Redeemable Noncontrolling Interests

JBG SMITH LP

In 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 December 31, 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.

Consolidated Real Estate Venture

In November 2017, a real estate venture acquired 965 Florida Avenue for $1.5 million and concurrently restructured the terms of the venture. Prior to the restructure, our partner held a 37.9% ownership interest. Pursuant to the terms of the venture agreement, we will fund all capital contributions until we achieve a 97.0% interest. Our partner can redeem its interest for cash two years after delivery, but no later than seven years subsequent to delivery. As of December 31, 2017, we held a 67.6% ownership interest and consolidated 965 Florida Avenue.

Below is a summary of the activity of redeemable noncontrolling interests for the year ended December 31, 2017:



	JBG SMITH LP			Consolidated Real Estate Venture			Total
	(In thousands)
Balance at January 1, 2017 ⁽¹⁾	$	—		$	—		$	—
OP Units issued at the Separation	96,632			—			96,632
OP Units issued in connection with the Combination ⁽²⁾	359,967			—			359,967
Net loss attributable to redeemable noncontrolling interests	(7,320		)	(8		)	(7,328		)
Other comprehensive income	225			—			225
Distributions and acquisition of consolidated real estate venture	(9,113		)	5,420			(3,693		)
Share-based compensation expense	32,634			—			32,634
Adjustment to redemption value	130,692			—			130,692
Balance as of December 31, 2017	$	603,717		$	5,412		$	609,129

__________________


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


⁽²⁾	Excludes certain OP Units issued in 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 12 for additional information.