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Redeemable Noncontrolling Interests

6 Months Ended

Jun. 30, 2022

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. Vested LTIP Units are convertible into OP Units and, in turn redeemable into cash or, at our election, our common shares, subject to certain limitations. During the six months ended June 30, 2022 and 2021, unitholders redeemed 280,451 and 648,752 OP Units, which we elected to redeem for an equivalent number of our common shares. As of June 30, 2022, outstanding OP Units and redeemable LTIP Units totaled 15.3 million, representing an 11.6% ownership interest in JBG SMITH LP. In our balance sheets, our OP Units and certain vested LTIP Units are presented at the higher of their redemption value or their carrying value, with adjustments to the redemption value 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.

Consolidated Real Estate Venture

We are a partner in a consolidated real estate venture that owns a multifamily asset, The Wren located in Washington, D.C. Pursuant to the terms of the real estate venture agreement, we are obligated to 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, 2022, 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,
	2022						2021
			Consolidated						Consolidated
	JBG		Real Estate				JBG		Real Estate
	SMITH LP		Venture		Total		SMITH LP		Venture		Total

	(In thousands)
Balance, beginning of period	$	536,725	$	9,324	$	546,049	$	545,051	$	7,876	$	552,927
OP Unit redemptions		(1,762)		—		(1,762)		(17,761)		—		(17,761)
LTIP Units issued in lieu of cash bonuses ⁽¹⁾		987		—		987		797		—		797
Net income (loss)		18,240		8		18,248		(319)		(26)		(345)
Other comprehensive income		1,311		—		1,311		235		—		235
Distributions		(4,110)		(79)		(4,189)		(3,927)		—		(3,927)
Share-based compensation expense		12,369		—		12,369		12,807		—		12,807
Adjustment to redemption value		(50,334)		(1,287)		(51,621)		(712)		618		(94)
Balance, end of period	$	513,426	$	7,966	$	521,392	$	536,171	$	8,468	$	544,639

	Six Months Ended June 30,
	2022						2021
			Consolidated						Consolidated
	JBG		Real Estate				JBG		Real Estate
	SMITH LP		Venture		Total		SMITH LP		Venture		Total

	(In thousands)
Balance, beginning of period	$	513,268	$	9,457	$	522,725	$	522,882	$	7,866	$	530,748
OP Unit redemptions		(7,776)		—		(7,776)		(21,680)		—		(21,680)
LTIP Units issued in lieu of cash bonuses ⁽¹⁾		6,584		—		6,584		5,614		—		5,614
Net income (loss)		18,237		21		18,258		(2,516)		(59)		(2,575)
Other comprehensive income		4,277		—		4,277		1,208		—		1,208
Distributions		(4,110)		(148)		(4,258)		(5,289)		—		(5,289)
Share-based compensation expense		24,896		—		24,896		25,371		—		25,371
Adjustment to redemption value		(41,950)		(1,364)		(43,314)		10,581		661		11,242
Balance, end of period	$	513,426	$	7,966	$	521,392	$	536,171	$	8,468	$	544,639

(1)	See Note 11 for additional information.