Segment Information

3 Months Ended

Mar. 31, 2025

Segment Information

Segment Information

16.Segment Information

We own, operate and develop mixed-use properties concentrated in and around Washington, D.C. We derive our revenue primarily from leases with multifamily and commercial tenants. In addition, our third-party real estate services business provides fee-based real estate services. Our operating segments are 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, our three operating and reportable segments are multifamily, commercial, and third-party real estate services.

The CODM measures and evaluates the performance of our operating segments based on only the following measures at our share pertaining to each of our segments:

● NOI (multifamily and commercial) - which includes our proportionate share of revenue and expenses attributable to real estate ventures. NOI includes property rental revenue and other property revenue, and deducts property expenses. NOI excludes deferred rent, commercial lease termination revenue, related party management fees, interest expense, and certain other non-cash adjustments, including the accretion of acquired below-market leases and the amortization of acquired above-market leases and below-market ground lease intangibles.

● Net third-party real estate services, excluding reimbursements - which includes revenue streams generated by this segment, excluding reimbursement revenue, as well as the expenses attributable to this segment at our proportionate share, calculated by excluding real estate services revenue from our interests in real estate ventures.

The CODM uses these measures predominantly in the annual budget and forecasting process as well as in his review of our quarterly financial results when making decisions about the allocation of operating and capital resources to each segment. We have included disclosure of NOI and the results of our third-party real estate services business at our share to align with our internal reporting and the information used by our CODM.

The following is a summary of NOI at our share for our multifamily and commercial segments, including a reconciliation to our total NOI at our share:

	Three Months Ended March 31, 2025
	Multifamily		Commercial		Total
	(In thousands, at our share)
Property rental revenue	$	54,602	$	49,757	$	104,359
Other property revenue		621		3,736		4,357
Total property revenue		55,223		53,493		108,716
Property expense:
Real estate taxes		5,571		5,592		11,163
Payroll		3,742		3,007		6,749
Utilities		3,918		3,402		7,320
Repairs and maintenance		5,437		4,472		9,909
Other property operating		3,045		4,148		7,193
Total property expense		21,713		20,621		42,334
NOI from reportable segments	$	33,510	$	32,872		66,382
Other NOI (1)						(1,097)
NOI					$	65,285

	Three Months Ended March 31, 2024
	Multifamily		Commercial		Total
	(In thousands, at our share)
Property rental revenue	$	51,731	$	63,346	$	115,077
Other property revenue		716		4,092		4,808
Total property revenue		52,447		67,438		119,885
Property expense:
Real estate taxes		5,402		7,989		13,391
Payroll		4,182		3,508		7,690
Utilities		3,546		3,669		7,215
Repairs and maintenance		4,363		5,248		9,611
Other property operating		2,367		4,071		6,438
Total property expense		19,860		24,485		44,345
NOI from reportable segments	$	32,587	$	42,953		75,540
Other NOI (1)						(1,705)
NOI					$	73,835

(1) Includes activity related to development assets and land assets for which we are the ground lessor.

The following is a summary of our third-party real estate services business at our share:

	Three Months Ended March 31,
	2025		2024
	(In thousands, at our share)
Property management fees	$	3,361	$	4,115
Asset management fees		580		924
Development fees		523		238
Leasing fees		654		1,120
Construction management fees		231		384
Other service revenue		1,035		1,001
Third-party real estate services revenue, excluding reimbursements		6,384		7,782
Third-party real estate services expenses, excluding reimbursements		7,236		12,136
Net third-party real estate services, excluding reimbursements	$	(852)	$	(4,354)

The following is a reconciliation of revenue at our share to total revenue per the statements of operations:

	Three Months Ended March 31,
	2025		2024
	(In thousands)
Total property revenue at our share	$	108,716	$	119,885
Third-party real estate services revenue, excluding reimbursements, at our share		6,384		7,782
Reimbursement revenue (1)		8,274		9,681
Our share of revenue attributable to unconsolidated real estate ventures		(2,106)		(4,566)
Other property revenue		1,735		1,403
Other adjustments (2)		(2,317)		10,999
Total revenue per statements of operations	$	120,686	$	145,184

(1) Represents reimbursements 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

(2) Adjustment to include deferred rent, above/below market lease amortization, commercial lease termination revenue and lease incentive amortization.

The following is the reconciliation of NOI at our share to loss before income tax benefit:

	Three Months Ended March 31,
	2025		2024
	(In thousands)
NOI at our share	$	65,285	$	73,835
Net third-party real estate services, excluding reimbursements, at our share		(852)		(4,354)
Add:
Income (loss) from unconsolidated real estate ventures, net		(592)		975
Interest and other income, net		525		2,100
Gain on the sale of real estate, net		537		197
Less:
Depreciation and amortization expense		47,587		56,855
General and administrative expense: corporate and other		15,557		14,973
Transaction and other costs		1,911		1,514
Interest expense		35,200		30,160
Loss on the extinguishment of debt		4,636		—
Impairment loss		8,483		17,211
Adjustments:
Our share of net third-party real estate services attributable to unconsolidated real estate ventures		(305)		(105)
NOI attributable to unconsolidated real estate ventures at our share		(990)		(3,046)
Non-cash rent adjustments (1)		(2,439)		1,430
Other adjustments (2)		(1,693)		6,023
Total adjustments		(5,427)		4,302
Loss before income tax benefit	$	(53,898)	$	(43,658)

(1) Adjustment to include deferred rent, above/below market lease amortization and lease incentive amortization.

(2) Adjustment to include payments associated with assumed lease liabilities related to operating properties and to exclude commercial lease termination revenue, related party management fees, corporate entity activity and inter-segment activity.