,450) Other comprehensive income — — — — 12,582 — 12,582 BALANCE AS OF JUNE 30, 2021 131,841 $ 1,319 $3,650,217 $ (466,230) $ (28,605) $ 16,540 $3,173,241

BALANCE AS OF DECEMBER 31, 2019 134,148 $ 1,342 $3,633,042 $ (231,164) $ (16,744) $ 201 $3,386,677 Net income attributable to common shareholders and noncontrolling interests — — — 6,145 — — 6,145 Conversion of common limited partnership units to common shares 943 10 35,868 — — — 35,878 Common shares repurchased (1,418) (14) (41,178) — — — (41,192) Common shares issued pursuant to ESPP 35 — 1,134 — — — 1,134 Dividends declared on common shares ($0.225 per common share) — — — (30,143) — — (30,143) Distributions to noncontrolling interests — — — — — (10) (10) Redeemable noncontrolling interests redemption value adjustment and other comprehensive loss allocation — — 113,339 — 3,755 — 117,094 Other comprehensive loss — — — — (34,897) — (34,897) BALANCE AS OF JUNE 30, 2020 133,708 $ 1,338 $3,742,205 $ (255,162) $ (47,886) $ 191 $3,440,686

See accompanying notes to the condensed consolidated financial statements (unaudited).

JBG SMITH PROPERTIES

Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands)

Six Months Ended June 30, 2021 2020 OPERATING ACTIVITIES: Net income (loss) $ (27,387) $ 7,912 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Share-based compensation expense 26,892 38,174 Depreciation and amortization, including amortization of deferred financing costs 123,444 102,896 Deferred rent (12,170) (11,728) (Income) loss from unconsolidated real estate ventures, net (3,010) 16,177 Amortization of market lease intangibles, net (658) (260) Amortization of lease incentives 4,191 3,525 Loss on extinguishment of debt — 33 Gain on sale of real estate (11,290) (59,477) Losses on operating lease and other receivables 975 10,614 Return on capital from unconsolidated real estate ventures 10,348 1,877 Other non-cash items 473 74 Changes in operating assets and liabilities: Tenant and other receivables 11,204 (10,198) Other assets, net 274 (87) Accounts payable and accrued expenses 238 (1,617) Other liabilities, net 32 (12,396) Net cash provided by operating activities 123,556 85,519 INVESTING ACTIVITIES: Development costs, construction in progress and real estate additions (67,408) (181,232) Proceeds from sale of real estate 14,370 154,493 Distributions of capital from unconsolidated real estate ventures 4,583 70,818 Investments in unconsolidated real estate ventures (21,990) (10,733) Net cash (used in) provided by investing activities (70,445) 33,346 FINANCING ACTIVITIES: Borrowings under mortgages payable — 195,159 Borrowings under revolving credit facility — 500,000 Borrowings under unsecured term loans — 100,000 Repayments of mortgages payable (3,342) (4,437) Repayments of revolving credit facility — (200,000) Debt issuance costs (4,587) (9,774) Finance lease payments — (3,031) Proceeds from common shares issued pursuant to ESPP 880 887 Common shares repurchased (19,203) (41,192) Dividends paid to common shareholders (59,232) (60,327) Distributions to redeemable noncontrolling interests (9,712) (7,610) Distributions to noncontrolling interests (22) (23) Contributions from noncontrolling interests 17,464 — Net cash (used in) provided by financing activities (77,754) 469,652 Net (decrease) increase in cash and cash equivalents and restricted cash (24,643) 588,517 Cash and cash equivalents and restricted cash, beginning of period 263,336 142,516 Cash and cash equivalents and restricted cash, end of period $ 238,693 $ 731,033 CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD: Cash and cash equivalents $ 201,150 $ 710,677 Restricted cash 37,543 20,356 Cash and cash equivalents and restricted cash $ 238,693 $ 731,033

JBG SMITH PROPERTIES Condensed Consolidated Statements of Cash Flows (Unaudited) (In thousands)

Six Months Ended June 30, 2021 2020 SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND NON-CASH INFORMATION: Cash paid for interest (net of capitalized interest of $3,256 and $8,633 in 2021 and $ 30,335 $ 25,647 2020) Accrued capital expenditures included in accounts payable and accrued expenses 41,662 70,367 Write-off of fully depreciated assets 43,185 13,378 Deconsolidation of real estate asset 26,476 — Conversion of common limited partnership units to common shares 21,680 35,878 Derecognition of operating lease right-of-use assets — (13,151) Derecognition of liabilities related to operating lease right-of-use assets — (13,151) Recognition of finance lease right-of-use assets — 42,354 Recognition of liabilities related to finance lease right-of-use assets — 40,684 Cash paid for amounts included in the measurement of lease liabilities for operating 1,320 4,015 leases

See accompanying notes to the condensed consolidated financial statements (unaudited).

JBG SMITH PROPERTIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Organization and Basis of Presentation

Organization JBG SMITH Properties ("JBG SMITH"), a Maryland real estate investment trust ("REIT"), owns and operates a portfolio of commercial and multifamily assets amenitized with ancillary retail. JBG SMITH's portfolio reflects its longstanding strategy of owning and operating assets within Metro-served submarkets in the Washington, D.C. metropolitan area that have high barriers to entry and vibrant urban amenities. Over half of our portfolio is in National Landing in Northern Virginia, where we serve as the exclusive developer for Amazon.com, Inc.'s ("Amazon") new headquarters and where Virginia Tech's planned new $1 billion Innovation Campus is located. In addition, our third-party asset management and real estate services business provides fee-based real estate services to the Washington Housing Initiative ("WHI") Impact Pool, Amazon, the legacy funds formerly organized by The JBG Companies ("JBG") (the "JBG Legacy Funds") and other third parties. Substantially all our assets are held by, and our operations are conducted through, JBG SMITH Properties LP ("JBG SMITH LP"), our operating partnership. As of June 30, 2021, JBG SMITH, as its sole general partner, controlled JBG SMITH LP and owned 90.9% of its common limited partnership units ("OP Units"). JBG SMITH is hereinafter referred to as "we," "us," "our" or other similar terms. References to "our share" refer to our ownership percentage of consolidated and unconsolidated assets in real estate ventures.

We were organized 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 ("Vornado") Washington, D.C. segment. On July 18, 2017, we acquired the management business and certain assets and liabilities of JBG (the "Combination"). The Separation and the Combination are collectively referred to as the "Formation Transaction."

As of June 30, 2021, our Operating Portfolio consisted of 64 operating assets comprising 43 commercial assets totaling 13.3 million square feet (11.4 million square feet at our share) and 21 multifamily assets totaling 7,776 units (6,125 units at our share). Additionally, we have: (i) one under-construction multifamily asset with 808 units (808 units at our share); (ii) 11 near-term development assets totaling 5.2 million square feet (5.0 million square feet at our share) of estimated potential development density; and (iii) 26 future development assets totaling 14.7 million square feet (11.9 million square feet at our share) of estimated potential development density.

We derive our revenue primarily from leases with commercial and multifamily tenants, which include fixed and percentage rents, and reimbursements from tenants for certain expenses such as real estate taxes, property operating expenses, and repairs and maintenance. In addition, our third-party asset management and real estate services business provides fee-based real estate services.

Basis of Presentation The accompanying unaudited condensed consolidated financial statements and notes are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions of Form 10-Q and Article 10 of Regulation S-X. Accordingly, these condensed consolidated financial statements do not contain certain information required in annual financial statements and notes as required under GAAP. In our opinion, all adjustments considered necessary for a fair presentation have been included, and all such adjustments are of a normal recurring nature. All intercompany transactions and balances have been eliminated. The results of operations for the three and six months ended June 30, 2021 and 2020 are not necessarily indicative of the results that may be expected for a full year. These condensed consolidated financial statements should be read in conjunction with our

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission.

information on our VIEs. The portions of the equity and net income (loss) of consolidated entities that are not attributable to us are presented separately as amounts attributable to noncontrolling interests in our condensed consolidated financial statements.

References to our financial statements refer to our condensed consolidated financial statements as of June 30, 2021 and December 31, 2020, and for the three and six months ended June 30, 2021 and 2020. References to our balance sheets refer to our condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020. References to our statements of operations refer to our condensed consolidated statements of operations for the three and six months ended June 30, 2021 and 2020. References to our statements of comprehensive loss refer to our condensed consolidated statements of comprehensive loss for the three and six months ended June 30, 2021 and 2020. References to our statements of cash flows refer to our condensed consolidated statements of cash flows for the six months ended June 30, 2021 and 2020.

Income Taxes We have elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code"). Under those sections, a REIT which distributes at least 90% of its REIT taxable income as dividends to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders. We currently adhere and intend to continue to adhere to these requirements and to maintain our REIT status in future periods. We also participate in the activities conducted by our subsidiary entities that have elected to be treated as taxable REIT subsidiaries under the Code. As such, we are subject to federal, state and local taxes on the income from these activities.

2. Summary of Significant Accounting Policies

Significant Accounting Policies There were no material changes to our significant accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020.

Use of Estimates The preparation of the financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The most significant of these estimates include: (i) the underlying cash flows and holding periods used in assessing impairment; (ii) the determination of useful lives for tangible and intangible assets; and (iii) the assessment of the collectability of receivables, including deferred rent receivables. Holding real estate assets over the long term directly decreases the likelihood of recording an impairment loss. If there is a change in the strategy of an asset or market conditions dictate an earlier sale date, an impairment loss may be recognized, and such loss could be material.

In March 2020, the World Health Organization declared a global pandemic related to the novel coronavirus ("COVID-19"). The significance, extent and duration of the impact of COVID-19 on us and our tenants remains largely uncertain and dependent on near-term and future developments that cannot be accurately predicted at this time, such as the continued severity, duration, transmission rate and geographic spread of COVID-19, the distribution, effectiveness and willingness of people to take COVID-19 vaccines, the extent and effectiveness of the containment measures taken, and the response of the overall economy, the financial markets and the population, particularly in the area in which we operate. The ultimate adverse impact of COVID-19 is highly uncertain; however, the effects of COVID-19 on us and our tenants have affected estimates used in the preparation of the underlying cash flows used in assessing our long-lived assets for impairment and the assessment of the collectability of receivables from tenants, including deferred rent receivables. We have made what we believe to be appropriate accounting estimates based on the facts and circumstances available as of the reporting date. To the extent these estimates differ from actual results, our consolidated financial statements may be materially affected.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Due to the business disruptions and challenges caused by COVID-19, we have provided rent deferrals and other lease concessions to certain tenants. We have entered into agreements with certain tenants, many of which have been placed on the cash basis of accounting, resulting in the deferral to future periods or abatement of $2.4 million of rent that had been

contractually due in the second quarter of 2021. We are negotiating additional rent deferrals and other lease concessions with some of our tenants, which have been considered when establishing credit losses against billed and deferred rent receivables. During 2020, we began recognizing revenue from substantially all co- working tenants and retailers except for grocers, pharmacies, essential businesses and certain national credit tenants on the cash basis of accounting.

Recent Accounting Pronouncements

Reference Rate Reform In March 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2020-04, Reference Rate Reform ("Topic 848"). Topic 848 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in Topic 848 is optional and may be elected over the period of March 12, 2020 through December 31, 2022 as reference rate reform activities occur. During the six months ended June 30, 2021, we did not make any elections. During the year ended December 31, 2020, we elected to apply the hedge accounting expedients related to (i) the assertion that our hedged forecasted transactions remain probable and (ii) the assessments of effectiveness for future London Interbank Offered Rate ("LIBOR") indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves our past presentation of our derivatives. We will continue to evaluate the impact of the guidance and may apply other elections, as applicable.

3. Dispositions and Assets Held for Sale

Dispositions In April 2021, we invested cash in and contributed land to two real estate ventures and recognized an $11.3 million gain, which is included in "Gain on sale of real estate" in our statements of operations for the three and six months ended June 30, 2021. See Note 4 for additional information.

In May 2021, we recognized an aggregate gain of $5.2 million from the sale of various assets by our unconsolidated real estate ventures, which is included in "Income (loss) from unconsolidated real estate ventures, net" in our statements of operations for the three and six months ended June 30, 2021. See Note 4 for additional information.

Assets Held for Sale The amounts included in "Assets held for sale" in our balance sheets primarily represent the carrying value of real estate. The following is a summary of assets held for sale:

Total Assets Held Assets Segment Location Square Feet (1) for Sale (In thousands) June 30, 2021 Pen Place (2) Other Arlington, Virginia 2,082 $ 73,876 December 31, 2020 Pen Place (2) Other Arlington, Virginia 2,082 $ 73,876

(1) Represents estimated or approved potential development density. (2) In March 2019, we entered into an agreement for the sale of Pen Place to Amazon, which we expect to close in late 2021.

4. Investments in Unconsolidated Real Estate Ventures

The following is a summary of our investments in unconsolidated real estate ventures:

Effective Ownership Real Estate Venture Partners Interest (1) June 30, 2021 December 31, 2020 (In thousands) Prudential Global Investment Management 50.0% $ 210,718 $ 216,939 Landmark 1.8% - 49.0% 66,688 66,724 CBREI Venture 5.0% - 64.0% 60,915 65,190 Canadian Pension Plan Investment Board ("CPPIB") 55.0% 48,622 47,522 J.P. Morgan Global Alternatives ("J.P. Morgan") (2) 50.0% 45,053 — Berkshire Group 50.0% 51,465 50,649 Brandywine Realty Trust 30.0% 13,686 13,710 Other 623 635 Total investments in unconsolidated real estate ventures (3) $ 497,770 $ 461,369

(1) Reflects our effective ownership interests in the underlying real estate as of June 30, 2021. We have multiple investments with certain venture partners with varying ownership interests in the underlying real estate. (2) J.P. Morgan is the advisor for an institutional investor. (3) As of June 30, 2021 and December 31, 2020, our total investments in unconsolidated real estate ventures are greater than the net book value of the underlying assets by $20.0 million and $18.9 million, resulting principally from capitalized interest, partially offset by our zero investment balance in the real estate venture with CPPIB that owns 1101 17th Street.

In April 2021, we entered into two real estate ventures with an institutional investor advised by J.P. Morgan, in which we have 50% ownership interests, to design, develop, manage and own approximately 2.0 million square feet of new mixed-use development located in Potomac Yard, the southern portion of National Landing. Our venture partner contributed a land site that is entitled for 1.3 million square feet of development at Potomac Yard Landbay F, while we contributed adjacent land with over 700,000 square feet of estimated development capacity at Potomac Yard Landbay G. We will also act as pre-developer, developer, property manager and leasing agent for all future commercial and residential properties on the site. We have determined the ventures are VIEs, but we are not the primary beneficiary of the VIEs and, accordingly, we have not consolidated either venture. We recognized an $11.3 million gain on the land contributed to one of the real estate ventures based on the cash received and the remeasurement of our retained interest in the asset, which was included in "Gain on sale of real estate" in our statements of operations for the three and six months ended June 30, 2021. As part of the transaction, our venture partner elected to accelerate the monetization of a 2013 promote interest in the land contributed by it to the ventures. During the three months ended June 30, 2021, the total amount of the promote paid was $17.5 million, of which $4.2 million was paid to certain of our non- employee trustees and certain of our executives.

In May 2021, our unconsolidated real estate venture with Landmark sold Courthouse Metro Land/Courthouse Metro Land – Option ("Courthouse Metro"), two future development assets located in Arlington, Virginia, for $3.0 million, and 5615 Fishers Lane, a future development asset located in Rockville, Maryland, for $6.5 million. In connection with the sales, we recognized our proportionate share of the aggregate gain totaling $3.1 million, which is included in "Income (loss) from unconsolidated real estate ventures, net" in our statements of operations for the three and six months ended June 30, 2021.

In May 2021, our unconsolidated real estate venture with CBREI Venture sold Fairway Apartments/Fairway Land ("Fairway"), multifamily and future development assets located in Reston, Virginia, for $93.0 million. In connection with the sale, we recognized our proportionate share of the gain of $2.1 million, which is included in "Income (loss) from unconsolidated real estate ventures, net" in our statements of operations for the three and six months ended June 30, 2021. Additionally, the venture repaid a related mortgage payable of $45.3 million.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We provide leasing, property management and other real estate services to our unconsolidated real estate ventures. We recognized revenue, including expense reimbursements, of $5.9 million and $11.8 million for the three and six months ended June 30, 2021, and $6.3 million and $13.0 million for the three and six months ended June 30, 2020, for such services.

A reconsideration event could cause us to consolidate an unconsolidated real estate venture in the future or deconsolidate a consolidated entity. We evaluate reconsideration events as we become aware of them. Reconsideration events include amendments to real estate venture agreements and changes in our partner's ability to make contributions to the venture. Under certain circumstances, we may purchase our partner's interest.

The following is a summary of the debt of our unconsolidated real estate ventures:

Weighted Average Effective Interest Rate (1) June 30, 2021 December 31, 2020 (In thousands) Variable rate (2) 2.49% $ 865,853 $ 863,617 Fixed rate (3) (4) 4.15% 290,386 323,050 Mortgages payable 1,156,239 1,186,667 Unamortized deferred financing costs (6,650) (7,479) Mortgages payable, net (4) $ 1,149,589 $ 1,179,188

(1) Weighted average effective interest rate as of June 30, 2021. (2) Includes variable rate mortgages payable with interest rate cap agreements. (3) Includes variable rate mortgages payable with interest rates fixed by interest rate swap agreements. (4) See Note 17 for additional information on guarantees of the debt of certain of our unconsolidated real estate ventures.

The following is a summary of the financial information for our unconsolidated real estate ventures:

June 30, 2021 December 31, 2020 (In thousands) Combined balance sheet information: Real estate, net $ 2,262,453 $ 2,247,384 Other assets, net 270,462 270,516 Total assets $ 2,532,915 $ 2,517,900

Mortgages payable, net $ 1,149,589 $ 1,179,188 Other liabilities, net 132,066 140,304 Total liabilities 1,281,655 1,319,492 Total equity 1,251,260 1,198,408 Total liabilities and equity $ 2,532,915 $ 2,517,900

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (In thousands) Combined income statement information: Total revenue $ 47,864 $ 45,314 $ 96,081 $ 114,893 Operating income (loss) (1) 41,493 (25,232) 43,207 (25,714) Net income (loss) (1) 33,356 (35,901) 26,830 (54,066)

(1) Includes the gain from the sale of Courthouse Metro, 5615 Fishers Lane and Fairway totaling $38.1 million during the three and six months ended June 30, 2021. Includes the loss from the sale of Woodglen of $16.4 million during the three and six months ended June 30, 2020.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 5. Variable Interest Entities We hold various interests in entities deemed to be VIEs, which we evaluate at acquisition, formation, after a change in the ownership agreement, after a change in the entity's economics or after any other reconsideration event to determine if the

VIE should be consolidated in our financial statements or should no longer be considered a VIE. An entity is a VIE because it is in the development stage and/or does not hold sufficient equity at risk, or conducts substantially all its operations on behalf of an investor with disproportionately few voting rights. We will consolidate a VIE if we are the primary beneficiary of the VIE, which entails having the power to direct the activities that most significantly impact the VIE’s economic performance. Certain criteria we assess in determining whether we are the primary beneficiary of the VIE include our influence over significant business activities, our voting rights, and any noncontrolling interest kick-out or participating rights. Unconsolidated VIEs As of June 30, 2021 and December 31, 2020, we had interests in entities deemed to be VIEs. Although we are engaged to act as the managing partner in charge of day-to-day operations of these investees, we are not the primary beneficiary of these VIEs, as we do not hold unilateral power over activities that, when taken together, most significantly impact the respective VIE's economic performance. We account for our investment in these entities under the equity method. As of June 30, 2021 and December 31, 2020, the net carrying amount of our investment in these entities was $162.9 million and $116.2 million, which are included in "Investments in unconsolidated real estate ventures" in our balance sheets. Our equity in the income of unconsolidated VIEs is included in "Income (loss) from unconsolidated real estate ventures, net" in our statements of operations. Our maximum loss exposure in these entities is limited to our investments, construction commitments and debt guarantees. See Note 17 for additional information. Consolidated VIEs JBG SMITH LP is our most significant consolidated VIE. We hold 90.9% of the limited partnership interest in JBG SMITH LP, act as the general partner and exercise full responsibility, discretion and control over its day-to-day management. The noncontrolling interests of JBG SMITH LP do not have substantive liquidation rights, substantive kick-out rights without cause, or substantive participating rights that could be exercised by a simple majority of noncontrolling interest limited partners (including by such a limited partner unilaterally). Because the noncontrolling interest holders do not have these rights, JBG SMITH LP is a VIE. As general partner, we have the power to direct the activities of JBG SMITH LP that most significantly affect its economic performance, and through our majority interest, we have both the right to receive benefits from and the obligation to absorb losses of JBG SMITH LP. Accordingly, we are the primary beneficiary of JBG SMITH LP and consolidate it in our financial statements. Because we conduct our business and hold our assets and liabilities through JBG SMITH LP, its total assets and liabilities comprise substantially all of our consolidated assets and liabilities.

Through the structure of the 1900 Crystal Drive transaction we executed in March 2021, we have the ability to facilitate an exchange out of an asset into 1900 Crystal Drive. We leased the land underlying 1900 Crystal Drive located in National Landing to a lessee, which plans to construct an 808-unit 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, 2021, no proceeds had been received from the mortgage loan. In connection with the mortgage loan, we have guaranteed the completion of the asset and provided certain carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy). The ground lessee was obligated to invest $17.5 million of equity funding, all of which was funded as of June 30, 2021, and we are obligated to provide the additional project funding through a mezzanine loan to the ground lessee. We determined that 1900 Crystal Drive is a VIE and that we are the primary beneficiary of the VIE. Accordingly, we consolidate the VIE with the lessee's ownership interest shown as "Noncontrolling interests" in our balance sheet. The ground lease, the mezzanine loan and the master lease described above are eliminated in consolidation. As of June 30, 2021, the VIE had total assets and liabilities of $20.3 million and $6.9 million. The assets can only be used to settle the obligations of the VIE, and the liabilities include third-party liabilities of the VIE for which the creditors or beneficial interest holders do not have recourse against us.

6. Other Assets, Net

The following is a summary of other assets, net:

June 30, 2021 December 31, 2020 (In thousands) Deferred leasing costs, net $ 119,795 $ 117,141 Lease intangible assets, net 11,805 15,565 Management and leasing contracts, net 22,560 25,512 Other identified intangible assets 17,090 17,500 Wireless spectrum licenses (1) 25,707 — Operating lease right-of-use assets 3,398 3,542 Finance lease right-of-use assets 41,782 41,996 Prepaid expenses 10,498 14,000 Deferred financing costs, net 9,971 6,656 Deposits (1) 2,904 28,560 Other 16,846 16,103 Total other assets, net $ 282,356 $ 286,575

(1) During 2020, we deposited $25.3 million with the Federal Communications Commission in connection with the acquisition of wireless spectrum licenses. In March 2021, we received the licenses. While the licenses are issued for ten years, as long as we act within the requirements and constraints of the regulatory authorities, the renewal and extension of these licenses is reasonably certain at minimal cost. Accordingly, we have concluded that the licenses are indefinite-lived intangible assets.

7. Debt

Mortgages Payable The following is a summary of mortgages payable:

Weighted Average Effective Interest Rate (1) June 30, 2021 December 31, 2020 (In thousands) Variable rate (2) 2.14% $ 677,246 $ 678,346 Fixed rate (3) 4.32% 923,280 925,523 Mortgages payable 1,600,526 1,603,869 Unamortized deferred financing costs and premium / discount, net (4) (9,383) (10,131) Mortgages payable, net $ 1,591,143 $ 1,593,738

(1) Weighted average effective interest rate as of June 30, 2021. (2) Includes variable rate mortgages payable with interest rate cap agreements. (3) Includes variable rate mortgages payable with interest rates fixed by interest rate swap agreements. (4) As of June 30, 2021, net deferred financing costs related to an unfunded mortgage loan totaling $4.2 million were included in "Other assets, net."

As of June 30, 2021 and December 31, 2020, the net carrying value of real estate collateralizing our mortgages payable totaled $1.7 billion and $1.8 billion. Our mortgages payable contain covenants that limit our ability to incur additional indebtedness on these properties and, in certain circumstances, require lender approval of tenant leases and/or yield maintenance upon repayment prior to maturity. Certain mortgages payable are recourse to us. See Note 17 for additional information.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document In July 2021, we entered into a mortgage loan with a principal balance of $85.0 million, collateralized by 1225 S. Clark Street. The mortgage loan has a seven-year term and an interest rate of LIBOR plus 1.60% per annum.

As of June 30, 2021 and December 31, 2020, we had various interest rate swap and cap agreements on certain mortgages payable with an aggregate notional value of $1.3 billion. See Note 15 for additional information.

Credit Facility As of June 30, 2021 and December 31, 2020, our $1.4 billion credit facility consisted of a $1.0 billion revolving credit facility maturing in January 2025, a $200.0 million unsecured term loan ("Tranche A-1 Term Loan") maturing in January 2023 and a $200.0 million unsecured term loan ("Tranche A-2 Term Loan") maturing in July 2024. The following is a summary of amounts outstanding under the credit facility: Effective Interest Rate (1) June 30, 2021 December 31, 2020 (In thousands) Revolving credit facility (2) (3) (4) 1.15% $ — $ —

Tranche A-1 Term Loan (5) 2.59% $ 200,000 $ 200,000 Tranche A-2 Term Loan (5) 2.49% 200,000 200,000 Unsecured term loans 400,000 400,000 Unamortized deferred financing costs, net (1,678) (2,021) Unsecured term loans, net $ 398,322 $ 397,979

(1) Effective interest rate as of June 30, 2021. (2) As of June 30, 2021 and December 31, 2020, letters of credit with an aggregate face amount of $1.5 million were outstanding under our revolving credit facility. (3) As of June 30, 2021 and December 31, 2020, net deferred financing costs related to our revolving credit facility totaling $5.8 million and $6.7 million were included in "Other assets, net." (4) The interest rate for our revolving credit facility excludes a 0.15% facility fee. (5) As of June 30, 2021 and December 31, 2020, the outstanding balance was fixed by interest rate swap agreements. The interest rate swaps mature concurrently with the respective term loan and provide a weighted average interest rate of 1.39% for the Tranche A-1 Term Loan and 1.34% for the Tranche A-2 Term Loan.

8. Other Liabilities, Net

The following is a summary of other liabilities, net:

June 30, 2021 December 31, 2020 (In thousands) Lease intangible liabilities, net $ 9,012 $ 10,300 Lease assumption liabilities 7,387 10,126 Lease incentive liabilities 14,214 13,913 Liabilities related to operating lease right-of-use assets 9,310 10,752 Liabilities related to finance lease right-of-use assets 40,561 40,221 Prepaid rent 20,030 19,809 Security deposits 18,210 13,654 Environmental liabilities 18,168 18,242 Deferred tax liability, net 6,160 2,509 Dividends payable — 34,075 Derivative agreements, at fair value 31,865 44,222 Deferred purchase price (1) 19,588 19,479 Other 7,051 10,472 Total other liabilities, net $ 201,556 $ 247,774

(1) Deferred purchase price associated with the acquisition of the former Americana Hotel site in December 2020.

9. Redeemable Noncontrolling Interests

JBG SMITH LP OP Units held by persons other than JBG SMITH are redeemable for cash or, at our election, our common shares, subject to certain limitations. During the six months ended June 30, 2021 and 2020, unitholders redeemed 648,752 and 942,940 OP Units, which we elected to redeem for an equivalent number of our common shares. As of June 30, 2021, outstanding OP Units totaled 13.2 million, representing a 9.1% ownership interest in JBG SMITH LP. On our balance sheets, our OP Units and certain vested long-term incentive partnership units ("LTIP Units") are presented at the higher of their redemption value or their carrying value, with such adjustments recognized in "Additional paid-in capital." Redemption value per OP Unit is equivalent to the market value of one of our common shares at the end of the period. In July 2021, unitholders redeemed 99,838 OP Units, which we elected to redeem for an equivalent number of our common shares.

Consolidated Real Estate Venture We are a partner in a consolidated real estate venture that owns a multifamily asset located in Washington, D.C. Pursuant to the terms of the real estate venture agreement, we will fund all capital contributions until our ownership interest reaches a maximum of 97.0%. Our partner can redeem its interest for cash under certain conditions. As of June 30, 2021, we held a 96.0% ownership interest in the real estate venture.

The following is a summary of the activity of redeemable noncontrolling interests:

Three Months Ended June 30, 2021 2020 Consolidated Consolidated JBG Real Estate JBG Real Estate SMITH LP Venture Total SMITH LP Venture Total (In thousands) Balance as of the beginning of the period $ 545,051 $ 7,876 $552,927 $ 496,984 $ 6,056 $ 503,040 OP Unit redemptions (17,761) — (17,761) (4,752) — (4,752) LTIP Units issued in lieu of cash bonuses (1) 797 — 797 450 — 450 Net loss attributable to redeemable noncontrolling interests (319) (26) (345) (3,443) (40) (3,483) Other comprehensive income (loss) 235 — 235 (182) — (182) Distributions (3,927) — (3,927) (3,782) — (3,782) Share-based compensation expense 12,807 — 12,807 20,465 — 20,465 Adjustment to redemption value (712) 618 (94) (12,673) — (12,673) Balance as of the end of the period $ 536,171 $ 8,468 $544,639 $ 493,067 $ 6,016 $ 499,083 Six Months Ended June 30, 2021 2020 Consolidated Consolidated JBG Real Estate JBG Real Estate SMITH LP Venture Total SMITH LP Venture Total (In thousands) Balance as of the beginning of the period $ 522,882 $ 7,866 $530,748 $ 606,699 $ 6,059 $ 612,758 OP Unit redemptions (21,680) — (21,680) (35,878) — (35,878) LTIP Units issued in lieu of cash bonuses (1) 5,614 — 5,614 4,066 — 4,066 Net income (loss) attributable to redeemable noncontrolling interests (2,516) (59) (2,575) 1,810 (43) 1,767

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Other comprehensive income (loss) 1,208 — 1,208 (3,755) — (3,755) Distributions (5,289) — (5,289) (3,782) — (3,782) Share-based compensation expense 25,371 — 25,371 37,246 — 37,246 Adjustment to redemption value 10,581 661 11,242 (113,339) — (113,339) Balance as of the end of the period $ 536,171 $ 8,468 $544,639 $ 493,067 $ 6,016 $ 499,083

(1) See Note 11 for additional information.

10. Property Rental Revenue

The following is a summary of property rental revenue from our non-cancellable leases:

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (In thousands) Fixed $ 112,972 $ 106,612 $ 225,221 $ 217,545 Variable 9,847 8,847 19,839 18,294 Property rental revenue $ 122,819 $ 115,459 $ 245,060 $ 235,839

11. Share-Based Payments

LTIP Units and Time-Based LTIP Units During the six months ended June 30, 2021, certain employees were granted 486,908 LTIP Units with time- based vesting requirements ("Time-Based LTIP Units") with a weighted average grant-date fair value of $29.21 per unit that vest ratably over four years subject to continued employment. Compensation expense for these units is being recognized over a four-year period.

Additionally, in January 2021, we granted 163,065 fully vested LTIP Units, with a grant-date fair value of $29.54 per unit, to certain employees who elected to receive all or a portion of their cash bonus, related to 2020 service, as LTIP Units. Compensation expense totaling $4.8 million for these LTIP Units was recognized in 2020.

In April 2021, as part of their annual compensation, we granted a total of 71,792 fully vested LTIP Units to non-employee trustees with an aggregate grant-date fair value of $1.9 million. The LTIP Units may not be sold while such trustee is serving on the Board of Trustees.

The aggregate grant-date fair value of these Time-Based LTIP Units and LTIP Units granted during the six months ended June 30, 2021 was $20.9 million. The LTIP Units were valued based on the closing common share price on the date of grant, less a discount for post-grant restrictions, and the Time-Based LTIP Units were valued using Monte Carlo simulations. The following is a summary of the significant assumptions used to value the Time-Based LTIP Units:

Expected volatility 34.0% to 39% Risk-free interest rate 0.1% to 0.4% Post-grant restriction periods 2 to 3 years

Performance-Based LTIP Units

In January 2021, certain employees were granted 627,874 LTIP Units with performance-based vesting requirements ("Performance-Based LTIP Units") with a weighted average grant-date fair value of $15.14 per unit. Our Performance-Based LTIP Units have a three-year performance period. 50% of any Performance- Based LTIP Units that are earned vest at the end of the three-year performance period and the remaining 50% vest on the fourth anniversary of the date of grant, subject to continued employment. If, however, the Performance-Based LTIP Units do not achieve a positive absolute total shareholder return ("TSR") at the end of the three-year performance period, but satisfy the relative performance criteria thereof, 50% of the units that otherwise could have been earned will be forfeited, and the remaining units that are earned will vest if and when we achieve a positive TSR during the succeeding seven years, measured at the end of each quarter. In January 2021, the three-year performance period ended for the Performance-Based LTIP Units granted

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document on February 2, 2018. Based on our relative performance and absolute TSR over the three-year performance period, 100% of the units granted were earned.

LTIP Units is being recognized over a four-year period. The following is a summary of the significant assumptions used to value the Performance-Based LTIP Units:

Expected volatility 34.0% Dividend yield 2.6% Risk-free interest rate 0.2%

Restricted Share Units ("RSUs") Beginning in 2021, certain non-executive employees were granted RSUs with time-based vesting requirements ("Time-Based RSUs") and RSUs with performance-based vesting requirements ("Performance- Based RSUs") as part of their annual compensation. Vesting requirements and compensation expense recognition for the Time-Based RSUs and the Performance-Based RSUs are identical to those of the Time- Based LTIP Units and Performance-Based LTIP Units. During the six months ended June 30, 2021, we granted 22,194 Time-Based RSUs with a weighted average grant-date fair value of $31.52 per unit, and 13,516 Performance-Based RSUs with a weighted average grant-date fair value of $15.16 per unit.

The aggregate grant-date fair value of the RSUs granted during the six months ended June 30, 2021 was $905,000. The Time-Based RSUs were valued based on the closing common share price on the date of grant and the Performance-Based RSUs were valued using Monte Carlo simulations with the same significant assumptions used to value the Performance-Based LTIP Units above.

ESPP Pursuant to the ESPP, employees purchased 34,320 common shares for $880,000 during the six months ended June 30, 2021. The following is a summary of the significant assumptions used to value the ESPP common shares using the Black-Scholes model:

Expected volatility 39.0% Dividend yield 1.5% Risk-free interest rate 0.1% Expected life 6 months

Share-Based Compensation Expense The following is a summary of share-based compensation expense:

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (In thousands) Time-Based LTIP Units $ 4,115 $ 4,288 $ 8,495 $ 7,639 Performance-Based LTIP Units 3,160 6,219 6,399 10,208 LTIP Units 1,091 1,100 1,091 1,100 Other equity awards (1) 1,459 1,590 2,922 3,139 Share-based compensation expense - other 9,825 13,197 18,907 22,086 Formation Awards 718 1,339 1,447 2,598 OP Units (2) 2,192 5,977 4,898 12,618 LTIP Units (2) 73 103 151 215 Special Performance-Based LTIP Units (3) 701 687 1,385 1,358 Special Time-Based LTIP Units (3) 757 752 1,505 1,510 Share-based compensation related to Formation Transaction and special equity awards (4) 4,441 8,858 9,386 18,299 Total share-based compensation expense 14,266 22,055 28,293 40,385

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Less amount capitalized (610) (1,243) (1,401) (2,211) Share-based compensation expense $ 13,656 $ 20,812 $ 26,892 $ 38,174

(1) Primarily comprising compensation expense for: (i) certain employees who have elected to receive all or a portion of any cash bonus earned in the form of fully vested LTIP Units, (ii) RSUs and (iii) our ESPP. (2) Represents share-based compensation expense for LTIP Units and OP Units issued in the Formation Transaction, which are subject to post-Combination employment obligations. (3) Represents equity awards issued related to our successful pursuit of Amazon's additional headquarters in National Landing. (4) Included in "General and administrative expense: Share-based compensation related to Formation Transaction and special equity awards" in the accompanying statements of operations.

As of June 30, 2021, we had $45.2 million of total unrecognized compensation expense related to unvested share-based payment arrangements, which is expected to be recognized over a weighted average period of 1.8 years.

In April 2021, our shareholders approved an amendment to the JBG SMITH 2017 Omnibus Share Plan (the "Plan") to increase the common shares reserved under the Plan by 8.0 million.

July 2021 Grants On July 29, 2021, certain employees were granted 624,116 Time-Based LTIP Units with an estimated grant- date fair value of $19.8 million and 865,773 Performance-Based LTIP Units with an estimated grant-date fair value of $20.0 million. The Time-Based LTIP Units and Performance-Based LTIP Units vest 50% on the fifth anniversary of the grant date and 25% on each of the sixth and seventh anniversaries of the grant date, subject to continued employment. The Performance-Based LTIP Units earn based on our achievement of four share price targets during the performance period commencing on the first anniversary of the grant date and ending on the sixth anniversary of the grant date.

12. Transaction and Other Costs

The following is a summary of transaction and other costs:

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (In thousands) Demolition costs (1) $ 439 $ — $ 1,447 $ — Integration and severance costs 222 1,351 462 2,660 Completed, potential and pursued transaction expenses 1,609 21 4,051 21 Other (2) — — — 4,000 Transaction and other costs $ 2,270 $ 1,372 $ 5,960 $ 6,681

(1) Related to 2000 South Bell Street and 2001 South Bell Street. (2) Related to a charitable commitment to the Washington Housing Conservancy, a non-profit that acquires and owns affordable workforce housing in the Washington, D.C. metropolitan area.

13. Interest Expense

The following is a summary of interest expense:

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Interest expense related to finance lease right-of-use assets 428 418 854 562 Net unrealized (gain) loss on derivative financial instruments not designated as cash flow hedges 46 17 (87) (30) Capitalized interest (1,546) (3,365) (3,256) (8,633) Interest expense $ 16,773 $ 15,770 $ 33,069 $ 27,775

14. Shareholders' Equity and Earnings Per Common Share

Common Shares Repurchased In March 2020, our Board of Trustees authorized the repurchase of up to $500 million of our outstanding common shares. During the six months ended June 30, 2021, we repurchased and retired 619,749 common shares for $19.2 million, an average purchase price of $30.96 per share. During the six months ended June 30, 2020, we repurchased and retired 1.4 million common shares for $41.2 million, an average purchase price of $29.01 per share. Since we began the share repurchase program, we have repurchased and retired 4.4 million common shares for $124.0 million, an average purchase price of $28.18 per share.

Earnings (Loss) Per Common Share The following is a summary of the calculation of basic and diluted earnings (loss) per common share and a reconciliation of the amounts of net income (loss) available to common shareholders used in calculating basic and diluted earnings per common share to net income (loss):

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (In thousands, except per share amounts) Net income (loss) $ (3,318) $ (40,263) $ (27,387) $ 7,912 Net (income) loss attributable to redeemable noncontrolling interests 345 3,483 2,575 (1,767) Net loss attributable to noncontrolling interests — — 1,108 — Net income (loss) attributable to common shareholders (2,973) (36,780) (23,704) 6,145 Distributions to participating securities (734) (907) (734) (907) Net income (loss) available to common shareholders - basic and diluted $ (3,707) $ (37,687) $ (24,438) $ 5,238

Weighted average number of common shares outstanding - basic and diluted 131,480 133,613 131,510 134,078

Earnings (loss) per common share - basic and diluted $ (0.03) $ (0.28) $ (0.19) $ 0.04

The effect of the redemption of OP Units and Time-Based LTIP Units that were outstanding as of June 30, 2021 and 2020 is excluded in the computation of diluted earnings per common share as the assumed exchange of such units for common shares on a one-for-one basis was antidilutive (the assumed redemption of these units would have no impact on the determination of diluted earnings per share). Since OP Units and Time-Based LTIP Units, which are held by noncontrolling interests, are attributed gains at an identical proportion to the common shareholders, the gains attributable and their equivalent weighted average OP Unit and Time-Based LTIP Unit impact are excluded from net income (loss) available to common shareholders and from the weighted average number of common shares outstanding in calculating diluted earnings per common share. Performance-Based LTIP Units, Special Performance-Based LTIP Units, Formation Awards and RSUs, which totaled 3.9 million for the three and six months ended June 30, 2021, and 5.2 million and 5.1 million for the three and six months ended June 30, 2020, were excluded from the calculation of diluted earnings per common share as they were antidilutive, but potentially could be dilutive in the future.

July 2021 Dividends On July 29, 2021, our Board of Trustees declared a quarterly dividend of $0.225 per common share, payable on August 27, 2021 to shareholders of record as of August 13, 2021.

15. Fair Value Measurements

Fair Value Measurements on a Recurring Basis To manage or hedge our exposure to interest rate risk, we follow established risk management policies and procedures, including the use of a variety of derivative financial instruments. We do not enter into derivative financial instruments for speculative purposes.

As of June 30, 2021 and December 31, 2020, we had various derivative financial instruments consisting of interest rate swap and cap agreements that are measured at fair value on a recurring basis. The net unrealized loss on our derivative financial instruments designated as cash flow hedges was $31.4 million and $43.9 million as of June 30, 2021 and December 31, 2020 and was recorded in "Accumulated other comprehensive loss" in our balance sheets, of which a portion was reclassified to "Redeemable noncontrolling interests." Within the next 12 months, we expect to reclassify $15.0 million of net unrealized loss as an increase to interest expense.

Accounting Standards Codification 820 ("Topic 820"), Fair Value Measurement and Disclosures, defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the exit price). Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels:

Level 1 — quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 — observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 — unobservable inputs that are used when little or no market data is available. The fair values of the derivative financial instruments are based on the estimated amounts we would receive or pay to terminate the contracts at the reporting date and are determined using interest rate pricing models and observable inputs. The derivative financial instruments are classified within Level 2 of the valuation hierarchy.

The following is a summary of assets and liabilities measured at fair value on a recurring basis:

Fair Value Measurements Total Level 1 Level 2 Level 3 (In thousands) June 30, 2021 Derivative financial instruments designated as cash flow hedges: Classified as liabilities in "Other liabilities, net" $ 31,865 — $ 31,865 — Derivative financial instruments not designated as cash flow hedges: Classified as assets in "Other assets, net" 121 — 121 —

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the impact of the credit valuation adjustments on the overall valuation of the derivative financial instruments was assessed, and it was determined that these adjustments were not significant to the overall valuation of the derivative financial instruments. As a result, it was determined that the derivative financial instruments in their entirety should be

classified in Level 2 of the fair value hierarchy. The net unrealized gains and losses included in "Other comprehensive income (loss)" in our statements of comprehensive loss for the three and six months ended June 30, 2021 and 2020 were attributable to the net change in unrealized gains or losses related to the interest rate swaps that were outstanding during those periods, none of which were reported in our statements of operations as the interest rate swaps were documented and qualified as hedging instruments.

Financial Assets and Liabilities Not Measured at Fair Value As of June 30, 2021 and December 31, 2020, all financial assets and liabilities were reflected in our balance sheets at amounts which, in our estimation, reasonably approximated their fair values, except for the following:

June 30, 2021 December 31, 2020 Carrying Carrying Amount (1) Fair Value Amount (1) Fair Value (In thousands) Financial liabilities: Mortgages payable $ 1,600,526 $ 1,649,969 $ 1,603,869 $ 1,606,470 Unsecured term loans 400,000 400,215 400,000 399,678

(1) The carrying amount consists of principal only. The fair values of the mortgages payable and unsecured term loans were determined using Level 2 inputs of the fair value hierarchy. The fair value of our mortgages payable is estimated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit profiles based on market sources. The fair value of our unsecured term loans is calculated based on the net present value of payments over the term of the facilities using estimated market rates for similar notes and remaining terms.

16. Segment Information

We review operating and financial data for each property on an individual basis; therefore, each of our individual properties is a separate operating segment. We define our reportable segments to be aligned with our method of internal reporting and the way our Chief Executive Officer, who is also our Chief Operating Decision Maker ("CODM"), makes key operating decisions, evaluates financial results, allocates resources and manages our business. Accordingly, we aggregate our operating segments into three reportable segments (commercial, multifamily, and third-party asset management and real estate services) based on the economic characteristics and nature of our assets and services.

The CODM measures and evaluates the performance of our operating segments, with the exception of the third-party asset management and real estate services business, based on the net operating income ("NOI") of properties within each segment. NOI includes property rental revenue and parking revenue, and deducts property operating expenses and real estate taxes.

With respect to the third-party asset management and real estate services business, the CODM reviews revenue streams generated by this segment ("Third-party real estate services, including reimbursements"), as well as the expenses attributable to the segment ("General and administrative: third-party real estate services"), which are both disclosed separately in our statements of operations. The following represents the components of revenue from our third-party real estate services business:

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (In thousands) Property management fees $ 4,776 $ 4,735 $ 9,718 $ 10,759 Asset management fees 2,229 2,375 4,457 5,099 Development fees (1) 4,392 3,048 18,642 5,860 Leasing fees 1,424 794 2,284 2,541 Construction management fees 234 460 406 1,473 Other service revenue 1,790 1,817 3,488 3,452 Third-party real estate services revenue, excluding reimbursements 14,845 13,229 38,995 29,184 Reimbursement revenue (2) 11,900 13,938 25,857 27,699 Third-party real estate services revenue, including reimbursements 26,745 27,167 64,852 56,883 Third-party real estate services expenses 25,557 29,239 54,493 58,053 Third-party real estate services revenue less expenses $ 1,188 $ (2,072) $ 10,359 $ (1,170)

(1) Estimated development fee revenue totaling $55.1 million as of June 30, 2021 is expected to be recognized over the next six years as unsatisfied performance obligations are completed. (2) Represents reimbursement of expenses incurred by us on behalf of third parties, including allocated payroll costs and amounts paid to third-party contractors for construction management projects.

Management company assets primarily consist of management and leasing contracts with a net book value of $22.6 million and $25.5 million as of June 30, 2021 and December 31, 2020, which are classified in "Other assets, net" in our balance sheets. Consistent with internal reporting presented to our CODM and our definition of NOI, the third-party asset management and real estate services operating results are excluded from the NOI data below. The following is the reconciliation of net income (loss) attributable to common shareholders to consolidated NOI:

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (In thousands) Net income (loss) attributable to common shareholders $ (2,973) $ (36,780) $ (23,704) $ 6,145 Add: Depreciation and amortization expense 56,678 52,616 121,404 101,105 General and administrative expense: Corporate and other 13,895 13,216 26,370 26,392 Third-party real estate services 25,557 29,239 54,493 58,053 Share-based compensation related to Formation Transaction and special equity awards 4,441 8,858 9,386 18,299 Transaction and other costs 2,270 1,372 5,960 6,681 Interest expense 16,773 15,770 33,069 27,775 Loss on extinguishment of debt — — — 33 Income tax expense (benefit) (5) (888) 4,310 (3,233) Net income (loss) attributable to redeemable noncontrolling interests (345) (3,483) (2,575) 1,767 Net loss attributable to noncontrolling interests — — (1,108) — Less: Third-party real estate services, including reimbursements revenue 26,745 27,167 64,852 56,883 Other revenue 1,904 1,516 4,090 3,146 Income (loss) from unconsolidated real estate ventures, net 3,953 (13,485) 3,010 (16,177) Interest and other income (loss), net (38) 114 (29) 1,021 Gain on sale of real estate 11,290 — 11,290 59,477 Consolidated NOI $ 72,437 $ 64,608 $ 144,392 $ 138,667

The following is a summary of NOI by segment. Items classified in the Other column include future development assets, corporate entities and the elimination of intersegment activity.

Three Months Ended June 30, 2021 Commercial Multifamily Other Total (In thousands) Property rental revenue $ 92,611 $ 32,718 $ (2,510) $ 122,819 Parking revenue 2,959 110 107 3,176 Total property revenue 95,570 32,828 (2,403) 125,995 Property expense: Property operating 25,112 12,042 (2,154) 35,000 Real estate taxes 12,148 5,065 1,345 18,558 Total property expense 37,260 17,107 (809) 53,558 Consolidated NOI $ 58,310 $ 15,721 $ (1,594) $ 72,437 Three Months Ended June 30, 2020 Commercial Multifamily Other Total (In thousands) Property rental revenue $ 85,575 $ 31,618 $ (1,734) $ 115,459 Parking revenue 772 38 — 810 Total property revenue 86,347 31,656 (1,734) 116,269 Property expense: Property operating 24,001 10,705 (914) 33,792 Real estate taxes 12,024 4,694 1,151 17,869 Total property expense 36,025 15,399 237 51,661 Consolidated NOI $ 50,322 $ 16,257 $ (1,971) $ 64,608

Six Months Ended June 30, 2021 Commercial Multifamily Other Total (In thousands) Property rental revenue $ 183,214 $ 65,304 $ (3,458) $ 245,060 Parking revenue 5,649 175 107 5,931 Total property revenue 188,863 65,479 (3,351) 250,991 Property expense: Property operating 49,087 24,237 (3,593) 69,731 Real estate taxes 23,920 10,310 2,638 36,868 Total property expense 73,007 34,547 (955) 106,599 Consolidated NOI $ 115,856 $ 30,932 $ (2,396) $ 144,392 Six Months Ended June 30, 2020 Commercial Multifamily Other Total (In thousands) Property rental revenue $ 176,773 $ 64,421 $ (5,355) $ 235,839 Parking revenue 7,016 175 — 7,191 Total property revenue 183,789 64,596 (5,355) 243,030 Property expense: Property operating 51,944 21,012 (4,661) 68,295 Real estate taxes 24,396 9,432 2,240 36,068 Total property expense 76,340 30,444 (2,421) 104,363 Consolidated NOI $ 107,449 $ 34,152 $ (2,934) $ 138,667

The following is a summary of certain balance sheet data by segment:

Commercial Multifamily Other Total (In thousands) June 30, 2021 Real estate, at cost $ 3,532,572 $ 2,067,402 $ 386,659 $5,986,633 Investments in unconsolidated real estate ventures 314,610 110,186 72,974 497,770 Total assets (1) 3,466,053 1,772,589 769,569 6,008,211 December 31, 2020 Real estate, at cost $ 3,459,171 $ 2,036,131 $ 505,329 $6,000,631 Investments in unconsolidated real estate ventures 327,798 108,593 24,978 461,369 Total assets (1) 3,430,509 1,787,718 861,320 6,079,547

(1) Includes assets held for sale. See Note 3 for additional information.

17. Commitments and Contingencies

Insurance We maintain general liability insurance with limits of $150.0 million per occurrence and in the aggregate, and property and rental value insurance coverage with limits of $1.5 billion per occurrence, with sub-limits for certain perils such as floods and earthquakes on each of our properties. We also maintain coverage, through our wholly owned captive insurance subsidiary, for a portion of the first loss on the above limits and for both terrorist acts and for nuclear, biological, chemical or radiological terrorism events with limits of $2.0 billion per occurrence. These policies are partially reinsured by third-party insurance providers.

We will continue to monitor the state of the insurance market, and the scope and costs of coverage for acts of terrorism. We cannot anticipate what coverage will be available on commercially reasonable terms in the future. We are responsible for deductibles and losses in excess of the insurance coverage, which could be material.

Our debt, consisting of mortgages payable secured by our properties, a revolving credit facility and unsecured term loans, contains customary covenants requiring adequate insurance coverage. Although we believe that we currently have adequate insurance coverage, we may not be able to obtain an equivalent amount of coverage at reasonable costs in the future. If lenders insist on greater coverage than we are able to obtain, it could adversely affect our ability to finance or refinance our properties.

Construction Commitments As of June 30, 2021, we had assets under construction that will, based on our current plans and estimates, require an additional $330.7 million to complete, which we anticipate will be primarily expended over the next three years. These capital expenditures are generally due as the work is performed, and we expect to finance them with debt proceeds, proceeds from asset recapitalizations and sales, issuance and sale of securities, and available cash.

Environmental Matters Most of our assets have been subject, at some point, to environmental assessments that are intended to evaluate the environmental condition of the assets. The environmental assessments did not reveal any material environmental contamination that we believe would have a material adverse effect on our overall business, financial condition or results of operations, or that have not been anticipated and remediated during site redevelopment as required by law. Nevertheless, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites or changes in cleanup requirements would not result in significant cost to us. Environmental liabilities totaled $18.2 million as of June 30, 2021 and December 31, 2020 and are included in "Other liabilities, net" in our balance sheets.

Other As of June 30, 2021, we had committed tenant-related obligations totaling $68.9 million ($65.0 million related to our consolidated entities and $3.9 million related to our unconsolidated real estate ventures at our share). The timing and amounts of payments for tenant-related obligations are uncertain and may only be due upon satisfactory performance of certain conditions.

There are various legal actions against us in the ordinary course of business. In our opinion, the outcome of such matters will not have a material adverse effect on our financial condition, results of operations or cash flows.

From time to time, we (or ventures in which we have an ownership interest) have agreed, and may in the future agree with respect to unconsolidated real estate ventures, to (i) guarantee portions of the principal, interest and other amounts in connection with borrowings, (ii) provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) in connection with borrowings or (iii) provide guarantees to lenders and other third parties for the completion of development projects. We customarily have agreements with our outside venture partners whereby the partners agree to reimburse the real estate venture or us for their share of any payments made under certain of these guarantees. At times, we also have agreements with certain of our outside venture partners whereby we agree to either indemnify the partners and/or the associated ventures with respect to certain contingent liabilities associated with operating assets or to reimburse our partner for its share of any payments made by them under certain guarantees. Guarantees (excluding environmental) customarily terminate either upon the satisfaction of specified circumstances or repayment of the underlying debt. Amounts that we may be required to pay in future periods in relation to guarantees associated with budget overruns or operating losses are not estimable.

As of June 30, 2021, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures totaling $62.7 million. As of June 30, 2021, we had no principal payment guarantees related to our unconsolidated real estate ventures.

Additionally, with respect to borrowings of our consolidated entities, we have agreed, and may in the future agree, to (i) guarantee portions of the principal, interest and other amounts, (ii) provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) or (iii) provide guarantees to lenders, tenants and other third parties for the completion of development projects. As of June 30, 2021, the aggregate amount of principal payment guarantees was $8.3 million for our consolidated entities.

In connection with the Formation Transaction, we have an agreement with Vornado regarding tax matters (the "Tax Matters Agreement") that provides special rules that allocate tax liabilities if the distribution of JBG SMITH shares by Vornado, together with certain related transactions, is determined not to be tax-free. Under the Tax Matters Agreement, we may be required to indemnify Vornado for any taxes and related amounts and costs resulting from a violation by us of the Tax Matters Agreement.

18. Transactions with Related Parties

Our third-party asset management and real estate services business provides fee-based real estate services to the WHI, Amazon, the JBG Legacy Funds and other third parties. We provide services for the benefit of the JBG Legacy Funds that own interests in the assets retained by the JBG Legacy Funds. In connection with the contribution to us of the assets formerly owned by the JBG Legacy Funds as part of the Formation Transaction, the general partner and managing member interests in the JBG Legacy Funds that were held by certain former JBG executives (and who became members of our management team and/or Board of Trustees) were not transferred to us and remain under the control of these individuals. In addition, certain members of our senior management and Board of Trustees have ownership interests in the JBG Legacy Funds and own carried interests in each fund and in certain of our real estate ventures that entitle them to receive cash payments if the fund or real estate venture achieves certain return thresholds.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We launched the WHI with the Federal City Council in June 2018 as a scalable market-driven model that uses private capital to help address the scarcity of housing for middle income families. We are the manager for the WHI Impact Pool, which is the social impact debt financing vehicle of the WHI. As of June 30, 2021, the WHI Impact Pool had completed

closings of capital commitments totaling $114.4 million, which included a commitment from us of $11.2 million. As of June 30, 2021, our remaining commitment was $8.3 million.

The third-party real estate services revenue, including expense reimbursements, from the JBG Legacy Funds and the WHI Impact Pool was $5.8 million and $11.6 million for the three and six months ended June 30, 2021, and $4.7 million and $12.7 million for the three and six months ended June 30, 2020. As of June 30, 2021 and December 31, 2020, we had receivables from the JBG Legacy Funds and the WHI Impact Pool totaling $2.8 million and $7.5 million for such services.

We rented our former corporate offices from an unconsolidated real estate venture and made payments totaling $495,000 and $766,000 for the three and six months ended June 30, 2021, and $2.4 million and $3.7 million for the three and six months ended June 30, 2020.

We have agreements with Building Maintenance Services ("BMS"), an entity in which we have a minor preferred interest, to supervise cleaning, engineering and security services at our properties. We paid BMS $4.1 million and $8.5 million during the three and six months ended June 30, 2021, and $3.3 million and $8.6 million for the three and six months ended June 30, 2020, which is included in "Property operating expenses" in our statements of operations.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements contained herein 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 future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "approximates," "believes," "expects," "anticipates," "estimates," "intends," "plans," "would," "may" or other similar expressions in this Quarterly Report on Form 10-Q. 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. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020 and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2020.

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 ("COVID-19") on our financial condition, results of operations, cash flows, performance, tenants, the real estate market, and the global economy and financial markets. The significance, extent and duration of the impact of COVID-19 on us and our tenants remains largely uncertain and dependent on near-term and future developments that cannot be accurately predicted at this time, such as the continued severity, duration, transmission rate and geographic spread of COVID-19, the distribution, effectiveness and willingness of people to take COVID-19 vaccines, the extent and effectiveness of the containment measures taken, and the response of the overall economy, the financial markets and the population, particularly in the area in which we operate. 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, 2020 as being heightened as a result of the ongoing and numerous adverse impacts of COVID-19.

For these forward-looking 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, which speak only as of the date of this Quarterly Report on Form 10-Q. 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 of this Quarterly Report on Form 10-Q.

Organization and Basis of Presentation

JBG SMITH Properties ("JBG SMITH"), a Maryland real estate investment trust ("REIT"), owns and operates a portfolio of commercial and multifamily assets amenitized with ancillary retail. JBG SMITH's portfolio reflects its longstanding strategy of owning and operating assets within Metro-served submarkets in the Washington, D.C. metropolitan area that have high barriers to entry and vibrant urban amenities. Over half of our portfolio is in National Landing where we serve as the exclusive developer for Amazon.com, Inc.'s ("Amazon") new headquarters and where Virginia Tech's planned new $1 billion Innovation Campus is located. In addition, our third-party asset management and real estate services business provides fee-based real estate services to the Washington Housing Initiative ("WHI") Impact Pool, Amazon, the legacy funds formerly organized by The JBG Companies ("JBG") (the "JBG Legacy Funds") and other third parties. Substantially all our assets are held by, and our operations are conducted through, JBG SMITH Properties LP ("JBG SMITH LP"), our operating partnership. JBG SMITH is referred to as "we," "us," "our" or other similar terms. References to "our share" refer to our ownership percentage of consolidated and unconsolidated assets in real estate ventures.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We were organized 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 ("Vornado") Washington, D.C. segment. On July 18, 2017, we acquired the management business and certain assets and liabilities of JBG (the "Combination"). The Separation and the Combination are collectively referred to as the "Formation Transaction."

References to our financial statements refer to our unaudited condensed consolidated financial statements as of June 30, 2021 and December 31, 2020, and for the three and six months ended June 30, 2021 and 2020. References to our balance sheets refer to our condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020. References to our statements of operations refer to our condensed consolidated statements of operations for the three and six months ended June 30, 2021 and 2020. References to our statements of cash flows refer to our condensed consolidated statements of cash flows for the six months ended June 30, 2021 and 2020.

The accompanying financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"), which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates.

We have elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code"). Under those sections, a REIT which distributes at least 90% of its REIT taxable income as dividends to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders. We currently adhere and intend to continue to adhere to these requirements and to maintain our REIT status in future periods. We also participate in the activities conducted by our subsidiary entities that have elected to be treated as taxable REIT subsidiaries under the Code. As such, we are subject to federal, state and local taxes on the income from these activities.

We aggregate our operating segments into three reportable segments (commercial, multifamily, and third- party asset management and real estate services) based on the economic characteristics and nature of our assets and services.

Our revenues and expenses are, to some extent, subject to seasonality during the year, which impacts quarterly net earnings, cash flows and funds from operations that affects the sequential comparison of our results in individual quarters over time. For instance, we have historically experienced higher utility costs in the first and third quarters of the year.

We compete with many property owners and developers. Our success depends upon, among other factors, trends affecting national and local economies, the financial condition and operating results of current and prospective tenants, the availability and cost of capital, interest rates, construction and renovation costs, taxes, governmental regulations and legislation, population trends, zoning laws, and our ability to lease, sublease or sell our assets at profitable levels. Our success is also subject to our ability to refinance existing debt on acceptable terms as it comes due.

Overview

We continue to focus on our comprehensive plan to reposition our holdings in National Landing in Northern Virginia by executing a broad array of Placemaking strategies. Our Placemaking strategies include the delivery of new multifamily and office developments, locally sourced amenity retail, and thoughtful improvements to the streetscape, sidewalks, parks and other outdoor gathering spaces. In keeping with our dedication to Placemaking, each new project is intended to contribute to authentic and distinct neighborhoods by creating a vibrant street environment with robust retail offerings and other amenities including improved

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document public spaces. We have also invested in Citizens Broadband Radio Service ("CBRS") wireless spectrum in National Landing as part of our efforts to make National Landing among the first 5G-operable submarkets in the nation.

In November 2018, Amazon announced it had selected sites that we own in National Landing as the location of its new headquarters. We currently have leases with Amazon totaling approximately 1.0 million square feet at six office buildings in National Landing, including approximately 167,000 square feet leased during the second quarter of 2021. In March 2019,

we executed purchase and sale agreements with Amazon for two of our National Landing development sites, Metropolitan Park and Pen Place, which will serve as the initial phase of construction associated with Amazon's new headquarters at National Landing. In January 2020, we sold Metropolitan Park to Amazon for $155.0 million and began constructing two new office buildings thereon, totaling 2.1 million square feet, inclusive of over 50,000 square feet of street-level retail with new shops and restaurants. We are the developer, property manager and retail leasing agent for Amazon's new headquarters at National Landing.

2021 Outlook A fundamental component of our strategy to maximizing long-term net asset value per share is active capital allocation. Since our inception in 2017, we have completed the sale, recapitalization and ground lease of $1.6 billion of primarily office assets, and we intend to opportunistically sell at least another $1.5 billion of non- core office assets and land. We are currently targeting dispositions primarily of office assets in submarkets where we have less concentration and where we anticipate lower growth rates going forward relative to other opportunities within our portfolio. Additionally, we may market select land assets where ground lease or joint venture execution may represent the clearest path to maximizing value. Redeploying the proceeds from any such sales and recapitalizations will not only help fund our planned growth but will also further advance the strategic shift of our portfolio to majority multifamily.

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. On March 13, 2020, a National Emergency was declared in the United States in response to COVID-19. The efforts made by federal, state and local governments to mitigate the spread of COVID-19 included orders requiring the temporary closure of or imposed limitations on the operations of certain non-essential businesses, which adversely affected many tenants, especially tenants in the retail industry. While many of these restrictions have been removed, it is difficult to determine the long-term impact of COVID-19 on our business, and we expect it to continue to negatively impact our operations in 2021.

The pandemic continues to evolve daily, and while we are optimistic about the future, given the rapid rise of new COVID-19 infections and the higher transmissibility of new variants, we remain cautious about the medium-term implications for office assets. Vacancy is still at record highs across the region, and most companies are still not fully back in the office. While we have seen an increase in leasing activity in our portfolio this quarter, occupancy of our in-service commercial portfolio declined by 250 basis points from March 31, 2021. Although parking revenue remained relatively flat during the three months ended June 30, 2021 as compared to the same period in 2020, parking revenue in our commercial portfolio was approximately 50% below pre-pandemic levels of approximately $30 million annually.

We are seeing improvements in our multifamily portfolio, with a 140 basis point increase in the occupancy of our in-service operating multifamily portfolio from March 31, 2021. While rents have not yet recovered to pre-pandemic levels, we are seeing an increase in market rents due to increased demand and limited new supply.

Due to the business disruptions and challenges caused by COVID-19, we provided rent deferrals and other lease concessions primarily to retail tenants. We have entered into agreements with certain tenants, many of which have been placed on the cash basis of accounting, resulting in the deferral to future periods or abatement of $2.4 million of rent that had been contractually due in the second quarter of 2021. We are negotiating additional rent deferrals and other lease concessions with some of our tenants, which have been considered when establishing credit losses against billed and deferred rent receivables. During 2020, we began recognizing revenue from substantially all co-working tenants and retailers except for grocers, pharmacies, essential businesses and certain national credit tenants on the cash basis of accounting. With 95% of our retail tenants now open for business, we expect the need to enter into additional deferrals to decrease as we enter the fall unless new restrictions are imposed.

The significance, extent and duration of the impact of COVID-19 on our business remains largely uncertain and dependent on future developments that cannot be accurately predicted at this time. These developments include: the continued severity, duration, transmission rate and geographic spread of COVID-19 in the United

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document States, the continued speed of the vaccine distribution, the effectiveness and willingness of people to take COVID-19 vaccines, the duration of associated immunity and the efficacy of vaccines 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, particularly in areas in which we

operate, as containment measures continue to be lifted, and whether the residential market in the Washington, D.C. region and any of our properties will be materially impacted by the moratoriums on residential evictions, among others. These uncertainties make it difficult to predict operating results for our business for 2021. Therefore, we could experience material declines in revenue, net income, NOI and/or Funds from Operations ("FFO"). For more information, see "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

Operating Results Key highlights for the three and six months ended June 30, 2021 included:

● net loss attributable to common shareholders of $3.0 million, or $0.03 per diluted common share, for the three months ended June 30, 2021 compared to $36.8 million, or $0.28 per diluted common share, for the three months ended June 30, 2020. Net loss attributable to common shareholders of $23.7 million, or $0.19 per diluted common share, for the six months ended June 30, 2021 compared to net income attributable to common shareholders of $6.1 million, or $0.04 per diluted common share, for the six months ended June 30, 2020. Net income attributable to common shareholders for the six months ended June 30, 2021 and 2020 included a gain on the sale of real estate of $11.3 million and $59.5 million; ● third-party real estate services revenue, including reimbursements, of $26.7 million and $64.9 million for the three and six months ended June 30, 2021 compared to $27.2 million and $56.9 million for the three and six months ended June 30, 2020; ● operating commercial portfolio leased and occupied percentages at our share of 85.9% and 84.4% as of June 30, 2021 compared to 87.3% and 86.9% as of March 31, 2021, and 90.4% and 88.1% as of June 30, 2020; ● operating multifamily portfolio leased and occupied percentages at our share of 91.6% and 86.3% as of June 30, 2021 compared to 91.0% and 85.9% as of March 31, 2021, and 85.8% and 82.3% as of June 30, 2020. The in-service operating multifamily portfolio was 95.0% leased and 89.8% occupied as of June 30, 2021, compared to 92.3% leased and 88.4% occupied as of March 31, 2021, and 93.3% leased and 90.2% occupied as of June 30, 2020; ● the leasing of 722,000 square feet, or 715,000 square feet at our share, at an initial rent (1) of $44.96 per square foot and a GAAP-basis weighted average rent per square foot (2) of $43.98 for the three months ended June 30, 2021, and the leasing of 1.1 million square feet on a consolidated basis and at our share, at an initial rent (1) of $46.19 per square foot and a GAAP-basis weighted average rent per square foot (2) of $45.38 for the six months ended June 30, 2021; and ● an increase in same store (3) NOI of 0.4% to $76.5 million for the three months ended June 30, 2021 compared to $76.1 million for the three months ended June 30, 2020, and a decrease in same store (3) NOI of 4.6% to $152.2 million for the six months ended June 30, 2021 compared to $159.5 million for the six months ended June 30, 2020.

(1) Represents the cash basis weighted average starting rent per square foot at our share, which excludes free rent and fixed escalations. (2) Represents the weighted average rent per square foot recognized over the term of the respective leases, including the effect of free rent and fixed escalations. (3) Includes the results of the properties that are owned, operated and in-service for the entirety of both periods being compared, which excludes properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared.

Additionally, investing and financing activity during the six months ended June 30, 2021 included: ● the leasing of the land underlying 1900 Crystal Drive located in National Landing to a lessee, which plans to construct an 808-unit multifamily asset comprising two towers with ground floor retail. Through the structure of the 1900 Crystal Drive transaction, we have the ability to facilitate an exchange out of an asset into 1900 Crystal Drive. 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

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the asset. We have an option to acquire the asset until a specified period after completion. See Note 5 to the financial statements for additional information; ● an investment in two real estate ventures, in which we have 50% ownership interests, to design, develop, manage and own approximately 2.0 million square feet of new mixed-use development located in Potomac Yard, the southern portion of National Landing. We recognized an $11.3 million gain on the land contributed to one of the real estate

ventures based on the cash received and the remeasurement of our retained interest in the asset. See Note 4 to the financial statements for additional information; ● recognition of an aggregate gain of $5.2 million from the sale of various assets by our unconsolidated real estate ventures. See Note 4 to the financial statements for additional information; ● the payment of dividends to our common shareholders totaling $59.2 million and distributions to our noncontrolling interests of $9.7 million; ● the repurchase and retirement of 619,749 of our common shares for $19.2 million, an average purchase price of $30.96 per share; and ● the investment of $67.4 million in development, construction in progress and real estate additions.

Activity subsequent to June 30, 2021 included: ● the declaration of a quarterly dividend of $0.225 per common share, payable on August 27, 2021 to shareholders of record as of August 13, 2021; and ● a new mortgage loan with a principal balance of $85.0 million, collateralized by 1225 S. Clark Street. The mortgage loan has a seven-year term and an interest rate of LIBOR plus 1.60% per annum.

Critical Accounting Policies and Estimates

Our Annual Report on Form 10-K for the year ended December 31, 2020 contains a description of our critical accounting policies, including asset acquisitions and business combinations, real estate, investments in real estate ventures, revenue recognition and share-based compensation. There have been no significant changes to our policies during the six months ended June 30, 2021.

Recent Accounting Pronouncements

See Note 2 to the financial statements for a description of recent accounting pronouncements.

Results of Operations

In January 2020, we sold Metropolitan Park. In December 2020, we acquired the Americana Portfolio, which consists of a 1.4-acre future development parcel in National Landing that was formerly occupied by the Americana Hotel and three other parcels. In April 2021, we contributed Potomac Yard Landbay G to an unconsolidated real estate venture.

Comparison of the Three Months Ended June 30, 2021 to 2020 The following summarizes certain line items from our statements of operations that we believe are important in understanding our operations and/or those items which significantly changed in the three months ended June 30, 2021 compared to the same period in 2020: Three Months Ended June 30, 2021 2020 % Change (Dollars in thousands) Property rental revenue $ 122,819 $ 115,459 6.4 % Third-party real estate services revenue, including reimbursements 26,745 27,167 (1.6)% Depreciation and amortization expense 56,678 52,616 7.7 % Property operating expense 35,000 33,792 3.6 % Real estate taxes expense 18,558 17,869 3.9 % General and administrative expense: Corporate and other 13,895 13,216 5.1 % Third-party real estate services 25,557 29,239 (12.6)% Share-based compensation related to Formation Transaction and special equity awards 4,441 8,858 (49.9)% Transaction and other costs 2,270 1,372 65.5 % Income (loss) from unconsolidated real estate ventures, net 3,953 (13,485) (129.3)% Interest expense 16,773 15,770 6.4 %

Property rental revenue increased by approximately $7.4 million, or 6.4%, to $122.8 million in 2021 from $115.5 million in 2020. The increase was primarily due to (i) a $4.6 million increase related to the deferral of rent and the write-off of deferred rent receivables for tenants that were placed on the cash basis of accounting in 2020 and a decrease in uncollectable operating lease receivables attributable to COVID-19 in 2021, (ii) a $4.2 million increase related to 4747 Bethesda Avenue, West Half, The Wren, 900 W Street and 901 W Street as these properties placed additional space into service, (iii) a $2.7 million increase related to 1770 Crystal Drive, which was placed into service in the fourth quarter of 2020, and (iv) a $1.5 million increase related to the commencement of leases with Amazon at 2100 Crystal Drive and 2200 Crystal Drive. The increase in property rental revenue was partially offset by a $3.4 million decrease related to the Universal Buildings and RTC-West due to lower occupancy and a $1.7 million decrease related to RiverHouse Apartments and The Bartlett due to increased rent concessions and lower market rents.

Third-party real estate services revenue, including reimbursements, decreased by approximately $422,000, or 1.6%, to $26.7 million in 2021 from $27.2 million in 2020. The decrease was primarily due to a $2.0 million decrease in reimbursements revenue related to tenant services projects, partially offset by a $1.3 million increase in development fee revenue primarily related to the timing of development projects.

Depreciation and amortization expense increased by approximately $4.1 million, or 7.7%, to $56.7 million in 2021 from $52.6 million in 2020. The increase was primarily due to a $2.2 million increase related to 4747 Bethesda Avenue, West Half, The Wren, 900 W Street and 901 W Street as these properties placed additional space into service, a $2.0 million increase related to 2345 Crystal Drive due to an increase in tenant improvements and an $801,000 increase due to 1770 Crystal Drive being placed into service. The increase in depreciation and amortization expense was partially offset by a $1.1 million decrease at 7200 Wisconsin Avenue due to the disposal of a tenant improvement in 2020.

Property operating expense increased by approximately $1.2 million, or 3.6%, to $35.0 million in 2021 from $33.8 million in 2020. The increase was primarily due to a $1.6 million increase related to 2451 Crystal Drive for costs incurred for construction management services provided to tenants and a $1.1 million increase related to 4747 Bethesda Avenue, West Half, The Wren and 900 W Street as these properties placed additional space into service. The increase in property operating expense was partially offset by a $674,000 decrease related to 1901 South Bell Street due to costs incurred in 2020 for construction management services provided to tenants and a $567,000 decrease related to the Crystal City Marriott as the property incurred higher costs due to COVID-19 in 2020.

Real estate tax expense increased by approximately $689,000, or 3.9%, to $18.6 million in 2021 from $17.9 million in 2020. The increase was primarily due to a $641,000 increase at 4747 Bethesda Avenue, The Wren, 900 W Street and 901 W Street as these properties placed additional space into service.

General and administrative expense: corporate and other increased by approximately $679,000, or 5.1%, to $13.9 million in 2021 from $13.2 million in 2020. The increase was primarily due to increases in employee compensation and consulting costs, partially offset by declines in share-based compensation expense and temporary staffing costs.

General and administrative expense: third-party real estate services decreased by approximately $3.7 million, or 12.6%, to $25.6 million in 2021 from $29.2 million in 2020. The decrease was primarily due to a decrease in reimbursable expenses related to tenant services projects.

General and administrative expense: share-based compensation related to Formation Transaction and special equity awards decreased by approximately $4.4 million, or 49.9%, to $4.4 million in 2021 from $8.9 million in 2020. The decrease was primarily due to the graded vesting of certain awards issued in prior years, which resulted in lower expense as portions of the awards vested.

Transaction and other costs of $2.3 million in 2021 includes $1.6 million of expenses related to completed, potential and pursued transactions, $439,000 of demolition costs related to 2000 South Bell Street and 2001

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document South Bell Street, and $222,000 of integration and severance costs. Transaction and other costs of $1.4 million in 2020 consist primarily of integration and severance costs.

Income from unconsolidated real estate ventures increased by approximately $17.4 million, or 129.3%, to $4.0 million for 2021 from a loss of $13.5 million in 2020. The increase was primarily due to (i) a $6.5 million impairment charge recognized in 2020 related to our investment in a venture that owned The Marriott Wardman Park hotel, and to losses incurred from the hotel’s COVID-19 related closure and (ii) an aggregate gain of $5.2 million from the sale of various assets by our real estate ventures in 2021 as compared to a $3.0 million loss from the sale of Woodglen in 2020.

Interest expense increased by approximately $1.0 million, or 6.4%, to $16.8 million in 2021 from $15.8 million in 2020. The increase was primarily due to a $1.8 million decrease in capitalized interest primarily due to the placing of additional space into service at 4747 Bethesda Avenue, West Half, The Wren, 901 W Street and 1770 Crystal Drive. The increase was also due to higher average outstanding balances under our mortgage loans. The increase in interest expense was partially offset by a lower outstanding balance under our revolving credit facility.

Gain on the sale of real estate of $11.3 million in 2021 was based on the cash received and the remeasurement of our retained interest in the land we contributed to one of our unconsolidated real estate ventures. See Note 4 to the financial statements for additional information.

Comparison of the Six Months Ended June 30, 2021 to 2020 The following summarizes certain line items from our statements of operations that we believe are important in understanding our operations and/or those items which significantly changed in the six months ended June 30, 2021 compared to the same period in 2020: Six Months Ended June 30, 2021 2020 % Change (Dollars in thousands)

Property rental revenue $245,060 $235,839 3.9 % Third-party real estate services revenue, including reimbursements 64,852 56,883 14.0 %

Depreciation and amortization expense 121,404 101,105 20.1 % Property operating expense 69,731 68,295 2.1 % Real estate taxes expense 36,868 36,068 2.2 % General and administrative expense: Corporate and other 26,370 26,392 (0.1)% Third-party real estate services 54,493 58,053 (6.1)% Share-based compensation related to Formation Transaction and special equity awards 9,386 18,299 (48.7)% Transaction and other costs 5,960 6,681 (10.8)%

Income (loss) from unconsolidated real estate ventures, net 3,010 (16,177) (118.6)% Interest expense 33,069 27,775 19.1 % Gain on sale of real estate 11,290 59,477 (81.0)%

Property rental revenue increased by approximately $9.2 million, or 3.9%, to $245.1 million in 2021 from $235.8 million in 2020. The increase was primarily due to (i) an $8.1 million increase related to 4747 Bethesda Avenue, West Half, The Wren, 900 W Street and 901 W Street as these properties placed additional space into service, (ii) a $6.1 million increase due to the deferral of rent and the write-off of deferred rent receivable for tenants that were placed on the cash basis of accounting in 2020 and a decrease in uncollectable operating lease receivables attributable to COVID-19 and (iii) a $4.8 million increase as 1770 Crystal Drive was placed into service in the fourth quarter of 2020. The increase in property rental revenue was partially offset by a $6.1 million decrease related to the Universal Buildings and RTC-West due to lower occupancy and a $3.5 million decrease related to RiverHouse Apartments and The Bartlett due to increased rent concessions and lower market rents.

Third-party real estate services revenue, including reimbursements, increased by approximately $8.0 million, or 14.0%, to $64.9 million in 2021 from $56.9 million in 2020. The increase was primarily due to a $12.8 million increase in development fees related to the timing of development projects. The increase in third-party

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document real estate services revenue was partially offset by a $1.8 million decrease in reimbursements revenue related to tenant services projects, a $1.7 million decrease in property and asset management fees due to the sale of assets within the JBG Legacy Funds and a $1.1 million decrease in construction management fees due to the timing of construction projects.

Depreciation and amortization expense increased by approximately $20.3 million, or 20.1%, to $121.4 million in 2021 from $101.1 million in 2020. The increase was primarily due to a $7.0 million increase related to the Universal Buildings due to the write-off of certain tenant improvements, a $6.5 million increase related to 4747 Bethesda Avenue, West Half, The Wren, 900 W Street and 901 W Street as these properties placed additional space into service, a $4.1 million increase related to 2345 Crystal Drive due to an increase in tenant improvements, a $1.6 million increase due to 1770 Crystal Drive being placed into service and a $1.4 million increase related to RTC-West due to the acceleration of depreciation of certain assets.

Property operating expense increased by approximately $1.4 million, or 2.1%, to $69.7 million in 2021 from $68.3 million in 2020. The increase was primarily due to (i) a $2.4 million increase related to 4747 Bethesda Avenue, West Half, The Wren, 900 W Street and 901 W Street as these properties placed additional space into service, (ii) a $1.6 million increase related to 2451 Crystal Drive due to costs incurred for construction management services provided to tenants and (iii) a $990,000 increase in ground rent expense related to Courthouse Plaza 1 and 2. The increase in property operating expense was partially offset by a $3.7 million decrease related to 1901 South Bell Street and 1235 S. Clark Street due to costs incurred in 2020 for construction management services provided to tenants.

Real estate tax expense increased by approximately $800,000, or 2.2%, to $36.9 million in 2021 from $36.1 million in 2020. The increase was primarily due to a $1.3 million increase at 4747 Bethesda Avenue, The Wren and 901 W Street as these properties placed additional space into service and an increase of $356,000 due to 1770 Crystal Drive being placed into service, partially offset by a decrease in real estate tax assessments for various properties located in National Landing.

General and administrative expense: corporate and other decreased by approximately $22,000, or 0.1%, to $26.4 million in 2021. The decrease was primarily due to a decline in share-based compensation expense, temporary staffing, marketing, and travel and entertainment expense, partially offset by an increase in employee compensation costs and consulting expenses.

General and administrative expense: third-party real estate services decreased by approximately $3.6 million, or 6.1%, to $54.5 million in 2021 from $58.1 million in 2020. This decrease was primarily due to a decrease in reimbursable expenses related to tenant services projects and a decrease in share-based compensation expense.

General and administrative expense: share-based compensation related to Formation Transaction and special equity awards decreased by approximately $8.9 million, or 48.7%, to $9.4 million in 2021 from $18.3 million in 2020. The decrease was primarily due to the graded vesting of certain awards issued in prior years, which resulted in lower expense as portions of the awards vested.

Transaction and other costs of $6.0 million in 2021 includes $4.1 million of expenses related to completed, potential and pursued transactions, $1.4 million of demolition costs related to 2000 South Bell Street and 2001 South Bell Street and $462,000 of integration and severance costs. Transaction and other costs of $6.7 million in 2020 primarily includes $4.0 million of costs related to a charitable commitment to the Washington Housing Conservancy, a non-profit that acquires and owns affordable workforce housing in the Washington, D.C. metropolitan area, and $2.7 million of integration and severance costs.

Income from unconsolidated real estate ventures increased by approximately $19.2 million, or 118.6%, to $3.0 million for 2021 from a loss of $16.2 million in 2020. The increase was primarily due to (i) a $6.5 million impairment charge recognized in 2020 related to our investment in a venture that owned The Marriott Wardman Park hotel, and $2.1 million for losses incurred from its COVID-19 related closure and (ii) an aggregate gain of $5.2 million from the sale of various assets by our real estate ventures in 2021 as compared to a $3.0 million loss from the sale of Woodglen in 2020.

Interest expense increased by approximately $5.3 million, or 19.1%, to $33.1 million in 2021 from $27.8 million in 2020. The increase was primarily due to a $5.4 million decrease in capitalized interest primarily due to the placing of additional space into service at 4747 Bethesda Avenue, West Half, The Wren, 901 W Street and 1770 Crystal Drive. The increase was also due to higher average outstanding balances under our

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document unsecured term loans and mortgage loans. The increase in interest expense was partially offset by a lower outstanding balance under our revolving credit facility.

FFO

FFO is a non-GAAP financial measure computed in accordance with the definition established by the National Association of Real Estate Investment Trusts ("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.

We believe FFO is a meaningful non-GAAP financial measure useful in comparing our levered operating performance from period-to-period and as compared to similar real estate companies because FFO excludes 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 does not represent cash generated from operating activities and is 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 may not be comparable to similarly titled measures used by other companies.

The following is the reconciliation of net income (loss) attributable to common shareholders, the most directly comparable GAAP measure, to FFO: Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (In thousands) Net income (loss) attributable to common shareholders $ (2,973) $ (36,780) $ (23,704) $ 6,145 Net income (loss) attributable to redeemable noncontrolling interests (345) (3,483) (2,575) 1,767 Net loss attributable to noncontrolling interests — — (1,108) — Net income (loss) (3,318) (40,263) (27,387) 7,912 Gain on sale of real estate (11,290) — (11,290) (59,477) (Gain) loss on sale from unconsolidated real estate ventures (5,189) 2,952 (5,189) 2,952 Real estate depreciation and amortization 54,475 49,924 116,975 95,586 Impairment of investment in unconsolidated real estate venture (1) — 6,522 — 6,522 Pro rata share of real estate depreciation and amortization from unconsolidated real estate ventures 7,277 7,498 14,588 14,380 FFO attributable to noncontrolling interests (41) (6) 1,030 (3) FFO attributable to OP Units 41,914 26,627 88,727 67,872 FFO attributable to redeemable noncontrolling interests (4,054) (2,911) (8,539) (7,408) FFO attributable to common shareholders $ 37,860 $ 23,716 $ 80,188 $ 60,464

(1) During the second quarter of 2020, we determined that our investment in the venture that owns The Marriott Wardman Park hotel was impaired due to a decline in the fair value of the underlying asset and recorded an impairment charge of $6.5 million, reducing the net book value of our investment to zero, and we suspended equity loss recognition for the venture after June 30, 2020. On October 1, 2020, we transferred our interest in this venture to our former venture partner.

NOI is a non-GAAP financial measure 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, 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.

During the three months ended June 30, 2021, our same store pool remained at 56 properties due to the inclusion of the commercial portion of 2221 S. Clark Street, which was bifurcated from the multifamily portion of the building, and the exclusion of Fairway Apartments, which was sold by an unconsolidated real estate venture during the second quarter of 2021. During the six months ended June 30, 2021, our same store pool increased from 52 properties to 56 properties due to the inclusion of 1800 South Bell Street, 500 L'Enfant Plaza, F1RST Residences, 1221 Van Street and the commercial portion of 2221 S. Clark Street and the exclusion of Fairway Apartments. Information provided on a same store basis includes the results of properties that are owned, operated and in-service for the entirety of both periods being compared, which excludes properties for which significant redevelopment, renovation or repositioning occurred during either of the periods being compared. While there is judgment surrounding changes in designations, a property is removed from the same store pool when the property is considered to be under-construction because it is undergoing significant redevelopment or renovation pursuant to a formal plan or is being repositioned in the market and such renovation or repositioning is expected to have a significant impact on property NOI. A development property or under-construction property is moved to the same store pool once a substantial portion of the growth expected from the development or redevelopment is reflected in both the current and comparable prior year period. Acquisitions are moved into the same store pool once we have owned the property for the entirety of the comparable periods and the property is not under significant development or redevelopment.

Same store NOI increased by $336,000, or 0.4%, to $76.5 million for the three months ended June 30, 2021 from $76.1 million in the same period in 2020. The increase was largely attributable to a decrease in uncollectable operating lease receivables and rent deferrals, partially offset by lower occupancy in our commercial portfolio, and lower rents and higher concessions in our multifamily portfolio.

Same store NOI decreased $7.3 million, or 4.6%, to $152.2 million for the six months ended June 30, 2021 from $159.5 million for the same period in 2020. The decrease was substantially attributable to COVID-19, which commenced at the end of the first quarter of 2020, including (i) higher concessions, lower rents and higher operating costs in our multifamily portfolio and (ii) lower occupancy and a decline in parking revenue in our commercial portfolio. The decline was partially offset by a decrease in rent deferrals and uncollectable operating lease receivables related to tenants impacted by COVID-19, the burn-off of rent abatements and a decrease in cleaning expenses across our commercial portfolio.

The following is the reconciliation of net income (loss) attributable to common shareholders to NOI and same store NOI:

Three Months Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 (Dollars in thousands) Net income (loss) attributable to common shareholders $ (2,973) $ (36,780) $ (23,704) $ 6,145 Add: Depreciation and amortization expense 56,678 52,616 121,404 101,105 General and administrative expense: Corporate and other 13,895 13,216 26,370 26,392 Third-party real estate services 25,557 29,239 54,493 58,053 Share-based compensation related to Formation Transaction and special equity awards 4,441 8,858 9,386 18,299 Transaction and other costs 2,270 1,372 5,960 6,681 Interest expense 16,773 15,770 33,069 27,775 Loss on extinguishment of debt — — — 33 Income tax expense (benefit) (5) (888) 4,310 (3,233) Net income (loss) attributable to redeemable noncontrolling interests (345) (3,483) (2,575) 1,767 Net loss attributable to noncontrolling interests — — (1,108) — Less: Third-party real estate services, including reimbursements revenue 26,745 27,167 64,852 56,883 Other revenue 1,904 1,516 4,090 3,146 Income (loss) from unconsolidated real estate ventures, net 3,953 (13,485) 3,010 (16,177) Interest and other income (loss), net (38) 114 (29) 1,021 Gain on sale of real estate 11,290 — 11,290 59,477 Consolidated NOI 72,437 64,608 144,392 138,667 NOI attributable to unconsolidated real estate ventures at our share 8,109 7,495 15,613 16,073 Non-cash rent adjustments (1) (4,088) (1,419) (8,853) (4,964) Other adjustments (2) 5,191 3,516 9,933 6,330 Total adjustments 9,212 9,592 16,693 17,439 NOI 81,649 74,200 161,085 156,106 Less: out-of-service NOI loss (3) (1,329) (1,475) (2,619) (2,857) Operating Portfolio NOI 82,978 75,675 163,704 158,963 Non-same store NOI (4) 6,527 (440) 11,490 (567) Same store NOI (5) $ 76,451 $ 76,115 $ 152,214 $ 159,530

Change in same store NOI 0.4% (4.6)% Number of properties in same store pool 56 56

(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.

Reportable Segments

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document We review operating and financial data for each property on an individual basis; therefore, each of our individual properties is a separate operating segment. We defined our reportable segments to be aligned with our method of internal reporting and the way our Chief Executive Officer, who is also our Chief Operating Decision Maker ("CODM"), makes key operating decisions, evaluates financial results, allocates resources and manages our business. Accordingly, we aggregate our operating segments into three reportable segments (commercial, multifamily, and third-party asset management and real estate services) based on the economic characteristics and nature of our assets and services.

With respect to the third-party asset management and real estate services business, the CODM reviews revenue streams generated by this segment ("Third-party real estate services, including reimbursements"), as well as the expenses attributable to the segment ("General and administrative: third-party real estate services"), which are both disclosed separately in our statements of operations and discussed in the preceding pages under "Results of Operations." The following represents the components of revenue from our third- party real estate services business:

(1) Estimated development fee revenue totaling $55.1 million as of June 30, 2021 is expected to be recognized over the next six years as unsatisfied performance obligations are completed. (2) Represents reimbursements of expenses incurred by us on behalf of third parties, including allocated payroll costs and amounts paid to third-party contractors for construction management projects.

Third-party real estate services revenue, including reimbursements, decreased by approximately $422,000, or 1.6%, to $26.7 million for the three months ended June 30, 2021 from $27.2 million for the same period in 2020. The decrease was primarily due to a $2.0 million decrease in reimbursements revenue related to tenant services projects, partially offset by a $1.3 million increase in development fee revenue primarily related to the timing of development projects. Third-party real estate services revenue, including reimbursements, increased by approximately $8.0 million, or 14.0%, to $64.9 million for the six months ended June 30, 2021 from $56.9 million for the same period in 2020. The increase was primarily due to a $12.8 million increase in development fees related to the timing of development projects. The increase in third-party real estate services revenue was partially offset by a $1.8 million decrease in reimbursements revenue related to tenant services projects, a $1.7 million decrease in property and asset management fees due to the sale of assets within the JBG Legacy Funds and a $1.1 million decrease in construction management fees due to the timing of construction projects.

Third-party real estate services expenses decreased by approximately $3.7 million, or 12.6%, to $25.6 million for the three months ended June 30, 2021 from $29.2 million for the same period in 2020. The decrease was primarily due to a decrease in reimbursable expenses related to tenant services projects. Third-party real estate services expenses decreased by approximately $3.6 million, or 6.1%, to $54.5 million for the six months ended June 30, 2021 from $58.1 million in 2020. This decrease was primarily due to a decrease in reimbursable expenses related to tenant services projects and a decrease in share-based compensation expense.

Consistent with internal reporting presented to our CODM and our definition of NOI, the third-party asset management and real estate services operating results are excluded from the NOI data below.

Property revenue is calculated as property rental revenue plus parking revenue. Property expense is calculated as property operating expenses plus real estate taxes. Consolidated NOI is calculated as property revenue less property expense. See Note 16 to the financial statements for the reconciliation of net income (loss) attributable to common shareholders to consolidated NOI for the three and six months ended June 30, 2021 and 2020. The following is a summary of NOI by segment:

Three Months Ended June 30, Six Months Ended June 30, 2021 2020 2021 2020 (In thousands) Property revenue: Commercial $ 95,570 $ 86,347 $ 188,863 $ 183,789 Multifamily 32,828 31,656 65,479 64,596 Other (1) (2,403) (1,734) (3,351) (5,355) Total property revenue 125,995 116,269 250,991 243,030

Property expense: Commercial 37,260 36,025 73,007 76,340 Multifamily 17,107 15,399 34,547 30,444 Other (1) (809) 237 (955) (2,421) Total property expense 53,558 51,661 106,599 104,363

Consolidated NOI: Commercial 58,310 50,322 115,856 107,449 Multifamily 15,721 16,257 30,932 34,152 Other (1) (1,594) (1,971) (2,396) (2,934) Consolidated NOI $ 72,437 $ 64,608 $ 144,392 $ 138,667

(1) Includes activity related to future development assets and corporate entities and the elimination of intersegment activity.

Comparison of the Three Months Ended June 30, 2021 to 2020 Commercial: Property rental revenue increased by $9.2 million, or 10.7%, to $95.6 million in 2021 from $86.3 million in 2020. Consolidated NOI increased by $8.0 million, or 15.9%, to $58.3 million in 2021 from $50.3 million in 2020. The increase in property revenue and consolidated NOI was due to (i) a decline in rent deferrals and uncollectable operating lease receivables related to tenants impacted by COVID-19, (ii) increases related to 4747 Bethesda Avenue and 1770 Crystal Drive as these properties were placed into service, and (iii) increases related to 2100 Crystal Drive, 2200 Crystal Drive, 1225 South Clark Street and 2345 Crystal Drive due to higher occupancy. These increases were partially offset by a decrease related to the Universal Buildings due to lower occupancy.

Multifamily: Property rental revenue increased by $1.2 million, or 3.7%, to $32.8 million in 2021 from $31.7 million in 2020. Consolidated NOI decreased by $536,000, or 3.3%, to $15.7 million in 2021 from $16.3 million in 2020. The increase in property revenue was due to The Wren, 900 W Street, 901 W Street and West Half as these properties placed additional units into service. The decrease in consolidated NOI was due to an increase in rent concessions and lower market rates, primarily at The Bartlett and RiverHouse Apartments, partially offset by increases in consolidated NOI from The Wren, 901 W Street and West Half.

Comparison of the Six Months Ended June 30, 2021 to 2020 Commercial: Property rental revenue increased by $5.1 million, or 2.8%, to $188.9 million in 2021 from $183.8 million in 2020. Consolidated NOI increased by $8.4 million, or 7.8%, to $115.9 million in 2021 from $107.4 million in 2020. The increase in property revenue and consolidated NOI was due to (i) a decline in rent deferrals and uncollectable operating lease receivables related to tenants impacted by COVID-19, (ii) increases in revenues related to 4747 Bethesda Avenue and 1770 Crystal Drive as these properties were placed into service, and (iii) increases related to 2100 Crystal Drive, 1225 South Clark Street and 2345 Crystal Drive due to higher occupancy. These increases were partially offset by a decrease in parking revenue due to reduced

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document transient and office parking and decreases related to the Universal Buildings and RTC-West due to lower occupancy.

Multifamily: Property rental revenue increased by $883,000, or 1.4%, to $65.5 million in 2021 from $64.6 million in 2020. Consolidated NOI decreased by $3.2 million, or 9.4%, to $30.9 million in 2021 from $34.2 million in 2020. The increase in property revenue was due to The Wren, 900 W Street, 901 W Street and West Half as these properties placed additional units into service. The decrease in consolidated NOI was due to (i) an increase in rent concessions and lower market rates, primarily at The Bartlett and RiverHouse Apartments, (ii) higher operating expenses and (iii) higher insurance costs. The decrease in consolidated NOI was partially offset by increases related to The Wren, 900 W Street, 901 W Street and West Half as these properties placed additional units into service.

Liquidity and Capital Resources

Property rental income is our primary source of operating cash flow and is dependent on many factors including occupancy levels and rental rates, as well as our tenants' ability to pay rent. In addition, our third- party asset management and real estate services business provides fee-based real estate services to the WHI, Amazon, the JBG Legacy Funds and other third parties. Our assets provide a relatively consistent level of cash flow that enables us to pay operating expenses, debt service, recurring capital expenditures, dividends to shareholders and distributions to holders of OP Units. Other sources of liquidity to fund cash requirements include proceeds from financings, recapitalizations, asset sales and the issuance and sale of securities. We anticipate that cash flows from continuing operations and proceeds from financings, recapitalizations and asset sales, together with existing cash balances, will be adequate to fund our business operations, debt amortization, capital expenditures, any dividends to shareholders and distributions to holders of OP Units over the next 12 months.

Financing Activities The following is a summary of mortgages payable:

Weighted Average Effective Interest Rate (1) June 30, 2021 December 31, 2020 (In thousands) Variable rate (2) 2.14% $ 677,246 $ 678,346 Fixed rate (3) 4.32% 923,280 925,523 Mortgages payable 1,600,526 1,603,869 Unamortized deferred financing costs and premium/ discount, net (4) (9,383) (10,131) Mortgages payable, net $ 1,591,143 $ 1,593,738

(1) Weighted average effective interest rate as of June 30, 2021. (2) Includes variable rate mortgages payable with interest rate cap agreements. (3) Includes variable rate mortgages payable with interest rates fixed by interest rate swap agreements. (4) As of June 30, 2021, net deferred financing costs related to an unfunded mortgage loan totaling $4.2 million were included in "Other assets, net."

In July 2021, we entered into a mortgage loan with a principal balance of $85.0 million, collateralized by 1225 S. Clark Street. The mortgage loan has a seven-year term and an interest rate of LIBOR plus 1.60% per annum.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document As of June 30, 2021 and December 31, 2020, we had various interest rate swap and cap agreements on certain mortgages payable with an aggregate notional value of $1.3 billion. See Note 15 to the financial statements for additional information.

Effective Interest Rate (1) June 30, 2021 December 31, 2020 (In thousands) Revolving credit facility (2) (3) (4) 1.15% $ — $ —

Our existing floating rate debt instruments, including our credit facility, with a principal balance totaling $1.5 billion and our hedging arrangements with a notional value totaling $1.7 billion currently use as a reference rate the U.S. dollar London Interbank Offered Rate ("LIBOR"), and we expect a transition from LIBOR to another reference rate due to plans to phase out the reference rate by the end of 2021, after which point its continuation cannot be assured. Though an alternative reference rate for LIBOR, the Secured Overnight Financing Rate ("SOFR"), exists, significant uncertainties still remain. We can provide no assurance regarding the future of LIBOR and when our LIBOR-based instruments will transition from LIBOR as a reference rate to SOFR or another reference rate. The discontinuation of a benchmark rate or other financial metric, changes in a benchmark rate or other financial metric, or changes in market perceptions of the acceptability of a benchmark rate or other financial metric, including LIBOR, could, among other things, result in increased interest payments, changes to our risk exposures, or require renegotiation of previous transactions. In addition, any such discontinuation or changes, whether actual or anticipated, could result in market volatility, adverse tax or accounting effects, increased compliance, legal and operational costs, and risks associated with contract negotiations.

Purchases under the program are made either in the open market or in privately negotiated transactions from time to time as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by us at our discretion and will be subject to economic and market conditions, share price,

applicable legal requirements and other factors. The program may be suspended or discontinued at our discretion without prior notice.

Liquidity Requirements Our principal liquidity needs for the next 12 months and beyond include:

● normal recurring expenses; ● debt service and principal repayment obligations, including balloon payments on maturing debt; ● capital expenditures, including major renovations, tenant improvements and leasing costs; ● development expenditures; ● dividends to shareholders and distributions to holders of OP Units; ● common share repurchases; and ● acquisitions of properties, either directly or indirectly through the acquisition of equity interests therein.

We expect to satisfy these needs using one or more of the following:

● cash and cash equivalent balances; ● cash flows from operations; ● distributions from real estate ventures; and ● proceeds from financings, recapitalizations and asset sales.

While we do not expect the need to do so during the next 12 months, we also can issue securities to raise funds.

While we have not experienced a significant impact to date in this regard, we expect COVID-19 to continue to have an adverse impact on our liquidity and capital resources. Future decreases in cash flows from operations resulting from tenant defaults, rent deferrals or decreases in our rents or occupancy, would decrease the cash available for the capital uses described above.

As of June 30, 2021, we had $998.5 million of availability under our credit facility (net of outstanding letters of credit totaling $1.5 million). As of June 30, 2021, we had no debt on a consolidated basis and at our share scheduled to mature in 2021.

Contractual Obligations and Commitments During the six months ended June 30, 2021, there were no material changes to the contractual obligation information presented in Item 7 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2020.

As of June 30, 2021, we had additional capital commitments and certain recorded guarantees to our unconsolidated real estate ventures totaling $62.7 million.

As of June 30, 2021, we had committed tenant-related obligations totaling $68.9 million ($65.0 million related to our consolidated entities and $3.9 million related to our unconsolidated real estate ventures at our share). The timing and amounts of payments for tenant-related obligations are uncertain and may only be due upon satisfactory performance of certain conditions.

closings of capital commitments totaling $114.4 million, which included a commitment from us of $11.2 million. As of June 30, 2021, our remaining commitment was $8.3 million.

On July 29, 2021, our Board of Trustees declared a quarterly dividend of $0.225 per common share.

Summary of Cash Flows The following summary discussion of our cash flows is based on our statements of cash flows and is not meant to be an all-inclusive discussion of the changes in our cash flows:

Six Months Ended June 30, 2021 2020 (In thousands) Net cash provided by operating activities $ 123,556 $ 85,519 Net cash (used in) provided by investing activities (70,445) 33,346 Net cash (used in) provided by financing activities (77,754) 469,652

Cash Flows for the Six Months Ended June 30, 2021 Cash and cash equivalents, and restricted cash decreased $24.6 million to $238.7 million as of June 30, 2021, compared to $263.3 million as of December 31, 2020. This decrease resulted from $77.8 million of net cash used in financing activities and $70.4 million of net cash used in investing activities, partially offset by $123.6 million of net cash provided by operating activities. Our outstanding debt was $2.0 billion as of June 30, 2021 and December 31, 2020.

Net cash provided by operating activities of $123.6 million primarily comprised: (i) $101.5 million of net income (before $140.1 million of non-cash items and $11.3 million gain on sale of real estate), (ii) $11.7 million of net change in operating assets and liabilities and (iii) $10.3 million of return on capital from unconsolidated real estate ventures. Non-cash income adjustments of $140.1 million primarily include depreciation and amortization expense, share-based compensation expense, deferred rent, amortization of lease incentives and net income from unconsolidated real estate ventures.

Net cash used in investing activities of $70.4 million comprised: (i) $67.4 million of development costs, construction in progress and real estate additions and (ii) $22.0 million of investments in unconsolidated real estate ventures, partially offset by (iii) $14.4 million of proceeds from the sale of real estate and (iv) $4.6 million of distributions of capital from unconsolidated real estate ventures.

Net cash used in financing activities of $77.8 million primarily comprised: (i) $59.2 million of dividends paid to common shareholders, (ii) $19.2 million of common shares repurchased, (iii) $9.7 million of distributions to redeemable noncontrolling interests, (iv) $4.6 million of debt issuance costs, and (v) $3.3 million of repayments of mortgages payable, partially offset by (vi) $17.5 million of contributions from noncontrolling interests.

Off-Balance Sheet Arrangements

Unconsolidated Real Estate Ventures We consolidate entities in which we have a controlling interest or are the primary beneficiary in a variable interest entity. From time to time, we may have off-balance-sheet unconsolidated real estate ventures and other unconsolidated arrangements with varying structures.

As of June 30, 2021, we have investments in unconsolidated real estate ventures totaling $497.8 million. For these investments, we exercise significant influence over but do not control these entities and, therefore, account for these investments using the equity method of accounting. For a more complete description of our real estate ventures, see Note 4 to the financial statements.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document From time to time, we (or ventures in which we have an ownership interest) have agreed, and may in the future agree with respect to unconsolidated real estate ventures, to (i) guarantee portions of the principal, interest and other amounts in connection with borrowings, (ii) provide customary environmental indemnifications and nonrecourse carve-outs (e.g.,

guarantees against fraud, misrepresentation and bankruptcy) in connection with borrowings or (iii) provide guarantees to lenders and other third parties for the completion of development projects. We customarily have agreements with our outside venture partners whereby the partners agree to reimburse the real estate venture or us for their share of any payments made under certain of these guarantees. At times, we also have agreements with certain of our outside venture partners whereby we agree to either indemnify the partners and/or the associated ventures with respect to certain contingent liabilities associated with operating assets or to reimburse our partner for its share of any payments made by them under certain guarantees. Guarantees (excluding environmental) customarily terminate either upon the satisfaction of specified circumstances or repayment of the underlying debt. Amounts that we may be required to pay in future periods in relation to guarantees associated with budget overruns or operating losses are not estimable.

Commitments and Contingencies

With respect to borrowings of our consolidated entities, we have agreed, and may in the future agree, to (i) guarantee portions of the principal, interest and other amounts, (ii) provide customary environmental indemnifications and nonrecourse carve-outs (e.g., guarantees against fraud, misrepresentation and bankruptcy) or (iii) provide guarantees to lenders, tenants and other third parties for the completion of development projects. As of June 30, 2021, the aggregate amount of principal payment guarantees was $8.3 million for our consolidated entities.

Environmental Matters

Under various federal, state and local laws, ordinances and regulations, an owner of real estate is liable for the costs of removal or remediation of certain hazardous or toxic substances on such real estate. These laws often impose such liability without regard to whether the owner knew of, or was responsible for, the presence of such hazardous or toxic substances. The costs of remediation or removal of such substances may be substantial and the presence of such substances, or the failure to promptly remediate such substances, may adversely affect the owner's ability to sell such real estate or to borrow using such real estate as collateral. In connection with the ownership and operation of our assets, we may be potentially liable for such costs. The operations of current and former tenants at our assets have involved, or may have involved, the use of hazardous materials or generated hazardous wastes. The release of such hazardous materials and wastes could result in us incurring liabilities to remediate any resulting contamination. The presence of contamination or the failure to remediate contamination at our properties may (i) expose us to third-party liability (e.g., for cleanup costs, natural resource damages, bodily injury or property damage), (ii) subject our properties to liens in favor of the government for damages and costs the government incurs in connection with the contamination, (iii) impose restrictions on the manner in which a property may be used or which businesses may be operated, or (iv) materially adversely affect our ability to sell, lease or develop the real estate or to borrow using the real estate as collateral. In addition, our assets are exposed to the risk of contamination originating from other sources. While a property owner may not be responsible for remediating contamination that has migrated onsite from an identifiable and viable offsite source, the contaminant's presence can have adverse effects on operations and the redevelopment of our assets. To the extent we send contaminated materials to other locations for treatment or disposal, we may be liable for cleanup of those sites if they become contaminated.

Most of our assets have been subject, at some point, to environmental assessments that are intended to evaluate the environmental condition of the assets. These environmental assessments generally have included a historical review, a public records review, a visual inspection of the site and surrounding assets, visual or historical evidence of underground storage tanks, and the preparation and issuance of a written report. Soil and/or groundwater subsurface testing is conducted at our assets, when necessary, to further investigate any issues raised by the initial assessment that could reasonably be expected to pose a material concern to the property or result in us incurring material environmental liabilities as a result of redevelopment. They may not, however, have included extensive sampling or subsurface investigations. In each case where the environmental assessments have identified conditions requiring remedial actions required by law, we have initiated appropriate actions. The environmental assessments did not reveal any material environmental contamination that we believe would have a material adverse effect on our overall business, financial condition or results of operations, or that have not been anticipated and remediated during site redevelopment as required by law. Nevertheless, there can be no assurance that the identification of new areas of contamination, changes in the extent or known scope of contamination, the discovery of additional sites or changes in cleanup requirements would not result in significant cost to us. As disclosed in Note 17

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document to the financial statements, environmental liabilities totaled $18.2 million as of June 30, 2021 and December 31, 2020 and are included in "Other liabilities, net" in our balance sheets.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We have exposure to fluctuations in interest rates, which are sensitive to many factors that are beyond our control. The following is a summary of our annual exposure to a change in interest rates:

June 30, 2021 December 31, 2020 Weighted Weighted Average Annual Average Effective Effect of 1% Effective Interest Change in Interest Balance Rate Base Rates Balance Rate (Dollars in thousands) Debt (contractual balances): Mortgages payable: Variable rate (1) $ 677,246 2.14% $ 6,867 $ 678,346 2.18% Fixed rate (2) 923,280 4.32% — 925,523 4.32%

$1,600,526 $ 6,867 $1,603,869 Credit facility: Revolving credit facility (3) $ — 1.15% $ — $ — 1.19% Tranche A-1 Term Loan (4) 200,000 2.59% — 200,000 2.59% Tranche A-2 Term Loan (4) 200,000 2.49% — 200,000 2.49% $ 400,000 $ — $ 400,000 Pro rata share of debt of unconsolidated real estate ventures (contractual balances): Variable rate (1) $ 320,479 2.44% $ 3,249 $ 319,057 2.47% Fixed rate (2) 81,940 4.46% — 79,989 4.36% $ 402,419 $ 3,249 $ 399,046

(1) Includes variable rate mortgages payable with interest rate cap agreements. (2) Includes variable rate mortgages payable with interest rates fixed by interest rate swap agreements. (3) The interest rate for our revolving credit facility excludes a 0.15% facility fee. (4) As of June 30, 2021 and December 31, 2020, the outstanding balance was fixed by interest rate swap agreements. The interest rate swaps mature concurrently with the term loan and provide a weighted average interest rate of 1.39% for the Tranche A-1 Term Loan and 1.34% for the Tranche A-2 Term Loan.

The fair value of our mortgages payable is estimated by discounting the future contractual cash flows of these instruments using current risk-adjusted rates available to borrowers with similar credit profiles based on market sources. The fair value of our unsecured term loans is calculated based on the net present value of payments over the term of the facilities using estimated market rates for similar notes and remaining terms. As of June 30, 2021 and December 31, 2020, the estimated fair value of our consolidated debt was $2.1 billion and $2.0 billion. These estimates of fair value, which are made at the end of the reporting period, may be different from the amounts that may ultimately be realized upon the disposition of our financial instruments.

Hedging Activities

To manage, or hedge, our exposure to interest rate risk, we follow established risk management policies and procedures, including the use of a variety of derivative financial instruments. We do not enter into derivative financial instruments for speculative purposes.

Derivative Financial Instruments Designated as Cash Flow Hedges

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Certain derivative financial instruments, consisting of interest rate swap and cap agreements, are designated as cash flow hedges, and are carried at their estimated fair value on a recurring basis. We assess the effectiveness of our cash flow hedges

both at inception and on an ongoing basis. If the hedges are deemed to be effective, the fair value is recorded in “Accumulated other comprehensive loss” in our balance sheets and is subsequently reclassified into "Interest expense" in our statements of operations in the period that the hedged forecasted transactions affect earnings. Our cash flow hedges become less than perfectly effective if the critical terms of the hedging instrument and the forecasted transactions do not perfectly match such as notional amounts, settlement dates, reset dates, calculation period and interest rates. In addition, we evaluate the default risk of the counterparty by monitoring the creditworthiness of the counterparty. While management believes its judgments are reasonable, a change in a derivative's effectiveness as a hedge could materially affect expenses, net income and equity.

As of June 30, 2021 and December 31, 2020, we had interest rate swap and cap agreements with an aggregate notional value of $862.7 million, which were designated as cash flow hedges. The fair value of our interest rate swaps and caps designated as cash flow hedges consisted of liabilities totaling $31.9 million and $44.2 million as of June 30, 2021 and December 31, 2020, included in "Other liabilities, net" in our balance sheets.

Derivative Financial Instruments Not Designated as Hedges Certain derivative financial instruments, consisting of interest rate swap and cap agreements, are considered economic hedges, but not designated as accounting hedges, and are carried at their estimated fair value on a recurring basis. Realized and unrealized gains are recorded in "Interest expense" in our statements of operations in the period in which the change occurs. As of June 30, 2021 and December 31, 2020, we had various interest rate cap agreements with an aggregate notional value of $867.7 million, which were not designated as cash flow hedges. The fair value of our interest rate caps not designated as hedges was not material as of June 30, 2021 and December 31, 2020.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2021, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are, from time to time, involved in legal actions arising in the ordinary course of business. In our opinion, the outcome of such matters is not expected to have a material adverse effect on our financial position, results of operations or cash flows.

ITEM 1A. RISK FACTORS There have been no material changes to the risk factors previously disclosed in our Annual Report for the year ended December 31, 2020, filed with the SEC on February 23, 2021.

(a) Not applicable.

(b) Not applicable.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

LTIP Unit Awards

On July 29, 2021 (the “Grant Date”), upon the recommendation of the Compensation Committee (the “Compensation Committee”) of the Board of Trustees (the “Board”) of JBG SMITH Properties (the “Company”), the Board approved grants of special LTIP unit awards (“Retention LTIP Grant”) to the Company’s executive officers and certain other employees, including to each of the following named executive officers: W. Matthew Kelly, Chief Executive Officer, David P. Paul, President and Chief Operating Officer, Kevin “Kai” Reynolds, Chief Development Officer, and M. Moina Banerjee, Chief Financial Officer (the “NEOs”).

The Retention LTIP Grant comprises 50% time-based vesting LTIPs (the “Time-Based LTIPs”) and 50% performance-based vesting LTIPs (the “Performance-Based LTIPs” and together with the “Time-Based LTIPs”, the “LTIP Units”), based on grant-date fair value. The Time-Based LTIPs vest 50% on the fifth anniversary of the Grant Date and 25% on each of the sixth and seventh anniversaries of the Grant Date, subject to the recipient's continued employment with the Company. The Performance-Based LTIPs earn based on the Company’s achievement of four share price targets during the period commencing on the first anniversary of the Grant Date and ending on the sixth anniversary of the Grant Date (the “Performance Period”) and will vest, if earned, over a seven-year period. Specifically, a number of Performance-Based LTIPs, rounded up to the nearest whole unit, equal to 17.5%, 22.5%, 27.5%, and 32.5% of the total Performance-Based LTIPs awarded earn on the first date during the Performance Period on which the closing sales price of the Company’s common shares, as reported on the NYSE, equals or exceed each of the following four share price targets for a consecutive 20 trading day period: $35.00, $40.00, $45.00, and $50.00. A maximum of 50% of the Performance-Based LTIPs can vest on the fifth anniversary of the Grant Date, and a maximum of an additional 25% of the Performance-Based LTIPs can vest on each of the sixth and seventh anniversaries of the Grant Date, in each case subject to such Performance-Based LTIPs being earned, as described above. Any Performance-Based LTIPs granted but not earned by the end of the Performance Period will be forfeited.

The total number of LTIP Units granted to each named executive officer is as follows: (i) 308,000 LTIP Units for Mr. Kelly; (ii) 62,000 LTIP Units for Mr. Paul; (iii) 103,000 LTIP Units for Mr. Reynolds; and (iv) 103,000 LTIP Units for Ms. Banerjee. The aggregate fair value of these awards is $15.4 million.

The purpose of the Retention LTIP Grant, which was made under the Company’s existing 2017 Omnibus Share Plan (the “Omnibus Plan”), is to further align the Company's senior team with its transformational objectives for the next seven years and its long-term NAV per share growth strategy as well as to provide incentive to the senior team to remain with the Company. Further, the Compensation Committee believes that

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the pandemic has had a significant impact on the job market – an impact that will likely hinder the ability to attract and retain employees. Consequently, the Compensation Committee believes the Retention LTIP Grant is critical for the Company to retain its talented senior team.

Vesting of the Retention LTIP Grant is generally contingent on the named executive officer’s continued employment through each vesting date, provided that, notwithstanding the language in each NEO’s employment agreement, if such executive’s employment terminates without cause or for good reason more than one year after the Grant Date, due to death or disability at any point after the Grant Date, the grantee will vest in the Performance-Based LTIPs that have been earned

through the date of termination at the next vesting date and Time-Based LTIPs that would have vested at the next vesting date had such grantee continued to be employed by the Company. Solely in the case of Mr. Paul, if his employment terminates without cause, for good reason or due to his retirement more than one year after the Grant Date, or due to death or disability at any point after the Grant Date, he will fully vest in the Time-Based LTIPs and he will be eligible to continue to earn and vest in the Performance-Based LTIPs through the seventh anniversary of the Grant Date as though he had remained employed with the Company through that date. If any such grantee’s employment terminates for any reason other than as described in the preceding sentences, any outstanding unvested LTIP Units as of the date of such termination will be forfeited and cancelled.

In connection with a “change in control” (as defined in the Omnibus Plan), if the acquirer of the Company assumes or replaces the Time-Based LTIPs on substantially the same terms, the awards will continue to vest; otherwise, the Time-Based LTIPs will vest in full immediately prior to the consummation of the Change in Control. With regard to the Performance-Based LTIPs and commencing more than one year after the grant date , if the acquirer of the Company assumes or replaces the awards such that it preserves the intent, economic opportunity and value of the award following the change in control, the award shall convert and continue to vest; otherwise, the Performance-Based LTIPs will become vested to the extent earned based on the price received in the change in control. If the Performance-Based LTIPs or Time-Based LTIPs are assumed by the acquirer in a change in control and the grantee is terminated without cause or for good reason within 18 months of the change in control, such Performance-Based LTIPs will become fully vested to the extent earned through the date of termination and the Time-Based LTIPs will become fully vested. Any Performance-Based LTIPs granted one year or less prior to the change in control, as of the date of such change in control will be forfeited and cancelled.

Copies of the forms of Executive LTIP Unit Agreements are being filed as Exhibits 10.3, 10.4, 10.5 and 10.6 to this Form 10-Q, and each is incorporated herein by this reference. The foregoing description of the terms of the LTIP Unit Awards is qualified in its entirety by reference to the full text of such award agreements.

ITEM 6. EXHIBITS

(a) Exhibit Index

Exhibits Description 3.1 Declaration of Trust of JBG SMITH Properties, as amended and restated (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on July 21, 2017). 3.2 Articles Supplementary to Declaration of Trust of JBG SMITH Properties (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on March 6, 2018). 3.3 Articles of Amendment to Declaration of Trust of JBG SMITH Properties (incorporated by reference to Exhibit 3.1 to our current report on Form 8-K, filed on May 3, 2018). 3.4 Amended and Restated Bylaws of JBG SMITH Properties (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K, filed on February 21, 2020). 10.1† Amendment No. 3 to the JBG SMITH Properties 2017 Omnibus Share Plan, effective April 29, 2021 (incorporated by reference to Exhibit 4.8 to our Registration Statement on Form S-8, filed on April 29, 2021). 10.2 Amendment No. 1 to Second Amended and Restated Limited Partnership Agreement of JBG SMITH Properties LP, effective April 29, 2021 (incorporated by reference to Exhibit 10.2 to our Registration Statement on Form S-3, filed on June 30, 2021). 10.3** Form of July 2021 Performance LTIP Unit Agreement. 10.4** Form of July 2021 Performance LTIP Unit Agreement (Special Termination & Vesting Provisions). 10.5** Form of July 2021 Restricted LTIP Unit Agreement. 10.6** Form of July 2021 Restricted LTIP Unit Agreement (Special Termination & Vesting Provisions). 31.1** Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended and Section 302 of the Sarbanes-Oxley Act of 2002. 31.2** Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended and Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended and 18 U.S.C 1350, as created by Section 906 of the Sarbanes- Oxley Act of 2002. 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema 101.CAL Inline XBRL Extension Calculation Linkbase 101.LAB Inline XBRL Extension Labels Linkbase 101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase 101.DEF Inline XBRL Taxonomy Extension Definition Linkbase 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

** Filed herewith. † Denotes a management contract or compensatory plan, contract or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

JBG SMITH Properties

Date: August 3, 2021 /s/ M. Moina Banerjee M. Moina Banerjee Chief Financial Officer (Principal Financial Officer)

JBG SMITH Properties

Date: August 3, 2021 /s/ Angela Valdes Angela Valdes Chief Accounting Officer (Principal Accounting Officer)

FORM OF JBG SMITH PROPERTIES 2017 OMNIBUS SHARE PLAN PERFORMANCE LTIP UNIT AGREEMENT

JULY 2021 EQUITY AWARD

Name of Employee: ______(the “Employee”)

No. of LTIP Units Awarded: ______

Grant Date: July 29, 2021

RECITALS

A. The Employee is an employee of JBG SMITH Properties, a Maryland real estate investment trust (the “Company”) and provides services to JBG SMITH Properties LP, a Delaware limited partnership, through which the Company conducts substantially all of its operations (the “Partnership”).

B. In accordance with the JBG SMITH Properties 2017 Omnibus Share Plan, as it may be amended from time to time (the “Plan”), the Company desires, in connection with the employment of the Employee, to provide the Employee with an opportunity to acquire LTIP Units (as defined in the agreement of limited partnership of the Partnership, as amended (the “Partnership Agreement”)) having the rights, voting powers, restrictions, limitations as to distributions, qualifications and terms and conditions of redemption and conversion set forth herein, in the Plan and in the Partnership Agreement, and thereby provide additional incentive for the Employee to promote the progress and success of the business of the Company, the Partnership and its Subsidiaries. Upon the close of business on the Grant Date pursuant to this Performance LTIP Unit Agreement (this “Agreement”), the Employee shall receive the number of LTIP Units specified above (the “Award LTIP Units”), subject to the restrictions and conditions set forth herein, in the Plan and in the Partnership Agreement.

C. The exact number of LTIP Units earned under this award (the “Award”) shall be determined based on the achievement of certain share price hurdles during the Performance Period, as provided herein. Any LTIP Units not earned at the conclusion of the Performance Period will be forfeited.

NOW, THEREFORE, the Company, the Partnership and the Employee agree as follows:

1. Definitions. Capitalized terms used herein without definitions shall have the meanings given to those terms in the Plan. In addition, as used herein:

“Cause” means, if not otherwise defined in the Employee’s Service Agreement, if any, the Employee’s: (i) conviction of, or plea of guilty or nolo contendere to, a felony, (ii) willful and continued failure to use reasonable best efforts to substantially perform his duties (other than such failure resulting from the Employee’s incapacity due to physical or

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document mental illness) that the Employee fails to remedy within 30 days after written notice is delivered by the Company to the Employee that specifically identifies in reasonable detail the manner in which the Company believes the Employee has not used reasonable efforts to perform in all material respects his duties hereunder, or (iii) willful misconduct (including, but not limited to, a willful breach of the provisions of any agreement with the Company with respect to confidentiality, ownership of documents, non-competition or non-solicitation) that is materially economically injurious to the Company or its affiliates. For purposes of this paragraph, no act, or failure to act, by the Employee will be considered “willful” unless committed in bad faith and without a reasonable belief that the act or omission was in the best interests of the Company.

“Closing Price” means the closing price of a Share as reported in the principal stock exchange or quotation system on which the Shares are listed on the applicable date.

“Committee” means the Compensation Committee of the Board of Trustees of the Company.

“Common Units” means Common Partnership Units issued by the Partnership.

“Continuous Service” means the continuous service to the Employer, without interruption or termination, in any capacity of employee, or, with the written consent of the Committee, consultant. Continuous Service shall not be considered interrupted in the case of: (a) any approved leave of absence; (b) transfers among the Employers, or any successor, in any capacity of employee, or with the written consent of the Committee, as a member of the Board or a consultant; or (c) any change in status as long as the individual remains in the service of the Employer in any capacity of employee or (if the Committee specifically agrees in writing that the Continuous Service is not uninterrupted) as a member of the Board or a consultant. An approved leave of absence shall include sick leave, military leave, or any other authorized personal leave.

“Disability” means, if not otherwise defined in the Employee’s Service Agreement, if any, if, as a result of the Employee’s incapacity due to physical or mental illness, the Employee shall have been substantially unable to perform his duties for a continuous period of 180 days, and within 30 days after written notice of termination is given after such 180-day period, the Employee shall not have returned to the substantial performance of his duties on a full-time basis, the employment of the Employee is terminated by the Company.

“Distribution Participation Date” shall have the meaning set forth in the Partnership Agreement and in Section 6 hereof.

“Employer” means either the Company, the Partnership or any of their subsidiaries that employ the Employee.

“Good Reason” means, if not otherwise defined in the Employee’s Service Agreement, if any, (a) a reduction by the Company in the Employee’s base salary, (b) a material diminution in the Employee’s position, authority, duties or responsibilities, (c) a relocation of the Employee’s location of employment to a location outside of the Washington D.C. metropolitan area, or (d) the Company’s material breach of the Agreement, provided, in each case, that the Employee terminates employment within 90 days after the Employee has actual knowledge of the occurrence, without the written consent of the Employee, of one of the foregoing events that has not been cured within 30 2

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document days after written notice thereof has been given by the Employee to the Company setting forth in reasonable detail the basis of the event (provided such notice must be given to the Company within 30 days of the Employee becoming aware of such condition).

“LTIP Unit Initial Sharing Percentage” shall have the meaning set forth in Section 6(c) hereof.

“Performance Period” means the period beginning on the first anniversary of the Grant Date and ending on the sixth anniversary of the Grant Date, subject to earlier termination as provided in Section 5(a)(i).

“Securities Act” means the Securities Act of 1933, as amended.

“Service Agreement” means, as of a particular date, any employment, consulting or similar service agreement then in effect between the Employee, on the one hand, and the Employer, on the other hand, as amended or supplemented through such date.

“Share” means a common share of beneficial interest of the Company.

“Transactional Change of Control” means a Change of Control resulting from any person or group making a tender offer for the Shares, a merger or consolidation where the Company is not the acquirer or surviving entity or consisting of a sale, lease, exchange or other transfer to an unrelated party of all or substantially all of the assets of the Company.

2. Effectiveness of Award. The Employee shall be admitted as a partner of the Partnership with beneficial ownership of the Award LTIP Units as of the Grant Date by (i) signing and delivering to the Partnership a copy of this Agreement and (ii) signing, as a Limited Partner, and delivering to the Partnership a counterpart signature page to the Partnership Agreement (attached hereto as Exhibit A). Upon execution of this Agreement by the Employee, the Partnership and the Company, the books and records of the Partnership shall reflect the issuance to the Employee of the Award LTIP Units. Thereupon, the Employee shall have all the rights of a Limited Partner of the Partnership with respect to a number of LTIP Units equal to the Award LTIP Units, as set forth in the Partnership Agreement, subject, however, to the restrictions and conditions specified in Section 3 below.

3. Vesting and Earning of Award LTIP Units.

(a) This Award is subject to performance vesting during the Performance Period and service vesting tied to Continuous Service of the Employee thereafter as specified herein. The Award LTIP Units will be subject to forfeiture based on the Company’s failure to achieve the Hurdle Price Level for a consecutive twenty (20) trading day period during the Performance Period, as set forth in this Section 3, subject to Section 5 hereof in the event of a Change in Control.

(b) The number of Award LTIP Units earned will be determined based on the Closing Price over any consecutive twenty (20) trading day period being equal to or greater than the Hurdle Price Levels set forth below. The date or dates on which such criteria are achieved (which date or dates shall be the twentieth (20th) consecutive trading day on which such Hurdle Price Level is met) are the “Hurdle Date” or “Hurdle Dates.”

Hurdle Price Level Percentage of Award LTIP Units Earned (in

$35 17.5%

$40 22.5%

$45 27.5%

$50 32.5%

The Award will be forfeited in its entirety if the Closing Price fails to reach $35 over a consecutive twenty (20) trading day period during the Performance Period. For the avoidance of doubt, once a Hurdle Date for a Hurdle Price Level is achieved, the applicable percentage of Award LTIP Units will be earned regardless of whether the Closing Price later falls below such Hurdle Price Level and further provided that Employee can only earn Award LTIP Units once per Hurdle Price Level. For example, if Shares attain a Closing Price over twenty (20) consecutive trading days of $35, then 17.5% of the Award LTIPs will be considered to have been earned. No additional Award LTIP Units will be considered to have been earned unless and until the Shares attain a Closing Price over twenty (20) consecutive trading days of $40, at which time an additional 22.5% of the Award LTIP Units will be considered to have been earned. For the avoidance of doubt, any Award LTIP Units that become earned will be subject to the requirements to remain in Continuous Service through the dates set forth in Section 3(d) below to become vested.

(i) determine the number of LTIP Units earned by the Employee, which number will be rounded up to the nearest whole number of LTIP Units (the “Earned Award LTIP Units”), provided that the Employee may not earn more than the number of LTIP Units granted except as set forth in (c)(ii) immediately below.

(ii) determine the number of additional LTIP Units that would have accumulated if the Employee had received all distributions paid by the Partnership from the Grant Date with respect to the Earned LTIP Units determined pursuant to clause (i) (reduced by the distributions actually paid with respect to such Earned Award LTIP Units) and such distributions had been invested in Common Units at a price equal to the fair market value of one Common Unit on the ex-dividend date (referred to as “Distribution Equivalent LTIP Units” and together with the Earned Award LTIP Units determined pursuant to clause (i), the “Earned LTIP Unit Equivalents”). Notwithstanding the foregoing, unless the Committee specifically resolves to issue Distribution Equivalent LTIP Units, the value of the unpaid distributions determined pursuant to the preceding sentence will be paid in cash. Accordingly, the Earned LTIP Unit Equivalents shall refer only to the Earned Award LTIP Units determined pursuant to clause (i). The Grant Date of any Distribution Equivalent LTIP Units shall be the date on which the Committee makes the determination provided for in this clause (ii), and the initial Economic Capital Account Balance of the Distribution Equivalent LTIP Units as of the Grant Date thereof shall be zero (0). The Distribution Equivalent LTIP Units shall be subject to the vesting set forth in Section 3(d) below. The issuance of the Distribution Equivalent LTIP Units will be subject to the Employee confirming the truth and accuracy of the representations set forth in Section 13 hereof 4

If, at the conclusion of the Performance Period, the number of Earned LTIP Unit Equivalents is smaller than the number of Award LTIP Units previously issued to the Employee, then the Employee, as of the conclusion of the Performance Period, shall forfeit a number of Award LTIP Units equal to the difference without payment of any consideration by the Partnership; thereafter the term Award LTIP Units will refer only to the Earned Award LTIP Units (and any Distribution Equivalent LTIP Units) and neither the Employee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in the LTIP Units that were so forfeited.

(d) If any of the Award LTIP Units have been earned based on performance as provided in Section 3(b), subject to Section 4 and Section 5 hereof, the Earned LTIP Unit Equivalents shall become vested in the following amounts and at the following times, provided that the Continuous Service of the Employee continues through and on the applicable vesting date or the accelerated vesting date provided in Section 4 or Section 5 hereof, as applicable:

(i) On the fifth anniversary of the Grant Date, the lesser of (i) 50% of the Award LTIP Units, and (ii) the Earned LTIP Unit Equivalents shall become vested;

(ii) Following the fifth anniversary of the Grant Date and up to and including the sixth anniversary of the Grant Date, any additional Earned LTIP Unit Equivalents shall become immediately vested subject to the condition that the total vested Earned LTIP Unit Equivalents do not exceed 50% of the Award LTIP Units;

(iii) On the sixth anniversary of the Grant Date, the lesser of (i) 75% of the Award LTIP Units, and (ii) the Earned LTIP Unit Equivalents shall become vested; and

(iv) On the seventh anniversary of the Grant Date, the balance of the Earned LTIP Unit Equivalents shall become vested (each of (i) through (iv), a “Vesting Period”).

(e) Any Award LTIP Units that do not become vested pursuant to Section 3(d), Section 4 or Section 5 hereof shall, without payment of any consideration by the Partnership, automatically and without notice be forfeited and be and become null and void, and neither the Employee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such unvested Award LTIP Units.

4. Termination of Employee’s Service Relationship; Death and Disability.

(a) If the Employee is a party to a Service Agreement that addresses treatment of the Award LTIP Units on a termination of employment and ceases to be an employee of the Company or any of its affiliates, the provisions of such Service Agreement that apply to the Award LTIP Unit will govern, provided, however, that this Agreement will govern, solely to determine the number of Award LTIP Units that become vested and not as it pertains to any defined terms, if a Service Agreement provides more favorable treatment than the treatment specified in 4(b)(A) or 4(b)(B). If the Employee is not a party to a Service Agreement that addresses treatment of the Award LTIP Unit on a termination of

(b) In the event of a termination of the Employee’s Continuous Service by (A) the Employer without Cause after the one-year anniversary of the Grant Date, (B) the Employee for Good Reason after the one-year anniversary of the Grant Date, (C) the Employee’s death, or (D) the Employee’s Disability (each, a “Qualified Termination”), the Employee will not forfeit the Award LTIP Units upon such termination, but the following provisions of this Section 4(b) shall modify the determination and vesting of the Earned LTIP Unit Equivalents for the Employee:

(i) the calculations provided in Section 3(c) hereof shall be performed through the date of Employee’s Qualified Termination and the number of Earned LTIP Unit Equivalents, if any, shall be determined as of the date of Employee’s Qualified Termination; and

a. If the Qualified Termination occurs prior to the fifth anniversary of the Grant Date, the Employee’s Earned LTIP Unit Equivalents, as calculated through the date of Employee’s Qualified Termination, shall be treated in the same manner as if Employee had continued in Continuous Service until the fifth anniversary of the Grant Date;

b. If the Qualified Termination occurs on or after the fifth anniversary of the Grant Date but prior to the sixth anniversary of the Grant Date, the Employee’s Earned LTIP Unit Equivalents, as calculated through the date of Employee’s Qualified Termination, shall be treated in the same manner as if Employee had continued in Continuous Service until the sixth anniversary of the Grant Date;

c. If the Qualified Termination occurs on after the sixth anniversary of the Grant Date, the Employee’s Earned LTIP Unit Equivalents, as calculated through the date of Employee’s Qualified Termination, shall be treated as if Employee had continued in Continuous Service until the seventh anniversary of the Grant Date.

(ii) Notwithstanding that the Continuous Service requirement pursuant to Section 3(d) hereof will not apply to the Employee after the effective date of a Qualified Termination, except in the case of death or Disability, the Employee will not have the right to Transfer (as defined in Section 23 hereof) his or her Award LTIP Units or request conversion of his or her Award LTIP Units into Common Units under the Partnership Agreement until such dates as of which his or her Earned LTIP Unit Equivalents would have become earned and vested pursuant to Section 3(d), absent a Qualified Termination. For the avoidance of doubt, the purpose of this Section 4(b)(ii) is to prevent a situation 6

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document where Employees who have had a Qualified Termination would be able to realize the value of their Award LTIP Units or Common Units (through Transfer or redemption) before other Employees whose Continuous Service continues through the applicable vesting dates set forth in Section 3(d) hereof.

(c) In the event of a termination of the Employee’s Continuous Service other than a Qualified Termination, all Award LTIP Units except for those that, as of the date at such termination, both (i) have ceased to be subject to forfeiture pursuant to Sections 3(b) and (c) hereof and (ii) are vested pursuant to Section 3(d) hereof shall, without payment of any consideration by the Partnership, automatically and without notice terminate, be forfeited and be and become null and void, and neither the Employee nor any of his or her successors, heirs, assigns, or personal representatives will thereafter have any further rights or interests in such Award LTIP Units.

5. Change in Control.

(a) If a Change in Control occurs on or prior to the sixth anniversary of the Grant Date, subject to the Employee’s Continuous Service through the consummation of such Change in Control, the Committee shall, prior to the consummation of the Change in Control, determine whether the intent, economic opportunity and economic value of the Award LTIP Units are capable of being replicated at least at the same level as in effect prior to the Change in Control:

(i) If the Committee determines that the intent, economic opportunity and economic value of the Award LTIP Units are not capable of being replicated at least at the same level as in effect prior to the Change in Control, (i) the Performance Period shall end as of immediately prior to the Change in Control, (ii) the provisions of Section 3 shall apply to determine the Earned LTIP Unit Equivalents except that if the Change in Control is a Transactional Change in Control, the fair value, as determined by the Committee, of the total consideration paid or payable in the transaction resulting in the Transactional Change of Control for one Share shall be used to determine if any incremental Award LTIP Units become earned, and the determination shall be made based on such price per Share without regard to the price over the preceding trading days, (iii) the Earned LTIP Unit Equivalents, as well as any Award LTIP Units that previously became Earned LTIP Unit Equivalents, shall become fully vested immediately prior to the consummation of such Change in Control, and (iv) any Award LTIP Units that do not become earned shall be forfeited.

(ii) If the Committee determines that the intent, economic opportunity and economic value of the Award LTIP Units are capable of being replicated at least at the same level as in effect prior to the Change in Control, the Performance Period shall not end as of immediately prior to the Change in Control and the Award LTIP Units shall continue with appropriate adjustments to the Hurdle Price Levels as the Committee deems appropriate.

(b) Notwithstanding anything herein to the contrary, if a Change in Control occurs on or before the first anniversary of the Grant Date, the Award LTIP Units shall be immediately forfeited without payment.

(d) Notwithstanding anything in this Agreement to the contrary, including, without limitation, the Committee’s determination in Section 5(a)(i) above, if (a) the Employee holds Earned LTIP Unit Equivalents as of immediately prior to a Change in Control, (b) the Earned LTIP Unit Equivalents are not continued, assumed or substituted in connection with such Change in Control, and (c) the Employee remains in employment as of immediately prior to the consummation of such Change in Control, then the Earned LTIP Unit Equivalents shall vest in full and become convertible into LTIP Units and non-forfeitable as of immediately prior to the consummation of the Change in Control. The Earned LTIP Unit Equivalents shall be considered “assumed” or “substituted” for purposes of the preceding sentence only if each of the following requirements is satisfied, as determined by the Committee, as constituted immediately before the Change in Control, in its sole discretion: (i) the contractual obligations represented by the Earned LTIP Unit Equivalents are expressly assumed (and not simply by operation of law) by the successor entity or its parent in connection with the Change in Control with appropriate adjustments to the number and type of securities of the successor entity or its parent subject to the converted or substituted award which at least preserves the compensation element of the Earned LTIP Unit Equivalents existing at the time of the Change in Control; (ii) in the case of a substituted award, it must be of the same type of award and have the same tax consequences to the Employee as the Earned LTIP Unit Equivalents; (iii) the vesting terms of the converted or substituted award (including with respect to accelerated vesting upon certain terminations of employment) must be substantially identical to the terms of the Earned LTIP Unit Equivalents; (iv) the converted or substituted award must be convertible or redeemable into another security that is itself convertible or redeemable into shares of a publicly traded company, each in a manner substantially identical to the corresponding terms of the Earned LTIP Unit Equivalents; and (v) all the other terms and conditions of the converted or substituted award must be no less favorable to the Employee than the terms of the Earned LTIP Unit Equivalents (including the provisions that would apply in the event of a subsequent Change in Control).

6. Distribution Participation Date and LTIP Unit Initial Sharing Percentage.

(a) The holder of the Award LTIP Units shall be entitled to receive distributions and allocations with respect to such Award LTIP Units to the extent provided for in the Partnership Agreement, including Exhibit E thereof, as modified hereby.

(b) The Distribution Participation Date with respect to such Award LTIP Units shall be the applicable Hurdle Date. Accordingly, for the avoidance of doubt, from the Grant Date until the applicable Distribution Participation Date, the holder of the Award LTIP Units shall only be entitled to certain distributions and allocations described in, and pursuant to, Sections 2.A. and 3 of Exhibit E to the Partnership Agreement with respect to an Award LTIP Unit in an amount equal to the product of the LTIP Unit Initial Sharing Percentage for such Award LTIP Unit and the amount otherwise distributable or allocable with respect to such Award LTIP Unit.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (c) The LTIP Unit Initial Sharing Percentage shall be ten percent (10%). For the avoidance of doubt, after the applicable Hurdle Date, Award LTIP Units, both vested and (until and unless forfeited pursuant to Section 3(d), Section 4(c) or Section 5(a)(i)) unvested, shall be entitled to receive the same distributions payable with respect to Common Units if the payment date for such distributions is after the Distribution Participation Date, even though the record date for such distributions is before the Distribution Participation Date.

(d) The Distribution Participation Date with respect to any Distribution Equivalent LTIPs shall be the Grant Date of such Distribution Equivalent LTIPs.

(e) All distributions paid with respect to Award LTIP Units, both before and after the Distribution Participation Date, shall be fully vested and non-forfeitable when paid, whether or not the underlying LTIP Units have been earned based on performance or have become vested based on the passage of time as provided in Section 3 or Section 4 hereof.

7. Certain Adjustments. The LTIP Units shall be subject to adjustment as provided in the Partnership Agreement, and except as otherwise provided therein, if (i) the Company shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of shares, sale of all or substantially all of the assets or stock of the Company, spin-off of a Subsidiary, business unit or other transaction similar thereto, (ii) any stock dividend, stock split, reverse stock split, stock combination, reclassification, recapitalization, significant repurchases of stock, or other similar change in the capital structure of the Company, or any extraordinary dividend or other distribution to holders of the Shares or Common Units other than regular dividends shall occur, or (iii) any other event shall occur that in each case in the good faith judgment of the Committee necessitates action by way of appropriate equitable adjustment in the terms of this Agreement, the Plan or the LTIP Units, then the Committee shall take such action as it deems necessary to maintain the Employee’s rights hereunder so that they are substantially proportionate to the rights existing under this Agreement and the terms of the LTIP Units prior to such event, including, without limitation: (A) adjustments in the LTIP Units; and (B) substitution of other awards under the Plan or otherwise. In the event of any change in the outstanding Shares (or corresponding change in the Conversion Factor applicable to Common Units) by reason of any share dividend or split, recapitalization, merger, consolidation, spin-off, combination or exchange of shares or other corporate change, or any distribution to common shareholders of the Company other than regular dividends, any Common Units, shares or other securities received by the Employee with respect to the applicable Award LTIP Unit which have not been earned or still subject to a risk of forfeiture will be subject to the same restrictions as the Award LTIP Units with respect to an equivalent number of shares or securities and shall be deposited with the Company.

8. Incorporation of Plan; Interpretation by Administrator. This Agreement is subject to the terms, conditions, limitations and definitions contained in the Plan, to the extent not inconsistent with the terms of this Agreement. In the event of any discrepancy or inconsistency between this Agreement and the Plan, the terms and conditions of this Agreement shall control. The Administrator may make such rules and regulations and establish such procedures for the administration of this Agreement, which are consistent with the terms of this Agreement, as it deems appropriate.

9. Certificates; Legend. Each certificate, if any, issued in respect of the Award LTIP Units awarded under this Agreement shall be registered in the Employee’s name and

10. Tax Withholding. The Company or its applicable affiliate (including the Partnership) has the right to withhold from cash compensation payable to the Employee all applicable income and employment taxes due and owing at the time the applicable portion of the Award LTIP Units becomes includible in the Employee’s income (the “Withholding Amount”), and/or to delay delivery of Award LTIP Units until appropriate arrangements have been made for payment of such withholding. In the alternative, the Company has the right to retain and cancel, or sell or otherwise dispose of, such number of Award LTIP Units as have a market value (determined as of the date the applicable LTIP Units vest) approximately equal to the Withholding Amount, with any excess proceeds being paid to Employee.

11. Amendment; Modification. This Agreement may only be modified or amended in a writing signed by the parties hereto, provided that the Employee acknowledges that the Plan may be amended or discontinued in accordance with the provisions thereof and that this Agreement may be amended or canceled by the Administrator, on behalf of the Company and the Partnership, in each case for the purpose of satisfying changes in law or for any other lawful purpose, so long as no such action shall adversely affect the Employee’s rights under this Agreement without the Employee’s written consent. No promises, assurances, commitments, agreements, undertakings or representations, whether oral, written, electronic or otherwise, and whether express or implied, with respect to the subject matter hereof, have been made by the parties which are not set forth expressly in this Agreement. The failure of the Employee or the Company or the Partnership to insist upon strict compliance with any provision of this Agreement, or to assert any right the Employee or the Company or the Partnership, respectively, may have under this Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

12. Complete Agreement. Other than as specifically stated herein or as otherwise set forth in any employment, change in control or other agreement or arrangement to which the Employee is a party which specifically refers to the Award LTIP Units or to the treatment of compensatory equity held by the Employee generally, this Agreement (together with those agreements and documents expressly referred to herein, for the purposes referred to herein) embody the complete and entire agreement and understanding between the parties with respect to the subject matter hereof, and supersede any and all prior promises, assurances, commitments, agreements, undertakings or representations, whether oral, written, electronic or otherwise, and whether express or implied, which may relate to the subject matter hereof in any way.

14. No Right to Employment. Nothing herein contained shall affect the right of the Company or any affiliate to terminate the Employee’s services, responsibilities and duties at any time for any reason whatsoever.

15. No Limit on Other Compensation Arrangements. Nothing contained in this Agreement shall preclude the Company from adopting or continuing in effect other or additional compensation plans, agreements or arrangements, and any such plans, agreements and arrangements may be either generally applicable or applicable only in specific cases or to specific persons.

16. Status of Award LTIP Units under the Plan. The Award LTIP Units are both issued as equity securities of the Partnership and granted as “Awards” under the Plan. The Company will have the right at its option, as set forth in the Partnership Agreement, to issue Shares in exchange for partnership units into which Award LTIP Units may have been converted pursuant to the Partnership Agreement, subject to certain limitations set forth in the Partnership Agreement, and such Shares, if issued, will be issued under the Plan. The Employee must be eligible to receive the LTIP Units in compliance with applicable federal and state securities laws and to that effect is required to complete, execute and deliver certain covenants, representations and warranties (attached as Exhibit B). The Employee acknowledges that the Employee will have no right to approve or disapprove such determination by the Company.

17. Severability. If, for any reason, any provision of this Agreement is held invalid, such invalidity shall not affect any other provision of this Agreement not so held invalid, and each such other provision shall to the full extent consistent with law continue in full force and effect. If any provision of this Agreement shall be held invalid in part, such invalidity shall in no way affect the rest of such provision not held so invalid, and the rest of such provision, together with all other provisions of this Agreement, shall to the full extent consistent with law continue in full force and effect.

18. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws.

19. Headings. The headings of paragraphs hereof are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 20. Notices. Any notice to be given to the Company shall be addressed to the Chief Legal Officer, JBG SMITH Properties, 4747 Bethesda Avenue, Suite 200, Bethesda, Maryland 20814, and any notice to be given the Employee shall be addressed to the Employee at the Employee’s address as it appears on the employment records of the Company, or at such other address as the Company or the Employee may hereafter designate in writing to the other.

21. Counterparts. This Agreement may be executed in multiple counterparts with the same effect as if each of the signing parties had signed the same document. All counterparts shall be construed together and constitute the same instrument.

22. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and any successors to the Company and any successors to the Employee by will or the laws of descent and distribution, but this Agreement shall not otherwise be assignable or otherwise subject to hypothecation by the Employee.

23. Transfer; Redemption. None of the LTIP Units shall be sold, assigned, transferred, pledged or otherwise disposed of or encumbered (whether voluntarily or involuntarily or by judgment, levy, attachment, garnishment or other legal or equitable proceeding) (each such action, a “Transfer”), or redeemed in accordance with the Partnership Agreement (a) prior to vesting and (b) unless such Transfer is in compliance with all applicable securities laws (including, without limitation, the Securities Act), and such Transfer is in accordance with the applicable terms and conditions of the Partnership Agreement. Any attempted Transfer of LTIP Units not in accordance with the terms and conditions of this Section 23 shall be null and void, and the Partnership shall not reflect on its records any change in record ownership of any LTIP Units as a result of any such Transfer, and shall otherwise refuse to recognize any such Transfer.

24. Data Privacy Consent. In order to administer the Plan and this Agreement and to implement or structure future equity grants, the Company and its agents may process any and all personal or professional data, including but not limited to Social Security or other identification number, home address and telephone number, date of birth and other information that is necessary or desirable for the administration of the Plan and/or this Agreement (the “Relevant Information”). By entering into this Agreement, the Employee (i) authorizes the Company to collect, process, register and transfer to its agents all Relevant Information; and (ii) authorizes the Company and its agents to store and transmit such information in electronic form. The Employee shall have access to, and the right to change, the Relevant Information. Relevant Information will only be used in accordance with applicable law and to the extent necessary to administer the Plan and this Agreement, and the Company and its agents will keep the Relevant Information confidential except as specifically authorized under this paragraph.

25. Electronic Delivery of Documents. By accepting this Agreement, the Employee (i) consents to the electronic delivery of this Agreement, all information with respect to the Plan and any reports of the Company provided generally to the Company’s stockholders; (ii) acknowledges that he or she may receive from the Company a paper copy of any documents delivered electronically at no cost to the Employee by contacting the Company by telephone or in writing; (iii) further acknowledges that he or she may revoke his or her consent to electronic delivery of documents at any time by notifying the Company of such revoked consent by telephone, postal service or electronic mail; and (iv) further acknowledges that he or she is not required to consent to electronic delivery of documents.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 26. Section 83(b) Election. In connection with this Agreement, the Employee hereby agrees to make an election to include in gross income in the year of transfer the fair market value of the applicable Award LTIP Units over the amount paid for them pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended, substantially in the form attached hereto as Exhibit C and to supply the necessary information in accordance with the regulations promulgated thereunder.

27. Acknowledgement. The Employee hereby acknowledges and agrees that this Agreement and the LTIP Units issued hereunder shall constitute satisfaction in full of all obligations of the Company and the Partnership, if any, to grant to the Employee LTIP Units pursuant to the terms of any written employment agreement or letter or other written offer or description of employment with the Company and/or the Partnership executed prior to or coincident with the date hereof.

[signature page follows]

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document IN WITNESS WHEREOF, this Performance LTIP Unit Agreement has been executed by the parties hereto as of the date and year first above written.

JBG SMITH PROPERTIES

By:

Name: Steven A. Museles Title: Chief Legal Officer and Secretary

JBG SMITH PROPERTIES LP

By: JBG SMITH PROPERTIES, its General Partner

By:

Name: Steven A. Museles Title: Chief Legal Officer and Secretary

EMPLOYEE

Name:

[Employee Name]

FORM OF LIMITED PARTNER SIGNATURE PAGE

The Employee, desiring to become one of the within named Limited Partners of JBG SMITH Properties LP, hereby accepts all of the terms and conditions of (including, without limitation, the provisions related to powers of attorney), and becomes a party to, the Second Amended and Restated Limited Partnership Agreement, dated as of December 17, 2020, of JBG SMITH Properties LP, as amended (the “Partnership Agreement”). The Employee agrees that this signature page may be attached to any counterpart of the Partnership Agreement and further agrees as follows (where the term “Limited Partner” refers to the Employee): Capitalized terms used but not defined herein have the meaning ascribed thereto in the Partnership Agreement.

1. The Limited Partner hereby confirms that it has reviewed the terms of the Partnership Agreement and affirms and agrees that it is bound by each of the terms and conditions of the Partnership Agreement, including, without limitation, the provisions thereof relating to limitations and restrictions on the transfer of Partnership Units.

2. The Limited Partner hereby confirms that it is acquiring the Partnership Units for its own account as principal, for investment and not with a view to resale or distribution, and that the Partnership Units may not be transferred or otherwise disposed of by the Limited Partner otherwise than in a transaction pursuant to a registration statement filed by the Partnership (which it has no obligation to file) or that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and all applicable state and foreign securities laws, and the General Partner may refuse to transfer any Partnership Units as to which evidence of such registration or exemption from registration satisfactory to the General Partner is not provided to it, which evidence may include the requirement of a legal opinion regarding the exemption from such registration. If the General Partner delivers to the Limited Partner common Shares of beneficial interest of the General Partner (“Common Shares”) upon redemption of any Partnership Units, the Common Shares will be acquired for the Limited Partner’s own account as principal, for investment and not with a view to resale or distribution, and the Common Shares may not be transferred or otherwise disposed of by the Limited Partner otherwise than in a transaction pursuant to a registration statement filed by the General Partner with respect to such Common Shares (which it has no obligation under the Partnership Agreement to file) or that is exempt from the registration requirements of the Securities Act and all applicable state and foreign securities laws, and the General Partner may refuse to transfer any Common Shares as to which evidence of such registration or exemption from such registration satisfactory to the General Partner is not provided to it, which evidence may include the requirement of a legal opinion regarding the exemption from such registration.

3. The Limited Partner hereby affirms that it has appointed the General Partner, any Liquidator and authorized officers and attorneys-in-fact of each, and each of those acting singly, in each case with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead, in accordance with Section 2.4 of the Partnership Agreement, which section is hereby incorporated by reference. The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive and not be affected by the death, incompetency, dissolution, disability, incapacity, bankruptcy or termination

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document of the Limited Partner and shall extend to the Limited Partner’s heirs, executors, administrators, legal representatives, successors and assigns.

4. The Limited Partner hereby confirms that, notwithstanding any provisions of the Partnership Agreement to the contrary, the LTIP Units shall not be redeemable by the Limited Partner pursuant to Section 8.6 of the Partnership Agreement.

a. The Limited Partner hereby irrevocably consents in advance to any amendment to the Partnership Agreement, as may be recommended by the General Partner, intended to avoid the Partnership being treated as a publicly-traded partnership within the meaning of Section 7704 of the Internal Revenue Code, including, without limitation, (x) any amendment to the provisions of Section 8.6 of the Partnership Agreement intended to increase the waiting period between the delivery of a Notice of Redemption and the Specified Redemption Date and/or the Valuation Date to up to sixty (60) days or (y) any other amendment to the Partnership Agreement intended to make the redemption and transfer provisions, with respect to certain redemptions and transfers, more similar to the provisions described in Treasury Regulations Section 1.7704-1(f).

b. The Limited Partner hereby appoints the General Partner, any Liquidator and authorized officers and attorneys-in-fact of each, and each of those acting singly, in each case with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead, to execute and deliver any amendment referred to in the foregoing paragraph 5(a) on the Limited Partner’s behalf. The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive and not be affected by the death, incompetency, dissolution, disability, incapacity, bankruptcy or termination of the Limited Partner and shall extend to the Limited Partner’s heirs, executors, administrators, legal representatives, successors and assigns.

6. The Limited Partner agrees that it will not transfer any interest in the Partnership Units (x) through (i) a national, non-U.S., regional, local or other securities exchange, (ii) PORTAL or (iii) an over-the-counter market (including an interdealer quotation system that regularly disseminates firm buy or sell quotations by identified brokers or dealers by electronic means or otherwise) or (y) to or through (a) a person, such as a broker or dealer, that makes a market in, or regularly quotes prices for, interests in the Partnership, (b) a person that regularly makes available to the public (including customers or subscribers) bid or offer quotes with respect to any interests in the Partnership and stands ready to effect transactions at the quoted prices for itself or on behalf of others or (c) another readily available, regular and ongoing opportunity to sell or exchange the interest through a public means of obtaining or providing information of offers to buy, sell or exchange the interest.

7. The Limited Partner acknowledges that the General Partner shall be a third-party beneficiary of the representations, covenants and agreements set forth in Sections 4 and 6 hereof. The Limited Partner agrees that it will transfer, whether by assignment or otherwise, Partnership Units only to the General Partner or to transferees that provide the Partnership and the General Partner with the representations and covenants set forth in Sections 4 and 6 hereof.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 8. This acceptance shall be construed and enforced in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.

Signature Line for Limited Partner: Name: Date: July [ ], 2021 Address of Limited Partner:

EMPLOYEE’S COVENANTS, REPRESENTATIONS AND WARRANTIES

The Employee hereby represents, warrants and covenants as follows:

(a) The Employee has received and had an opportunity to review the following documents (the “Background Documents”):

(i) The Company’s latest Annual Report to Shareholders;

(ii) The Company’s Proxy Statement for its most recent Annual Meeting of Shareholders;

(iii) The Company’s Report on Form 10-K for the fiscal year most recently ended;

(iv) The Company’s Form 10-Q for the most recently ended quarter if one has been filed by the Company with the Securities and Exchange Commission since the filing of the Form 10-K described in clause (iii) above;

(v) Each of the Company’s Current Report(s) on Form 8-K, if any, filed since the later of the Form 10-K described in clause (iii) above and the Form 10-Q described in clause (iv) above;

(vi) The Partnership Agreement; and

(vii) The Plan.

The Employee also acknowledges that any delivery of the Background Documents and other information relating to the Company and the Partnership prior to the determination by the Partnership of the suitability of the Employee as a holder of Award LTIP Units shall not constitute an offer of Award LTIP Units until such determination of suitability shall be made.

(b) The Employee hereby represents and warrants that:

(i) The Employee either (A) is an “accredited investor” as defined in Rule 501(a) under the Securities Act of 1933, as amended (the “Securities Act”), or (B) by reason of the business and financial experience of the Employee, together with the business and financial experience of those persons, if any, retained by the Employee to represent or advise him with respect to the grant to him of LTIP Units, the potential conversion of LTIP Units into Common Partnership Units of the Partnership (“Common Units”) and the potential redemption of such Common Units for the Company’s common Shares (“REIT Shares”), has such knowledge, sophistication and experience in financial and business matters and in making investment decisions of this type that the Employee (I) is capable of evaluating the merits and risks of an investment in the Partnership and potential investment in the Company and of making an informed investment decision, (II) is capable of protecting his own interest or has engaged representatives or advisors to assist him in protecting his interests, and (III) is capable of bearing the economic risk of such investment.

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (ii) The Employee understands that (A) the Employee is responsible for consulting his own tax advisors with respect to the application of the U.S. federal income tax laws, and the tax laws of any state, local or other taxing jurisdiction to which the Employee is or by reason of the award of LTIP Units may become subject, to his particular situation; (B) the Employee has not received or relied upon business or tax advice from the Company, the Partnership or any of their respective employees, agents, consultants or advisors, in their capacity as such; (C) the Employee provides services to the Partnership on a regular basis and in such capacity has access to such information, and has such experience of and involvement in the business and operations of the Partnership, as the Employee believes to be necessary and appropriate to make an informed decision to accept this award of LTIP Units; and (D) an investment in the Partnership and/or the Company involves substantial risks. The Employee has been given the opportunity to make a thorough investigation of matters relevant to the LTIP Units and has been furnished with, and has reviewed and understands, materials relating to the Partnership and the Company and their respective activities (including, but not limited to, the Background Documents). The Employee has been afforded the opportunity to obtain any additional information (including any exhibits to the Background Documents) deemed necessary by the Employee to verify the accuracy of information conveyed to the Employee. The Employee confirms that all documents, records, and books pertaining to his receipt of LTIP Units which were requested by the Employee have been made available or delivered to the Employee. The Employee has had an opportunity to ask questions of and receive answers from the Partnership and the Company, or from a person or persons acting on their behalf, concerning the terms and conditions of the LTIP Units. The Employee has relied upon, and is making its decision solely upon, the Background Documents and other written information provided to the Employee by the Partnership or the Company.

(iii) The LTIP Units to be issued, the Common Units issuable upon conversion of the LTIP Units and any REIT Shares issued in connection with the redemption of any such Common Units will be acquired for the account of the Employee for investment only and not with a current view to, or with any intention of, a distribution or resale thereof, in whole or in part, or the grant of any participation therein, without prejudice, however, to the Employee’s right (subject to the terms of the LTIP Units, the Plan and this Agreement) at all times to sell or otherwise dispose of all or any part of his LTIP Units, Common Units or REIT Shares in compliance with the Securities Act, and applicable state securities laws, and subject, nevertheless, to the disposition of his assets being at all times within his control.

(iv) The Employee acknowledges that (A) neither the LTIP Units to be issued, nor the Common Units issuable upon conversion of the LTIP Units, have been registered under the Securities Act or state securities laws by reason of a specific exemption or exemptions from registration under the Securities Act and applicable state securities laws and, if such LTIP Units or Common Units are represented by certificates, such certificates will bear a legend to such effect, (B) the reliance by the Partnership and the Company on such exemptions is predicated in part on the accuracy and completeness of the representations and warranties of the Employee contained herein, (C) such LTIP Units or Common Units, therefore, cannot be resold unless registered under the Securities Act and applicable state securities laws, or unless an exemption from registration is available, (D) there is no public market for such LTIP Units and Common Units and (E) neither the Partnership nor the Company has any obligation or intention to register such LTIP Units or the Common Units issuable upon conversion of the LTIP Units under the Securities Act or any state securities laws or to take any action that would make available any exemption from the registration requirements of such laws, except that, upon the redemption of the Common Units for

Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Copyright © 2021 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document REIT Shares, the Company may issue such REIT Shares under the Plan and pursuant to a Registration Statement on Form S-8 under the Securities Act, to the extent that (I) the Employee is eligible to receive such REIT Shares under the Plan at the time of such issuance, (II) the Company has filed a Form S-8 Registration Statement with the Securities and Exchange Commission registering the issuance of such REIT Shares and (III) such Form S-8 is effective at the time of the issuance of such REIT Shares. The Employee hereby acknowledges that because of the restrictions on transfer or assignment of such LTIP Units acquired hereby and the Common Units issuable upon conversion of the LTIP Units which are set forth in the Partnership Agreement or this Agreement, the Employee may have to bear the economic risk of his ownership of the LTIP Units acquired hereby and the Common Units issuable upon conversion of the LTIP Units for an indefinite period of time.

(v) The Employee has determined that the LTIP Units are a suitable investment for the Employee.

(vi) No representations or warranties have been made to the Employee by the Partnership or the Company, or any officer, director, shareholder, agent or affiliate of any of them, and the Employee has received no information relating to an investment in the Partnership or the LTIP Units except the information specified in paragraph (a) above.

(c) So long as the Employee holds any LTIP Units, the Employee shall disclose to the Partnership in writing such information as may be reasonably requested with respect to ownership of LTIP Units as the Partnership may deem reasonably necessary to ascertain and to establish compliance with provisions of the Code applicable to the Partnership or to comply with requirements of any other appropriate taxing authority.

(d) The Employee hereby agrees to make an election under Section 83(b) of the Code with respect to the LTIP Units awarded hereunder, and has delivered with this Agreement a completed, executed copy of the election form attached hereto as Exhibit C. The Employee agrees to file the election (or to permit the Partnership to file such election on the Employee’s behalf) within thirty (30) days after the award of the LTIP Units hereunder with the IRS Service Center at which such Employee files his personal income tax returns.

(e) The address set forth on the signature page of this Agreement is the address of the Employee’s principal residence, and the Employee has no present intention of becoming a resident of any country, state or jurisdiction other than the country and state in which such residence is sited.

ELECTION TO INCLUDE IN GROSS INCOME IN YEAR OF TRANSFER OF PROPERTY PURSUANT TO SECTION 83(B) OF THE INTERNAL REVENUE CODE

The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue Code with respect to the property described below and supplies the following information in accordance with the regulations promulgated thereunder:

1. The name, address and taxpayer identification number of the undersigned are:

Name: [Employee Name] (the “Taxpayer”)

Address:

Social Security No./Taxpayer Identification No.:

2. Description of property with respect to which the election is being made:

The election is being made with respect to LTIP Units in JBG SMITH Properties LP (the “Partnership”).

3. The date on which the LTIP Units were transferred is July __, 2021. The taxable year to which this election relates is calendar year 2021.

4. Nature of restrictions to which the LTIP Units are subject:

(a) With limited exceptions, until the LTIP Units vest, the Taxpayer may not transfer in any manner any portion of the LTIP Units without the consent of the Partnership.

(b) The Taxpayer’s LTIP Units vest in accordance with the vesting provisions described in the Schedule attached hereto. Unvested LTIP Units are forfeited in accordance with the vesting provisions described in the Schedule attached hereto.

5. The fair market value at time of transfer (determined without regard to any restrictions other than a nonlapse restriction as defined in Treasury Regulations Section 1.83-3(h)) of the LTIP Units with respect to which this election is being made was $0 per LTIP Unit.

6. The amount paid by the Taxpayer for the LTIP Units was $0 per LTIP Unit.

7. A copy of this statement has been furnished to the Partnership and JBG SMITH Properties.

Vesting Provisions of LTIP Units

The LTIP Units are subject to performance-based vesting criteria, based on certain share price hurdles, and subsequent time-based vesting criteria, provided that the Taxpayer remains an employee of JBG SMITH Properties or its affiliate through the relevant vesting periods, subject to acceleration in the event of certain extraordinary transactions or termination of the Taxpayer’s service relationship with JBG SMITH Properties (or its affiliate) under specified circumstances. Unvested LTIP Units are subject to forfeiture in the event of failure to vest based on the failure to satisfy the applicable performance goals and the passage of time and continued employment.

JBG SMITH Properties, a Maryland real estate investment trust By: Name: Steven A. Museles Title: Chief Legal Officer and Secretary Employee