JBG SMITH Properties (JBGS) Q3 2024 earnings summary

Executive summary

• Operating portfolio as of September 30, 2024, included 41 assets: 16 multifamily (6,781 units), 23 commercial (7.2M sq ft), and two land assets; 75% of holdings are in National Landing, VA.

• Multifamily portfolio occupancy rose to 95.7% (97.0% leased), with effective rents up 4.5% for new leases and 6.1% on renewals; Same Store NOI up 3.5%.

• Net loss attributable to common shareholders was $27.0M ($0.32/share) for Q3 2024, compared to $58.0M ($0.58/share) in Q3 2023; nine-month net loss was $83.6M ($0.95/share) vs. $47.4M ($0.45/share) in 2023.

• Office portfolio occupancy fell to 79.1% (down 150 bps from Q2); office leasing showed early signs of recovery, with 150,000 SF of leases signed in Q3 and a 1.2% cash rental rate increase on renewals.

• Received Nareit and GRESB sustainability awards, reflecting leadership in ESG and community impact.

Financial highlights

• Q3 2024 property rental revenue was $113.3M, down 5.8% year-over-year; nine-month property rental revenue was $348.5M, down 4.5%.

• Q3 2024 Core FFO attributable to common shares was $19.3M ($0.23/share), down from $41.0M ($0.40/share) YoY.

• Q3 consolidated NOI was $65.1M (down from $72.9M in Q3 2023); nine-month consolidated NOI was $197.2M (down from $225.6M in 2023).

• Interest expense increased 26.4% year-over-year in Q3 to $35.3M and 20.9% for nine months to $97.4M.

• Annualized NOI was $282.4M, or $278.1M excluding sold/out-of-service assets, nearly flat sequentially.

Outlook and guidance

• Focus remains on capital allocation to maximize long-term NAV per share, including asset sales, recapitalizations, and share repurchases.

• Office portfolio faces continued headwinds; 475,000 sq ft expected to be vacated in National Landing by mid-2025, with some buildings to be repurposed.

• Recovery in development expected to be gradual, with a 9.3M SF pipeline mostly entitled by end of 2025.

• Under-construction multifamily asset (775 units) expected to deliver in Q3 2025; $51.1M in remaining development costs anticipated over the next year.

• Downward pressure on office Same Store NOI and earnings expected through 2025 due to known tenant vacates and higher interest expense.