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Redeemable Noncontrolling Interests

12 Months Ended

Dec. 31, 2022

12. 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 redeemable into OP Units. During the years ended December 31, 2022 and 2021, unitholders redeemed 701,222 and 906,126 OP Units, which we elected to redeem for an equivalent number of our common shares. As of December 31, 2022, outstanding OP Units and redeemable LTIP Units totaled 15.0 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 consolidated 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. In 2023, as of the date of this filing, unitholders redeemed 716,905 OP Units and LTIP 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, The Wren, located in Washington, D.C. Our partner can redeem their interest for cash under certain conditions. As of December 31, 2022, we held a 99.7% ownership interest in the real estate venture, which reflects the redemption of a 3.7% interest in October 2022 for $9.5 million.

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


	Year Ended December 31,
	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
Redemptions		(16,704)		(9,531)		(26,235)		(29,634)		—		(29,634)
LTIP Units issued in lieu of cash bonuses ⁽¹⁾		6,584		—		6,584		5,614		—		5,614
Net income (loss)		13,212		32		13,244		(8,671)		(57)		(8,728)
Other comprehensive income		8,411		—		8,411		2,675		—		2,675
Distributions		(16,172)		(267)		(16,439)		(17,170)		(148)		(17,318)
Share-based compensation expense		38,384		—		38,384		47,222		—		47,222
Adjustment to redemption value		(66,320)		956		(65,364)		(9,650)		1,796		(7,854)
Balance, end of period	$	480,663	$	647	$	481,310	$	513,268	$	9,457	$	522,725

(1)	See Note 14 for additional information.