# Comstock Holding Companies, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Comstock Holding Companies, Inc.](/companies/chci.md) (CIK 1299969)
- Form: 10-Q
- Filed: 2025-05-12
- Accepted by EDGAR: May 12, 2025, 09:24 ET
- Period: 2025-03-31
- Accession: 0001299969-25-000032
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1299969/000129996925000032/chci-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1299969/000129996925000032/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $12.6m | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $10.3m | us-gaap:CostOfRevenue |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $535.0k | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | $1.7m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $323.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $1.6m | us-gaap:NetIncomeLoss |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 10,367,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $582.0k | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2025-03-31 | $28.3m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $34.8m | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $62.8m | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $3.3m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2025-03-31 | $9.1m | us-gaap:Liabilities |
| Shareholders' equity | at 2025-03-31 | $53.7m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 21,189 characters.

*The following discussion and analysis should be read in conjunction with our consolidated financial statements, the related notes thereto, and Management’s Discussion and Analysis included in our 2024 Annual Report on Form 10-K, as well as our condensed consolidated financial statements and the related notes thereto included elsewhere in this document. Unless otherwise indicated, references to “2025” refer to the three months ended March 31, 2025 and references to “2024” refer to the three months ended March 31, 2024. The following discussion may contain forward-looking statements that reflect our plans and expectations. Our actual results could differ materially from those anticipated by these forward-looking statements. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law.*

### Overview

We are a leading asset manager, developer, and operator of mixed-use and transit-oriented properties in the Washington, D.C. region. We have become the area’s premier real estate service company by creating extraordinary places, delivering exceptional experiences, and generating excellent results for all stakeholders.

We provide a comprehensive suite of real estate services to our asset-owning clients, including asset management, property management, development and construction management, and more. Our client base is composed primarily of institutional real estate investors, high net worth family offices, financial institutions, and governmental bodies seeking to develop real estate they own through public-private partnerships. We employ a talented staff of real estate professionals that are led by our seasoned management team and are tasked with delivering high-quality services to the premium, strategically located assets in our managed portfolio.

We primarily operate under long-term asset management and property management agreements that provide recurring fee-based revenue streams.

- Our asset management services platform is anchored by a long-term, full-service asset management agreement with Comstock Partners, LC ("CP"), an affiliate entity controlled by our Chief Executive Officer Christopher Clemente, which includes a cost-plus fee structure and covers all of the properties in our Anchor Portfolio (the "2022 AMA" - See Note 13 in the Notes to Consolidated Financial Statements for additional information). We have entered into separate asset management agreements for non-Anchor Portfolio assets. We provide asset management services for market-rate fees to all the commercial and residential assets in our managed portfolio, as well as to certain assets managed by ParkX (see below).
- As a vertically integrated real estate services company, we perform all property management services through three wholly owned subsidiaries: CHCI Commercial, CHCI Residential, and ParkX Management ("ParkX"). All properties in our managed portfolio have entered into property management agreements that provide for market-rate fees related to our services.

Our asset-light, debt-free business model allows us to substantially mitigate risks that are typically associated with real estate development and operation. The fee-based approach we have adopted helps drive consistent top-line growth that, along with our streamlined balance sheet, provides maximum flexibility to explore growth opportunities outside of our core business operations.

We have directly aligned the equity ownership of our Company with the ownership interests of the affiliated assets that we manage in our Anchor Portfolio. This relationship, along with the baseline cost-plus feature and supplemental performance-based revenue opportunities provided by the 2022 AMA, provides us with a stable business platform on which we can (i) produce consistent, positive financial results, (ii) mature and expand our real estate service offerings, (iii) diversify and grow our managed portfolio of assets, both organically and through additional third-party relationships, (iv) pursue strategic investments and complimentary acquisitions, and (v) deliver exceptional value to our shareholders.

We distinguish ourselves from industry peers through an established standard of excellence that extends from who we hire to how we deliver our comprehensive suite of real estate services. We are able to maintain this high standard because *We Show Up -* every day, in person, in a collaborative environment that is structured to deliver on our mission to make a difference for our customers, our stakeholders, and in the communities that we serve.

### Managed Portfolio

The focus of our managed portfolio revolves primarily around high quality, mixed-use real estate properties and developments that are strategically located adjacent to Metro rail stations, providing convenient access to public transportation.

Our Anchor Portfolio (see below for details) includes, or will soon include, millions of square feet of Trophy and Class A office towers, luxury multi-family residential buildings, luxury hotels with branded condominium residences, high-end retail and entertainment options, associated public spaces, and commercial parking garages to serve all the properties. Over the twelve months of fiscal year 2024, Anchor Portfolio assets generated well over $100.0 million of gross revenue for the property owners.

The following table summarizes the operating assets that were included in our managed portfolio as of March 31, 2025:

|  | Type # of Assets Size/Scale % Leased |
| ---: | --- |
|  | Commercial(1) 14 2.3 million sqft. 82% |
|  | Residential 6 1.8 million sqft. / ~1,700 units 96% |
|  | ParkX - Garages 32 ~25,000 spaces |
|  | ParkX - Security & Other(2) 24 ~3,000 hrs/week |
|  | **Total** **76** |
| (1) | Commercial % leased includes Q1 2024 delivery of a new office tower located in The Row at Reston Station. Excluding that impact, the % leased for stabilized assets is 93%. |
| (2) | # of assets total excludes 14 properties where both parking & other services are provided to avoid double-counting. |

In addition, we manage the following assets that are under construction and scheduled for delivery in the next 12 to 24 months:

- 2 commercial assets that represent approximately 266,000 square feet;
- 1 residential asset with 420 units representing approximately 430,000 square feet;
- 1 JW Marriott-branded hotel/condominium with 247 keys and 94 residential units representing a total of approximately 520,000 square feet; and
- 1 commercial parking garage with approximately 1,300 spaces.

Our development pipeline currently includes 5 commercial assets that represent approximately 1.5 million square feet, 5 residential assets with 2,326 units that represent approximately 2.5 million square feet, and 1 hotel that will include 140 keys. At full build out, our managed portfolio of assets is currently projected to total 92 assets representing nearly 10 million square feet.

The following tables provide further details on the assets that comprise our managed portfolio:

*Anchor Portfolio*

|  |  |  |
| --- | --- | --- |
| **Name** | **Asset Status** | **Description** |
| Reston Station | Operating + Under Construction + In Development | Among the largest mixed-use, transit-oriented developments in the Washington, D.C. region, covering nearly 90 acres spanning the Dulles Toll Road and surrounding the Wiehle Reston-East Metro Station and strategically located mid-way between Tysons, Va. and Dulles International Airport on Metro's Silver Line (Fairfax County, Va.) |
| Loudoun Station | Operating + In Development | Loudoun County’s first and only mixed-use, Metro-connected development that is located adjacent to Ashburn Station at the terminus of Metro's Silver Line in Ashburn, Va (Loudoun County, Va.) |

18

*Other Portfolio Assets*

|  |  |  |
| --- | --- | --- |
| **Name** | **Asset Status** | **Description** |
| The Hartford | Operating | Acquired in 2019, this 211,000 square foot mixed-use building is located adjacent to the Clarendon Station on Metro's Orange Line and is the subject of a joint venture with DivcoWest and Comstock Partners, LC. The premier office tower in the Ballston Corridor submarket of Arlington County, Va. |
| BLVD Forty Four | Operating | Acquired in 2021, this 15-story, mixed-use 250-unit, luxury high-rise apartment tower is located adjacent to BLVD Ansel and just 1 block from the Rockville Station on Metro’s Red Line in Rockville, Md (Montgomery County) and is the subject of a joint venture with Comstock Partners, LC. The two-building complex is the premier residential offering in Rockville Town Center. |
| BLVD Ansel | Operating | Acquired in 2022, this 18-story, mixed-use 250-unit, luxury high-rise apartment tower is located adjacent to BLVD Forty Four and just 1 block from the Rockville Station on Metro’s Red Line in Rockville, Md (Montgomery County) and is the subject of a joint venture with Comstock Partners, LC. The two-building complex is the premier residential offering in Rockville Town Center. |
| Comstock 41 | Operating | Acquired in 2023, this 18,150 square foot parcel located at 41 Maryland Ave. in Rockville, Md. and is adjacent to BLVD Forty Four; currently a surface parking lot operated by ParkX Management, LC; provides an excellent opportunity for significant value enhancement through by-right entitlements for approximately 117 residential units |
| Investors X | Operating | Investment in Comstock Investors X, LC that owns legacy homebuilding assets that were monetized through market-rate sales that were completed in March 2024 |
| ParkX | Operating | Commercial parking garages & spaces managed by ParkX Management that are located at/around affiliated managed properties as well as a growing number of third-party locations |

### Comstock 41 - Additional Information

Given its proximity to BLVD Forty Four, we acquired Comstock 41 with the intention to explore rezoning opportunities for this property that would allow for potential relocation of moderately-priced dwelling units from BLVD Forty Four to Comstock 41 as well as utilization of excess parking capacity at both BLVD Forty Four and BLVD Ansel. In conjunction with the acquisition, we entered into a contingent fee agreement with BLVD Forty Four should these pursuits prove successful. (See Note 12 in the Notes to Condensed Consolidated Financial Statements for additional information).

In November 2024, we entered into a definitive purchase agreement for Comstock 41 with SCG Development Holdings, LLC ("SCG") that is contingent upon the successful rezoning of the property to allow for the development of an affordable housing project at the site. Upon closing, we will enter into an operating agreement and a development agreement with SCG, under which we will provide construction management services for the affordable housing project that will be fully financed by SCG. We will also be entitled to provide property management services once the development is ready for occupancy.

### Outlook

Our management team is committed to executing our goal to provide exceptional experiences to those we do business with while maximizing shareholder value. We believe that we are properly staffed for current and foreseeable market conditions and will maintain the ability to manage risk and pursue additional growth as opportunities arise. Our real estate development and asset management operations are primarily focused on the greater Washington, D.C. area, where we believe our decades of experience provides us with the best opportunity to continue developing, managing, and investing in high-quality real estate assets and capitalizing on positive growth trends.

Our growth will continue to be fueled by our Anchor Portfolio, which will continue to generate revenue as development and construction efforts are completed for all the planned Anchor Portfolio assets, allowing us to then lease, stabilize, and arrange permanent financing for each property. Importantly, the long-term asset management agreements covering the properties included in the Anchor Portfolio, when combined with our asset-light and debt-free business model, provide us with visibility to future revenue and earnings growth while mitigating the risk for potential losses.

We aspire 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. Our commitment to this mission drives our ability to expand our managed portfolio of assets, grow revenue, and deliver value to our shareholders.

### Results of Operations

The following tables set forth consolidated statement of operations data for the periods presented (in thousands):

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Revenue | $12,639 | $10,638 |
| Operating costs and expenses: |  |  |
| Cost of revenue | 10,287 | 8,885 |
| Selling, general, and administrative | 535 | 535 |
| Depreciation and amortization | 80 | 68 |
| Total operating costs and expenses | 10,902 | 9,488 |
| Income (loss) from operations | 1,737 | 1,150 |
| Other income (expense): |  |  |
| Interest income | 184 | 141 |
| Gain (loss) on real estate ventures | 9 | (193) |
| Other income (expense), net | (18) | 22 |
| Income (loss) from operations before income tax | 1,912 | 1,120 |
| Provision for (benefit from) income tax | 323 | 210 |
| Net income (loss) | $1,589 | $910 |

### Comparison of the Three Months Ended March 31, 2025 and 2024

#### Revenue

The following table summarizes revenue by line of business (in thousands):

|  | Three Months Ended March 31, 2025 Amount% |  | 2024 Amount% |  | Change $% |  |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Asset management | $7,127 | 56.4% | $6,255 | 58.8% | $872 | 13.9% |
| Property management | 2,958 | 23.4% | 2,745 | 25.8% | 213 | 7.8% |
| Parking management | 2,554 | 20.2% | 1,638 | 15.4% | 916 | 55.9% |
| Total revenue | $12,639 | 100.0% | $10,638 | 100.0% | $2,001 | 18.8% |

Revenue increased 18.8% in 2025. The $2.0 million comparative increase was primarily driven by a $0.8 million, or 40.8%, increase in recurring, fee-based revenue from our property and parking management subsidiaries that was driven by the continued expansion of our managed portfolio. Also contributing to the increase was $0.6 million of additional supplemental leasing fees.

#### Operating costs and expenses

The following table summarizes operating costs and expenses (in thousands):

|  | Three Months Ended March 31, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Cost of revenue | $10,287 | $8,885 | $1,402 | 15.8% |
| Selling, general, and administrative | 535 | 535 | — | 0.0% |
| Depreciation and amortization | 80 | 68 | 12 | 17.6% |
| Total operating costs and expenses | $10,902 | $9,488 | $1,414 | 14.9% |

Operating costs and expenses increased 14.9% in 2025. The $1.4 million increase was primarily due to a $1.3 million net increase in personnel expenses stemming from increased headcount and employee compensation.

#### Other income (expense)

The following table summarizes other income (expense) (in thousands):

|  | Three Months Ended March 31, 2025 | 2024 | Change $% |  |
| --- | ---: | ---: | ---: | ---: |
| Interest income | $184 | $141 | $43 | 30.5% |
| Gain (loss) on real estate ventures | 9 | (193) | 202 | 104.7% |
| Other income (expense), net | (18) | 22 | (40) | (181.8)% |
| Total other income (expense) | $175 | $(30) | $205 | 683.3% |

Other income (expense) changed by $0.2 million in 2025, primarily due to a combined net $0.2 million improvement in the valuations of our equity method investments in real estate ventures.

#### Income taxes

Provision for income tax was $0.3 million in 2025, compared to $0.2 million in 2024. The $0.1 million increase primarily stems from an increase in taxable income and a slightly higher annualized effective tax rate, partially offset by a larger tax benefit from stock compensation shortfall/windfall adjustments.

### Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, we prepare certain financial measures that are not calculated in accordance with generally accepted accounting principles in the United States (“GAAP”), specifically Adjusted EBITDA.

We define Adjusted EBITDA 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 gain (loss) on equity method investments.

We use Adjusted EBITDA to evaluate financial performance, analyze the underlying trends in our business and establish operational goals and forecasts that are used when allocating resources. We expect to compute Adjusted EBITDA consistently using the same methods each period.

We believe Adjusted EBITDA is a useful measure because it permits investors to better understand changes over comparative periods by providing financial results that are unaffected by certain non-cash items that are not considered by management to be indicative of our operational performance.

While we believe that Adjusted EBITDA is useful to investors when evaluating our business, it is not prepared and presented in accordance with GAAP, and therefore should be considered supplemental in nature. Adjusted EBITDA should not be considered in isolation, or as a substitute, for other financial performance measures presented in accordance with GAAP. Adjusted EBITDA may differ from similarly titled measures presented by other companies.

The following table presents a reconciliation of net income (loss), the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted EBITDA (in thousands):

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net income (loss) | $1,589 | $910 |
| Interest income | (184) | (141) |
| Income taxes | 323 | 210 |
| Depreciation and amortization | 80 | 68 |
| Stock-based compensation | 251 | 246 |
| (Gain) loss on real estate ventures | (9) | 193 |
| Adjusted EBITDA | $2,050 | $1,486 |

21

The increase in Adjusted EBITDA for the three months ended March 31, 2025 is primarily driven by significant increases in recurring fee-based property and parking management revenue and supplemental asset management fee revenue.

### Liquidity and Capital Resources

Liquidity is defined as the current amount of readily available cash and the ability to generate adequate amounts of cash to meet the current needs for cash. We assess our liquidity in terms of our cash and cash equivalents on hand and the ability to generate cash to fund our operating activities.

Our principal sources of liquidity as of March 31, 2025 were our cash and cash equivalents of $28.3 million and our $10.0 million of available borrowings on our Credit Facility. (See Note 5 in the Notes to Consolidated Financial Statements for additional information).

Significant factors which could affect future liquidity include the adequacy of available lines of credit, cash flows generated from operating activities, working capital management, and investments.

Our primary capital needs are for working capital obligations and other general corporate purposes, including investments and capital expenditures. Our primary sources of working capital are cash from operations and distributions from investments in real estate ventures. We have historically financed our operations with internally generated funds and, more rarely and only when necessary, borrowings from our Credit Facility. We believe we currently have adequate liquidity and availability of capital to fund our present operations.

### Cash Flows

The following table summarizes our cash flows for the periods indicated (in thousands):

|  | Three Months Ended March 31, 2025 | 2024 | Change |
| --- | ---: | ---: | ---: |
| Net cash provided by (used in) operating activities | $582 | $(2,241) | $2,823 |
| Net cash provided by (used in) investing activities | (515) | 119 | (634) |
| Net cash provided by (used in) financing activities | (531) | (444) | (87) |
| Net increase (decrease) in cash and cash equivalents | $(464) | $(2,566) | $2,102 |

#### Operating Activities

The $2.8 million variance in net operating cash activity was primarily driven by a $2.2 million incremental cash inflow stemming from changes to our net working capital and a $0.6 million increase in net income after adjustments for non-cash items. The net working capital increase was primarily influenced by increased accounts receivable collections.

#### Investing Activities

The $0.6 million variance in net investing cash activity was primarily driven by a $0.6 million decrease in distributions received from investments in real estate ventures.

#### Financing Activities

The $0.1 million increase in net cash used in financing activities was primarily driven by a $0.1 million increase in cash paid for taxes related to the net share settlement of equity awards.

## Controls and procedures

As filed, 2,603 characters.

### Evaluation of Disclosure Controls and Procedures

As of March 31, 2025, management, including the CEO and CFO, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)).

Based on that evaluation, management, including the CEO and CFO, concluded that as of March 31, 2025, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. We maintain a system of internal control over financial reporting that is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States.

### Changes in Internal Control over Financial Reporting

There have been no material changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

### Limitations on the Effectiveness of Controls

In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. We do not expect that our disclosure controls and internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met, therefore internal control over financial reporting may not prevent or detect misstatements.

Filed May 12, 2025.
Source: SEC EDGAR, the filing index for accession 0001299969-25-000032. Last ingested by Listed: Nov 5, 2026, 20:56 ET. No prices; not investment advice.