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Redeemable Noncontrolling Interests

6 Months Ended

Jun. 30, 2020

9.Redeemable Noncontrolling Interests

JBG SMITH LP

A portion of the 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, 2020 and 2019, unitholders redeemed 942,940 and 1.7 million OP Units, which we elected to redeem for an equivalent number of our common shares. As of June 30, 2020, outstanding OP Units totaled 14.2 million, representing a 9.6% ownership interest in JBG SMITH LP. On our balance sheets, our OP Units and certain vested LTIPs 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 2020, unitholders redeemed 81,069 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 real estate venture that owns an under construction multifamily asset located at 965 Florida Avenue 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 two, but no later than

seven years, after delivery. As of June 30, 2020, we held a 95.7% ownership interest in the real estate venture, and approximately 40% of the units had been placed in service.

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


	Three Months Ended June 30,
	2020						2019
			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	$	496,984	$	6,056	$	503,040	$	578,781	$	5,982	$	584,763
OP Unit redemptions		(4,752)		—		(4,752)		(316)		—		(316)
Long-term incentive partnership units ("LTIP Units") issued in lieu of cash bonuses ⁽¹⁾		450		—		450		818		—		818
Net income (loss) attributable to redeemable noncontrolling interests		(3,443)		(40)		(3,483)		(292)		4		(288)
Other comprehensive loss		(182)		—		(182)		(1,503)		—		(1,503)
Contributions (distributions)		(3,782)		—		(3,782)		(3,838)		—		(3,838)
Share-based compensation expense		20,465		—		20,465		15,343		—		15,343
Adjustment to redemption value		(12,673)		—		(12,673)		(20,751)		—		(20,751)
Balance as of the end of the period	$	493,067	$	6,016	$	499,083	$	568,242	$	5,986	$	574,228

	Six Months Ended June 30,
	2020						2019
			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	$	606,699	$	6,059	$	612,758	$	552,159	$	5,981	$	558,140
OP Unit redemptions		(35,878)		—		(35,878)		(57,318)		—		(57,318)
LTIP Units issued in lieu of cash bonuses ⁽¹⁾		4,066		—		4,066		3,954		—		3,954
Net income (loss) attributable to redeemable noncontrolling interests		1,810		(43)		1,767		3,094		5		3,099
Other comprehensive loss		(3,755)		—		(3,755)		(2,886)		—		(2,886)
Contributions (distributions)		(3,782)		—		(3,782)		(3,838)		—		(3,838)
Share-based compensation expense		37,246		—		37,246		31,616		—		31,616
Adjustment to redemption value		(113,339)		—		(113,339)		41,461		—		41,461
Balance as of the end of the period	$	493,067	$	6,016	$	499,083	$	568,242	$	5,986	$	574,228

(1)	See Note 11 for additional information.