BETHESDA, Md.--(BUSINESS WIRE)--JBG SMITH (NYSE: JBGS), a leading owner and developer of high-growth, mixed-use properties in the Washington, DC market, today filed its Form 10-Q for the quarter ended June 30, 2020 and reported its financial results.

Additional information regarding our results of operations, properties and tenants can be found in our Second Quarter 2020 Investor Package, which is posted in the Investor Relations section of our website at www.jbgsmith.com. Additional information about the current and potential future impact of COVID-19 and the ensuing economic turmoil on us, as well as our response to it, can be found in our Letter to Shareholders in our Second Quarter 2020 Investor Package. We encourage investors to consider the information presented here with the information in that document.

Second Quarter 2020 Financial Results

• Net loss attributable to common shareholders was $36.8 million, or $0.28 per diluted share.
• Funds From Operations (“FFO”) attributable to common shareholders was $23.7 million, or $0.18 per diluted share.
• Core Funds From Operations (“Core FFO”) attributable to common shareholders was $34.1 million, or $0.26 per diluted share.

Six Months Ended June 30, 2020 Financial Results

• Net income attributable to common shareholders was $6.1 million, or $0.04 per diluted share.
• FFO attributable to common shareholders was $60.5 million, or $0.45 per diluted share.
• Core FFO attributable to common shareholders was $86.2 million, or $0.64 per diluted share.

Operating Portfolio Highlights

• Annualized Net Operating Income (“NOI”) for the three months ended June 30, 2020 was $307.0 million, compared to $334.6 million for the three months ended March 31, 2020, at our share.
• The operating commercial portfolio was 90.4% leased and 88.1% occupied as of June 30, 2020, compared to 91.0% and 88.7% as of March 31, 2020, at our share.
• The operating multifamily portfolio was 85.8% leased and 82.3% occupied as of June 30, 2020, compared to 87.0% and 84.5% as of March 31, 2020, at our share.
• Executed approximately 206,000 square feet of office leases at our share in the second quarter, comprising approximately 32,000 square feet of new leases and approximately 174,000 square feet of second generation leases, which generated a 5.4% rental rate increase on a GAAP basis and a 4.2% rental rate increase on a cash basis. Executed approximately 505,000 square feet of office leases at our share during the six months ended June 30, 2020, comprising approximately 80,000 square feet of new leases and approximately 425,000 square feet of second generation leases, which generated a 4.6% rental rate increase on a GAAP basis and a 1.3% rental rate increase on a cash basis.
• Same Store Net Operating Income (“SSNOI”) at our share decreased 3.0% to $74.5 million for the three months ended June 30, 2020, compared to $76.8 million for the three months ended June 30, 2019 driven by (i) lower occupancy, a reduction in revenue and higher operating costs at our multifamily properties, which were all related to the COVID-19 pandemic, and (ii) a reduction in revenue in our commercial portfolio due to the deferral of rent, an increase in uncollectable operating lease receivables, and a decline in parking revenue, all attributable to the COVID-19 pandemic, offset by the burn-off of rent abatements. SSNOI at our share increased 0.4% to $150.4 million for the six months ended June 30, 2020, compared to $149.8 million for the six months ended June 30, 2019 largely due to the burn off of rent abatements and increase in occupancy in our commercial portfolio, which was partially offset by higher operating costs and a reduction in revenue due to the deferral of rent and an increase in uncollectable operating lease receivables attributable to the COVID-19 pandemic. The reported same store pools as of June 30, 2020 include only the assets that were in-service for the entirety of both periods being compared.

Development Portfolio Highlights

Under Construction

• As of June 30, 2020, there were three assets under construction (one commercial asset and two multifamily assets), consisting of approximately 274,000 square feet and 577 units, both at our share.
• During the quarter ended June 30, 2020, we completed 965 Florida Avenue ahead of schedule and below budget.

Near-Term Development

• As of June 30, 2020, there were no assets in near-term development.

Future Development Pipeline

• As of June 30, 2020, there were 35 future development assets consisting of 16.6 million square feet of estimated potential density at our share, including the 2.1 million square feet held for sale to Amazon.com ("Amazon").

Third-Party Asset Management and Real Estate Services Business

For the three months ended June 30, 2020, revenue from third-party real estate services, including reimbursements, was $27.2 million. Excluding reimbursements and service revenue from our interests in consolidated and unconsolidated real estate ventures, revenue from our third-party asset management and real estate services business was $12.5 million, primarily driven by $4.3 million of property management fees, $3.0 million of development fees, $2.3 million of asset management fees and $1.7 million of other service revenue.

Balance Sheet

• We had $2.2 billion of debt ($2.6 billion including our share of debt of unconsolidated real estate ventures) as of June 30, 2020. Of the $2.6 billion of debt at our share, approximately 58% was fixed-rate and rate caps were in place for approximately 38% of our floating rate debt.
• The weighted average interest rate of our debt at share was 2.89% as of June 30, 2020.
• As of June 30, 2020, our total enterprise value was approximately $6.3 billion, comprising 147.9 million common shares and units valued at $4.4 billion and debt (net of premium / (discount) and deferred financing costs) at our share of $2.6 billion, less cash and cash equivalents at our share of $724.2 million.
• As of June 30, 2020, we had $710.7 million of cash and cash equivalents ($724.2 million of cash and cash equivalents at our share), and $498.5 million of capacity under our credit facility.
• Net Debt to Annualized Adjusted EBITDA at our share for the three months ended June 30, 2020 was 8.1x and our Net Debt / Total Enterprise Value was 30.2% as of June 30, 2020.

Investing and Financing Activities

• Recognized a loss of $3.0 million from the sale of 11333 Woodglen Drive/NoBe II Land/Woodglen by our unconsolidated real estate venture with Landmark.
• Drew an additional $300.0 million under our revolving credit facility.
• Drew the remaining $100.0 million under our Tranche A-1 Term Loan.
• Refinanced the mortgage loan collateralized by RTC-West, increasing the principal balance by $20.2 million.
• Our real estate venture, which owns 1900 N Street, entered into a mortgage loan with a maximum principal balance of $160.0 million collateralized by the asset. The venture initially received proceeds from the mortgage loan of $134.5 million ($74.0 million at our share), with an additional $25.5 million available in the future.

Subsequent to June 30, 2020:

• Entered into three separate mortgage loans with an aggregate principal balance of $385.0 million, collateralized by The Bartlett, 1221 Van Street and 220 20th Street.
• Repaid the $500.0 million outstanding balance on our revolving credit facility.

Dividends

On July 30, 2020, our Board of Trustees declared a quarterly dividend of $0.225 per common share, which will be paid on August 27, 2020 to shareholders of record as of August 13, 2020.

About JBG SMITH

JBG SMITH is an S&P 400 company that owns, operates, invests in and develops a dynamic portfolio of high-growth mixed-use properties in and around Washington, DC. Through an intense focus on placemaking, JBG SMITH cultivates vibrant, amenity-rich, walkable neighborhoods throughout the Capital region, including National Landing where it now serves as the exclusive developer for Amazon’s new headquarters. JBG SMITH’s portfolio currently comprises 20.7 million square feet of high-growth office, multifamily and retail assets, 98% at our share of which are Metro-served. It also maintains a robust future development pipeline encompassing 16.6 million square feet of mixed-use development opportunities. For more information on JBG SMITH please visit www.jbgsmith.com.