Dispositions

Discontinued Operations

On July 17, 2017, we completed the spin-off of our Washington, DC segment comprised of (i) 37 office properties totaling over 11.1 million square feet, five multifamily properties with 3,133 units and five other assets totaling approximately 406,000 square feet and (ii) 18 future development assets totaling over 10.4 million square feet of estimated potential development density, and (iii) $412.5 million of cash ($275.0 million plus The Bartlett financing proceeds less transaction costs and other mortgage items) to JBG SMITH Properties (“JBGS”). On July 18, 2017, JBGS was combined with the management business and certain Washington, DC assets of The JBG Companies (“JBG”), a Washington, DC real estate company. Steven Roth, the Chairman of the Board of Trustees and Chief Executive Officer of Vornado, is the Chairman of the Board of Trustees of JBGS. Mitchell Schear, former President of our Washington, DC business, is a member of the Board of Trustees of JBGS. We are providing transition services to JBGS initially including information technology, financial reporting and payroll services. The spin-off was effected through a tax-free distribution by Vornado to the holders of Vornado common shares of all of the common shares of JBGS at the rate of one JBGS common share for every two common shares of Vornado and the distribution by the Operating Partnership to the holders of its common units of all of the outstanding common units of JBG SMITH Properties LP (“JBGSLP”) at the rate of one JBGSLP common unit for every two common units of VRLP held of record. See JBGS’ Amendment No. 3 on Form 10 (File No. 1-37994) filed with the Securities and Exchange Commission on June 9, 2017 for additional information. Beginning in the third quarter of 2017, the historical financial results of our Washington, DC segment are reflected in our consolidated financial statements as discontinued operations for all periods presented.

On June 20, 2017, we completed a $220,000,000 financing of The Bartlett residential building. The five-year interest-only loan is at LIBOR plus 1.70% (2.90% at September 30, 2017), and matures in June 2022. On July 17, 2017, the property, the loan and the $217,000,000 of net proceeds were transferred to JBGS in connection with the tax-free spin-off of our Washington, DC segment.

On July 17, 2017, prior to completion of the tax-free spin-off of our Washington, DC segment, we repaid the $43,581,000 LIBOR plus 1.25% mortgage encumbering 1700 and 1730 M Street which was scheduled to mature in August 2017. The unencumbered property was then transferred to JBGS in connection with the tax-free spin-off of our Washington, DC segment.


7.	Dispositions - continued

Discontinued Operations - continued

The tables below set forth the assets and liabilities related to discontinued operations as of September 30, 2017 and December 31, 2016 and their combined results of operations and cash flows for the three and nine months ended September 30, 2017 and 2016.



(Amounts in thousands)	Balance as of
	September 30, 2017		December 31, 2016
Assets related to discontinued operations:
Real estate, net	$	—	$	3,222,720
Other assets	1,774		345,893
	$	1,774	$	3,568,613
Liabilities related to discontinued operations:
Mortgages payable, net	$	—	$	1,165,015
Other liabilities	3,602		94,428
	$	3,602	$	1,259,443



(Amounts in thousands)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2017			2016			2017			2016
(Loss) income from discontinued operations:
Total revenues	$	25,747		$	134,912		$	260,969		$	392,108
Total expenses	21,708			109,506			211,930			331,377
	4,039			25,406			49,039			60,731
JBG SMITH Properties spin-off transaction costs	(53,581		)	(2,739		)	(67,045		)	(4,597		)
Net gains on sale of real estate and a lease position	1,530			2,864			3,797			5,074
Income (loss) from partially owned assets	93			316			435			(3,363		)
Impairment losses	—			(465		)	—			(161,165		)
Pretax (loss) income from discontinued operations	(47,919		)	25,382			(13,774		)	(103,320		)
Income tax expense	(11		)	(302		)	(727		)	(884		)
(Loss) income from discontinued operations	$	(47,930	)	$	25,080		$	(14,501	)	$	(104,204	)




(Amounts in thousands)	For the Nine Months Ended September 30,
	2017			2016
Cash flows related to discontinued operations:
Cash flows from operating activities	$	39,581		$	107,797
Cash flows from investing activities	(48,377		)	(176,374		)