Redeemable Noncontrolling Interests

In conjunction with the Formation Transaction, JBG SMITH LP issued 19.8 million OP Units to persons other than JBG SMITH that are redeemable for cash or our common shares beginning August 1, 2018, subject to certain limitations. These OP Units represent a 14.4% interest in JBG SMITH LP as of September 30, 2017. The carrying amount of the redeemable noncontrolling interests is adjusted to its redemption value at the end of each reporting period, but no less than its initial carrying value, with such adjustments recognized in "Additional paid-in capital". Redemption value is equivalent to the market value of one of our common shares at the end of the period multiplied by the number of vested OP Units outstanding. Below is a summary of the activity of redeemable noncontrolling interests for the nine months ended September 30, 2017:



	Nine Months Ended September 30,
	2017
	(In thousands)
Balance at January 1, 2017 ⁽¹⁾	$	—
OP Units issued at the Separation	96,632
OP Units issued in connection with the Combination ⁽²⁾	359,967
Net loss attributable to redeemable noncontrolling interests	(2,481		)
Share-based compensation expense	15,799
Adjustment to redemption value	97,084
Balance as of September 30, 2017	$	567,001

__________________


⁽¹⁾	We did not have any redeemable noncontrolling interests prior to the Separation on July 17, 2017.


⁽²⁾	Excludes certain OP Units issued as part of the Combination which have an estimated fair value of $110.6 million, that are subject to post-combination employment with vesting over periods of either 12 or 60 months. See Note 11 for further information.