JBG SMITH and J.P. Morgan Global Alternatives Announce Strategic Joint Venture to Realize Next Phase of Potomac Yard Redevelopment

Rhea-AI Summary

JBG SMITH (NYSE: JBGS) and J.P. Morgan Global Alternatives have formed a joint venture to develop approximately 2.0 million square feet of mixed-use space at Potomac Yard, Alexandria. J.P. Morgan contributes a land site for 1.3 million square feet of development, while JBG SMITH adds over 700,000 square feet. JBG SMITH holds a 50% stake and will manage the properties. This venture increases JBG SMITH's ownership interest in National Landing to 79%. The project aligns with Virginia Tech’s Innovation Campus nearby, aiming to foster an innovation ecosystem.

Positive

• Joint venture to develop 2.0 million square feet of mixed-use properties in Potomac Yard.
• JBG SMITH increases ownership in National Landing to 79% of development density.
• Proximity to Virginia Tech’s $1 billion Innovation Campus enhances project appeal.

Negative

• None.

JBG SMITH (NYSE: JBGS), a leading owner and developer of high-quality, mixed-use properties in the Washington, DC market, and J.P. Morgan Global Alternatives announced today a joint venture to design, develop, manage, and own approximately 2.0 million square feet of new mixed-use development in Potomac Yard, the southern portion of National Landing in Alexandria, Virginia.

Institutional investors advised by J.P. Morgan Global Alternatives contributed a land site that is entitled for approximately 1.3 million square feet of development it controls at Potomac Yard Landbay F, while JBG SMITH contributed adjacent land with more than 700,000 square feet of development capacity at Potomac Yard, Landbay G. In addition to its 50% ownership stake in the joint venture, JBG SMITH will act as pre-developer, developer, property manager, and leasing agent for all future commercial and residential properties on the site. As a result of this transaction, JBG SMITH’s at share ownership of development rights in Potomac Yard increased by more than 285,000 square feet, expanding its economic ownership interest in National Landing to 79% of all unencumbered future development density.

The assets included in this joint venture are immediately adjacent to Virginia Tech’s $1 billion Innovation Campus, which virtually launched its inaugural semester in the fall of 2020 and is approximately one mile south of Amazon’s new headquarters. On this campus, Virginia Tech intends to create an innovation ecosystem by co-locating academic and private sector uses to accelerate research and development spending, as well as the commercialization of technology. The plans call for two multifamily buildings totaling approximately 419,000 square feet that have been placed in JBG SMITH’s Near-Term Development Pipeline and could start construction within the next 12 months.

The remaining 1.6 million square feet of mixed-use development across Landbays F and G is expected to be developed over time and, consequently, are included in the Future Development Pipeline.

“We are thrilled that this joint venture will further the community’s collective long-term vision of National Landing as a thriving, transit-oriented, mixed-use destination and world-class innovation district,” said Ed Chaglassian, Executive Vice President and Head of Acquisitions at JBG SMITH. “Just as Amazon is serving as a catalyst for further private investment in offices, apartments, recreation, and public space in the center of National Landing, Virginia Tech plays a similar role in the southern portion of National Landing. This transaction will help ensure that the surrounding neighborhoods can grow in lockstep with Virginia Tech in ways that will complement and enhance its Innovation Campus.”

“Potomac Yard is a rare opportunity to create an irreplaceable and differentiated community and we are very excited to partner with JBG SMITH and Virginia Tech on this transformational project,” said Preston Meyer, Managing Director, J.P. Morgan Asset Management – Real Estate Americas.

JBG SMITH has served as master developer for Potomac Yard Landbay F since 2013 and is currently master developer for Virginia Tech’s $1 billion Innovation Campus. The entire site is located within short walking distance to the new Potomac Yard Metro station, which is expected to open by spring 2022.

About JBG SMITH

JBG SMITH owns, operates, invests in and develops a dynamic portfolio of mixed-use properties in the high growth and high barrier-to-entry submarkets in and around Washington, DC. Through an intense focus on placemaking, JBG SMITH cultivates vibrant, amenity-rich, walkable neighborhoods throughout the Washington, DC metropolitan area. Over half of JBG SMITH’s holdings are in the National Landing submarket in Northern Virginia, where it serves as the exclusive developer for Amazon’s new headquarters, and where Virginia Tech’s planned new $1 billion Innovation Campus are located. JBG SMITH's portfolio currently comprises 17.3 million square feet of high-growth office, multifamily and retail assets at share, 98% of which are Metro-served. It also maintains a development pipeline encompassing 16.8 million square feet of mixed-use development opportunities. For more information on JBG SMITH please visit www.jbgsmith.com.

About J.P. Morgan Global Alternatives

J.P. Morgan Global Alternatives is the alternative investment arm of J.P. Morgan Asset Management. With more than 50 years as an alternatives investment manager, $163 billion in assets under management and more than 600 professionals (as of December 31, 2020), we offer strategies across the alternative investment spectrum including real estate, private equity and credit, infrastructure, transportation, liquid alternatives, and hedge funds. Operating from offices throughout the Americas, Europe and Asia Pacific, our 14 independent alternative investment engines combine specialist knowledge and singular focus with the global reach, vast resources and powerful infrastructure of J.P. Morgan to help meet each client's specific objectives. For more information: jpmorganassetmanagement.com.

Forward-Looking Statements

Certain statements contained herein may 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 performance. They represent our intentions, plans, expectations and beliefs and are subject to numerous assumptions, risks and uncertainties. Consequently, the future results of JBG SMITH Properties (“JBG SMITH” or the “Company”) may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “approximate”, “believes,” “expects,” “anticipates,” “intends,” “plans,” “proposed,” “would,” “may,” or similar expressions in this press release. We also note the following forward-looking statements: estimated square feet, including square feet planned for multifamily, office and retail uses; estimated development density; estimated construction timing; and plans related to Virginia Tech’s innovation ecosystem, including co-locating academic and private sector uses to accelerate research and development spending, as well as the commercialization of technology. Many of the factors that will determine the outcome of these and our other forward-looking statements and plans are beyond our ability to control or predict. These factors include, among others: adverse economic conditions in the Washington, DC metropolitan area, the timing of and costs associated with development and property improvements, financing commitments, and general competitive factors. For further discussion of factors that could materially affect the outcome of our forward-looking statements and other risks and uncertainties, see “Risk Factors” and the Cautionary Statement Concerning Forward-Looking Statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 and other periodic reports the Company files with the Securities and Exchange Commission. For these 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. 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 after the date hereof.

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FAQ

What is the joint venture between JBG SMITH and J.P. Morgan Global Alternatives?

JBG SMITH and J.P. Morgan have formed a joint venture to design, develop, and manage approximately 2.0 million square feet of mixed-use development in Potomac Yard, Alexandria.

How much development capacity does JBG SMITH contribute to the joint venture?

JBG SMITH contributes over 700,000 square feet of development capacity to the joint venture.

What is JBG SMITH's ownership stake in the new joint venture?

JBG SMITH holds a 50% ownership stake in the joint venture with J.P. Morgan.

How does the joint venture affect JBG SMITH's ownership interest in National Landing?

The joint venture increases JBG SMITH's ownership interest in National Landing to 79% of all unencumbered future development density.

What developments are planned for Potomac Yard as part of this joint venture?

The joint venture plans to develop two multifamily buildings totaling approximately 419,000 square feet in the near term.