Name: JBG SMITH Properties Q1 2025 Earnings Call
Start: 2025-04-29T00:00:00.000Z

Executive Summary

Q1 2025 showed weaker GAAP results with revenue at $120.7M and GAAP loss per share of $0.56; Core FFO per share was $0.09, down from $0.14 in Q4 and $0.23 in Q3, as higher utilities and lower commercial occupancy pressured Same Store NOI (-5.5% q/q) .
Adjusted EBITDA fell to $45.4M and Net Debt to annualized Adjusted EBITDA rose to 13.7x, continuing a sequential deterioration (Q4: 11.7x; Q3: 10.6x) as office headwinds persisted and interest expense increased .
Strategic capital allocation was the quarter’s defining theme: JBGS sold 8001 Woodmont for $194.0M (4.7% cap rate), refinanced RiverHouse at a fixed 5.03% rate, and repurchased 12.2M shares for $187.5M at $15.43 average, while declaring a $0.175 dividend .
Management reiterated a near-term earnings decline and leverage increase through mid-2025, but highlighted offsets from multifamily lease-up (The Grace, Reva, The Zoe, Valen) and constrained DC multifamily supply; this narrative and ongoing asset recycling/share repurchases are key stock drivers .

What Went Well and What Went Wrong

What Went Well
- “Maximizing long-term NAV per share” through aggressive buybacks; 12.2M shares repurchased in Q1 ($187.5M), and 69.0M since 2020 (51% of 2019 shares) at $19.08 average, funded by recycling multifamily assets at/above NAV .
- Multifamily resilience: In-Service portfolio 95.7% leased/94.3% occupied; effective rents +1.5% (new) and +5.6% (renewal), 55.5% renewal rate; Zoe delivered with strong interest and fully leased 8,000 sq. ft. retail .
- Balance sheet optimization: RiverHouse refinancing ($258.9M, 5.03% fixed, interest-only), floating rate exposure low (88.3% fixed/hedged), manageable 2025 maturities (1.3% of debt) .
What Went Wrong
- Same Store NOI down 5.5% q/q to $63.1M, driven by lower commercial occupancy and higher utilities; Operating Portfolio NOI decreased to $67.5M (from $68.1M in Q4 and $70.6M in Q3) .
- GAAP results pressured: revenue fell sequentially to $120.7M (Q4: $130.8M; Q3: $136.0M), GAAP loss per share worsened vs Q3 and Q4; interest expense elevated and debt extinguishment loss ($4.6M) also weighed .
- Office softness: operating commercial portfolio 78.3% leased/76.4% occupied, leasing volume seasonally anemic (71k sq. ft.), modest mark-to-market (+0.7% cash), continued out-of-service actions in National Landing .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$136.026	$130.782	$120.686
GAAP EPS (Loss per Share, $USD)	$(0.32)	$(0.72)	$(0.56)
FFO per Diluted Share ($USD)	$0.23	$0.13	$(0.08)
Core FFO per Diluted Share ($USD)	$0.23	$0.14	$0.09
Adjusted EBITDA ($USD Millions)	$60.010	$52.919	$45.356
Net Debt / Annualized Adjusted EBITDA (x)	10.6x	11.7x	13.7x

Segment breakdown (Q1 2025):

Segment	Operating Portfolio NOI ($USD Millions)	Annualized NOI ($USD Millions)	% Occupied
Multifamily	$33.510	$134.040	91.3%
Commercial	$32.868	$131.472	76.4%
Ground Leases	$1.144	$4.576	N/A
Total	$67.522	$270.088	83.2%

KPIs (Q1 2025):

KPI	Value
Multifamily – Operating: 93.0% leased / 91.3% occupied
Multifamily – In-Service: 95.7% leased / 94.3% occupied
Multifamily effective new lease rate change: +1.5%
Multifamily effective renewal lease rate change: +5.6%
Renewal rate: 55.5%
Commercial – Operating: 78.3% leased / 76.4% occupied
Office leasing activity: ~71k sq. ft.; new leases ~14k; mark-to-market +0.7% cash, +1.0% GAAP
Same Store NOI (Total): $63.077M; q/q change: -5.5%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Earnings trajectory (FFO/Core FFO, EBITDA)	Through mid-2025	Not formally guided	“Expect continued decreases in our earnings” as RiverHouse capitalization ceases and known tenant vacates occur; offsets from multifamily deliveries and rent growth	Lowered (qualitative)
Leverage (Net Debt / Annualized Adjusted EBITDA)	Through mid-2025	Not formally guided	“Expect increases… through mid-2025,” mitigated by multifamily stabilization and National Landing demand	Raised (qualitative)
Dividend	Ongoing	$0.175 per quarter	$0.175 declared for Q2 payable May 22, 2025	Maintained
Asset recycling	2025	Continue opportunistic sales	Ongoing plan to sell liquid multifamily/land assets at/above NAV to fund buybacks	Reaffirmed

Note: JBGS does not provide quantitative ranges for revenue, margins, OpEx, OI&E, or tax; guidance is qualitative.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Capital allocation & share repurchases	Repurchased 3.1M shares; focus on recycling; debt extensions	Continued repurchases; noted liquidity and refinancing; buybacks ongoing	12.2M shares repurchased ($187.5M); strategy to sell multifamily/land to fund buybacks; long-term NAV focus	More aggressive buybacks; asset sales funding
Office market/federal exposure	Lower occupancy; seasonal/anemic leasing; net absorption weak; some tenant vacates	Year-end: office headwinds; SSNOI down; fixed debt proportion high	Leasing paused amid federal staffing/spending uncertainty; out-of-service actions >1.0M sq. ft.; defense/tech tenants dominate activity	Cautious; reducing stock; targeted leasing
Multifamily demand & supply	Lease-up of Grace/Reva; rents rising; concessions higher at some assets	Seasonal strength; In-Service >95% leased; refinancing at Grace/Reva	Zoe delivered; strong interest; constrained regional supply; Amazon return to office lifted demand in National Landing (+12.7% Amazonians)	Strengthening; new deliveries
Leverage & debt strategy	Net Debt/Adj EBITDA 10.6x; term loan extension to 2026 (+option)	11.7x; 88% fixed/hedged; manageable maturities	13.7x; 88.3% fixed/hedged; 2025 maturities only 1.3% of debt; RiverHouse locked at 5.03%	Higher near-term leverage; mitigants intact
Sustainability	Not highlighted	Not highlighted	Sustainability Summary released on Earth Day	Increased disclosure

Management Commentary

“Our most important role… is that of capital allocator… buying our own discounted shares… made the most sense… selling our multifamily assets, which remain attractively priced… is the most accretive means of funding these buybacks.”
“Closed on the sale of 8001 Woodmont… $194.0 million, representing a 4.7% capitalization rate… garnered unexpectedly strong pricing and buyer pool depth.”
“Refinanced RiverHouse Apartments with a $258.9 million loan… fixed interest rate of 5.03%… favorable outcome… provides additional balance sheet flexibility.”
“We expect continued decreases in our earnings and increases in our Net Debt to Annualized Adjusted EBITDA through mid-2025… impacts… lessened by… delivery/stabilization of newly constructed multifamily assets… rent growth… office demand in National Landing.”

Q&A Highlights

Earnings call transcript for Q1 2025 was not available in our document catalog; no Q&A section could be reviewed [ListDocuments returned none].
Management’s letter and the 8‑K highlight clarifications around near-term earnings/leverage headwinds, multifamily offsets, and capital allocation priorities .

Estimates Context

Consensus EPS and revenue estimates for Q1 2025 were not available via S&P Global for comparison; Target Price Consensus Mean stood at $17.5* (“Values retrieved from S&P Global”). Actual GAAP revenue was $120.686M and GAAP loss per share was $0.56 .
Given the lack of EPS/revenue consensus detail, analyst models may need to reflect: (i) continued near-term earnings pressure and higher Net Debt/Adj EBITDA; (ii) timing of multifamily stabilization; (iii) office out-of-service impact and leasing pace .

Key Takeaways for Investors

Near-term headwinds persist: expect lower earnings and higher leverage through mid-2025; watch the cadence of multifamily lease-up (Zoe, Valen) and seasonal demand for stabilization milestones .
Capital allocation is the main story: continued recycling of multifamily/land at/above NAV to fund buybacks is accretive—monitor transaction pipeline and buyback pace as key share price drivers .
Office strategy remains defensive and selective: significant out-of-service space reduces competitive stock; leasing skewed to defense/tech; monitor National Landing tenant wins and signed-not-commenced rent ramp .
Balance sheet risk contained near term: high fixed/hedged debt, small 2025 maturities, and RiverHouse fixed-rate refi mitigate rate sensitivity; however, interest burden and debt extinguishment costs can still pressure GAAP results .
Multifamily fundamentals resilient: strong occupancy/rents and constrained regional supply support NOI; Amazon’s RTO adds incremental demand in National Landing .
Dividend maintained ($0.175), but FAD payout ratio elevated in Q1 (169.4%); sustainability depends on capex timing, lease commencements, and stabilization progress .
Watch estimate revisions: with limited formal guidance and qualitative headwinds, sell-side may trim near-term EBITDA/FFO; upside optionality from asset sales, fee revenue, and potential office distress opportunities remains .

Additional details and sources:

Q1 2025 press release and investor package: financials, NOI and FFO tables, portfolio metrics, and capital allocation updates .
Dividend declaration: $0.175 per share, payable May 22, 2025 .
Prior quarters for trend analysis: Q4 2024 (revenue $130.8M, Core FFO/share $0.14, Adjusted EBITDA $52.9M) ; Q3 2024 (revenue $136.0M, Core FFO/share $0.23, Adjusted EBITDA $60.0M) .
Estimates: Target Price Consensus Mean $17.5* (“Values retrieved from S&P Global”). EPS and revenue consensus unavailable.*

JBG SMITH Properties (JBGS)·Q1 2025 Earnings Summary