COMSTOCK HOLDING COMPANIES, INC. Annual Report on Form 10-K For the Fiscal Year Ended December 31, 2024
Comstock Holding Companies, Inc. filed its annual report on Form 10-K for the fiscal year ended December 31, 2024. The company reported total revenues of $[insert amount], a decrease of [insert percentage] compared to the previous year. Net income was $[insert amount], a decrease of [insert percentage] compared to the previous year. The company’s total assets increased to $[insert amount], while total liabilities decreased to $[insert amount]. The company’s cash and cash equivalents decreased to $[insert amount], and its accounts receivable increased to $[insert amount]. The company’s stock is listed on the Nasdaq Capital Market under the ticker symbol CHCI, and as of February 28, 2025, there were 9,826,066 shares of Class A common stock and 220,250 shares of Class B common stock outstanding.
Overview
Comstock Holding Companies, Inc. (CHCI) is a leading asset manager, developer, and operator of mixed-use and transit-oriented properties in the Washington, D.C. region. The company provides a comprehensive suite of real estate services to its asset-owning clients, including asset management, property management, development and construction management. CHCI’s client base is composed primarily of institutional real estate investors, high net worth family offices, financial institutions, and governmental bodies.
CHCI operates under long-term asset management and property management agreements that provide recurring fee-based revenue streams. The company’s asset management services platform is anchored by a long-term, full-service asset management agreement with an affiliated entity, Comstock Partners, LC (CP). CHCI also performs all property management services through three wholly owned subsidiaries: CHCI Commercial, CHCI Residential, and ParkX Management.
CHCI’s managed portfolio focuses primarily on high-quality, mixed-use real estate properties and developments that are strategically located adjacent to Metro rail stations. The Anchor Portfolio includes millions of square feet of office towers, luxury multi-family residential buildings, luxury hotels, retail, and commercial parking garages. In 2024, the Anchor Portfolio assets generated over $100 million in gross revenue for the property owners.
Financial Performance
CHCI’s revenue increased 14.7% in 2024 to $51.3 million, driven by a 101.4% increase in recurring, fee-based revenue from property and parking management services, as well as $3.1 million in additional supplemental fees from leasing activity and refinancing. This was partially offset by a $3.3 million decrease in incentive fees.
Operating costs and expenses increased 15.3% in 2024 to $41.0 million, primarily due to a $3.6 million increase in personnel expenses from increased headcount and employee compensation, as well as a $1.9 million increase in reimbursable/billable expenses.
Other income (expense) improved by $1.5 million in 2024, primarily due to a $0.9 million improvement in mark-to-market valuation impacts of equity method investments in real estate ventures and a $0.6 million increase in interest income.
CHCI recorded a $3.8 million income tax benefit in 2024, compared to a $0.4 million provision in 2023, primarily driven by a $6.5 million valuation allowance release. As of December 31, 2024, the company had $111.1 million in net operating loss (NOL) carryforwards.
Non-GAAP Financial Measures
CHCI uses Adjusted EBITDA, a non-GAAP financial measure, to evaluate its financial performance. Adjusted EBITDA is defined as net income (loss) from continuing operations, excluding the impact of interest expense (net of interest income), income taxes, depreciation and amortization, stock-based compensation, and mark-to-market valuation gain (loss) on equity method investments in real estate ventures.
Adjusted EBITDA increased to $11.6 million in 2024, up from $10.4 million in 2023, primarily driven by significant increases in recurring fee-based property and parking management revenue and supplemental asset management fee revenue.
Liquidity and Capital Resources
As of December 31, 2024, CHCI’s principal sources of liquidity were $28.8 million in cash and cash equivalents and $10.0 million in available borrowings on its Credit Facility. The company’s primary capital needs are for working capital obligations and other general corporate purposes, including investments and capital expenditures.
CHCI has historically financed its operations with internally generated funds and, when necessary, borrowings from its Credit Facility. The company believes it currently has adequate liquidity and availability of capital to fund its present operations.
Managed Portfolio
CHCI’s managed portfolio revolves primarily around high-quality, mixed-use real estate properties and developments that are strategically located adjacent to Metro rail stations. As of December 31, 2024, the portfolio included:
| Type | # of Assets | Size/Scale | % Leased |
|---|---|---|---|
| Commercial | 14 | 2.3 million sq ft | 82% |
| Residential | 6 | 1.8 million sq ft / ~1,700 units | 96% |
| ParkX - Garages | 32 | 22,000+ spaces | N/A |
| ParkX - Security & Other | 20 | ~2,500 hrs/week | N/A |
| Total | 72 | N/A | N/A |
In addition, CHCI manages assets under construction and in the development pipeline, which are expected to add significant scale to the portfolio in the next 12 to 24 months.
The Anchor Portfolio, which includes the Reston Station and Loudoun Station developments, is the primary focus of CHCI’s managed portfolio. These mixed-use, transit-oriented properties are among the largest of their kind in the Washington, D.C. region.
Outlook
CHCI’s management team is committed to executing its goal of providing exceptional experiences to its clients while maximizing shareholder value. The company believes it is properly staffed for current and foreseeable market conditions and will maintain the ability to manage risk and pursue additional growth as opportunities arise.
The company’s growth will continue to be fueled by its Anchor Portfolio, as development and construction efforts are completed, allowing CHCI to lease, stabilize, and arrange permanent financing for each property. The long-term asset management agreements covering the Anchor Portfolio, combined with CHCI’s asset-light and debt-free business model, provide the company with visibility to future revenue and earnings growth while mitigating the risk for potential losses.
CHCI aspires to be among the most admired real estate asset managers, operators, and developers by creating extraordinary places, providing exceptional experiences, and generating excellent results for all stakeholders. The company’s commitment to this mission drives its ability to expand its managed portfolio of assets, grow revenue, and deliver value to its shareholders.
Analysis
CHCI’s financial performance in 2024 was strong, with significant growth in revenue and Adjusted EBITDA. The company’s focus on recurring, fee-based revenue streams from its asset management and property management services has provided a stable and predictable foundation for its business.
The 14.7% increase in revenue was driven by impressive growth in the company’s property and parking management services, as well as supplemental fees from leasing and refinancing activities. This demonstrates CHCI’s ability to effectively manage and grow its managed portfolio of assets.
While operating costs and expenses also increased, the 15.3% rise was primarily due to higher personnel expenses and reimbursable/billable expenses, which are typically associated with the company’s growth. CHCI’s ability to manage these costs while maintaining strong profitability is a testament to its operational efficiency.
The improvement in other income (expense), particularly the $0.9 million gain in mark-to-market valuation of real estate ventures, further bolsters CHCI’s financial performance. The company’s strategic investments and joint ventures appear to be generating positive returns.
CHCI’s strong liquidity position, with $28.8 million in cash and cash equivalents and $10.0 million in available borrowings, provides the company with the financial flexibility to pursue growth opportunities and make strategic investments as they arise. The company’s asset-light, debt-free business model is a key strength, as it allows CHCI to mitigate risks typically associated with real estate development and operation.
The company’s Anchor Portfolio, which includes the Reston Station and Loudoun Station developments, is the primary driver of its growth. These large-scale, mixed-use, transit-oriented properties are well-positioned to capitalize on the continued development and urbanization of the Washington, D.C. region. The long-term asset management agreements covering these assets provide CHCI with visibility into future revenue and earnings growth.
CHCI’s commitment to its mission of creating extraordinary places, providing exceptional experiences, and generating excellent results for all stakeholders is evident in its financial performance and strategic direction. The company’s focus on talent, collaboration, and operational excellence sets it apart from industry peers and positions it for continued success.
Overall, CHCI’s 2024 financial results demonstrate the company’s ability to execute its business strategy and deliver value to its clients and shareholders. The company’s strong liquidity, recurring revenue streams, and strategic asset portfolio provide a solid foundation for future growth and expansion.
