JBG Smith reports lower core FFO amid legal judgment
The real estate investment trust saw core FFO attributable to common shares fall to $0.18 per diluted share in the second quarter.
JBG Smith Properties (JBGS), the real estate investment trust, reported a decline in core funds from operations for the second quarter. The result followed a period of mixed performance across its multifamily and office portfolios and the emergence of a significant legal liability.
Core FFO attributable to common shares decreased to $0.18 per diluted share in the second quarter of 2026, down from $0.19 in the same period a year prior. Annualized net operating income (NOI), adjusted for assets sold or recapitalized, rose 1.3% sequentially to $249.2 million from $246.1 million in the first quarter. However, same-store NOI declined 4.0% compared to the second quarter of 2025.
Growth in the multifamily segment was driven by leasing, which increased 80 basis points sequentially to 94.3% from 93.5% in the first quarter. Occupancy for the segment remained flat at 92.0%. Multifamily portfolio NOI increased approximately 1.0% from the first quarter.
The office portfolio also saw sequential gains. Leasing rose 1.1% to 78.0% from 76.9% in the first quarter, while occupancy increased 0.2% to 75.4%. Office portfolio NOI increased 1.6% from the first quarter, adjusting for the recapitalization of Tysons Dulles Plaza.
Net debt to annualized adjusted EBITDA stood at 12.4x as of June 30, 2026. These leverage levels are elevated, attributed to the lease-up of new multifamily assets. In May 2026, the company began converting 2200 Crystal Drive into a 195-unit multifamily asset through a joint venture.
On July 31, 2026, a DC Superior Court judgment ordered the company and other defendants to pay approximately $356.1 million in treble damages regarding the Wardman Tower matter. JBG Smith intends to appeal the decision and has not recognized a liability because it does not deem a loss probable.