JBG SMITH Properties (JBGS) risk factors, FY2025 10-K

Risks Related to Our Business and Operations

1. 01A material portion of our portfolio comprises office assets, which have generally experienced lower demand since early 2020 and may experience a further decrease in demand that could have a material adverse effect on us22% rewritten
2. 02Our portfolio of assets is geographically concentrated in Washington, D.C. metropolitan area submarkets, and particularly concentrated in National Landing, which makes us susceptible to adverse economic and other conditions such that an economic downturn affecting this area could have a material adverse effect on us35% rewritten
3. 03Our assets and the property development market in the Washington, D.C. metropolitan area are dependent on an economy that is heavily reliant on federal government spending and use of office assets, and any actual or anticipated curtailment of such spending could have a material adverse effect on us56% rewritten
4. 04We have significant exposure to Amazon and the National Landing submarket26% rewritten
5. 05We derive a significant portion of our revenue from U.S. federal government tenants, and we may face additional risks and costs associated with directly managing assets occupied by government tenants44% rewritten
6. 06Rent control or rent stabilization legislation and other regulatory restrictions may limit our ability to increase rents and pass through new or increased operating costs to our residents
7. 07We are exposed to risks associated with real estate development and redevelopment, such as unanticipated expenses, delays and other contingencies, any of which could have a material adverse effect on us
8. 08We depend on major tenants in our commercial portfolio, and the bankruptcy, insolvency or inability to pay rent of any of these tenants could have a material adverse effect on us
9. 09We derive a significant portion of our revenue from five of our assets
10. 10The loss of one or more members of our senior management team could adversely affect our ability to manage our business and to implement our growth strategies or could create a negative perception in the capital markets
11. 11The actual density of our development pipeline and/or any development parcel may not be consistent with our estimated potential development density36% rewritten
12. 12We face risks related to multifamily rental antitrust, regulatory scrutiny and related litigation
13. 13We face risks related to the real estate industry
14. 14We may incur significant costs to comply with environmental laws, and environmental contamination may impair our ability to lease, develop and/or sell real estate

Risks Related to the Capital Markets and Related Activities

1. 15We face risks related to our common shares22% rewritten
2. 16We have a substantial amount of indebtedness, and our debt agreements include restrictive covenants and other requirements, which may limit our financial and operating activities, our future acquisition and development activities, or otherwise affect our financial condition24% rewritten
3. 17We may not be able to obtain capital to make investments and/or obtaining that capital could fundamentally change the composition of our portfolio
4. 18The liquidity of our common shares may decline as a result of our continued repurchase of our common shares49% rewritten
5. 19We are subject to interest rate risk, which could increase our interest expense, increase the cost to refinance and increase the cost of issuing new debt22% rewritten
6. 20Tax consequences to holders of OP Units upon a sale of certain of our assets may cause the interests of our senior management to differ from your own85% rewritten
7. 21Certain of our trustees and executive officers may have actual or potential conflicts of interest as a result of other past and future investments in real estate venturesNew
8. 22We may acquire properties or portfolios of properties through tax deferred contribution transactions, which could result in shareholder dilution and limit our ability to sell or refinance such assets
9. 23Our declaration of trust and bylaws, the partnership agreement of JBG SMITH LP and MGCL, and the Code contain provisions that may delay, defer or prevent a change of control transaction that might involve a premium price for our common shares or that our shareholders otherwise believe to be in their best interest
10. 24As permitted by the MGCL, we have elected to opt out of the business combination and control share provisions of the MGCL. However, we cannot assure you that our Board of Trustees will not opt to be subject to such provisions of the MGCL in the future, including opting to be subject to such provisions retroactively61% rewritten
11. 25Our rights and the rights of our shareholders to take action against our trustees and officers are limited

Risks Related to Our Status as a REIT

1. 26We may fail to qualify or remain qualified as a REIT and may be required to pay income taxes at corporate rates
2. 27REIT distribution requirements could adversely affect our liquidity and our ability to execute our business plan or require us to make distributions of our shares or other securities
3. 28The tax imposed on REITs engaging in "prohibited transactions" may limit our ability to engage in transactions that would be treated as sales for U.S. federal income tax purposes
4. 29To comply with the restrictions imposed on REITs, we may have to conduct certain activities and own certain assets through a TRS, which will be subject to normal corporate income tax, and we could be subject to a 100% penalty tax if our transactions with our TRSs are not conducted on arm's length terms
5. 30Changes in tax laws could negatively impact us
6. 31CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
7. 32For a further discussion of factors that could materially affect the outcome of our forward-looking statements, see "Risk Factors" in this Annual Report on Form 10-K