JBG SMITH PROPERTIES Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of future performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "approximates," "believes," "expects," "anticipates," "estimates," "intends," "plans," "would," "may" or other similar expressions in this Quarterly Report on Form 10-Q. Many of the factors that will determine the outcome of these and our other forward-looking statements are beyond our ability to control or predict. For further discussion of factors that could materially affect the outcome of our forward-looking statements, see "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the year endedDecember 31, 2020 and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year endedDecember 31, 2020 . One of the most significant factors that could cause actual outcomes to differ materially from our forward-looking statements is the adverse effect of the current pandemic of the novel coronavirus ("COVID-19") on our financial condition, results of operations, cash flows, performance, tenants, the real estate market, and the global economy and financial markets. The significance, extent and duration of the impact of COVID-19 on us and our tenants remains largely uncertain and dependent on near-term and future developments that cannot be accurately predicted at this time, such as the continued severity, duration, transmission rate and geographic spread of COVID-19, the distribution, effectiveness and willingness of people to take COVID-19 vaccines, the extent and effectiveness of the containment measures taken, and the response of the overall economy, the financial markets and the population, particularly in the area in which we operate. Moreover, investors are cautioned to interpret many of the risks identified under the section titled "Risk Factors" in our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2020 as being heightened as a result of the ongoing and numerous adverse impacts of COVID-19. For these forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Quarterly Report on Form 10-Q. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q.
Organization and Basis of Presentation
JBG SMITH Properties ("JBG SMITH"), aMaryland real estate investment trust ("REIT"), owns and operates a portfolio of commercial and multifamily assets amenitized with ancillary retail. JBG SMITH's portfolio reflects its longstanding strategy of owning and operating assets within Metro-served submarkets in theWashington, D.C. metropolitan area that have high barriers to entry and vibrant urban amenities. Over half of our portfolio is inNational Landing where we serve as the exclusive developer for Amazon.com, Inc.'s ("Amazon") new headquarters and whereVirginia Tech's under-construction$1 billion Innovation Campus is located. In addition, our third-party asset management and real estate services business provides fee-based real estate services to the Washington Housing Initiative ("WHI")Impact Pool , Amazon, the legacy funds formerly organized by The JBG Companies ("JBG") (the "JBG Legacy Funds") and other third parties. Substantially all our assets are held by, and our operations are conducted through,JBG SMITH Properties LP ("JBG SMITH LP "), our operating partnership. JBG SMITH is referred to as "we," "us," "our" or other similar terms. References to "our share" refer to our ownership percentage of consolidated and unconsolidated assets in real estate ventures. We were organized for the purpose of receiving, via the spin-off onJuly 17, 2017 (the "Separation"), substantially all of the assets and liabilities of Vornado Realty Trust's ("Vornado")Washington, D.C. segment. OnJuly 18, 2017 , we acquired the management business and certain assets and liabilities of JBG (the "Combination"). The Separation and the Combination are collectively referred to as the "Formation Transaction." 30
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References to our financial statements refer to our unaudited condensed consolidated financial statements as ofSeptember 30, 2021 andDecember 31, 2020 , and for the three and nine months endedSeptember 30, 2021 and 2020. References to our balance sheets refer to our condensed consolidated balance sheets as ofSeptember 30, 2021 andDecember 31, 2020 . References to our statements of operations refer to our condensed consolidated statements of operations for the three and nine months endedSeptember 30, 2021 and 2020. References to our statements of cash flows refer to our condensed consolidated statements of cash flows for the nine months endedSeptember 30, 2021 and 2020. The accompanying financial statements are prepared in accordance with accounting principles generally accepted inthe United States of America ("GAAP"), which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates. We have elected to be taxed as a REIT under sections 856-860 of the Internal Revenue Code of 1986, as amended (the "Code"). Under those sections, a REIT which distributes at least 90% of its REIT taxable income as dividends to its shareholders each year and which meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its shareholders. We currently adhere and intend to continue to adhere to these requirements and to maintain our REIT status in future periods. We also participate in the activities conducted by our subsidiary entities that have elected to be treated as taxable REIT subsidiaries under the Code. As such, we are subject to federal, state and local taxes on the income from these activities. We aggregate our operating segments into three reportable segments (commercial, multifamily, and third-party asset management and real estate services) based on the economic characteristics and nature of our assets and services. Our revenues and expenses are, to some extent, subject to seasonality during the year, which impacts quarterly net earnings, cash flows and funds from operations that affects the sequential comparison of our results in individual quarters over time. For instance, we have historically experienced higher utility costs in the first and third quarters of the year. We compete with many property owners and developers. Our success depends upon, among other factors, trends affecting national and local economies, the financial condition and operating results of current and prospective tenants, the availability and cost of capital, interest rates, construction and renovation costs, taxes, governmental regulations and legislation, population trends, zoning laws, and our ability to lease, sublease or sell our assets at profitable levels. Our success is also subject to our ability to refinance existing debt on acceptable terms as it comes due.
Overview
As ofSeptember 30, 2021 , our Operating Portfolio consisted of 63 operating assets comprising 42 commercial assets totaling 13.1 million square feet (11.3 million square feet at our share) and 21 multifamily assets totaling 7,776 units (6,125 units at our share). Additionally, we have: (i) one under-construction multifamily asset with 808 units (808 units at our share); (ii) 11 near-term development assets totaling 5.3 million square feet (5.0 million square feet at our share) of estimated potential development density; and (iii) 25 future development assets totaling 14.3 million square feet (11.6 million square feet at our share) of estimated potential development density. In 2021, we achieved carbon neutrality across our Operating Portfolio through the purchase of verified carbon offsets and renewable energy credits. We continue to focus on our comprehensive plan to reposition our holdings inNational Landing inNorthern Virginia by executing a broad array of Placemaking strategies. Our Placemaking strategies include the delivery of new multifamily and office developments, locally sourced amenity retail, and thoughtful improvements to the streetscape, sidewalks, parks and other outdoor gathering spaces. In keeping with our dedication to Placemaking, each new project is intended to contribute to authentic and distinct neighborhoods by creating a vibrant street environment with robust retail offerings and other amenities including improved public spaces. We have also invested in Citizens Broadband Radio Service ("CBRS") wireless spectrum inNational Landing as part of our efforts to makeNational Landing among the first 5G-operable submarkets in the nation. InNovember 2018 , Amazon announced it had selected sites that we own inNational Landing as the location of its new headquarters. We currently have leases with Amazon totaling approximately 1.0 million square feet at six office buildings 31 Table of Contents inNational Landing . InMarch 2019 , we executed purchase and sale agreements with Amazon for two of ourNational Landing development sites,Metropolitan Park andPen Place , which will serve as the initial phase of construction associated with Amazon's new headquarters atNational Landing . InJanuary 2020 , we soldMetropolitan Park to Amazon for$155.0 million and began constructing two new office buildings thereon, totaling 2.1 million square feet, inclusive of over 50,000 square feet of street-level retail with new shops and restaurants. We are the developer, property manager and retail leasing agent for Amazon's new headquarters atNational Landing .
2021 Outlook
A fundamental component of our strategy to maximize long-term net asset value per share is active capital allocation. Since our inception in 2017, we have completed the sale, recapitalization and/or ground lease of$1.7 billion of primarily office assets, and we intend to opportunistically sell at least another$1.4 billion of non-core office assets and land. We are currently targeting dispositions primarily of office assets in submarkets where we have less concentration and where we anticipate lower growth rates going forward relative to other opportunities within our portfolio. Additionally, we may market select land assets where ground lease or joint venture execution may represent the clearest path to maximizing value. Redeploying the proceeds from any such sales and recapitalizations will not only help fund our planned growth but will also further advance the strategic shift of our portfolio to majority multifamily. OnMarch 11, 2020 , theWorld Health Organization declared the outbreak of COVID-19 a global pandemic and recommended containment and mitigation measures worldwide. OnMarch 13, 2020 , a National Emergency was declared inthe United States in response to COVID-19. The efforts made by federal, state and local governments to mitigate the spread of COVID-19 included orders requiring the temporary closure of or imposed limitations on the operations of certain non-essential businesses, which adversely affected many tenants, especially tenants in the retail industry. The pandemic continues to evolve, and while we are optimistic about the future, we remain cautious about the medium-term implications for office assets. Vacancy is still at record highs across the region, and most companies are still not fully back in the office. Occupancy of our commercial portfolio declined by 180 basis points fromJune 30, 2021 , the majority of which was related to pre-pandemic decision making, although we had two civilian agencyGovernment Services Administration tenants that reduced their leased square footage due to a planned shift toward working from home. We expect continued pressure on our office occupancy through the end of the year and into 2022. Although parking revenue increased during the three months endedSeptember 30, 2021 as compared to the same period in 2020, parking revenue in our commercial portfolio was approximately 60% below pre-pandemic levels of approximately$30 million annually due to delayed return-to-the-office plans for many of our office tenants. We are seeing improvements in our multifamily portfolio, with a 390 basis point increase in the occupancy of our operating multifamily portfolio fromJune 30, 2021 and an increase in market rents due to increased demand and limited new supply. The significance, extent and duration of the impact of COVID-19 on our business remains largely uncertain and dependent on future developments that cannot be accurately predicted at this time. These developments include: the continued severity, duration, transmission rate and geographic spread of COVID-19 inthe United States , the continued speed of the vaccine distribution, the effectiveness and willingness of people to take COVID-19 vaccines, the duration of associated immunity and the efficacy of vaccines against variants of COVID-19, the extent and effectiveness of other containment measures taken, and the response of the overall economy, the financial markets and the population, particularly in areas in which we operate, as containment measures continue to be lifted, and whether the residential market in theWashington, D.C. region and any of our properties will be materially impacted by the moratoriums on residential evictions, among others. These uncertainties make it difficult to predict operating results for our business for 2021. Therefore, we could experience material declines in revenue, net income, NOI and/or Funds from Operations ("FFO"). For more information, see "Risk Factors" in our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2020 .
Operating Results
Key highlights for the three and nine months ended
net income attributable to common shareholders of
a net loss attributable to common shareholders of
32
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diluted common share, for the three months ended
attributable to common shareholders of
common share, for the nine months ended
million, or
third-party real estate services revenue, including reimbursements, of
and nine months ended
operating commercial portfolio leased and occupied percentages at our share of
? 84.9% and 82.6% as of
30, 2021, and 88.4% and 85.3% as of
operating multifamily portfolio leased and occupied percentages at our share of
92.9% and 90.2% as of
operating multifamily portfolio was 95.1% leased and 92.1% occupied as of
2021, and 92.8% leased and 88.1% occupied as of
the leasing of 159,000 square feet, or 126,000 square feet at our share, at an
initial rent (1) of
rent per square foot (2) of
consolidated basis and at our share, at an initial rent (1) of
square foot and a GAAP-basis weighted average rent per square foot (2) of
same store (3) NOI of
million for the nine months ended
for the nine months ended
(1) Represents the cash basis weighted average starting rent per square foot at
our share, which excludes free rent and fixed escalations.
(2) Represents the weighted average rent per square foot recognized over the term
of the respective leases, including the effect of free rent and fixed
escalations.
(3) Includes the results of the properties that are owned, operated and
in-service for the entirety of both periods being compared, which excludes
properties for which significant redevelopment, renovation or repositioning
occurred during either of the periods being compared.
Additionally, investing and financing activity during the nine months ended
the lease of the land underlying
to a lessee, which plans to construct an 808-unit multifamily asset comprising
two towers with ground floor retail. Through the structure of the 1900 Crystal
Drive transaction, we have the ability to facilitate an exchange out of an
? asset into
development manager for the construction of
we are the lessee in a master lease of the asset. We have an option to acquire
the asset until a specified period after completion. See Note 5 to the financial statements for additional information; an investment in two real estate ventures, in which we have 50% ownership
interests, to design, develop, manage and own approximately 2.0 million square
feet of new mixed-use development located in Potomac Yard, the southern portion
? of
contributed to one of the real estate ventures based on the cash received and
the remeasurement of our retained interest in the asset. See Note 4 to the
financial statements for additional information;
recognition of an aggregate gain of
statements for additional information;
the execution of an agreement to acquire The Batley, a 432-unit multifamily
asset in the Union Market submarket of
in a like-kind exchange for the proceeds from the sale of
See Note 3 to the financial statements for additional information;
a new mortgage loan with a principal balance of
interest rate of LIBOR plus 1.60% per annum;
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? the payment of dividends to our common shareholders totaling
distributions to our noncontrolling interests of
? the repurchase and retirement of 2.9 million of our common shares for
million, an average purchase price of
? the investment of
real estate additions.
Activity subsequent to
? the declaration of a quarterly dividend of
Critical Accounting Policies and Estimates
Our Annual Report on Form 10-K for the year endedDecember 31, 2020 contains a description of our critical accounting policies, including asset acquisitions and business combinations, real estate, investments in real estate ventures, revenue recognition and share-based compensation. There have been no significant changes to our policies during the nine months endedSeptember 30, 2021 .
Recent Accounting Pronouncements
See Note 2 to the financial statements for a description of recent accounting pronouncements.
Results of Operations InJanuary 2020 , we soldMetropolitan Park . InDecember 2020 , we acquired the Americana Portfolio, which consists of a 1.4-acre future development parcel inNational Landing that was formerly occupied by theAmericana Hotel and three other parcels. InApril 2021 , we contributed Potomac Yard Landbay G to an unconsolidated real estate venture.
Comparison of the Three Months Ended
The following summarizes certain line items from our statements of operations that we believe are important in understanding our operations and/or those items which significantly changed in the three months endedSeptember 30, 2021 compared to the same period in 2020: Three Months Ended September 30, 2021 2020 % Change (Dollars in thousands) Property rental revenue$ 125,900 $
118,680 6.1 % Third-party real estate services revenue, including reimbursements
25,842 26,987 (4.2) %
Depreciation and amortization expense 56,726 56,481 0.4 % Property operating expense 40,198 37,572 7.0 % Real estate taxes expense 18,259 17,354 5.2 % General and administrative expense: Corporate and other 12,105 11,086 9.2 % Third-party real estate services 25,542 28,207 (9.4) % Share-based compensation related to Formation Transaction and special equity awards 3,480 7,133 (51.2) % Transaction and other costs 2,951 845 249.2 % Income (loss) from unconsolidated real estate ventures, net 20,503 (965) * Interest expense 17,243 16,885 2.1 % * Not meaningful. Property rental revenue increased by approximately$7.2 million , or 6.1%, to$125.9 million in 2021 from$118.7 million in 2020. The increase was primarily due to (i) a$5.1 million increase related to the deferral of rent and the write-off of deferred rent receivables for tenants that were placed on the cash basis of accounting in 2020 and a decrease in uncollectable operating lease receivables attributable to COVID-19 in 2021, (ii) a$4.7 million increase related to4747 Bethesda Avenue , 34
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West Half, The Wren,900 W Street and901 W Street as these properties placed additional space into service, (iii) a$2.6 million increase related to1770 Crystal Drive , which was placed into service in the fourth quarter of 2020, and (iv) a$1.8 million increase related to the commencement of the lease with Amazon at2100 Crystal Drive . The increase in property rental revenue was partially offset by a$6.4 million decrease related to lower occupancy at the Universal Buildings,2011 Crystal Drive ,2101 L Street and RTC-West. Third-party real estate services revenue, including reimbursements, decreased by approximately$1.1 million , or 4.2%, to$25.8 million in 2021 from$27.0 million in 2020. The decrease was primarily due to a$2.0 million decrease in reimbursements revenue, a$705,000 decrease in other service revenue and a$584,000 decrease in construction management fees, partially offset by a$1.4 million increase in development fee revenue primarily related to the timing of development projects and a$736,000 increase in leasing fees. Depreciation and amortization expense increased by approximately$245,000 , or 0.4%, to$56.7 million in 2021 from$56.5 million in 2020. The increase was primarily due to (i) a$1.9 million increase related to2345 Crystal Drive due to an increase in tenant improvements, (ii) a$1.7 million increase related to4747 Bethesda Avenue , West Half, The Wren,900 W Street and901 W Street as these properties placed additional space into service, and (iii) a$924,000 increase due to1770 Crystal Drive being placed into service. The increase in depreciation and amortization expense was partially offset by a$4.0 million decrease related to2000 South Bell Street and2001 South Bell Street as we commenced construction on two new buildings in 2021. Property operating expense increased by approximately$2.6 million , or 7.0%, to$40.2 million in 2021 from$37.6 million in 2020. The increase was primarily due to (i) a$1.2 million increase related to2451 Crystal Drive for costs incurred for construction management services provided to tenants, (ii) an$885,000 increase related to4747 Bethesda Avenue , West Half, The Wren,900 W Street and901 W Street as these properties placed additional space into service, (iii) a$576,000 increase due to1770 Crystal Drive being placed into service and (iv)$535,000 related to2221 South Clark Street due to higher operating expenses. The increase in property operating expense was partially offset by a$1.5 million decrease related to1901 South Bell Street due to costs incurred in 2020 for construction management services provided to tenants. Real estate tax expense increased by approximately$905,000 , or 5.2%, to$18.3 million in 2021 from$17.4 million in 2020. The increase was primarily due to a$548,000 increase related to4747 Bethesda Avenue and The Wren as these properties placed additional space into service, and a$543,000 increase related to5 M Street Southwest due to an increase in its applicable tax rate in 2021. General and administrative expense: corporate and other increased by approximately$1.0 million , or 9.2%, to$12.1 million in 2021 from$11.1 million in 2020. The increase was primarily due to a decrease in capitalizable payroll costs related to development projects. General and administrative expense: third-party real estate services decreased by approximately$2.7 million , or 9.4%, to$25.5 million in 2021 from$28.2 million in 2020. The decrease was primarily due to a decrease in reimbursable expenses. General and administrative expense: share-based compensation related to Formation Transaction and special equity awards decreased by approximately$3.7 million , or 51.2%, to$3.5 million in 2021 from$7.1 million in 2020. The decrease was primarily due to the graded vesting of certain awards issued in prior years, which resulted in lower expense as portions of the awards vested. Transaction and other costs of$3.0 million in 2021 primarily included$1.4 million of demolition costs related to2000 South Bell Street and2001 South Bell Street and$1.4 million of expenses related to completed, potential and pursued transactions. Transaction and other costs of$845,000 in 2020 consisted of$406,000 of integration and severance costs,$260,000 of expenses related to completed, potential and pursued transactions, and$179,000 of demolition costs related to223 23rd Street and2300 Crystal Drive . Income from unconsolidated real estate ventures increased by approximately$21.5 million to$20.5 million for 2021 from a loss of$965,000 in 2020. The increase was primarily due to the recognition of our proportionate share of the gain from the sale of500 L'Enfant Plaza of$23.1 million . The increase in income from unconsolidated real estate ventures was 35
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partially offset by a
Interest expense increased by approximately$358,000 , or 2.1%, to$17.2 million in 2021 from$16.9 million in 2020. The increase was primarily due to a$1.3 million decrease in capitalized interest primarily due to the placing of additional space into service at4747 Bethesda Avenue , West Half, The Wren,901 W Street and1770 Crystal Drive , and a$293,000 increase due to a new mortgage loan at1225 S. Clark Street . The increase in interest expense was partially offset by a$1.2 million decrease related to the repayment of a mortgage loan at WestEnd25 in 2020.
Comparison of the Nine Months Ended
The following summarizes certain line items from our statements of operations that we believe are important in understanding our operations and/or those items which significantly changed in the nine months endedSeptember 30, 2021 compared to the same period in 2020: Nine Months Ended September 30, 2021 2020 % Change (Dollars in thousands) Property rental revenue$ 370,960 $
354,519 4.6 % Third-party real estate services revenue, including reimbursements
90,694 83,870 8.1 %
Depreciation and amortization expense 178,130 157,586 13.0 % Property operating expense 109,929 105,867 3.8 % Real estate taxes expense 55,127 53,422 3.2 % General and administrative expense: Corporate and other 38,475 37,478 2.7 % Third-party real estate services 80,035 86,260 (7.2) % Share-based compensation related to Formation Transaction and special equity awards 12,866 25,432 (49.4) % Transaction and other costs 8,911 7,526 18.4 % Income (loss) from unconsolidated real estate ventures, net 23,513 (17,142) 237.2 % Interest expense 50,312 44,660 12.7 % Gain on sale of real estate 11,290 59,477 (81.0) %
Property rental revenue increased by approximately$16.4 million , or 4.6%, to$371.0 million in 2021 from$354.5 million in 2020. The increase was primarily due to (i) a$12.8 million increase related to4747 Bethesda Avenue , West Half, The Wren,900 W Street and901 W Street as these properties placed additional space into service, (ii) an$11.1 million increase due to the deferral of rent and the write-off of deferred rent receivable for tenants that were placed on the cash basis of accounting in 2020 and a decrease in uncollectable operating lease receivables attributable to COVID-19, (iii) a$7.4 million increase related to1770 Crystal Drive , which was placed into service in the fourth quarter of 2020, (iv) a$3.9 million increase related to1225 S. Clark Street due to the commencement of a lease and (v) a$3.2 million increase related to the additional space leased by Amazon at2345 Crystal Drive . The increase in property rental revenue was partially offset by (i) a$14.1 million decrease related to lower occupancy at the Universal Buildings,2011 Crystal Drive ,2101 L Street and RTC-West, (ii) a$4.2 million decrease related toRiverHouse Apartments and The Bartlett due to increased rent concessions and lower market rents, and (iii) a$3.4 million decrease related to1901 South Bell Street due to tenant reimbursements for construction services in 2020. Third-party real estate services revenue, including reimbursements, increased by approximately$6.8 million , or 8.1%, to$90.7 million in 2021 from$83.9 million in 2020. The increase was primarily due to a$14.2 million increase in development fees related to the timing of development projects. The increase in third-party real estate services revenue was partially offset by a$3.8 million decrease in reimbursements revenue, a$1.7 million decrease in property and asset management fees due to the sale of assets within the JBG Legacy Funds and a$1.7 million decrease in construction management fees due to the timing of construction projects. Depreciation and amortization expense increased by approximately$20.5 million , or 13.0%, to$178.1 million in 2021 from$157.6 million in 2020. The increase was primarily due to (i) an$8.1 million increase related to4747 Bethesda Avenue , West Half, The Wren,900 W Street and901 W Street as these properties placed additional space into service, (ii) a$6.8 million increase related to the Universal Buildings due to the write-off of certain tenant improvements, (iii) a$6.0 million increase related to2345 Crystal Drive due to an increase in tenant improvements, (iv) a$2.5 million increase due to 1770 36
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Crystal Drive being placed into service, (v) a$1.5 million increase related to1550 Crystal Drive as additional space was placed into service and (vi) a$1.3 million increase related to RTC-West due to the acceleration of depreciation of certain assets. The increase in depreciation and amortization expense was partially offset by a$5.1 million decrease related to2000 South Bell Street and2001 South Bell Street as we commenced construction on two new buildings in 2021. Property operating expense increased by approximately$4.1 million , or 3.8%, to$109.9 million in 2021 from$105.9 million in 2020. The increase was primarily due to (i) a$3.3 million increase related to4747 Bethesda Avenue , West Half, The Wren,900 W Street and901 W Street as these properties placed additional space into service, (ii) a$2.8 million increase related to2451 Crystal Drive due to costs incurred for construction management services provided to tenants, (iii) a$1.4 million increase due to1770 Crystal Drive being placed into service and (iv) an$832,000 increase atCourthouse Plaza 1 and 2 related to ground rent expense. The increase in property operating expense was partially offset by a$4.3 million decrease related to1901 South Bell Street due to costs incurred in 2020 for construction management services provided to tenants. Real estate tax expense increased by approximately$1.7 million , or 3.2%, to$55.1 million in 2021 from$53.4 million in 2020. The increase was primarily due to (i) a$1.8 million increase at4747 Bethesda Avenue , West Half, The Wren,900 W Street and901 W Street as these properties placed additional space into service, (ii) a$701,000 increase related to5 M Street Southwest due to an increase in its applicable tax rate in 2021 and (iii) an increase of$533,000 due to1770 Crystal Drive being placed into service. The increase in real estate tax expense was partially offset by a decrease in real estate tax assessments for various properties located inNational Landing .
General and administrative expense: corporate and other increased by
approximately
General and administrative expense: third-party real estate services decreased by approximately$6.2 million , or 7.2%, to$80.0 million in 2021 from$86.3 million in 2020. This decrease was primarily due to a decrease in reimbursable expenses and a decrease in share-based compensation expense. General and administrative expense: share-based compensation related to Formation Transaction and special equity awards decreased by approximately$12.6 million , or 49.4%, to$12.9 million in 2021 from$25.4 million in 2020. The decrease was primarily due to the graded vesting of certain awards issued in prior years, which resulted in lower expense as portions of the awards vested. Transaction and other costs of$8.9 million in 2021 consisted of$5.4 million of expenses related to completed, potential and pursued transactions,$2.9 million of demolition costs related to2000 South Bell Street and2001 South Bell Street and$616,000 of integration and severance costs. Transaction and other costs of$7.5 million in 2020 primarily included$4.0 million of costs related to a charitable commitment to theWashington Housing Conservancy , a non-profit that acquires and owns affordable workforce housing in theWashington, D.C. metropolitan area, and$3.1 million of integration and severance costs. Income from unconsolidated real estate ventures increased by approximately$40.7 million , or 237.2%, to$23.5 million for 2021 from a loss of$17.1 million in 2020. The increase was primarily due to (i) the recognition of our proportionate share of the gain from the sale of various assets totaling$28.3 million as compared to a$3.0 million loss from the sale of Woodglen in 2020 and (ii) a$6.5 million impairment charge recognized in 2020 related to our investment in a venture that ownedThe Marriott Wardman Park hotel, and$2.7 million for losses incurred from its COVID-19 related closure. The increase in income from unconsolidated real estate ventures was partially offset by a$1.4 million impairment of our investment in an unconsolidated real estate venture due to a decrease in the value of the underlying asset. Interest expense increased by approximately$5.7 million , or 12.7%, to$50.3 million in 2021 from$44.7 million in 2020. The increase was primarily due to a$6.7 million decrease in capitalized interest primarily due to the placing of additional space into service at4747 Bethesda Avenue , West Half, The Wren,901 W Street and1770 Crystal Drive and a$5.7 million increase due to new mortgage loans entered into in 2020 at1221 Van Street , The Bartlett and220 20th Street . The increase was also due to higher average outstanding balances under our unsecured term loans. The increase in interest expense was 37
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partially offset by a lower outstanding balance under our revolving credit
facility and a
Gain on the sale of real estate of$11.3 million in 2021 was based on the cash received and the remeasurement of our retained interest in the land we contributed to one of our unconsolidated real estate ventures. See Note 4 to the financial statements for additional information. Gain on the sale of real estate of$59.5 million in 2020 was due to the sale ofMetropolitan Park .
FFO
FFO is a non-GAAP financial measure computed in accordance with the definition established by theNational Association of Real Estate Investment Trusts ("NAREIT") in the NAREIT FFO White Paper - 2018 Restatement. NAREIT defines FFO as net income (loss) (computed in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, including our share of such adjustments for unconsolidated real estate ventures. We believe FFO is a meaningful non-GAAP financial measure useful in comparing our levered operating performance from period-to-period and as compared to similar real estate companies because FFO excludes real estate depreciation and amortization expense and other non-comparable income and expenses, which implicitly assumes that the value of real estate diminishes predictably over time rather than fluctuating based on market conditions. FFO does not represent cash generated from operating activities and is not necessarily indicative of cash available to fund cash requirements and should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as a performance measure or cash flow as a liquidity measure. FFO may not be comparable to similarly titled measures used by other companies.
The following is the reconciliation of net income (loss) attributable to common shareholders, the most directly comparable GAAP measure, to FFO:
Three Months Ended
September 30, Nine Months Ended September 30,
2021 2020 X 2021 2020
(In thousands)
Net income (loss) attributable to common
shareholders $ 893 $ (22,793) $ (22,811) $ (16,648)
Net income (loss) attributable to redeemable
noncontrolling interests 103 (2,212) (2,472) (445)
Net loss attributable to noncontrolling
interests - - (1,108) -
Net income (loss) 996 (25,005) (26,391) (17,093)
Gain on sale of real estate - - (11,290) (59,477)
(Gain) loss on sale of unconsolidated real
estate assets (23,137) - (28,326) 2,952
Real estate depreciation and amortization 54,547 54,004 171,522 149,590
Impairment of investments in unconsolidated
real estate ventures (1) 1,380 - 1,380 6,522
Pro rata share of real estate depreciation
and amortization from unconsolidated real
estate ventures 7,002 7,350 21,590 21,730
FFO attributable to noncontrolling interests (54) (4) 976 (7)
FFO attributable to OP Units 40,734 36,345 129,461 104,217
FFO attributable to redeemable
noncontrolling interests (4,703) (3,945) (13,242) (11,353)
FFO attributable to common shareholders
(1) Related to decreases in the value of the underlying assets.
NOI and Same StoreNOI NOI is a non-GAAP financial measure management uses to assess a segment's performance. The most directly comparable GAAP measure is net income (loss) attributable to common shareholders. We use NOI internally as a performance measure and believe NOI provides useful information to investors regarding our financial condition and results of operations because it reflects only property related revenue (which includes base rent, tenant reimbursements and other
operating revenue, net
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of free rent and payments associated with assumed lease liabilities) less
operating expenses and ground rent, if applicable. NOI also excludes deferred
rent, related party management fees, interest expense, and certain other
non-cash adjustments, including the accretion of acquired below-market leases
and the amortization of acquired above-market leases and below-market ground
lease intangibles. Management uses NOI as a supplemental performance measure of
our assets and believes it provides useful information to investors because it
reflects only those revenue and expense items that are incurred at the asset
level, excluding non-cash items. In addition, NOI is considered by many in the
real estate industry to be a useful starting point for determining the value of
a real estate asset or group of assets. However, because NOI excludes
depreciation and amortization and captures neither the changes in the value of
our assets that result from use or market conditions, nor the level of capital
expenditures and capitalized leasing commissions necessary to maintain the
operating performance of our assets, all of which have real economic effect and
could materially impact the financial performance of our assets, the utility of
NOI as a measure of the operating performance of our assets is limited. NOI
presented by us may not be comparable to NOI reported by other REITs that define
these measures differently. We believe to facilitate a clear understanding of
our operating results, NOI should be examined in conjunction with net income
(loss) attributable to common shareholders as presented in our financial
statements. NOI should not be considered as an alternative to net income (loss)
attributable to common shareholders as an indication of our performance or to
cash flows as a measure of liquidity or our ability to make distributions.
During the three months ended September 30, 2021 , our same store pool decreased
to 55 properties from 56 properties due to the exclusion of 500 L'Enfant Plaza ,
which was sold by an unconsolidated real estate venture during the period.
During the nine months ended September 30, 2021 , our same store pool increased
from 52 properties to 55 properties due to the inclusion of 1800 South Bell
Street , F1RST Residences, 1221 Van Street and the commercial portion of 2221 S.
Clark Street , and the exclusion of Fairway Apartments , which was sold during the
period. Information provided on a same store basis includes the results of
properties that are owned, operated and in-service for the entirety of both
periods being compared, which excludes properties for which significant
redevelopment, renovation or repositioning occurred during either of the periods
being compared. While there is judgment surrounding changes in designations, a
property is removed from the same store pool when the property is considered to
be under-construction because it is undergoing significant redevelopment or
renovation pursuant to a formal plan or is being repositioned in the market and
such renovation or repositioning is expected to have a significant impact on
property NOI. A development property or under-construction property is moved to
the same store pool once a substantial portion of the growth expected from the
development or redevelopment is reflected in both the current and comparable
prior year period. Acquisitions are moved into the same store pool once we have
owned the property for the entirety of the comparable periods and the property
is not under significant development or redevelopment.
Same store NOI remained at $72.7 million for the three months ended
September 30, 2021 compared to the same period in 2020. Same Store NOI was
positively impacted by a decrease in uncollectable operating lease receivables
and rent deferrals, which was offset by lower occupancy in our commercial
portfolio, and lower rents and higher concessions for certain of our multifamily
assets.
Same store NOI decreased $7.7 million , or 3.3%, to $223.3 million for the nine
months ended September 30, 2021 from $231.0 million for the same period in 2020.
The decrease was substantially attributable to the COVID-19 pandemic, which
commenced at the end of the first quarter of 2020, including (i) higher
concessions and lower rents in our multifamily portfolio and (ii) lower
occupancy and a decline in parking revenue in our commercial portfolio. These
declines were partially offset by a decrease in cleaning expenses across our
commercial portfolio.
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The following is the reconciliation of net income (loss) attributable to common shareholders to NOI and same store NOI:
Three Months Ended
September 30, Nine Months Ended September 30,
2021 2020 2021 2020
(Dollars in thousands)
Net income (loss) attributable to common
shareholders $ 893 $ (22,793) $ (22,811) $ (16,648)
Add:
Depreciation and amortization expense 56,726 56,481 178,130 157,586
General and administrative expense:
Corporate and other 12,105 11,086 38,475 37,478
Third-party real estate services 25,542 28,207 80,035 86,260
Share-based compensation related to
Formation Transaction and special equity
awards 3,480 7,133 12,866 25,432
Transaction and other costs 2,951 845 8,911 7,526
Interest expense 17,243 16,885 50,312 44,660Loss on extinguishment of debt - - - 33 Income tax expense (benefit) 217 (488) 4,527 (3,721) Net income (loss) attributable to redeemable noncontrolling interests 103 (2,212) (2,472) (445) Net loss attributable to noncontrolling interests - - (1,108) -
Less:
Third-party real estate services, including reimbursements revenue 25,842 26,987 90,694 83,870 Other revenue 1,568 2,292 5,658 5,438 Income (loss) from unconsolidated real estate ventures, net 20,503 (965) 23,513 (17,142) Interest and other income, net 192 -
163 1,021
Gain on sale of real estate - - 11,290 59,477
Consolidated NOI 71,155 66,830 215,547 205,497
NOI attributable to unconsolidated real
estate ventures at our share 7,336 7,130 22,951 23,206
Non-cash rent adjustments (1) (3,701) (4,934)
(12,554) (9,898)
Other adjustments (2) 4,683 2,881 14,608 9,236
Total adjustments 8,318 5,077 25,005 22,544
NOI 79,473 71,907 240,552 228,041Less: out-of-service NOI loss (3) (2,019) (442)
(4,638) (2,774)
Operating Portfolio NOI 81,492 72,349 245,190 230,815
Non-same store NOI (4) 8,777 (388) 21,868 (165)
Same store NOI (5) $ 72,715 $ 72,737 $ 223,322 $ 230,980
Change in same store NOI 0.0% (3.3)%Number of properties in same store pool 55 55
(1) Adjustment to exclude straight-line rent, above/below market lease
amortization and lease incentive amortization.
(2) Adjustment to include other revenue and payments associated with assumed
lease liabilities related to operating properties and to exclude commercial
lease termination revenue and allocated corporate general and administrative
expenses to operating properties.
(3) Includes the results of our under-construction assets, and near-term and
future development pipelines.
(4) Includes the results of properties that were not in-service for the entirety
of both periods being compared and properties for which significant
redevelopment, renovation or repositioning occurred during either of the
periods being compared.
(5) Includes the results of the properties that are owned, operated and
in-service for the entirety of both periods being compared.
Reportable Segments
We review operating and financial data for each property on an individual basis; therefore, each of our individual properties is a separate operating segment. We defined our reportable segments to be aligned with our method of internal reporting and the way our Chief Executive Officer,who is also our Chief Operating Decision Maker ("CODM"), makes key operating decisions, evaluates financial results, allocates resources and manages our business. Accordingly, we aggregate our operating segments into three reportable segments (commercial, multifamily, and third-party asset management and real estate services) based on the economic characteristics and nature of our assets and services. 40
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The CODM measures and evaluates the performance of our operating segments, with the exception of the third-party asset management and real estate services business, based on the NOI of properties within each segment.
With respect to the third-party asset management and real estate services
business, the CODM reviews revenue streams generated by this segment
("Third-party real estate services, including reimbursements"), as well as the
expenses attributable to the segment ("General and administrative: third-party
real estate services"), which are both disclosed separately in our statements of
operations. The following represents the components of revenue from our
third-party real estate services business:
Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 X 2021 2020
(In thousands)
Property management fees $ 4,831 $ 4,694 $ 14,549 $ 15,453
Asset management fees 2,145 2,301 6,602 7,400
Development fees (1) 4,032 2,614 22,705 8,474
Leasing fees 1,822 1,086 4,106 3,627Construction management fees - 584 375 2,057 Other service revenue 1,295 2,000 4,783 5,452 Third-party real estate services revenue, excluding reimbursements 14,125 13,279 53,120 42,463 Reimbursement revenue (2) 11,717 13,708 37,574 41,407 Third-party real estate services revenue, including reimbursements 25,842 26,987 90,694 83,870 Third-party real estate services expenses 25,542 28,207 80,035 86,260 Third-party real estate services revenue less expenses $ 300$ (1,220)
(1) Estimated development fee revenue totaling
unsatisfied performance obligations are completed.
(2) Represents reimbursements of expenses incurred by us on behalf of third
parties, including allocated payroll costs and amounts paid to third-party
contractors for construction management projects.
See discussion of third-party real estate services revenue, including reimbursements, and third-party real estate services expenses for the three and nine months endedSeptember 30, 2021 in the preceding pages under "Results of Operations." Consistent with internal reporting presented to our CODM and our definition of NOI, the third-party asset management and real estate services operating results are excluded from the NOI data below. 41
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Property revenue is calculated as property rental revenue plus parking revenue. Property expense is calculated as property operating expenses plus real estate taxes. Consolidated NOI is calculated as property revenue less property expense. See Note 16 to the financial statements for the reconciliation of net income (loss) attributable to common shareholders to consolidated NOI for the three and nine months endedSeptember 30, 2021 and 2020. The following is a summary of NOI by segment: Three Months Ended Nine Months Ended September 30, September 30, 2021 2020 X 2021 2020 (In thousands) Property revenue: Commercial$ 96,042 $ 93,052 $ 284,905 $ 276,841 Multifamily 35,131 30,526 100,610 95,122 Other (1) (1,561) (1,822) (4,912) (7,177) Total property revenue 129,612 121,756 380,603 364,786 Property expense: Commercial 39,166 38,837 112,173 115,177 Multifamily 19,142 17,882 53,689 48,326 Other (1) 149 (1,793) (806) (4,214) Total property expense 58,457 54,926 165,056 159,289 Consolidated NOI: Commercial 56,876 54,215 172,732 161,664 Multifamily 15,989 12,644 46,921 46,796 Other (1) (1,710) (29) (4,106) (2,963) Consolidated NOI$ 71,155 $ 66,830 $ 215,547 $ 205,497
(1) Includes activity related to future development assets and corporate entities
and the elimination of intersegment activity.
Comparison of the Three Months Ended
Commercial: Property rental revenue increased by$3.0 million , or 3.2%, to$96.0 million in 2021 from$93.1 million in 2020. Consolidated NOI increased by$2.7 million , or 4.9%, to$56.9 million in 2021 from$54.2 million in 2020. The increase in property revenue and consolidated NOI was due to (i) a decline in rent deferrals and uncollectable operating lease receivables related to tenants impacted by COVID-19, (ii) increases related to1770 Crystal Drive as the property was placed into service, and (iii) increases related to2100 Crystal Drive ,1225 South Clark Street and2345 Crystal Drive due to higher occupancy. These increases were partially offset by a decrease related to the Universal Buildings and2101 L Street due to lower occupancy. Multifamily: Property rental revenue increased by$4.6 million , or 15.1%, to$35.1 million in 2021 from$30.5 million in 2020. Consolidated NOI increased by$3.3 million , or 26.5%, to$16.0 million in 2021 from$12.6 million in 2020. The increase in property revenue and consolidated NOI was due to The Wren,900 W Street ,901 W Street and West Half as these properties placed additional units into service. These increases were partially offset by lower rents and higher concessions atRiverHouse Apartments and2221 South Clark Street .
Comparison of the Nine Months Ended
Commercial: Property rental revenue increased by$8.1 million , or 2.9%, to$284.9 million in 2021 from$276.8 million in 2020. Consolidated NOI increased by$11.1 million , or 6.8%, to$172.7 million in 2021 from$161.7 million in 2020. The increase in property revenue and consolidated NOI was due to (i) a decline in rent deferrals and uncollectable operating lease receivables related to tenants impacted by COVID-19, (ii) increases in revenues related to4747 Bethesda Avenue and1770 Crystal Drive as these properties were placed into service, and (iii) increases related to2100 Crystal Drive ,1225 South Clark Street and2345 Crystal Drive due to higher occupancy. These increases were partially offset by a decrease in parking revenue due to reduced transient and office parking and decreases related to the Universal Buildings,2101 L Street and RTC-West due to lower occupancy. 42
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Multifamily: Property rental revenue increased by$5.5 million , or 5.8%, to$100.6 million in 2021 from$95.1 million in 2020. Consolidated NOI increased by$125,000 , or 0.3%, to$46.9 million in 2021 from$46.8 million in 2020. The increase in property revenue and consolidated NOI was due to The Wren,900 W Street ,901 W Street and West Half as these properties placed additional units into service. These increases were partially offset by lower rents and higher concessions atRiverHouse Apartments and The Bartlett.
Liquidity and Capital Resources
Property rental income is our primary source of operating cash flow and is dependent on many factors including occupancy levels and rental rates, as well as our tenants' ability to pay rent. In addition, our third-party asset management and real estate services business provides fee-based real estate services to the WHI, Amazon, the JBG Legacy Funds and other third parties. Our assets provide a relatively consistent level of cash flow that enables us to pay operating expenses, debt service, recurring capital expenditures, dividends to shareholders and distributions to holders of OP Units. Other sources of liquidity to fund cash requirements include proceeds from financings, recapitalizations, asset sales and the issuance and sale of securities. We anticipate that cash flows from continuing operations and proceeds from financings, recapitalizations and asset sales, together with existing cash balances, will be adequate to fund our business operations, debt amortization, capital expenditures, any dividends to shareholders and distributions to holders of OP Units over the next 12 months.
Financing Activities
The following is a summary of mortgages payable:
Weighted Average
Effective
Interest Rate (1) September 30, 2021 December 31, 2020
(In thousands)
Variable rate (2) 2.08% $ 762,246 $ 678,346
Fixed rate (3) 4.32% 922,161 925,523
Mortgages payable 1,684,407 1,603,869
Unamortized deferred financing costs and
premium/discount, net (4) (10,122) (10,131)
Mortgages payable, net $ 1,674,285 $ 1,593,738
(1) Weighted average effective interest rate as of
(2) Includes variable rate mortgages payable with interest rate cap agreements.
(3) Includes variable rate mortgages payable with interest rates fixed by
interest rate swap agreements.
(4) As of
mortgage loan totaling
As ofSeptember 30, 2021 andDecember 31, 2020 , the net carrying value of real estate collateralizing our mortgages payable totaled$1.8 billion . Our mortgages payable contain covenants that limit our ability to incur additional indebtedness on these properties and, in certain circumstances, require lender approval of tenant leases and/or yield maintenance upon repayment prior to maturity. Certain mortgages payable are recourse to us. See Note 17 to the financial statements for additional information.
In
As ofSeptember 30, 2021 andDecember 31, 2020 , we had various interest rate swap and cap agreements on certain mortgages payable with an aggregate notional value of$1.3 billion . See Note 15 to the financial statements for additional information. 43 Table of Contents Credit Facility As ofSeptember 30, 2021 andDecember 31, 2020 , our$1.4 billion credit facility consisted of a$1.0 billion revolving credit facility maturing inJanuary 2025 , a$200.0 million unsecured term loan ("Tranche A-1 Term Loan") maturing inJanuary 2023 and a$200.0 million unsecured term loan ("Tranche A-2 Term Loan") maturing inJuly 2024 . The following is a summary of amounts outstanding under the credit facility: Effective Interest Rate (1) September 30, 2021 December 31, 2020 (In thousands)
Revolving credit facility (2) (3) (4) 1.13% $ - $ - Tranche A-1 Term Loan (5) 2.59% $ 200,000 $ 200,000 Tranche A-2 Term Loan (5) 2.49% 200,000 200,000 Unsecured term loans 400,000 400,000 Unamortized deferred financing costs, net (1,507) (2,021) Unsecured term loans, net $ 398,493 $ 397,979
(1) Effective interest rate as of
(2) As of
aggregate face amount of
our revolving credit facility.
(3) As of
related to our revolving credit facility totaling
million were included in "Other assets, net."
(4) The interest rate for our revolving credit facility excludes a 0.15% facility
fee.
(5) As of
fixed by interest rate swap agreements. The interest rate swaps mature
concurrently with the respective term loan and provide a weighted average
interest rate of 1.39% for the Tranche A-1 Term Loan and 1.34% for the
Tranche A-2 Term Loan.
Our existing floating rate debt instruments, including our credit facility, with a principal balance totaling$1.6 billion and our hedging arrangements with a notional value totaling$1.7 billion currently use as a reference rate theU.S. dollar London Interbank Offered Rate ("LIBOR"), and we expect a transition from LIBOR to another reference rate due to plans to phase out the reference rate by the end of 2021, after which point its continuation cannot be assured. Though an alternative reference rate for LIBOR, the Secured Overnight Financing Rate ("SOFR"), exists, significant uncertainties still remain. We can provide no assurance regarding the future of LIBOR and when our LIBOR-based instruments will transition from LIBOR as a reference rate to SOFR or another reference rate. The discontinuation of a benchmark rate or other financial metric, changes in a benchmark rate or other financial metric, or changes in market perceptions of the acceptability of a benchmark rate or other financial metric, including LIBOR, could, among other things, result in increased interest payments, changes to our risk exposures, or require renegotiation of previous transactions. In addition, any such discontinuation or changes, whether actual or anticipated, could result in market volatility, adverse tax or accounting effects, increased compliance, legal and operational costs, and risks associated with contract negotiations.
Common Shares Repurchased
InMarch 2020 , ourBoard of Trustees authorized the repurchase of up to$500 million of our outstanding common shares. During three and nine months endedSeptember 30, 2021 , we repurchased and retired 2.3 million and 2.9 million common shares for$68.9 million and$88.1 million , an average purchase price of$29.73 and$29.99 per share. During the three and nine months endedSeptember 30, 2020 , we repurchased and retired 1.4 million and 2.9 million common shares for$38.4 million and$79.6 million , an average purchase price of$26.64 and$27.82 per share. Since we began the share repurchase program, we have repurchased and retired 6.7 million common shares for$192.9 million , an average purchase price of$28.71 per share. Purchases under the program are made either in the open market or in privately negotiated transactions from time to time as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by us at our discretion and will be subject to economic and market conditions, share price, 44
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applicable legal requirements and other factors. The program may be suspended or discontinued at our discretion without prior notice.
Liquidity Requirements
Our principal liquidity needs for the next 12 months and beyond include:
? normal recurring expenses;
? debt service and principal repayment obligations, including balloon payments on
maturing debt;
? capital expenditures, including major renovations, tenant improvements and
leasing costs; ? development expenditures;
? dividends to shareholders and distributions to holders of OP Units;
? common share repurchases; and
? acquisitions of properties, either directly or indirectly through the
acquisition of equity interests therein.
We expect to satisfy these needs using one or more of the following:
? cash and cash equivalent balances;
? cash flows from operations;
? distributions from real estate ventures; and
? proceeds from financings, recapitalizations and asset sales.
While we do not expect the need to do so during the next 12 months, we also can issue securities to raise funds.
While we have not experienced a significant impact to date in this regard, we expect COVID-19 to continue to have an adverse impact on our liquidity and capital resources. Future decreases in cash flows from operations resulting from tenant defaults, rent deferrals or decreases in our rents or occupancy, would decrease the cash available for the capital uses described above. As ofSeptember 30, 2021 , we had$998.6 million of availability under our credit facility (net of outstanding letters of credit totaling$1.4 million ). As ofSeptember 30, 2021 , we had no debt on a consolidated basis and at our share scheduled to mature in 2021.
Contractual Obligations and Commitments
During the nine months endedSeptember 30, 2021 , there were no material changes to the contractual obligation information presented in Item 7 of Part II of our Annual Report on Form 10-K for the year endedDecember 31, 2020 .
As of
As ofSeptember 30, 2021 , we had committed tenant-related obligations totaling$76.9 million ($73.6 million related to our consolidated entities and$3.3 million related to our unconsolidated real estate ventures at our share). The timing and amounts of payments for tenant-related obligations are uncertain and may only be due upon satisfactory performance of certain conditions. We launched the WHI with theFederal City Council inJune 2018 as a scalable market-driven model that uses private capital to help address the scarcity of housing for middle income families. We are the manager for theWHI Impact Pool , which is the social impact debt financing vehicle of the WHI. As ofSeptember 30, 2021 , theWHI Impact Pool had 45
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completed closings of capital commitments totaling
On
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