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JBG SMITH Properties (JBGS)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $123.870 million, diluted loss per share was $0.48, and Core FFO per share was $0.15; Net loss attributable to common shareholders was $28.555 million .
  • Annualized NOI at share fell to $232.9 million excluding sold/recapped/recently acquired assets (from $251.0 million in Q2) as higher utilities and operating expenses weighed on results; Same Store NOI declined 6.7% QoQ to $54.056 million .
  • Office leasing momentum continued: 182,000 square feet executed in Q3 with positive second‑generation cash and GAAP rent mark‑to‑market (+11.1% cash; +12.3% GAAP); multifamily delivered Valen and advanced lease‑up across new towers .
  • Leverage increased: Net Debt/annualized Adjusted EBITDA rose to 12.6x (from 11.8x in Q2); management expects leverage to moderate as new multifamily assets stabilize; quarterly cash dividend maintained at $0.175 per share .
  • Estimate comparisons were limited: S&P Global consensus for Q3 EPS and revenue was unavailable; target price consensus remained $17.50. Where available, estimates are shown below (Values retrieved from S&P Global).*

What Went Well and What Went Wrong

What Went Well

  • Office leasing executed 182,000 SF in Q3, including ~149,000 SF of new leases; second‑generation leases achieved +11.1% cash and +12.3% GAAP rent mark‑to‑market, signaling pricing power in targeted submarkets .
  • Valen (355 units) construction completed; lease‑up progressed across The Grace, Reva, and The Zoe, supported by National Landing demand drivers (Amazon HQ, Pentagon proximity, placemaking) .
  • Commercial occupancy and leasing increased q/q to 75.7% occupied and 77.6% leased, while multifamily operating occupancy improved to 87.2% (from 85.8% in Q2) .

What Went Wrong

  • Annualized NOI at share declined excluding portfolio changes ($232.9 million vs. $242.2 million Q2), largely due to higher utilities (commercial) and higher operating expenses/concessions (multifamily) despite ongoing lease‑up .
  • Same Store NOI decreased 6.7% QoQ to $54.056 million, driven by lower commercial occupancy and parking revenue and lower multifamily occupancy/higher operating expense .
  • Leverage rose to 12.6x Net Debt/annualized Adjusted EBITDA; FAD payout ratio was elevated: 112.9% in Q3 and 114.5% YTD, reflecting capital expenditure timing and seasonality .

Financial Results

MetricQ3 2024Q1 2025Q2 2025Q3 2025
Revenue ($USD Millions)136.026 120.686 126.479 123.870
Net Loss Attributable to Common Shareholders ($USD Millions)26.980 45.720 19.241 28.555
Loss per Common Share – Diluted ($)0.32 0.56 0.29 0.48
EBITDA ($USD Millions)56.676 30.671 61.432 49.807
FFO per Common Share – Diluted ($)0.23 (0.08) 0.15 0.17
Core FFO per Common Share – Diluted ($)0.23 0.09 0.19 0.15
MarginsQ2 2025Q3 2025
EBITDA Margin %37.5605*36.8853*
Net Income Margin %(15.0826%)*(23.1766%)*

Values retrieved from S&P Global.*

Segment Breakdown (Annualized NOI at share)

SegmentQ2 2025Q3 2025
Multifamily ($USD Millions)123.876 104.724
Commercial ($USD Millions)139.984 133.016
Ground Leases ($USD Millions)4.548 4.512

KPIs

KPIQ2 2025Q3 2025
Operating Multifamily – Leased / Occupied (%)89.0% / 85.8% 89.1% / 87.2%
Operating Commercial – Leased / Occupied (%)76.5% / 74.8% 77.6% / 75.7%
Same Store NOI ($USD Millions)59.527 54.056
Change in Same Store NOI (%)(3.0%) (6.7%)
Office Leasing Executed (SF)208,000 182,000
Second‑Gen Office Rent MTM (Cash / GAAP)(6.1%) / (4.8%) +11.1% / +12.3%
Annualized NOI (ex sold/recapped/recently acquired) ($USD Millions)251.0 232.9

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per Common ShareQ3 2025$0.175 (Q2 declaration) $0.175 (payable Nov 20, 2025) Maintained
Net Debt / Annualized Adjusted EBITDAQ3 202511.8x (Q2 actual) 12.6x (Q3 actual) Increased (actual)
Leverage OutlookForwardExpect ND/Adj EBITDA to increase through mid‑2025 (Q1 commentary) Expect moderation as new multifamily assets stabilize Qualitative shift (improving outlook)
Signed but Not Yet Commenced Annualized Base Rent (Office/Retail)2025–2027N/A~$8.384 million at share (timing ladder through 2027) Informational

Earnings Call Themes & Trends

Note: Q3 2025 earnings call transcript was not available in our document set; themes reflect the management letter and investor package.

TopicPrevious Mentions (Q‑2 and Q‑1)Current Period (Q3 2025)Trend
Defense/tech demand in National LandingQ2: Anticipated benefit from $1T defense budget; backlog of requirements; focus on SCIF space Demand characterized by defense tech tenants; SCIF capability as differentiator; 149k SF new leases in Q3 Positive structural demand; near‑term momentum sustained
Office inventory rationalization/conversionsQ1–Q2: >1.0M SF taken out of service; adaptive reuse strategy 2100/2200 Crystal Drive entitled for hospitality/multifamily; pipeline detailed Accelerating adaptive reuse
Multifamily lease‑up/new supplyQ1: Zoe completed; Grace/Reva lease‑up mid‑70s% Valen delivered; continued lease‑up; operating occupancy improved q/q Progressing; stabilization expected to aid leverage
Capital allocation/share repurchasesQ1–Q2: $187.5M (Q1); $184.9M (Q2); strategic pivot toward office investments (Tysons Dulles Plaza) Repurchased 3.1M shares ($62.9M) in Q3; additional 0.384M shares in Oct; YTD 26.8M shares at $16.52 avg Ongoing; accretive use of capital
Macro/federal riskQ2: Evolving federal priorities; near‑term uncertainty despite defense tailwinds Government shutdown risk flagged as potential disruptor to leasing decisions and regional activity Heightened near‑term risk

Management Commentary

  • “We made meaningful progress across our portfolio, driven by strong leasing momentum, disciplined capital allocation, and the continued transformation of National Landing... converting a robust pipeline of prospective tenants into signed leases – particularly in National Landing.” – W. Matthew Kelly, CEO .
  • “The current government shutdown has the potential to significantly disrupt that normalization… could begin to hinder tenants’ desire to make leasing decisions, and significantly dampen regional economic activity.” .
  • “Entitled 2100 and 2200 Crystal Drive… 345‑key dual‑brand hotel and ~195 multifamily units.” .
  • “So far this year, we have repurchased 26.8 million shares at an average price of $16.52 per share, totaling $443.1 million.” .

Q&A Highlights

  • Earnings call transcript not available for Q3 2025 in our document set; therefore, Q&A highlights and any on‑call guidance clarifications could not be extracted or verified.

Estimates Context

  • Revenue/EPS estimates for Q3 2025 were unavailable in S&P Global; no beat/miss determination can be made.*
  • Target Price Consensus Mean remained $17.50 for Q3 and Q4 2025.*
  • Q4 2025 Revenue Consensus Mean: $102.131 million (forward look).*

Values retrieved from S&P Global.*

MetricQ3 2025Q4 2025
Revenue Consensus Mean ($USD Millions)N/A*102.131*
Primary EPS Consensus Mean ($)N/A*N/A*
EBITDA Consensus Mean ($USD Millions)45.445 (actual)*N/A*
Target Price Consensus Mean ($)17.50*17.50*

Key Takeaways for Investors

  • Leasing momentum and positive second‑generation rent MTM (+11.1% cash, +12.3% GAAP) indicate pricing power where JBGS has product/amenities advantages, supporting medium‑term NOI once leases commence .
  • Multifamily lease‑up and Valen’s delivery provide a pathway to leverage moderation as assets stabilize and occupancy improves; management explicitly expects leverage to moderate as these assets contribute .
  • Same Store NOI declines (Q3: −6.7%) and Annualized NOI contraction reflect cost pressures (utilities, operating expenses) and occupancy softness; cost control and occupancy gains are critical near‑term levers .
  • Capital allocation remains shareholder‑friendly: ~$62.9M Q3 buybacks and additional October repurchases; ongoing arbitrage vs. NAV can underpin total return even amid operating headwinds .
  • Adaptive reuse/entitlements (e.g., 2100/2200 Crystal Drive) plus targeted office acquisitions (Tysons Dulles Plaza) create optionality to redeploy capital into higher risk‑adjusted returns over the cycle .
  • Macro risk—current government shutdown—could temporarily slow leasing decisions; positioning in defense/tech nodes (National Landing) and SCIF capability helps mitigate relative risk vs. broader DC office market .
  • Dividend held at $0.175 per share; monitor FAD payout ratio (Q3: 112.9%) given capex/leasing commencement timing; payout should normalize with stabilization and seasonal impacts .