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Redeemable Noncontrolling Interests

6 Months Ended

Jun. 30, 2023

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 redeemable into OP Units. During the six months ended June 30, 2023 and 2022, unitholders redeemed 1.6 million and 280,451 OP Units, which we elected to redeem for an equivalent number of our common shares. As of June 30, 2023, outstanding OP Units and redeemable LTIP Units totaled 14.1 million, representing an 11.9% 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 common share at the end of the period. In July 2023, unitholders redeemed 257,151 OP Units and LTIP Units, which we elected to redeem for an equivalent number of our common shares.

Consolidated Real Estate Venture

We were a partner in a consolidated real estate venture that owned a multifamily asset, The Wren, located in Washington, D.C. As of June 30, 2022, we held a 96.0% ownership interest in the real estate venture. In October 2022, one partner redeemed its 3.7% interest, and in February 2023, another partner redeemed its 0.3% interest, increasing our ownership interest to 100.0%.

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


	Three Months Ended June 30,
	2023						2022
			Consolidated						Consolidated
	JBG		Real Estate				JBG		Real Estate
	SMITH LP		Venture		Total		SMITH LP		Venture		Total

	(In thousands)
Balance, beginning of period	$	457,778	$	—	$	457,778	$	536,725	$	9,324	$	546,049
Redemptions		(11,726)		—		(11,726)		(1,762)		—		(1,762)
LTIP Units issued in lieu of cash compensation ⁽¹⁾		757		—		757		987		—		987
Net income (loss)		(1,398)		—		(1,398)		18,240		8		18,248
Other comprehensive income		1,781		—		1,781		1,311		—		1,311
Distributions		(3,927)		—		(3,927)		(4,110)		(79)		(4,189)
Share-based compensation expense		9,606		—		9,606		12,369		—		12,369
Adjustment to redemption value		3,015		—		3,015		(50,334)		(1,287)		(51,621)
Balance, end of period	$	455,886	$	—	$	455,886	$	513,426	$	7,966	$	521,392

	Six Months Ended June 30,
	2023						2022
			Consolidated						Consolidated
	JBG		Real Estate				JBG		Real Estate
	SMITH LP		Venture		Total		SMITH LP		Venture		Total

	(In thousands)
Balance, beginning of period	$	480,663	$	647	$	481,310	$	513,268	$	9,457	$	522,725
Redemptions		(25,508)		(647)		(26,155)		(7,776)		—		(7,776)
LTIP Units issued in lieu of cash compensation ⁽¹⁾		5,213		—		5,213		6,584		—		6,584
Net income		1,965		—		1,965		18,237		21		18,258
Other comprehensive income (loss)		(444)		—		(444)		4,277		—		4,277
Distributions		(3,927)		—		(3,927)		(4,110)		(148)		(4,258)
Share-based compensation expense		19,149		—		19,149		24,896		—		24,896
Adjustment to redemption value		(21,225)		—		(21,225)		(41,950)		(1,364)		(43,314)
Balance, end of period	$	455,886	$	—	$	455,886	$	513,426	$	7,966	$	521,392

(1)	See Note 11 for additional information.