Status of JBG Smith
Title says it all. What’s going on at JBG these days? Haven’t heard much about them lately. I know they used to be held in high regard. Is that still the case?
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Don’t know too much about their inner workings at the moment but they’re still struggling as a whole because of their heavy exposure to office and development. I believe they cut their dividend not too long ago and losing the Potomac Yards redevelopment didn’t help.
Have also heard they’re looking around the southeast as well since DC has been tough for them.
That said, I toured their National Landing projects not too long ago and was impressed with the transformation that’s starting to materialize. Definitely a long road to recovery but they still own some prime real estate around the DMV.
Agree with everything above.
Just know it’s a completely different company than the old dominant PE firm. They’re a REIT that has its hands tied by the HQ2/Potomac Yard development. Has definitely gone corporate. I don’t think current regime lasts much longer after losing Potomac Yard.
Don't know exactly how their financials are but I guess you'd be able to read their 10k and figure it out pretty quick. Office portfolio has gotten absolutely romped but I think they pivoted their exposure a little while ago so that may have weathered the storm.
I think phases of HQ2 being pushed destroyed the staffing in the shop and turnover was super high last I heard. I know they used to be the pinnacle of DC but they've had tons of turnover with analysts/associates being the most tenured staff on deals at certain points. I think the VT innovation campus project is keeping them busy and afloat for now.
Also the Matt Kelly response to getting the Wizards move reads like the pissiest sour grapes message I've ever seen lmao
https://www.businesswire.com/news/home/20240327931613/en/JBG-SMITH-Rele…
Still a reputable shop, but things changed drastically when they went became a REIT. Lot of the entrepreneurial folks left as it went from chasing deals to more of a development management focus as they try to sort through what to do with all of the Vornado assets that came over in the "merger". HQ2 has been successful, and they are just the fee developer on it and sold the land to Amazon already, the second phase will happen at some point. The reason things haven't gone as well lately is they tend to overdesign buildings and with where the market is today nothing really pencils for them. They have gotten out of a lot of their office liabilities, but they can't get any of these high-rises near HQ2 to pencil. From the REIT perspective, they were really pitching the pipeline and future potential, hard to do that in todays environment, and not something most REIT investors are looking for anyways. It was an exciting idea (buy it up now as in a few years we will have all of these other income generators coming online next to HQ2, but the markets have made it very difficult to see that vision come to fruition.
Generally agreed, but I don't think that they chose the REIT approach for business reasons, my understanding is that it's more of a capital event for the old guard to cash out. REIT structure and their old philosophies had a ton of conflicting interests IMO.
That is correct. All of the principals got paid out via the merger and then all slowly departed. Very few people still there from the private days. Some of the younger blood I think was sold on the idea of this huge pipeline they could execute post merger, but it never happened. 100% on the conflicts, they used to need deal folks out there making things happen, now it's more of a here is your business plan to execute on for X asset, go meet the schedule and budget and come back to IC with updates. A total flip of the type of person needed.
yeah it was “cleanest” way to cash out from my understanding. Wasn’t some strategy
old JBG was “the” shop though. Have heard tales of their principals taking home massive paydays via carry
The move to become a REIT was a cynical management cash-out from the beginning and it's no surprise it hasn't worked. Recall JBG's failed reverse merger with New York REIT prior to finding Vornado - tells you a lot of what mgmt was thinking at the time ($$$). If anything, the wider failure of office has provided cover for JBG's specific failure.
All the good talent jumped ship. It doesn't hold the same clout as it did.
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