Segment Information

12 Months Ended

Dec. 31, 2022

Segment Information

Segment Information

19.          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. To conform to the current period presentation, we have reclassified the prior period segment financial data for 1700 M Street, for which we are the ground lessor, that had been classified as part of the commercial segment to the other segment to better align with our internal reporting.

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 consolidated statements of operations.

The following represents the components of revenue from our third-party asset management and real estate services business:

	Year Ended December 31,
	2022		2021		2020
	(In thousands)
Property management fees	$	19,589	$	19,427	$	20,178
Asset management fees		6,191		8,468		9,791
Development fees		8,325		25,493		11,496
Leasing fees		6,017		5,833		5,594
Construction management fees		522		512		2,966
Other service revenue		5,706		6,146		7,255
Third-party real estate services revenue, excluding reimbursements		46,350		65,879		57,280
Reimbursement revenue (1)		42,672		48,124		56,659
Third-party real estate services revenue, including reimbursements		89,022		114,003		113,939
Third-party real estate services expenses		94,529		107,159		114,829
Third-party real estate services revenue less expenses	$	(5,507)	$	6,844	$	(890)

(1) 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 $13.7 million and $19.6 million as of December 31, 2022 and 2021, which are classified in "Intangible assets, net" in our consolidated 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:

	Year Ended December 31,
	2022		2021		2020
	(in thousands)
Net income (loss) attributable to common shareholders	$	85,371	$	(79,257)	$	(62,303)
Add:
Depreciation and amortization expense		213,771		236,303		221,756
General and administrative expense:
Corporate and other		58,280		53,819		46,634
Third-party real estate services		94,529		107,159		114,829
Share-based compensation related to Formation Transaction and special equity awards		5,391		16,325		31,678
Transaction and other costs		5,511		10,429		8,670
Interest expense		75,930		67,961		62,321
Loss on the extinguishment of debt		3,073		—		62
Impairment loss		—		25,144		10,232
Income tax expense (benefit)		1,264		3,541		(4,265)
Net income (loss) attributable to redeemable noncontrolling interests		13,244		(8,728)		(4,958)
Net income (loss) attributable to noncontrolling interests		371		(1,740)		—
Less:
Third-party real estate services, including reimbursements revenue		89,022		114,003		113,939
Other revenue		7,421		7,671		15,372
Loss from unconsolidated real estate ventures, net		(17,429)		(2,070)		(20,336)
Interest and other income (loss), net		18,617		8,835		(625)
Gain on the sale of real estate, net		161,894		11,290		59,477
Consolidated NOI	$	297,210	$	291,227	$	256,829

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

	Year Ended December 31, 2022
	Commercial		Multifamily		Other		Total
	(In thousands)
Property rental revenue	$	301,955	$	180,068	$	9,715	$	491,738
Parking revenue		16,530		857		256		17,643
Total property revenue		318,485		180,925		9,971		509,381
Property expense:
Property operating		86,223		62,017		1,764		150,004
Real estate taxes		37,950		20,580		3,637		62,167
Total property expense		124,173		82,597		5,401		212,171
Consolidated NOI	$	194,312	$	98,328	$	4,570	$	297,210
	Year Ended December 31, 2021
	Commercial		Multifamily		Other		Total
	(In thousands)
Property rental revenue	$	352,180	$	139,918	$	7,488	$	499,586
Parking revenue		12,441		415		246		13,102
Total property revenue		364,621		140,333		7,734		512,688
Property expense:
Property operating		102,967		52,527		(4,856)		150,638
Real estate taxes		45,701		20,207		4,915		70,823
Total property expense		148,668		72,734		59		221,461
Consolidated NOI	$	215,953	$	67,599	$	7,675	$	291,227

	Year Ended December 31, 2020
	Commercial		Multifamily		Other		Total
	(In thousands)
Property rental revenue	$	331,714	$	121,559	$	5,685	$	458,958
Parking revenue		13,888		327		239		14,454
Total property revenue		345,602		121,886		5,924		473,412
Property expense:
Property operating		105,458		47,508		(7,341)		145,625
Real estate taxes		47,607		19,233		4,118		70,958
Total property expense		153,065		66,741		(3,223)		216,583
Consolidated NOI	$	192,537	$	55,145	$	9,147	$	256,829

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

	Commercial		Multifamily		Other		Total
	(In thousands)
December 31, 2022
Real estate, at cost	$	2,754,832	$	2,986,907	$	416,343	$	6,158,082
Investments in unconsolidated real estate ventures		218,723		304		80,854		299,881
Total assets		2,829,576		2,483,902		589,960		5,903,438
December 31, 2021
Real estate, at cost	$	3,422,278	$	2,367,712	$	446,486	$	6,236,476
Investments in unconsolidated real estate ventures		281,515		103,389		77,981		462,885
Total assets		3,591,839		1,797,807		996,560		6,386,206