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Redeemable Noncontrolling Interests

9 Months Ended

Sep. 30, 2021

9.Redeemable Noncontrolling Interests

JBG SMITH LP

OP Units held by persons other than JBG SMITH are redeemable for cash or, at our election, our common shares, subject to certain limitations. During the nine months ended September 30, 2021 and 2020, unitholders redeemed 829,107 and 1.1 million OP Units, which we elected to redeem for an equivalent number of our common shares. As of September 30, 2021, outstanding OP Units totaled 13.1 million, representing a 9.2% ownership interest in JBG SMITH LP. On our balance sheets, our OP Units and certain vested long-term incentive partnership units ("LTIP Units") are presented at the higher of their redemption value or their carrying value, with adjustments to the redemption value recognized in "Additional paid-in capital." Redemption value per OP Unit is equivalent to the market value of one of our common shares at the end of the period. In October 2021, unitholders redeemed 20,953 OP Units, which we elected to redeem for an equivalent number of our common shares.

Consolidated Real Estate Venture

We are a partner in a consolidated real estate venture that owns a multifamily asset located in Washington, D.C. Pursuant to the terms of the real estate venture agreement, we are obligated to fund all capital contributions until our ownership interest reaches a maximum of 97.0%. Our partner can redeem its interest for cash under certain conditions. As of September 30, 2021, we held a 96.0% ownership interest in the real estate venture.

The following is a summary of the activity of redeemable noncontrolling interests:


	Three Months Ended September 30,
	2021						2020
			Consolidated						Consolidated
	JBG		Real Estate				JBG		Real Estate
	SMITH LP		Venture		Total		SMITH LP		Venture		Total

	(In thousands)
Balance, beginning of period	$	536,171	$	8,468	$	544,639	$	493,067	$	6,016	$	499,083
OP Unit redemptions		(5,670)		—		(5,670)		(4,796)		—		(4,796)
Net income (loss) attributable to redeemable noncontrolling interests		116		(13)		103		(2,176)		(36)		(2,212)
Other comprehensive income		413		—		413		309		—		309
Distributions		(3,993)		—		(3,993)		(3,723)		—		(3,723)
Share-based compensation expense		10,695		—		10,695		14,496		—		14,496
Adjustment to redemption value		(20,748)		1,474		(19,274)		(14,012)		1,776		(12,236)
Balance, end of period	$	516,984	$	9,929	$	526,913	$	483,165	$	7,756	$	490,921

	Nine Months Ended September 30,
	2021						2020
			Consolidated						Consolidated
	JBG		Real Estate				JBG		Real Estate
	SMITH LP		Venture		Total		SMITH LP		Venture		Total

	(In thousands)
Balance, beginning of period	$	522,882	$	7,866	$	530,748	$	606,699	$	6,059	$	612,758
OP Unit redemptions		(27,350)		—		(27,350)		(40,674)		—		(40,674)
LTIP Units issued in lieu of cash bonuses ⁽¹⁾		5,614		—		5,614		4,066		—		4,066
Net loss attributable to redeemable noncontrolling interests		(2,400)		(72)		(2,472)		(366)		(79)		(445)
Other comprehensive income (loss)		1,621		—		1,621		(3,446)		—		(3,446)
Distributions		(9,282)		—		(9,282)		(7,505)		—		(7,505)
Share-based compensation expense		36,066		—		36,066		51,742		—		51,742
Adjustment to redemption value		(10,167)		2,135		(8,032)		(127,351)		1,776		(125,575)
Balance, end of period	$	516,984	$	9,929	$	526,913	$	483,165	$	7,756	$	490,921

(1)	See Note 11 for additional information.