Nov 6, 2026, 6:30 AM ETReal Estate

JBG SMITH — Third Quarter 2026 Earnings Summary

JBGSJBG SMITH PROPERTIES

Financial Performance

Reported a net loss attributable to common shareholders of $82.0 million ($1.41 per diluted share) for the three months ended September 30, 2026, compared to a net loss of $28.6 million ($0.48 per share) in the same period in 2025.
Funds from Operations (FFO) attributable to common shareholders were $10.4 million ($0.18 per share) for the quarter, up from $10.1 million ($0.17 per share) in Q3 2025.
Core FFO attributable to common shareholders was $12.7 million ($0.22 per share) for the quarter, compared to $9.1 million ($0.15 per share) in Q3 2025.
Annualized Net Operating Income (NOI) increased 2.9% quarter-over-quarter to $256.4 million.
Same Store NOI increased 3.3% year-over-year to $60.8 million for the three months ended September 30, 2026.
Total revenue for the quarter was $132.4 million, compared to $123.9 million in Q3 2025.
Net Debt to Annualized Adjusted EBITDA was 11.6x as of September 30, 2026, an improvement from 12.6x in the prior quarter.
Cash and cash equivalents were $78.5 million, with $454.2 million of undrawn capacity under the revolving credit facility.
Total enterprise value was approximately $3.2 billion, comprising $718.2 million in equity and $2.6 billion in debt (net of premium/discount and deferred financing costs) at JBG SMITH Share.

Management expects to be on track for the strongest year of new leasing since 2019 entering the fourth quarter.
The company anticipates continued improvement in operating performance in the short run, though a recovery in the private capital markets for office assets may require a longer time horizon.
JBG SMITH intends to continue recycling capital out of higher-priced multifamily assets into more accretive uses, including acquisitions of high-growth defense-tech office assets and share repurchases, for the foreseeable future.
The company expects the discount on assets being bought to equal or exceed the discount on assets being sold, maintaining the accretive nature of the capital allocation strategy despite rising rates.
Management believes Northern Virginia remains well-positioned to benefit from demand drivers tied to defense modernization and national security investment.

Multifamily: The operating portfolio ended the quarter at 92.9% leased and 91.5% occupied. The Same Store multifamily portfolio was 94.4% leased and 93.1% occupied. Asking rents increased 1.7% from June 2026 and 3.7% from December 2025. Multifamily portfolio NOI increased approximately 3.4% from the second quarter.
Office: The operating portfolio ended the quarter at 78.5% leased and 76.8% occupied. The company executed 193,000 square feet of office leases during the quarter, including 74,000 square feet of new leases. Second-generation leases generated a 1.9% rental rate decrease on a cash basis.
Third-Party Services: Revenue from third-party real estate services, including reimbursements, was $18.3 million for the quarter. Excluding reimbursements and service revenue from real estate ventures, revenue was $8.0 million.
Development Pipeline: The pipeline consisted of 3.5 million square feet of Estimated Potential Development Density at JBG SMITH Share. One asset, 2200 Crystal Drive, was under construction, being converted into a 195-unit multifamily asset.
Recapitalizations: Subsequent to quarter end, the company recapitalized 800 North Glebe (selling a 90% interest) and Dulles View (selling 50% of its interest) via joint ventures to attract private capital partners.

The DC metro region's multifamily vacancy was 6.4% as of September, flat relative to the same period last year, with only approximately 2% of regional inventory currently under construction.
Northern Virginia office market vacancy ended the quarter at approximately 21%, while trophy vacancy fell to 12.9%, the lowest recorded by CBRE since tracking began.
99% of the company's third-quarter office leasing activity was with tenants in the defense and technology industries.
Demand for office space with Sensitive Compartmented Information Facilities (SCIF) is particularly strong, with 65% of the defense-tech tenancy having a SCIF or secure facility.
The company has reduced its office inventory by more than 25% since formation through repurposing older buildings for redevelopment or conversion.
The company's tenant retention rate among defense-tech tenants has been 81% since the beginning of 2025, with these tenants expanding their footprints by an average of 14% upon renewal.

Elevated long-term interest rates have increased borrowing costs, widened bid-ask spreads, and placed pressure on real estate valuations.
The company faced a significant employment downturn in the DC region in 2025, losing over 100,000 jobs, which temporarily disrupted multifamily fundamentals and slowed transaction activity.
Further improvement in occupancy and private market demand for office investment is necessary to realize value within the office portfolio.
The Wardman Tower litigation remains a risk factor, including potential costs and the need to post bonds.
Adverse economic conditions in the Washington, DC metropolitan area, including reductions in federal government spending or headcount, could impact demand.

CEO W. Matthew Kelly stated that the underlying fundamentals in multifamily and office sectors are improving, particularly in markets driven by the defense tech industry.
Management expressed confidence in the "win-win" proposition of their capital allocation strategy, offering liquidity to investors favoring share repurchases and NAV accretion to those favoring long-term growth.
The company highlighted the successful recast of its $690.0 million Revolving Credit Facility and $243.9 million Tranche A-2 Term Loan with extended maturities to August 2031 as a demonstration of strong balance sheet and lender support.
Management emphasized that their mixed-use operator DNA allows them to unlock value by converting obsolete office buildings into multifamily housing, a strategy they believe single-asset-class investors cannot replicate.

No specific analyst questions and answers were included in the provided press release text.

The Board of Trustees declared a quarterly dividend of $0.175 per common share on October 29, 2026, payable on November 25, 2026.
Through October 30, 2026, the company repurchased and retired 1.0 million common shares for $11.5 million, with a weighted average purchase price of $11.07 per share.
Since launching its share repurchase program in 2020, JBG SMITH has repurchased 86.5 million shares (approximately 65% of shares outstanding as of December 31, 2019) for $1.6 billion.
The company repaid $67.0 million under the revolving credit facility subsequent to quarter end.
The company secured mortgage financing on recapitalized assets (800 North Glebe and Dulles View) at attractive pricing and leverage levels despite a challenging financing environment.
The company holds a 3.5 million square-foot development pipeline and 11.8 million square feet of operating assets at share.