COVID-19 rent deferrals deal big loss to area landlord JBG Smith

Bethesda, Maryland-based JBG Smith, one of the largest owners of commercial real estate in the Washington region, posted a quarterly loss, largely from COVID-19-related rent deferrals for office and retail tenants and other pandemic-related expenses.

JBG Smith owns almost 21 million square feet of office, apartment and retail real estate in the Washington region, including Amazon’s current and future HQ2 buildings in Arlington.

The company posted a quarterly net loss of $22.8 million, compared to net income of $9.4 million for the same quarter a year ago.

It said results were impacted by $14.8 million associated with the COVID-19 pandemic, including lower occupancy, lower rents, higher operating costs and rent concessions and deferrals.

Funds from operations, a measure of income that better reflects financials of real estate companies, was $32.4 million, down from $45.6 million in the same quarter a year ago.

Office tenants have largely kept up, with JBG Smith reporting 99.4% of office tenant rent collected last quarter, though $600,000 was not.

It collected just 63.1% of rent from retail tenants, or $3.6 million that was not paid. During the quarter, it entered into rent deferral agreements with tenants totaling $1.3 million, and recognized $2.3 million of credit losses for rent deferral agreements that are currently in negotiations.

JBG Smith continues to develop new commercial real estate with 28 future projects in some stage of development, including 2.1 million square feet in National Landing it is developing for Amazon.

One recent investment included $25.3 million to acquire wireless spectrum for 5G licenses across the National Landing development.

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