Transactions with Vornado and Related Parties

6 Months Ended

Jun. 30, 2019

Related Party Transactions [Abstract]

Related Party Transactions Disclosure [Text Block]

Transactions with Vornado and Related Parties

Transactions with Vornado

In connection with the Formation Transaction, we entered into an agreement with Vornado under which Vornado provided operational support for a period that ended July 18, 2019. These services included information technology, financial reporting and payroll services. The charges for these services were based on an hourly or per transaction fee arrangement including reimbursement for overhead and out-of-pocket expenses totaling $1.1 million and $2.3 million for the three and six months ended June 30, 2018. The charges for these services in 2019 were de minimis.

Pursuant to agreements, we are providing Vornado with leasing and property management services for certain of its assets that were not part of the Separation. The total revenue related to these services were $489,000 and $977,000 for the three and six months ended June 30, 2019, and $444,000 and $1.0 million for the three and six months ended June 30, 2018. We believe that the terms of these agreements are comparable to those that would have been negotiated based on market rates.

We have agreements with Building Maintenance Services ("BMS"), a wholly owned subsidiary of Vornado, to supervise cleaning, engineering and security services at our properties. We paid BMS $5.4 million and $10.6 million for the three and six months ended June 30, 2019, and $6.1 million and $10.1 million during the three and six months ended June 30, 2018, which are included in "Property operating expenses" in our statements of operations.

In connection with the Formation Transaction, we have a Tax Matters Agreement with Vornado. See Note 15 for additional information.

Transactions with JBG Legacy Funds and the Washington Housing Initiative ("WHI")

Our third-party asset management and real estate services business provides fee-based real estate services to third parties, the JBG Legacy Funds and the WHI. We provide services for the benefit of the JBG Legacy Funds that own interests in the assets retained by the JBG Legacy Funds. In connection with the contribution of the JBG Assets to us, it was determined that the general partner and managing member interests in the JBG Legacy Funds that were held by former JBG executives (and who became members of our management team and/or Board of Trustees) would not be transferred to us and remain under the control of these individuals. In addition, certain members of our senior management and Board of Trustees have an ownership interest in the JBG Legacy Funds and own carried interests in each fund and in certain of our real estate ventures that entitles them to receive additional compensation if the fund or real estate venture achieves certain return thresholds. The WHI was launched by us and the Federal

City Council in June 2018 as a scalable market-driven model that uses private capital to help address the scarcity of housing for middle income families. During the second quarter of 2019, the WHI Impact Pool ("Impact Pool") completed its initial closing of capital commitments totaling $78.0 million, which included a commitment from us of $7.6 million. We are the third-party manager for the Impact Pool, which is the social impact investment vehicle of the WHI. 

The third-party real estate services revenue, including reimbursements, from these JBG Legacy Funds and the Impact Pool was $10.0 million and $18.4 million for the three and six months ended June 30, 2019, and $8.3 million and $16.9 million for the three and six months ended June 30, 2018. As of June 30, 2019 and December 31, 2018, we had receivables from the JBG Legacy Funds and the Impact Pool totaling $5.8 million and $3.6 million for such services.

We rent our corporate offices from an unconsolidated real estate venture and incurred expenses totaling $1.3 million and $2.6 million for the three and six months ended June 30, 2019 and $1.2 million and $2.4 million for the three and six months ended June 30, 2018, which is recorded in "General and administrative expense: Corporate and other" in our statements of operations.