| Segment Information |
16.Segment Information We own, operate and develop mixed-use properties concentrated in and around Washington, D.C. We derive our revenue primarily from leases with multifamily and commercial tenants. In addition, our third-party real estate services business provides fee-based real estate services. Our operating segments are aligned with our method of internal reporting and the way our Chief Executive Officer, who is also our Chief Operating Decision Maker ("CODM"), makes key operating decisions, evaluates financial results, allocates resources and manages our business. Accordingly, our three operating and reportable segments are multifamily, commercial and third-party real estate services. The CODM measures and evaluates the performance of our operating segments based on only the following measures at our share pertaining to each of our segments: | ● | NOI (multifamily and commercial) - which includes our proportionate share of revenue and expenses attributable to real estate ventures. NOI includes property rental revenue and other property revenue, and deducts property expenses. NOI excludes deferred rent, commercial lease termination revenue, related party management fees, interest expense, and certain other non-cash adjustments, including the accretion of acquired below-market leases and the amortization of acquired above-market leases and below-market ground lease intangibles. |
| ● | Net third-party real estate services, excluding reimbursements - which includes revenue streams generated by this segment, excluding reimbursement revenue, as well as the expenses attributable to this segment at our proportionate share, calculated by excluding real estate services revenue from our interests in real estate ventures. |
The CODM uses these measures predominantly in the annual budget and forecasting process as well as in his review of our quarterly financial results when making decisions about the allocation of operating and capital resources to each segment. We have included disclosure of NOI and the results of our third-party real estate services business at our share to align with our internal reporting and the information used by our CODM. The following is a summary of NOI at our share for our multifamily and commercial segments, including a reconciliation to our total NOI at our share: | | | | | | | | | | | | Three Months Ended June 30, 2025 | | | Multifamily | | Commercial | | Total | | | | (In thousands, at our share) | Property rental revenue | | $ | 53,563 | | $ | 51,683 | | $ | 105,246 | Other property revenue | | | 654 | | | 4,568 | | | 5,222 | Total property revenue | | | 54,217 | | | 56,251 | | | 110,468 | Property expense: | | | | | | | | | | Real estate taxes | | | 6,165 | | | 5,803 | | | 11,968 | Payroll | | | 3,845 | | | 3,102 | | | 6,947 | Utilities | | | 3,776 | | | 2,768 | | | 6,544 | Repairs and maintenance | | | 6,276 | | | 5,233 | | | 11,509 | Other property operating | | | 3,188 | | | 4,384 | | | 7,572 | Total property expense | | | 23,250 | | | 21,290 | | | 44,540 | NOI from reportable segments | | $ | 30,967 | | $ | 34,961 | | | 65,928 | Other NOI (1) | | | | | | | | | (295) | NOI | | | | | | | | $ | 65,633 | | | Three Months Ended June 30, 2024 | | | Multifamily | | Commercial | | Total | | | | (In thousands, at our share) | Property rental revenue | | $ | 52,203 | | $ | 58,286 | | $ | 110,489 | Other property revenue | | | 937 | | | 4,533 | | | 5,470 | Total property revenue | | | 53,140 | | | 62,819 | | | 115,959 | Property expense: | | | | | | | | | | Real estate taxes | | | 5,477 | | | 7,685 | | | 13,162 | Payroll | | | 4,222 | | | 3,280 | | | 7,502 | Utilities | | | 3,390 | | | 3,202 | | | 6,592 | Repairs and maintenance | | | 5,468 | | | 5,560 | | | 11,028 | Other property operating | | | 2,606 | | | 4,468 | | | 7,074 | Total property expense | | | 21,163 | | | 24,195 | | | 45,358 | NOI from reportable segments | | $ | 31,977 | | $ | 38,624 | | | 70,601 | Other NOI (1) | | | | | | | | | (1,348) | NOI | | | | | | | | $ | 69,253 |
| | | | | | | | | | | | Six Months Ended June 30, 2025 | | | Multifamily | | Commercial | | Total | | | | (In thousands, at our share) | Property rental revenue | | $ | 108,165 | | $ | 101,440 | | $ | 209,605 | Other property revenue | | | 1,275 | | | 8,304 | | | 9,579 | Total property revenue | | | 109,440 | | | 109,744 | | | 219,184 | Property expense: | | | | | | | | | | Real estate taxes | | | 11,736 | | | 11,395 | | | 23,131 | Payroll | | | 7,587 | | | 6,109 | | | 13,696 | Utilities | | | 7,694 | | | 6,170 | | | 13,864 | Repairs and maintenance | | | 11,713 | | | 9,705 | | | 21,418 | Other property operating | | | 6,233 | | | 8,532 | | | 14,765 | Total property expense | | | 44,963 | | | 41,911 | | | 86,874 | NOI from reportable segments | | $ | 64,477 | | $ | 67,833 | | | 132,310 | Other NOI (1) | | | | | | | | | (1,392) | NOI | | | | | | | | $ | 130,918 |
| | | | | | | | | | | | Six Months Ended June 30, 2024 | | | Multifamily | | Commercial | | Total | | | | (In thousands, at our share) | Property rental revenue | | $ | 103,934 | | $ | 121,632 | | $ | 225,566 | Other property revenue | | | 1,653 | | | 8,625 | | | 10,278 | Total property revenue | | | 105,587 | | | 130,257 | | | 235,844 | Property expense: | | | | | | | | | | Real estate taxes | | | 10,879 | | | 15,674 | | | 26,553 | Payroll | | | 8,404 | | | 6,788 | | | 15,192 | Utilities | | | 6,936 | | | 6,871 | | | 13,807 | Repairs and maintenance | | | 9,831 | | | 10,808 | | | 20,639 | Other property operating | | | 4,973 | | | 8,539 | | | 13,512 | Total property expense | | | 41,023 | | | 48,680 | | | 89,703 | NOI from reportable segments | | $ | 64,564 | | $ | 81,577 | | | 146,141 | Other NOI (1) | | | | | | | | | (3,058) | NOI | | | | | | | | $ | 143,083 |
| (1) | Includes activity related to development assets and land assets for which we are the ground lessor. |
The following is a summary of our third-party real estate services business at our share: | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | | 2025 | | 2024 | X | 2025 | | 2024 | | | | (In thousands, at our share) | Property management fees | | $ | 3,279 | | $ | 3,874 | | $ | 6,640 | | $ | 7,989 | Asset management fees | | | 706 | | | 1,242 | | | 1,286 | | | 2,166 | Development fees | | | 464 | | | 421 | | | 987 | | | 659 | Leasing fees | | | 1,099 | | | 1,128 | | | 1,753 | | | 2,248 | Construction management fees | | | 267 | | | 177 | | | 498 | | | 561 | Other service revenue | | | 1,035 | | | 1,260 | | | 2,070 | | | 2,261 | Third-party real estate services revenue, excluding reimbursements | | | 6,850 | | | 8,102 | | | 13,234 | | | 15,884 | Third-party real estate services expenses, excluding reimbursements | | | 5,397 | | | 9,126 | | | 12,633 | | | 21,262 | Net third-party real estate services, excluding reimbursements | | $ | 1,453 | | $ | (1,024) | | $ | 601 | | $ | (5,378) |
The following is a reconciliation of revenue at our share to total revenue per the statements of operations: | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | | 2025 | | 2024 | X | 2025 | | 2024 | | | | | (In thousands) | Total property revenue at our share | | $ | 110,468 | | $ | 115,959 | | $ | 219,184 | | $ | 235,844 | Third-party real estate services revenue, excluding reimbursements, at our share | | | 6,850 | | | 8,102 | | | 13,234 | | | 15,884 | Reimbursement revenue (1) | | | 7,775 | | | 8,955 | | | 16,049 | | | 18,636 | Our share of revenue attributable to unconsolidated real estate ventures | | | (2,151) | | | (1,954) | | | (4,257) | | | (6,520) | Real estate venture partner’s share of revenue attributable to consolidated real estate ventures | | | 508 | | | — | | | 508 | | | — | Other property revenue | | | 1,354 | | | 1,908 | | | 3,089 | | | 3,311 | Other adjustments (2) | | | 1,675 | | | 2,350 | | | (642) | | | 13,349 | Total revenue per statements of operations | | $ | 126,479 | | $ | 135,320 | | $ | 247,165 | | $ | 280,504 |
| (1) | Represents reimbursements of expenses incurred by us on behalf of third parties, including allocated payroll costs and amounts paid to third-party contractors for construction management projects |
| (2) | Adjustment to include deferred rent, above/below market lease amortization, commercial lease termination revenue and lease incentive amortization. |
The following is the reconciliation of NOI at our share to loss before income tax (expense) benefit: | | | | | | | | | | | | | | | Three Months Ended June 30, | | Six Months Ended June 30, | | | 2025 | | 2024 | X | 2025 | | 2024 | | | | (In thousands) | NOI at our share | | $ | 65,633 | | $ | 69,253 | | $ | 130,918 | | $ | 143,083 | Net third-party real estate services, excluding reimbursements, at our share | | | 1,453 | | | (1,024) | | | 601 | | | (5,378) | Add: | | | | | | | | | | | | | Income (loss) from unconsolidated real estate ventures, net | | | 1,091 | | | (226) | | | 499 | | | 749 | Interest and other income, net | | | 698 | | | 3,432 | | | 1,223 | | | 5,532 | Gain on the sale of real estate, net | | | 41,832 | | | 89 | | | 42,369 | | | 286 | Less: | | | | | | | | | | | | | Depreciation and amortization expense | | | 47,560 | | | 51,306 | | | 95,147 | | | 108,161 | General and administrative expense: corporate and other | | | 16,720 | | | 17,001 | | | 32,277 | | | 31,974 | Transaction and other costs | | | 2,846 | | | 824 | | | 4,757 | | | 2,338 | Interest expense | | | 35,571 | | | 31,973 | | | 70,771 | | | 62,133 | (Gain) loss on the extinguishment of debt, net | | | (2,234) | | | — | | | 2,402 | | | — | Impairment loss | | | 31,813 | | | 1,025 | | | 40,296 | | | 18,236 | Adjustments: | | | | | | | | | | | | | Our share of net third-party real estate services attributable to real estate ventures | | | (210) | | | (229) | | | (515) | | | (334) | NOI attributable to unconsolidated real estate ventures at our share | | | (1,287) | | | (1,168) | | | (2,277) | | | (4,215) | Real estate venture partner’s share of NOI attributable to consolidated real estate ventures | | | 272 | | | — | | | 272 | | | — | Non-cash rent adjustments (1) | | | (71) | | | 2,509 | | | (2,510) | | | 3,939 | Other adjustments (2) | | | (399) | | | (3,324) | | | (2,092) | | | 2,705 | Total adjustments | | | (1,695) | | | (2,212) | | | (7,122) | | | 2,095 | Loss before income tax (expense) benefit | | $ | (23,264) | | $ | (32,817) | | $ | (77,162) | | $ | (76,475) |
| (1) | Adjustment to include deferred rent, above/below market lease amortization and lease incentive amortization. |
| (2) | Adjustment to include payments associated with assumed lease liabilities related to operating properties and to exclude commercial lease termination revenue, related party management fees, corporate entity activity and inter-segment activity. |
|