Buyers of luxury condos in Woodley Park's historic Wardman Tower will share in a $356 million judgment after a D.C. Superior Court found that Bethesda-based JBG Smith and co-defendants misrepresented the condition of units in the building's 2017 conversion from a landmark hotel into 32 high-end residences.
The court entered the judgment July 31, awarding the Wardman Tower Residential Condominium Unit Owners Association $118.7 million in actual damages and ordering the defendants to pay triple that amount under the D.C. Consumer Protection Procedures Act, according to JBG Smith's SEC filing disclosing the ruling. Attorneys' fees have not yet been determined.
The condo association alleged that JBG Smith marketed the units at 2660 Connecticut Ave. NW as "well-built" despite defects in the building's elevators, electrical system and foundation, Bisnow reported. The association filed suit in November 2020. A bench trial began Nov. 10, 2025, and the last witness testified March 5, 2026.
The 32 units originally sold for a combined $115 million, averaging about $3.6 million each. Monthly condo fees range from roughly $3,400 to $6,400.
JBG Smith disputes liability
JBG Smith, which trades on the NYSE as JBGS, said in its Q2 2026 earnings release on Aug. 10 that the Wardman Tower project "was designed and constructed by other parties and was substantially complete prior to our formation." The company was created in 2017 when Vornado Realty Trust spun off its D.C. portfolio and merged it with JBG Cos., the original developer.
JBG Smith said it never held an ownership interest in the project and that its only connection was a subsidiary that provided services under a project management agreement. The company called the court's conclusion that it is liable for that subsidiary's employees' actions unsupported by the facts or applicable law regarding corporate separateness.
The company said it intends to appeal promptly and expects defendants to post bonds to stay enforcement of the judgment while the appeal proceeds. It warned that collateralizing those bonds may impact its liquidity.
In an Aug. 3 statement reported by the Washington Business Journal, JBG Smith said the ruling, if upheld, would discourage future real estate investment in Washington, D.C. and place the city at a competitive disadvantage.
Financial pressure mounts
The verdict forced JBG Smith to delay its originally scheduled Aug. 4 earnings release. The Q2 results, signed by Co-President and CFO M. Moina Banerjee, showed a net loss of $59.2 million for the quarter ended June 30. It was the company's 13th consecutive quarterly loss.
The $356 million judgment dwarfs JBG Smith's cash on hand.
The company held $74.6 million in cash and equivalents as of June 30 and carried $2.48 billion in net debt, a leverage ratio it described as "elevated." JBG Smith has not recorded a liability for the judgment on its books, concluding that a loss is not probable at this time.
The condo association had originally sought $185 million in compensatory damages, which would have trebled to roughly $555 million. The defendants also include four JBG affiliates and an affiliate of New York-based Plaza Construction.
The Wardman Tower, built in 1928 by developer Harry Wardman, once housed residents including Dwight Eisenhower and Lyndon Johnson. JBG Smith has said it intends to appeal promptly, but no timeline has been disclosed.
