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Redeemable Noncontrolling Interests

9 Months Ended

Sep. 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. During the nine months ended September 30, 2022 and 2021, unitholders redeemed 493,596 and 829,107 OP Units, which we elected to redeem for an equivalent number of our common shares. As of September 30, 2022, outstanding OP Units and redeemable LTIP Units totaled 15.1 million, representing an 11.7% ownership interest in JBG SMITH LP. 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" in our balance sheets. 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. Our partners can redeem their interest for cash under certain conditions. As of September 30, 2022, we held a 96.0% ownership interest in the real estate venture. On October 4, 2022, one of our partners redeemed their interest for $9.5 million, increasing our ownership interest to 99.7%.

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


	Three Months Ended September 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	$	513,426	$	7,966	$	521,392	$	536,171	$	8,468	$	544,639
OP Unit redemptions		(4,891)		—		(4,891)		(5,670)		—		(5,670)
Net income (loss)		(2,557)		11		(2,546)		116		(13)		103
Other comprehensive income		4,376		—		4,376		413		—		413
Distributions		(4,083)		(119)		(4,202)		(3,993)		—		(3,993)
Share-based compensation expense		6,211		—		6,211		10,695		—		10,695
Adjustment to redemption value		(30,681)		1,820		(28,861)		(20,748)		1,474		(19,274)
Balance, end of period	$	481,801	$	9,678	$	491,479	$	516,984	$	9,929	$	526,913

	Nine Months Ended September 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		(12,667)		—		(12,667)		(27,350)		—		(27,350)
LTIP Units issued in lieu of cash bonuses ⁽¹⁾		6,584		—		6,584		5,614		—		5,614
Net income (loss)		15,680		32		15,712		(2,400)		(72)		(2,472)
Other comprehensive income		8,653		—		8,653		1,621		—		1,621
Distributions		(8,193)		(267)		(8,460)		(9,282)		—		(9,282)
Share-based compensation expense		31,107		—		31,107		36,066		—		36,066
Adjustment to redemption value		(72,631)		456		(72,175)		(10,167)		2,135		(8,032)
Balance, end of period	$	481,801	$	9,678	$	491,479	$	516,984	$	9,929	$	526,913

(1)	See Note 11 for additional information.