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JBG SMITH Closes an Additional $344 Million of Capital Recycling, Increases Share Repurchase Authorization to $1 Billion
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Rhea-AI Sentiment
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Tags
buyback
Rhea-AI Summary
JBG SMITH (NYSE: JBGS) has announced the sale of two properties totaling $344 million and increased its common share repurchase authorization by $500 million, bringing the total to $1 billion. The significant sales include a $198 million transaction of the PenPlace site to Amazon, set for its HQ2, and the sale of the 1900 N Street office building. The company aims to focus on multifamily investments, enhancing shareholder value through strategic capital recycling.
Positive
Sale of PenPlace for $198 million enhances asset portfolio.
Increased share repurchase authorization to $1 billion boosts shareholder value.
Negative
None.
PenPlace Development Site and Downtown Trophy Office Building Among the Sales
BETHESDA, Md.--(BUSINESS WIRE)--
JBG SMITH (NYSE: JBGS), a leading owner and developer of high-quality, mixed-use properties in the Washington, DC market, today announced the sale of two assets for $344 million, as well as an increase of the Company’s common share repurchase authorization by $500 million to $1 billion total.
JBG SMITH closed the $198 million sale of its PenPlace development site to Amazon for the second phase of its HQ2. The 12-acre site was recently approved by Arlington County to house 3.2 million square feet of office space, including the landmark Helix building, more than 100,000 square feet of retail and approximately 2.75 acres of public open space. As previously reported, the sale of PenPlace was used to facilitate a like-kind exchange for JBG SMITH’s acquisition of The Batley, a 432-unit apartment building in DC’s Union Market which closed in 2021.
Additionally, 1900 N Street was sold to German company Commerz Real, through its open-ended real estate fund Hausinvest. Delivered in 2019 and located in DC’s Central Business District, 1900 N Street is an 11-story trophy office building comprising approximately 261,000 square feet of office space and nearly 9,000 square feet of street-level retail space. The mixed-use office building was a joint venture between JBG SMITH (55%) and Canada Pension Plan Investment Board (45%). JBG SMITH will continue to serve as property manager and leasing agent.
“These sales further advance our capital recycling strategy. Amazon’s purchase of PenPlace represents another milestone for JBG SMITH and further proves that we are full steam ahead in National Landing,” said Matt Kelly, JBG SMITH Chief Executive Officer. “As we saw with the sale of Metropolitan Park to Amazon in 2020, finalizing this deal allows us to move forward with our partners, realize Amazon’s vision and complete its second home here in the region. Metropolitan Park and PenPlace will bring exciting new amenities to the broader neighborhood including public parks, dynamic retail, and infrastructure improvements.”
Amazon, JBG SMITH and its construction and development partners recently celebrated the “topping out” – or completion of the 22nd and final level – at Metropolitan Park, with news coming shortly after that Amazon had hired 5,000 employees assigned to HQ2. The two buildings are still on schedule to deliver in 2023 with several local retailers already announced for the ground floor.
Finally, JBG SMITH’s Board of Trustees increased the Company’s common share repurchase authorization by $500 million to an aggregate $1 billion, including approximately $31 million remaining for repurchases under the Board’s previous authorization approved in March of 2020. Purchases made pursuant to the program will be 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 the Company in its discretion and will be subject to economic and market conditions, share price, applicable legal requirements and other factors. The program may be suspended or discontinued at the Company’s discretion without prior notice.
“Our accelerated capital recycling plan will shift JBG SMITH’s portfolio to majority multifamily, with an office portfolio concentrated in National Landing,” said George Xanders, JBG SMITH Chief Investment Officer. “We set a target to market $1 billion of non-core office and land assets in 2022 and are well on our way to exceeding this goal with $990 million closed year-to-date. These proceeds provide us the flexibility to invest in opportunities with the highest potential risk-adjusted returns, including share repurchases under our recently increased share repurchase plan when our stock is trading at a material discount to NAV.”
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 developer for Amazon’s new headquarters, and where Virginia Tech’s $1 billion Innovation Campus is under construction. JBG SMITH's portfolio currently comprises 17.9 million square feet of high-growth office, multifamily and retail assets at share, 99% of which are metro-served. It also maintains a development pipeline encompassing 14.4 million square feet of mixed-use development opportunities. JBG SMITH is committed to the operation and development of green, smart, and healthy buildings and plans to maintain carbon neutral operations annually. For more information on JBG SMITH please visit www.jbgsmith.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: total square footage to be housed by Amazon’s buildings on the PenPlace development site, new amenities coming to PenPlace and Metropolitan Park, scheduled delivery date, and our plan to shift our portfolio to majority multifamily. 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, 2021 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.
