JBG SMITH Properties

In November 2023, the District of Columbia filed a lawsuit in the Court against RealPage, Inc., a provider of revenue management systems, numerous multifamily rental companies, and 14 owners and/or operators of multifamily housing in the District of Columbia, including JBG Associates, L.L.C., one of our subsidiaries, alleging that the defendants violated the District of Columbia Antitrust Act by unlawfully agreeing to use RealPage, Inc. revenue management systems and sharing sensitive data. The District of Columbia is seeking monetary damages, equitable relief, attorneys’ fees, interest and costs. On September 17, 2026, JBG Associates, L.L.C. and the District of Columbia resolved the matter via a Consent

Judgment and Order entered by the Court under which JBG Associates, L.L.C. agreed to certain injunctive relief and to remit a settlement payment of $8.1 million to the District of Columbia. Per the Consent Judgment and Order, nothing set forth in the order, including the settlement payment, shall be deemed or construed to be an admission by JBG Associates, L.L.C. or evidence of any wrongdoing or violation of law by JBG Associates, L.L.C. or as evidence of the truth of any of the claims or allegations made in the lawsuit.

We, along with multiple other parties, are named defendants in a lawsuit arising out of a condominium development project known as Wardman Tower in Washington, D.C. The lawsuit was filed by the Wardman Tower Residential Condominium Unit Owners Association in the Court on November 25, 2020. The lawsuit seeks damages resulting primarily from alleged construction and design deficiencies, and alleged misrepresentations and omissions, including claims under the CPPA. The Wardman Tower project was designed and constructed by other parties and was substantially complete prior to our formation. We have never had any ownership interest in the project. One of our subsidiary entities, which was only made a defendant in the litigation during the trial, had acted under a project management agreement with the project owner. The lawsuit sought compensatory damages and asked that those damages be trebled under the CPPA, plus attorneys' fees.

The bench trial began on November 10, 2025, and the last witness testified on March 5, 2026. On July 31, 2026, the Court entered judgment in favor of Wardman Tower Residential Condominium Unit Owners Association, found damages in the amount of $118.7 million, and ordered the defendants, which include us, to pay treble that amount, or approximately $356.1 million in damages, plus attorneys’ fees in an amount to be determined. We believe the judgment against us, including its conclusion that we are liable for acts of employees of a subsidiary providing services under a project management agreement between the project owner and another subsidiary, is not supported by the facts of the case or applicable law regarding corporate separateness. We believe there are substantial grounds to challenge both the liability findings against us and the size and trebling of the award. On August 27, 2026, we filed our Notice of Appeal. We will continue to defend ourselves vigorously in this matter. The timing and success of any appeal is uncertain, and we cannot be certain of the ultimate outcome of the case.

In assessing whether we should accrue a liability in our financial statements as a result of the judgment, we considered various factors, including the legal and factual circumstances of the case, the trial record, applicable law, the views of legal counsel and the likelihood of successful appeals. As a result of this review, we concluded that a loss attributable to us from this case is not probable at this time and, therefore, a liability has not been recorded with respect to this case as of September 30, 2026. While we believe it is not probable a loss will occur, the existence of the judgment indicates that it is reasonably possible that a loss could occur. The estimate of the possible range of loss is $0 to the $356.1 million judgment, plus attorneys’ fees in an amount to be determined and post-judgment interest that will accrue during the appeal. Additional developments in the lawsuit could affect these assumptions, and therefore, the amount of any accrual.

We anticipate that one or more bonds will be posted by the defendants to stay enforcement of the judgment pending the appeal, and to the extent we are required to collateralize any portion of the bonds, it may impact our liquidity.

There are various other legal actions arising in the ordinary course of business. In our opinion, the outcome of such matters is not expected to have a material adverse effect on our financial position, results of operations or cash flows. Our accrual for loss contingencies relating to unresolved legal matters was included in "Other liabilities, net" in our balance sheets. Actual losses may differ materially from amounts recorded and the ultimate outcome of these legal proceedings is generally not yet determinable.