JBG Smith has postponed the release of its second-quarter earnings after a D.C. court ordered the Bethesda-based REIT, among others, to pay approximately $356M in damages in a lawsuit over its luxury condo building in Woodley Park.
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The company was scheduled to release its earnings after the market closed Tuesday. But on Friday, the D.C. Superior Court ruled in favor of the condominium association of Wardman Tower, which sued JBG Smith in 2020 for alleged construction and design deficiencies associated with its condo redevelopment of the former historic Wardman Tower.
The court last week determined damages in the amount of $118.7M and ordered the defendants to pay triple that amount, JBG Smith said in a Monday press release. The company said it is postponing its earnings results “to allow sufficient time to assess the impact” of the judgment. It said it intends to appeal the judgment and expects to release its financial results on or before Aug. 10.
In 2017, JBG Smith’s predecessor, JBG Cos., transformed the 1920s-era Wardman Tower hotel at 2660 Connecticut Ave. NW into a 32-unit condo building. Units sold for $4M and up.
In its 2020 lawsuit, the condo association claimed that JBG Smith misrepresented the units as “well-built” even though the building allegedly had defects related to its elevators, electrical system, foundation and more, the Washington Business Journal reported, citing court documents. The condo association sued JBG Smith Properties, four JBG affiliates and an affiliate of New York-based Plaza Construction, according to the WBJ.
JBG Smith said in the Monday release that the project “was designed and constructed by other parties and achieved substantial completion prior to our formation.” It also said there are “substantial grounds” to challenge the ruling and the damages award.
The court ruling marks another setback to JBG Smith, which has reported losses for 12 straight quarters, the WBJ reported. The REIT's red ink has been shrinking, from a $59.9M net loss during Q3 2025 to a net loss of $45.5M the following period and a loss of $18.7M in the first quarter.
JBG Smith was formed in 2017 after Vornado spun off its D.C. business and combined it with The JBG Cos.
Construction defect lawsuits have been on the rise in recent years, and so has the size of payouts developers have been ordered to make.
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