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What changed in Comstock Holding Companies, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Comstock Holding Companies, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+136 added−115 removedSource: 10-K (2024-03-21) vs 10-K (2023-03-29)

Top changes in Comstock Holding Companies, Inc.'s 2023 10-K

136 paragraphs added · 115 removed · 91 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

50 edited+21 added−14 removed32 unchanged
Biggest changeOur Portfolio The following table summarizes the 41 assets that are included in our managed portfolio: Type # of Assets Size/Scale % Leased Commercial 13 2.0 million sqft. 87% Residential 6 1.7 million sqft. / ~1,700 units 89% Parking 22 14,000 spaces Total 41 In addition, in our development pipeline we currently have 16 commercial assets that represent approximately 2.3 million square feet, approximately 3,100 residential units that represent approximately 3.2 million square feet, and 2 hotel assets that will include approximately 380 keys.
Biggest changeOur Portfolio The following table summarizes the operating assets that are included in our managed portfolio: Type # of Assets Size/Scale % Leased Commercial 13 2.0 million sqft. 92% Residential 6 1.8 million sqft. / ~1,700 units 97% Parking 30 18,000+ spaces Total 49 In addition, we manage the following assets that are under construction and scheduled for delivery in the next 12 to 24 months: • 3 commercial assets representing approximately 600,000 square feet; • 1 residential asset with 420 units representing approximately 430,000 square feet; • 1 JW Marriott-branded hotel/condominium with 243 keys and 95 residential units representing a total of approximately 520,000 square feet; and • 2 commercial parking garages with approximately 2,900 spaces.
We are currently leasing and managing the four existing office buildings and one existing retail building while finalizing plans for the permitted new development. • Midline District The Midline District, located directly across Wiehle Avenue from the Reston Row District and the Metro Plaza District, has entitlements in place that allow for approximately 1.2 million square feet of new mixed-use development on approximately 8 acres.
We are currently leasing and managing the four existing office buildings and one existing retail building while finalizing plans for the permitted new development. • Midline District (In Development) The Midline District, located directly across Wiehle Avenue from the Reston Row District and the Metro Plaza District, has entitlements in place that allow for approximately 1.2 million square feet of new mixed-use development on approximately 8 acres.
Built in 2003, the 211,000 square foot mixed-use Leadership in Energy and Environmental Design (“LEED”) GOLD building is leased to multiple high-quality tenants. In February 2020, we arranged for DivcoWest, an unaffiliated entity, to purchase a majority ownership stake in the Hartford Building and secured a $87 million loan facility from MetLife.
Built in 2003, the 211,000 square foot mixed-use Leadership in Energy and Environmental Design (“LEED”) GOLD building is leased to multiple high-quality tenants. In February 2020, we arranged for DivcoWest, an unaffiliated entity, to purchase a majority ownership stake in The Hartford and secured a $87 million loan facility from MetLife.
We are currently updating the entitlements secured by the previous owner and plan to commence development and leasing operations after receiving the necessary permits for the new development. • West District The West District currently consists of approximately 11 acres of land located adjacent to the Reston Row District and Metro Plaza District and includes a previously developed 90,000 square foot office building owned by one of our affiliates and an apartment building owned by a third party.
We are currently updating the entitlements secured by the previous owner and plan to commence development and leasing operations after receiving the necessary permits for the new development. • West District (In Development) The West District currently consists of approximately 11 acres of land located adjacent to the Reston Row District and Metro Plaza District and includes a previously developed 90,000 square foot office building owned by one of our affiliates and an apartment building owned by a third party.
It is anticipated that entitlements will allow for five mixed-use buildings in the West District, including the aforementioned existing apartment building. Loudoun Station Loudoun Station, located in Ashburn, Virginia adjacent to Ashburn Station at the terminus of Metro’s Silver Line, is Loudoun County’s first and only Metro-connected development.
It is anticipated that entitlements will allow for five mixed-use buildings in the West District, including the aforementioned existing apartment building. Loudoun Station (Operating + In Development) Loudoun Station, located in Ashburn, Virginia adjacent to Ashburn Station at the terminus of Metro’s Silver Line, is Loudoun County’s first and only Metro-connected development.
The Reston Station transit facility provides Metro commuters with an indoor bus transit depot designed to accommodate upwards of 110 buses per hour, 2,300 commuter parking spaces operated by Fairfax County, and approximately 2,750 additional parking spaces for retail, office, and commuter uses, a Tesla Super Charging Station and numerous other electric vehicle charging stations, secure bicycle parking and storage facilities, substantial storm water management vaults, and state-of-the-art water treatment systems. • Reston Row District The Reston Row District is currently being developed on approximately 9 acres adjacent to the Metro Plaza District.
The Reston Station transit facility provides Metro commuters with an indoor bus transit depot designed to accommodate upwards of 110 buses per hour, 2,300 commuter parking spaces operated by Fairfax County, and approximately 2,750 additional parking spaces for retail, office, and commuter uses, a Tesla Super Charging Station and numerous other electric vehicle charging stations, secure bicycle parking and storage facilities, substantial storm water management vaults, and state-of-the-art water treatment systems. • Reston Row District (Under Construction) The Reston Row District is currently being developed on approximately 9 acres adjacent to the Metro Plaza District.
We maintain an investor relations page on our website where our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments to those reports and other required SEC filings may be accessed free of charge as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Item 1B.
We maintain an investor relations page on our website where our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, amendments to those reports and other required SEC filings may be accessed free of charge as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC.
Recent Developments CES Divestiture On March 31, 2022, we completed the sale of Comstock Environmental Services, LLC ("CES"), a wholly owned subsidiary, to August Mack Environmental, Inc. ("August Mack"). This strategic divestiture was based on the continued growth and future prospects of our asset management business.
Significant Developments CES Divestiture On March 31, 2022, we completed the sale of Comstock Environmental Services, LLC ("CES"), a wholly owned subsidiary, to August Mack Environmental, Inc. ("August Mack"). This strategic divestiture was based on the continued growth and future prospects of our asset management business.
Item 1. Business As used herein, "Comstock", "CHCI", "the Company," "we," "us," "our," and similar terms are referring to Comstock Holding Companies, Inc. and its subsidiaries, unless the context indicates otherwise. Overview Comstock is a leading real estate asset manager and developer of mixed-use and transit-oriented properties in the Washington, D.C. region.
Item 1. Business As used herein, "Comstock", "CHCI", "the Company," "we," "us," "our," and similar terms are referring to Comstock Holding Companies, Inc. and its subsidiaries, unless the context indicates otherwise. Overview Comstock is a leading asset manager, developer, and operator of mixed-use and transit-oriented properties in the Washington, D.C. region.
As part of the transaction, we entered into asset management and property management agreements to manage the property. 3 Table of Contents BLVD Forty Four In October 2021, we entered into a joint venture with CP to acquire a stabilized 15-story, luxury high-rise apartment building in Rockville, Maryland that was built in 2015, which we rebranded as BLVD Forty Four.
As part of the transaction, we entered into asset management and property management agreements to manage the property. BLVD Forty Four In October 2021, we entered into a joint venture with CP to acquire a stabilized 15-story, luxury high-rise apartment building in Rockville, Maryland that was built in 2015, which we rebranded as BLVD Forty Four.
The particular environmental laws that apply to any given real estate asset vary based on several factors, including the environmental conditions related to a particular property and the present and former uses of the property Additional Information Comstock Holding Companies, Inc. was incorporated in Delaware in 2004.
The particular environmental laws that apply to any given real estate asset vary based on several factors, including the environmental conditions related to a particular property and the present and former uses of the property. 7 Table of Contents Additional Information Comstock Holding Companies, Inc. was incorporated in Delaware in 2004.
The Reston Station neighborhood is being developed in phases and is composed of the following five districts: • Metro Plaza District The Metro Plaza District is located adjacent to Wiehle Reston-East Metro Station and contains approximately 1.4 million square feet of mixed-use development, highlighted by three Trophy-Class office buildings and BLVD Reston, a luxury residential tower with 448 units.
The Reston Station neighborhood is being developed in phases and is composed of the following five districts: 2 Table of Contents • Metro Plaza District (Operating) The Metro Plaza District is located adjacent to Wiehle Reston-East Metro Station and contains approximately 1.4 million square feet of mixed-use development, highlighted by three Trophy-Class office buildings and BLVD Reston, a luxury residential tower with 448 units.
We have registered our trademarks and routinely take steps, and 6 Table of Contents occasionally take legal action, to protect against brand infringement from third parties. Mr.
We have registered our trademarks and routinely take steps, and occasionally take legal action, to protect against brand infringement from third parties. Mr.
(See Notes 10 and 14 in the Notes to Consolidated Financial Statements for additional information). Our Services Our experienced team of commercial real estate professionals provides a full range of real estate services related to the acquisition, development, and operation of real estate assets.
(See Notes 10 and 14 in the Notes to Consolidated Financial Statements for additional information). Our Services Our experienced team of professionals provides a comprehensive suite of services and solutions related to the acquisition, development, and operation of real estate assets.
Accordingly, we have reflected CES as a discontinued operation in our consolidated financial statements for all periods presented, and unless otherwise noted, all amounts and disclosures relate solely to our continuing operations. (See Note 3 in the Notes to Consolidated Financial Statements for additional information).
Accordingly, we have reflected CES as a discontinued operation in our consolidated financial statements for all periods presented, and unless otherwise noted, all amounts and disclosures relate solely to our continuing operations.
As of December 31, 2022, the residual cash flow primarily relates to anticipated proceeds from the sale of rezoned residential lots and returns of cash securing outstanding letters of credit and cash collateral posted for land development bonds covering work performed by subsidiaries owned by Investors X.
("Investors X"), an unconsolidated variable interest entity that owns Comstock’s residual homebuilding operations. As of December 31, 2022, the residual cash flow primarily relates to anticipated proceeds from the sale of rezoned residential lots and returns of cash securing outstanding letters of credit and cash collateral posted for land development bonds covering work performed by subsidiaries owned by Investors X.
Herndon Station Herndon Station will include up to approximately 340,000 square feet of residential, retail and entertainment spaces, including a performing arts center, and an approximately 700-space commercial parking garage in the historic downtown portion of the Town of Herndon in western Fairfax County, Virginia.
At full build, the Loudoun Station development will cover nearly 50 acres. 3 Table of Contents Herndon Station (In Development) Herndon Station will include up to approximately 340,000 square feet of residential, retail and entertainment spaces, including a performing arts center, and an approximately 700-space commercial parking garage in the historic downtown portion of the Town of Herndon in western Fairfax County, Virginia.
The cash will be released to CHCI as bond release work associated with these projects is completed. The Hartford Building In December 2019, we entered into a joint venture with CP to acquire a stabilized Class-A office building immediately adjacent to Clarendon Station on Metro’s Orange Line in Arlington County, Virginia’s premier transit-oriented office market, the Rosslyn-Ballston Corridor.
The Hartford In December 2019, we entered into a joint venture with CP to acquire The Hartford Building ("The Hartford"), a stabilized Class-A office building immediately adjacent to Clarendon Station on Metro’s Orange Line in Arlington County, Virginia’s premier transit-oriented office market, the Rosslyn-Ballston Corridor.
It is also home to a 1,500-space Metro commuter parking garage that is the subject of a public-private partnership between a Comstock affiliate and Loudoun County. At full build, the Loudoun Station development will cover nearly 50 acres.
It is also home to a 1,500-space Metro commuter parking garage that is the subject of a public-private partnership between a Comstock affiliate and Loudoun County.
Our employees have access to a comprehensive suite of benefits, including, but not limited to: medical, dental, vision, and life insurance options; flexible and health savings accounts; 401k plan matching; and professional development reimbursement. We offer numerous wellness initiatives and training opportunities, including diversity training and a broad suite of e-learning courses.
Our employees have access to a comprehensive suite of benefits, including, but not limited to, medical, dental, vision, and life insurance options; flexible and health savings accounts; 401k plan matching; and professional development reimbursement.
Our knowledge and long track record of developing and managing first-in-class properties across the region positions Comstock as an attractive partner for government entities looking to improve infrastructure and enhance their surrounding communities.
Our proven track record of developing and managing best-in-class properties across the region has positioned us as an attractive partner for additional government entities looking to improve infrastructure and enhance their surrounding communities.
The following are highlights from our 2022 ESG Roadmap, the full version of which can be found in the “Corporate Responsibility” section of our website: Environmental We believe that environmentally sound business practices are critical to the long-term success of our business and the communities in which we operate.
The following are highlights from our 2023 ESG Report, the full version of which can be found on our website: www.Comstock.com/Corporate-Responsibility . Environmental We believe that environmentally sound business practices are critical to the long-term success of our business and the communities in which we operate.
These sub-markets, which include the Dulles Corridor and the Rosslyn-Ballston Corridor in Northern Virginia and the I-270 Technology and Life Science Corridor in Montgomery County, Maryland, are experiencing increased demand resulting from a flight to quality, which we believe will continue to drive commercial tenants’ demand for the type of developments and amenity-rich buildings in our managed portfolio.
These sub-markets, which include the Dulles Corridor and the Rosslyn-Ballston Corridor in Northern Virginia and the I-270 Technology and Life Science Corridor in Montgomery County, Maryland, are currently experiencing a "flight to quality" that is driving demand for the type of premium developments and amenity-rich buildings that compose our managed portfolio.
Other Portfolio Assets Investors X On April 30, 2019, we entered into a Master Transfer agreement with CPRES, that provided for priority distribution of residual cash flow from its Class B membership interest in Comstock Investors X, L.C. ("Investors X"), an unconsolidated variable interest entity that owns Comstock’s residual homebuilding operations.
Other Portfolio Assets The following summarizes additional operating assets that are currently in our managed portfolio: Investors X On April 30, 2019, we entered into a Master Transfer agreement with CPRES, that provided for priority distribution of residual cash flow from its Class B membership interest in Comstock Investors X, L.C.
Series C Preferred Stock Redemption and 2022 Asset Management Agreement On June 13, 2022, we completed two separate significant transactions to further deleverage our balance sheet and enhance our long-term revenue outlook and growth potential.
(See Note 3 in the Notes to Consolidated Financial Statements for additional information). 1 Table of Contents Series C Preferred Stock Redemption and 2022 Asset Management Agreement On June 13, 2022, we completed two separate significant transactions to further deleverage our balance sheet and enhance our long-term revenue outlook and growth potential.
All 41 properties included in our managed portfolio have entered into property management agreements with our operational subsidiaries that provide for market-rate fees related to our services, including 10 commercial parking garages owned by unaffiliated parties and managed by ParkX.
All properties included in our managed portfolio have entered into property management agreements with our three wholly owned operational subsidiaries that provide for market-rate fees related to our services.
We had no material publicly reportable information security incidents in the fiscal year ended December 31, 2022 . Competition The real estate asset management and services industry is highly competitive. We compete with other businesses in the asset management and real estate-related services businesses on the basis of price, location, experience, service and reputation.
Competition The real estate asset management and services industry is highly competitive. We compete with other businesses in the asset management and real estate-related services businesses on the basis of price, location, experience, service and reputation.
We continuously strive to diversify our workforce, provide equal access to opportunities to our people, and promote a working environment based on mutual trust, confidence, and respect.
We promote collaboration, support, and innovation, providing all our employees the opportunity to achieve their professional and wellness goals. We continuously strive to diversify our workforce, provide equal access to opportunities to our people, and promote a working environment based on mutual trust, confidence, and respect.
We provide a broad suite of asset management, property management, development and construction management, and other real estate services to our asset-owning clients, composed primarily of institutional real estate investors, high net worth family offices, and governmental bodies with surplus real estate holdings.
We provide a broad suite of asset management, property management, development and construction management, and other real estate-related services to our asset-owning clients, composed primarily of institutional real estate investors, high net worth family offices, financial institutions, and governmental bodies seeking to enhance their surrounding communities by developing real estate they own through public-private partnerships.
Supporting and fostering these initiatives is instrumental in making our communities better places to live, work, and play while simultaneously bolstering asset value, reducing risk, and positively impacting all stakeholders.
We believe that companies developing real estate have a responsibility to maximize the positive impacts while taking steps to minimize negative impacts. Supporting and fostering these initiatives is instrumental in making our communities better places to live, work, and play while simultaneously bolstering asset value, reducing risk, and positively impacting all stakeholders.
Our fee-based, asset-light, and substantially debt-free business model allows us to mitigate many of the risks that are typically associated with real estate development.
We operate a fee-based, asset-light, and substantially debt-free business model that allows us to substantially mitigate risks that are typically associated with real estate development and operation. 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.
Located at the Wiehle-Reston East station on Metro’s Silver Line, the Reston Station neighborhood spans the Dulles Toll Road and covers approximately 80 acres.
Anchor Portfolio Reston Station Reston Station is one of the largest mixed-use, transit-oriented developments in the mid-Atlantic region. Located at the Wiehle-Reston East station on Metro’s Silver Line, the Reston Station neighborhood spans the Dulles Toll Road and covers approximately 90 acres.
In addition, recent changes to the comprehensive land use plans of Fairfax County and Loudoun County that encourage high-density and mixed-use development proximate to the Silver Line Metro Stations may further result in compelling growth opportunities. • Actively growing our supplemental real estate services and exploring investment opportunities We provide a variety of fee-based real estate services, such as capital markets, brokerage and title insurance.
In addition, recent changes to the comprehensive land use plans of Fairfax County and Loudoun County that encourage high-density and mixed-use development proximate to Metro's Silver Line stations may further enhance our potential growth opportunities.
Marriott International has entered into a franchise agreement with a Comstock affiliate concerning the development and operation of Virginia's first JW Marriott Hotel and Condominium residential tower, containing approximately 250 hotel rooms, 100 JW Marriott-branded condominium residences, and 25,000 square feet of meeting space. 2 Table of Contents • Commerce District The Commerce District is located on approximately 16 acres adjacent to Wiehle Reston-East Metro Station, directly across the Dulles Toll Road from the Metro Plaza District.
This newest phase of the Reston Station development has entitlements in place allowing for approximately 1.5 million square feet of mixed-use development and will include two Trophy-Class office buildings, a residential building with 420 multifamily units, over 100,000 square feet of retail, and Virginia's first JW Marriott Hotel and Condominium tower, which will have 243 hotel rooms, 95 JW Marriott-branded condominium residences, and approximately 25,000 square feet of meeting space. • Commerce District (In Development) The Commerce District is located on approximately 16 acres adjacent to Wiehle Reston-East Metro Station, directly across the Dulles Toll Road from the Metro Plaza District.
In early 2018, we transitioned our business strategy from the prior focus on the development and sale of residential homes to our current fee-based services model that concentrates on asset management of commercial and mixed-use real estate, primarily in the greater Washington, D.C. region.
Parking Our wholly owned subsidiary ParkX currently manages a total of 30 commercial parking garages and spaces, including 13 commercial parking garages owned by unaffiliated parties. 4 Table of Contents Our Business Strategy In early 2018, we transitioned away from the development and sale of residential homes to our current business model, which primarily focuses on driving recurring fee-based revenue streams from the asset and property management services we provide for commercial and mixed-use real estate properties in the greater Washington, D.C. region.
In exercising this obligation, our Board and its individual committees perform several specific functions, including risk assessment, review and oversight. While management is responsible for the day-to-day management of risk, our Board retains oversight of risk management for our company, assisting management by providing guidance on strategic risks, financial risks, and operational risks.
The core responsibility of our Board is to exercise its fiduciary duty to act in the best interests of our Company and our stockholders. In exercising this obligation, our Board and its individual committees perform several specific functions, including risk assessment, review and oversight.
We have established corporate governance guidelines and policies that promote Company values, including a code of conduct as well as a code of ethics. Our information security team deploys an array of cybersecurity capabilities to protect our various business systems and data. We continually invest in protecting against, monitoring, and mitigating risks across the enterprise.
Our information security team deploys an array of cybersecurity capabilities to protect our various business systems and data. We continually invest in protecting against, monitoring, and mitigating risks across the enterprise. We had no material publicly reportable information security incidents in the fiscal year ended December 31, 2023 .
In recognition of the positive impacts resulting from Reston Station’s design, the development was awarded the designation of Best Workplaces for Commuters in 2020 and 2021 by the Best Workplaces for Commuters Organization created by the National Center for Transit Research at the Center for Urban Transportation Research. 5 Table of Contents Social (Human Capital) We strive to create extraordinary places and provide exceptional experiences in places people live, work, and play.
In recognition of the positive impacts resulting from Reston Station’s design, the development has been awarded the designation of Best Workplaces for Commuters each year since 2020 by the Best Workplaces for Commuters Organization, coordinated by the National Center for Transit Research at the Center for Urban Transportation Research.
We recognize the vital importance of community engagement in achieving this goal, which is why philanthropic partnerships have always been a key focus. We host a variety of community events in the public spaces we develop, aimed at creating rich and meaningful experiences.
Social (Human Capital) We strive to create extraordinary places and provide exceptional experiences in places where people live, work, and play. We recognize the vital importance of community engagement in achieving this goal, which is why philanthropic partnerships have always been a key focus.
We encourage all employees to participate in charitable efforts in the community by providing paid leave to volunteer and numerous charitable contribution matching opportunities. A key to our success is our ability to attract and retain a talented workforce that understands the numerous benefits of working in-office rather than remotely.
A key to our success is our ability to attract and retain a talented workforce that understands the numerous benefits of working in-office rather than remotely. We employ a diverse, multi-generational staff that consisted of 172 full-time and 28 part-time employees as of December 31, 2023.
Since 1985, we have acquired, developed, operated, and sold millions of square feet of residential, commercial, and mixed-use properties.
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. Since 1985, we have acquired, developed, operated, and sold millions of square feet of residential, commercial, and mixed-use properties.
We support local organizations through charitable events, including Boys & Girls Club of Greater Washington, Habitat for Humanity, St. Jude Children’s Research Hospital, multiple youth sports organizations and local schools, and others. We partner with Cornerstones, Reston’s leading non-profit dedicated to helping underserved populations, to purchase winter coats for children and contribute meals to those in need.
We host a variety of community events in the public spaces we develop, aimed at creating rich and meaningful experiences. We support local organizations through charitable events, including Boys & Girls Club of Greater Washington, Habitat for Humanity, St. Jude Children’s Research Hospital, multiple youth sports organizations and local schools, and others.
We believe the continued growth and investment of these large technology companies will continue to benefit Northern Virginia’s employment market, further driving demand for the assets we manage and the communities we are developing. • Leveraging our expertise to secure public-private partnership development opportunities We have worked closely with our affiliates to secure public-private partnerships with multiple local governments (including Fairfax County, Loudoun County, and the Town of Herndon, Virginia) to develop and manage large-scale mixed-use, transit-oriented developments.
The expansion and continued investment of these large technology companies will benefit Northern Virginia’s employment market, further driving increased demand for the assets we manage and the mixed-use communities we are developing. • Leveraging our growth platform and industry expertise to secure additional development and investment opportunities Our stable growth platform and streamlined balance sheet provide us with insulation from significant downturns in the commercial real estate industry.
Governance Our employees, managers and officers conduct our business under the direction of our CEO and the oversight of our Board of Directors (the “Board”) to enhance our long-term value for our stockholders. The core responsibility of our Board is to exercise its fiduciary duty to act in the best interests of our Company and our stockholders.
We offer numerous wellness initiatives and training opportunities, including diversity training and a broad suite of e-learning courses. 6 Table of Contents Governance Our employees, managers and officers conduct our business under the direction of our CEO and the oversight of our Board of Directors (the “Board”) to enhance our long-term value for our stockholders.
We recognize that development of real estate can have significant impact, positive or negative, for the surrounding community, the region, and the environment that we all share. We believe that companies developing real estate have a responsibility to maximize the positive impacts while taking steps to minimize negative impacts.
To learn more about Comstock's culture, please visit www.Comstock.com/WeShowUp . Our Values We are committed to pursuing environmental sustainability, social responsibility, and robust governance practices across all our operations. We recognize that development of real estate can have significant impact, positive or negative, for the surrounding community, the region, and the environment that we all share.
Our asset management services platform is anchored by the 2022 AMA, a long-term full-service asset management agreement with a Comstock affiliate that extends through 2035 and covers most of the properties we currently manage, including two of the largest transit-oriented, mixed-use developments in the Washington, D.C. area: Reston Station and Loudoun Station (see below for details). 1 Table of Contents As a vertically integrated real estate services company, we self-perform all property management activity through three wholly owned operational subsidiaries: CHCI Commercial Management, LC (“CHCI Commercial”); CHCI Residential Management, LC (“CHCI Residential”); and ParkX Management, LC (“ParkX”).
Our asset management services platform is anchored by a long-term full-service asset management agreement with a Comstock affiliate that extends through 2035 and covers all of the properties in our Anchor Portfolio (the "2022 AMA" - see below for additional details).
We believe that our extensive experience managing a large-scale, diverse portfolio of stabilized assets and assets in development provides us with the knowledge and tools required to execute our unique business strategy, which is primarily focused on: • Properties that generate stable, recurring cash flows We primarily operate under long-term asset management agreements that provide a highly visible and reliable source of revenue and position us to grow as our Anchor Portfolio and other assets under management expand.
Our decades of experience and in-depth industry knowledge provide us with the necessary foundation to successfully deliver on our unique business strategy, which is centered around the following strategic areas of focus: • Generation of stable, recurring revenue and cash flows We primarily operate under long-term asset management and property management agreements that provide recurring fee-based revenue streams, including the 2022 AMA and its cost-plus fee structure foundation that covers all the assets we manage in our Anchor Portfolio.
We benefit from our market-leading position in Northern Virginia's Dulles Corridor, one of the nation’s fastest growing real estate markets that is undergoing an urban transformation thanks to the recently completed construction of a Metro commuter rail connecting Dulles International Airport and the surrounding areas to Washington, D.C. and beyond.
We maintain a market-leading position in Northern Virginia's Dulles Corridor, which is undergoing an urban transformation as a result of the creation and expansion of Metro's Silver Line, which connects Loudoun County and Dulles International Airport to Reston, Tysons, Washington, D.C., and suburban Maryland.
This shift took us from an approach that was capital-intensive and required significant on-balance sheet land inventory to one that is asset-light and debt-free, thereby substantially reducing the risk typically associated with the development and operation of real estate assets.
This significant shift took us from a high risk, capital-intensive approach to one that is asset-light and debt-free, providing us with a stronger balance sheet that allows for greater flexibility when it comes to exploring additional opportunities to grow our business.
We also provide residential, retail and parking property management services for the property in exchange for market rate fees.
We also provide residential, retail and parking property management services for the property in exchange for market rate fees. Comstock 41 In December 2023, we completed the acquisition of an 18,150 square foot land parcel located at 41 Maryland Avenue in Rockville, Maryland (“Comstock 41”) through a wholly owned subsidiary for $1.5 million.
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Our primary focus is the continued growth of our managed portfolio; however, the fundamental strength of our balance sheet permits us to also explore strategic investment opportunities, typically in the form of a minority capital co-investment in select stabilized assets that complement our existing portfolio.
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Our industry expertise and commitment to excellence enable us to consistently deliver best-in-class services across the diverse assets in our managed portfolio.
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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.
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We specialize in supporting the seamless integration of residential, commercial, and retail offerings into vibrant mixed-use communities, exemplified by Reston Station and Loudoun Station, two assets in our Anchor Portfolio that are among the region's largest and most prominent mixed-use, transit-oriented developments.
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At full build out, our managed portfolio of assets will total 57 properties representing nearly 10 million square feet. Anchor Portfolio Reston Station Reston Station is one of the largest mixed-use, transit-oriented developments in the mid-Atlantic region.
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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.
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This newest phase of the Reston Station development has entitlements in place allowing for approximately 1.5 million square feet of mixed-use development, including two Trophy-Class office buildings, more than 500 multifamily units, over 100,000 square feet of retail, and hotel uses.
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As a vertically integrated real estate services company, we perform all property management activity through three wholly owned operational subsidiaries: CHCI Commercial Management, LC (“CHCI Commercial”); CHCI Residential Management, LC (“CHCI Residential”); and ParkX Management, LC (“ParkX”).
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Our Business Strategy Comstock has been active in the Washington, D.C. metropolitan area since 1985, having operated, developed, and acquired, and sold millions of square feet of real estate assets, including but not limited to, office buildings, residential developments, parking garages, and retail centers. We have also participated in multiple public-private partnership developments that have included large-scale public infrastructure improvements.
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This relationship, along with the 2022 AMA that includes a baseline cost-plus feature and supplemental performance-based revenue opportunities, provide us with a stable, streamlined 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.
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Our Anchor Portfolio provides consistent revenue pursuant to the cost-plus fee structure foundation of the 2022 AMA, also providing multiple stable sources for performance-based incentive fees that may further drive incremental top-line growth.
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We distinguish ourselves from industry peers through an established standard of excellence that extends from who we hire to how we deliver our broad suite of real estate services.
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This key aspect of our business model has enabled us to generate positive financial results and earnings in every quarter since transforming to our current asset-light operating platform in 2019. • Mixed-use and transit-oriented assets in high-growth, high-potential areas We focus on select transitioning “sub-urban” markets in the greater Washington D.C. metropolitan area.
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We are able 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.
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We believe residential tenant demand will follow a similar trend, increasing the population willing to pay premium rents for high-quality residential units in neighborhoods that are transit-oriented.
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Our asset management services platform is anchored by the 2022 AMA, which covers all the assets in our Anchor Portfolio. In addition, we have entered into separate asset management agreements for non-Anchor Portfolio assets.
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A significant portion of our portfolio of managed assets are located in these sought-after areas that also feature strong projected long-term economic growth, supported by attractive demographic attributes and superior transportation infrastructure. • Capitalizing on significant growth trends that drive market demand in Northern Virginia Significant growth trends in demand for cybersecurity and other technology services in the government sector, as well as in the private sector, have generated substantial growth and attracted large technology companies, such as Microsoft, 4 Table of Contents Google, and Amazon to the Dulles Corridor and the Rosslyn-Ballston Corridor in Northern Virginia.
Added
Our development pipeline currently includes 5 commercial assets that represent approximately 1.5 million square feet, 6 residential assets with 2,599 units that represent approximately 2.8 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 68 assets that represent nearly 10 million square feet.
Removed
These areas are home to significant data infrastructure, capable of serving the growing needs of technology companies and the federal government. Specifically, with its vast network of high-capacity data centers, the Dulles Corridor in Loudoun County reportedly hosts upwards of 70% of the world’s internet traffic and has become known as the “Internet Capital of the World”.
Added
The cash will be released to CHCI as bond release work associated with these projects is completed.
Removed
Providing these supplemental services serves as a catalyst for identifying additional strategic real estate investment opportunities. We seek out opportunities that can provide appropriate risk-adjusted returns and are suitable for co-investment, potentially with institutional investors that may lack the local expertise or operational infrastructure necessary to identify, acquire, and manage such assets.
Added
This investment property sits adjacent to BLVD Ansel and BLVD Forty Four and is currently a surface parking lot. Comstock 41 has existing entitlements for at least 117 dwelling units and approximately 11,000 square feet of retail space.
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Our acquisition strategy is currently focused on value-add, core, and core-plus opportunities, as well as other opportunistic asset acquisitions. Our Values – Environment, Social and Governance ("ESG") We are committed to pursuing environmental sustainability, social responsibility, and robust governance practices across all our operations.
Added
We have demonstrated a proven track record of successfully managing a large-scale, diverse portfolio that contains both stabilized and in-development assets.
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We employ a diverse, multi-generational staff that consisted of 152 full-time and 18 part-time employees as of December 31, 2022. We promote collaboration, support, and innovation, providing all our employees the opportunity to achieve their professional and wellness goals.
Added
This approach, along with additional opportunities to recognize supplemental and performance-based revenue based on provisions included in the 2022 AMA and our other management agreements, provide us with stability and visibility that help drive consistent, predictable top-line growth and positive operating cash flows. • Addition of high-quality, mixed-use and transit-oriented assets in high-growth, high-potential areas The assets in our managed portfolio are primarily composed of high-quality, trophy-class assets located in transitioning “sub-urban” markets found within the greater Washington D.C. region.
Removed
We have continued to enforce certain protocols and procedures related to the COVID-19 pandemic as needed to ensure the safety, health, and comfort of our employees the communities that we manage. and we remain in compliance with all federal and local ordinances and guidelines.
Added
We anticipate the heightened demand for top-tier real estate will persist across both commercial and residential markets, driven by an increasing number of tenants who are willing to pay higher rents for top-quality assets located in mixed-use, transit-oriented communities with access to premium amenities.
Added
In Northern Virginia specifically, growing demand for technology and cybersecurity services has driven the proliferation of major corporations opening operational headquarters in the region, including Amazon, Microsoft, CoStar, Nestle, Raytheon Technologies, Boeing, and others to the region.
Added
As a result, we are well positioned to pursue, and potentially capitalize on, market disruptions that produce new attractively valued assets that would complement our existing managed portfolio. We typically engage a joint-venture partner that will provide the majority of capital needed for our investments in real estate ventures.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties On November 1, 2020, we executed a new lease to relocate our corporate headquarters to new office space located at 1900 Reston Metro Plaza, Reston, Virginia for a ten-year term from an affiliate partially owned by our Chief Executive Officer.
Biggest changeItem 2. Properties On November 1, 2020, we executed a lease to relocate our corporate headquarters to office space located at 1900 Reston Metro Plaza in Reston, Virginia for a ten-year term.
In January 2022, we executed a lease for a remote monitoring center for ParkX, our parking management subsidiary, and in November 2022 we executed a lease to expand our corporate headquarters, bringing the total amount of leased space to 25,630 square feet as of December 31, 2022.
In January 2022, we executed a lease for a remote monitoring center for ParkX, our parking management subsidiary, and in November 2022 we executed a lease to expand our corporate headquarters, bringing the total amount of leased space to 25,630 square feet as of December 31, 2023.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe believe that we have obtained adequate insurance coverage, rights to indemnification, or where appropriate, have established reserves in connection with these legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 7 Table of Contents PART II
Biggest changeWe believe that we have obtained adequate insurance coverage, rights to indemnification, or where appropriate, have established reserves in connection with these legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 9 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our Class A common stock is traded on The Nasdaq Capital Market under the symbol “CHCI”. As of December 31, 2022, there were 54 registered holders of record of our Class A common stock and 1 holder of our Class B common stock.
Biggest changeItem 5. Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Our Class A common stock is traded on The Nasdaq Capital Market under the symbol “CHCI”. As of December 31, 2023, there were 37 registered holders of record of our Class A common stock and 1 holder of our Class B common stock.
We have never declared or paid any dividends on our common stock. We do not anticipate paying any dividends on our common stock during the foreseeable future but intend to retain any earnings for future growth of our business.
We have never declared or paid any dividends on our common stock. We do not anticipate paying any dividends on our common stock during the foreseeable future and intend to retain any earnings for future growth of our business.
We did not repurchase any securities under our share repurchase program or issue any unregistered securities during the year ended December 31, 2022. Item 6. [RESERVED] Not Applicable. 8 Table of Contents
We did not repurchase any securities under our share repurchase program or issue any unregistered securities during the year ended December 31, 2023. Item 6. [RESERVED] Not Applicable. 10 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOur real estate asset and property management operations are primarily focused on the greater Washington, D.C. area, where we have operated, developed, and acquired high-quality assets for nearly 40 years, providing us with the leverage needed to capitalize on the region's numerous positive growth trends. 10 Table of Contents Results of Operations The following tables set forth consolidated statement of operations data for the periods presented (in thousands): Year Ended December 31, 2022 2021 Revenue $ 39,313 $ 31,093 Operating costs and expenses: Cost of revenue 29,371 24,649 Selling, general, and administrative 1,784 1,285 Depreciation and amortization 206 94 Total operating costs and expenses 31,361 26,028 Income (loss) from operations 7,952 5,065 Other income (expense): Interest expense (222) (235) Gain (loss) on real estate ventures 121 (14) Other income 2 6 Income (loss) from continuing operations before income tax 7,853 4,822 Provision for (benefit from) income tax 125 (11,217) Net income (loss) from continuing operations 7,728 16,039 Net income (loss) from discontinued operations, net of tax (381) (2,430) Net income (loss) $ 7,347 $ 13,609 Impact of Series C preferred stock redemption 2,046 — Net income (loss) attributable to common stockholders $ 9,393 $ 13,609 Comparison of the Years Ended December 31, 2022 and 2021 Revenue The following table summarizes revenue by line of business (in thousands): Year Ended December 31, 2022 2021 Change Amount % Amount % $ % Asset management $ 26,680 67.9 % $ 22,539 72.5 % $ 4,141 18.4 % Property management 9,398 23.9 % 6,939 22.3 % 2,459 35.4 % Parking management 3,235 8.2 % 1,615 5.2 % 1,620 100.3 % Total revenue $ 39,313 100.0 % $ 31,093 100.0 % $ 8,220 26.4 % Revenue increased 26.4% in 2022.
Biggest changeAlthough the long-term impact of the COVID-19 pandemic on the greater Washington, D.C. area real estate market remains uncertain, we believe that our Anchor Portfolio is well positioned to withstand any future potential negative impacts. 13 Table of Contents Results of Operations The following tables set forth consolidated statement of operations data for the periods presented (in thousands): Year Ended December 31, 2023 2022 Revenue $ 44,721 $ 39,313 Operating costs and expenses: Cost of revenue 33,040 29,371 Selling, general, and administrative 2,305 1,784 Depreciation and amortization 212 206 Total operating costs and expenses 35,557 31,361 Income (loss) from operations 9,164 7,952 Other income (expense): Interest income (expense), net 96 (222) Gain (loss) on real estate ventures (1,187) 121 Other income (expense), net 79 2 Income (loss) from continuing operations before income tax 8,152 7,853 Provision for (benefit from) income tax 368 125 Net income (loss) from continuing operations 7,784 7,728 Net income (loss) from discontinued operations, net of tax — (381) Net income (loss) $ 7,784 $ 7,347 Impact of Series C preferred stock redemption — 2,046 Net income (loss) attributable to common stockholders $ 7,784 $ 9,393 Comparison of the Years Ended December 31, 2023 and 2022 Revenue The following table summarizes revenue by line of business (in thousands): Year Ended December 31, 2023 2022 Change Amount % Amount % $ % Asset management $ 29,278 65.5 % $ 26,680 67.9 % $ 2,598 9.7 % Property management 10,604 23.7 % 9,398 23.9 % 1,206 12.8 % Parking management 4,839 10.8 % 3,235 8.2 % 1,604 49.6 % Total revenue $ 44,721 100.0 % $ 39,313 100.0 % $ 5,408 13.8 % Revenue increased 13.8% in 2023.
For additional information, see Note 7 in the Notes to Consolidated Financial Statements. We believe we currently have adequate liquidity and availability of capital to fund our present operations and meet our commitments on our existing debt.
(See Note 7 in the Notes to Consolidated Financial Statements for additional information). We believe we currently have adequate liquidity and availability of capital to fund our present operations and meet our commitments on our existing debt.
The 2022 AMA increased the base fees we collect, expanded the services that qualify for additional supplemental fees, extended the term through 2035, and most notably introduced a mark-to-market incentive fee based 9 Table of Contents on the imputed profit of Anchor Portfolio assets, generally as each is stabilized and as further specified in the agreement.
The 2022 AMA increased the base fees we collect, expanded the services that qualify for additional supplemental fees, extended the term through 2035, and most notably introduced a mark-to-market incentive fee based on the imputed profit of Anchor Portfolio assets, generally as each is stabilized and as further specified in the agreement.
All references to “2022” and “2021” are referring to the twelve-month period ended December 31 for each of those respective fiscal years. This section of this Annual Report on Form 10-K generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021. The following discussion may contain forward-looking statements that reflect our plans and expectations.
All references to “2023” and “2022” are referring to the twelve-month period ended December 31 for each of those respective fiscal years. This section of this Annual Report on Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022. The following discussion may contain forward-looking statements that reflect our plans and expectations.
Our principal sources of liquidity as of December 31, 2022 were our cash and cash equivalents of $11.7 million and our $10.0 million of available borrowings on our Credit Facility. 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 principal sources of liquidity as of December 31, 2023, were our cash and cash equivalents of $18.8 million and our $10.0 million of available borrowings on our Credit Facility. 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.
For the years ended December 31, 2022 and 2021, we recorded net decreases to our deferred tax valuation allowance of $1.4 million and $13.0 million, respectively. . Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not applicable. 15 Table of Contents
For the years ended December 31, 2023 and 2022, we recorded net decreases to our deferred tax valuation allowance of $1.5 million and $1.1 million, respectively. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Not applicable. 18 Table of Contents
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 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 mark-to-market valuation gain (loss) on equity method investments in real estate ventures.
Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.
Income taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis.
Financing Activities Net cash used in financing activities increased by $9.8 million in 2022, primarily driven a $4.0 million cash payment made in connection with the early redemption of our Series C preferred stock and a $5.5 million payment made to satisfy the outstanding balance of our credit facility.
Financing Activities The $9.7 million variance in net financing cash activity was primarily driven by a $4.0 million cash payment made in 2022 related to the early redemption of Series C Preferred Stock and a $5.5 million payment made in 2022 to satisfy the outstanding balance of our credit facility.
The following table presents a reconciliation of net income (loss) from continuing operations, the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted EBITDA (in thousands): Year Ended December 31, 2022 2021 Net income (loss) from continuing operations $ 7,728 $ 16,039 Interest expense 222 235 Income taxes 125 (11,217) Depreciation and amortization 206 94 Stock-based compensation 834 633 (Gain) loss on real estate ventures (121) 14 Adjusted EBITDA $ 8,994 $ 5,798 Seasonality and Quarterly Fluctuations None.
The following table presents a reconciliation of net income (loss) from continuing operations, the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted EBITDA (in thousands): Year Ended December 31, 2023 2022 Net income (loss) from continuing operations $ 7,784 $ 7,728 Interest (income) expense, net (96) 222 Income taxes 368 125 Depreciation and amortization 212 206 Stock-based compensation 968 834 (Gain) loss on real estate ventures 1,187 (121) Adjusted EBITDA $ 10,423 $ 8,994 Seasonality and Quarterly Fluctuations None.
Those judgments are normally based on knowledge and experience with regard to past and current events and assumptions about future events. Certain accounting policies, methods and estimates are particularly sensitive because of their significance to the consolidated financial statements and because of the possibility that future events affecting them may differ from management’s current judgments.
Certain accounting policies, methods and estimates are particularly sensitive because of their significance to the consolidated financial statements and because of the possibility that future events affecting them may differ from management’s current judgments.
As of December 31, 2022, we had $131.7 million of net operating loss (“NOL") carryforwards. 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.
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 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. 12 Table of Contents 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.
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.
Off-Balance Sheet Arrangements From time to time, we may have off-balance-sheet unconsolidated investments in real estate ventures and other unconsolidated arrangements with varying structures. For a full discussion of our current investments in real estate ventures, see Note 5 in the Notes to Consolidated Financial Statements.
Off-Balance Sheet Arrangements From time to time, we may have off-balance-sheet unconsolidated investments in real estate ventures and other unconsolidated arrangements with varying structures. (See Note 5 in the Notes to Consolidated Financial Statements for additional information). Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP.
As a result, we have only recognized Incentive Fees at or near each asset's respective triggering event (as detailed in the 2022 AMA) when imputed profit could be reasonably calculated and relied upon to not materially change.
As a result, we only recognize Incentive Fees at or near each asset's respective triggering event (as detailed in the 2022 AMA) when imputed profit could be reasonably calculated and relied upon to not materially change. For the years ended December 31, 2023 and 2022, we recognized revenue from Incentive Fees of $4.8 million and $3.9 million, respectively.
Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2022 2021 Continuing operations Net cash provided by (used in) operating activities $ 8,397 $ 8,688 Net cash provided by (used in) investing activities (2,099) 1,276 Net cash provided by (used in) financing activities (10,068) (227) Total net increase (decrease) in cash - continuing operations (3,770) 9,737 Discontinued operations, net (331) (946) Net increase (decrease) in cash and cash equivalents $ (4,101) $ 8,791 13 Table of Contents Operating Activities Net cash provided by operating activities decreased by $0.3 million in 2022, primarily driven by a $3.6 million incremental cash outflow stemming from changes to our net working capital, including increased accounts receivable, partially offset by a $3.3 million increase in net income from continuing operations after adjustments for non-cash items that contributed to the comparative increase.
Cash Flows The following table summarizes our cash flows for the periods indicated (in thousands): Year Ended December 31, 2023 2022 Change ($) Continuing operations Net cash provided by (used in) operating activities $ 9,003 $ 8,397 $ 606 Net cash provided by (used in) investing activities (1,547) (2,099) 552 Net cash provided by (used in) financing activities (390) (10,068) 9,678 Total net increase (decrease) in cash - continuing operations 7,066 (3,770) 10,836 Discontinued operations, net — (331) 331 Net increase (decrease) in cash and cash equivalents $ 7,066 $ (4,101) $ 11,167 16 Table of Contents Operating Activities The $0.6 million variance in net operating cash activity was primarily driven by a $1.9 million increase in net income from continuing operations after adjustments for non-cash items, partially offset by a $1.3 million incremental cash outflow stemming from changes to our net working capital that was primarily due to decreased accrued personnel costs.
Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP. Accounting policies, methods and estimates are an integral part of the preparation of consolidated financial statements in accordance with U.S. GAAP and, in part, are based upon management’s current judgments.
Accounting policies, methods and estimates are an integral part of the preparation of consolidated financial statements in accordance with U.S. GAAP and, in part, are based upon management’s current judgments. Those judgments are normally based on knowledge and experience with regard to past and current events and assumptions about future events.
Accordingly, we have reflected CES as a discontinued operation in our consolidated financial statements for all periods presented, and unless otherwise noted, all amounts and disclosures relate solely to our continuing operations.
("August Mack"). This strategic divestiture was based on the continued growth and future prospects of our asset management business. Accordingly, we have reflected CES as a discontinued operation in our consolidated financial statements for all periods presented, and unless otherwise noted, all amounts and disclosures relate solely to our continuing operations.
Investing Activities Net cash provided by (used in) investing activities decreased by $3.4 million in 2022, primarily driven by primarily driven by a $3.3 million decrease in distributions from real estate investments, a $0.4 million increase in fixed and intangible asset purchases, and a $0.7 million decrease in investments in real estate ventures, partially offset by $1.0 million in proceeds received from the CES divestiture.
Investing Activities The $0.6 million variance net investing cash activity was primarily driven by a $1.1 million decrease in investments in real estate ventures and a $0.4 million decrease in fixed asset purchases, partially offset by $1.0 million in proceeds received from the CES divestiture that was finalized in the first quarter of fiscal year 2022.
We have determined we are not the primary beneficiary for any of our investments in real estate ventures and therefore do not include them in our consolidated balance sheets as of December 31, 2022 and 2021.
We have determined we are not the primary beneficiary in these investments, and therefore do not consolidate them into our balance sheets as of December 31, 2023 and 2022 or into our statements of operations for the years ended December 31, 2023 and 2022.
We determine primary beneficiary status of a VIE at the time of investment and perform ongoing 14 Table of Contents reassessments to evaluate whether changes in the entity’s capital structure or changes in the nature of its involvement with the entity result in a change to the VIE designation or a change to its consolidation conclusion.
We determine primary beneficiary status of a VIE at the time of investment and perform ongoing reassessments to evaluate whether changes in the entity’s capital structure or changes in the nature of its involvement with the entity result in a change to the VIE designation or a change to its consolidation conclusion. 17 Table of Contents We have minority voting and economic interests in our investments in real estate ventures that we have elected to report at fair value and do not control the activities that most significantly impact their economic performance.
We provide a broad suite of asset management, property management, development and construction management, and other real estate services to our asset-owning clients, composed primarily of institutional real estate investors, high net worth family offices, and governmental bodies with surplus real estate holdings.
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.
All 41 properties included in our managed portfolio have entered into property management agreements with our operational subsidiaries that provide for market-rate fees related to our services, including 10 commercial parking garages owned by unaffiliated parties and managed by ParkX.
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 included in our managed portfolio have entered into property management agreements with our operational subsidiaries that provide for market-rate fees related to our services.
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.
(See Notes 10 and 14 in the Notes to Consolidated Financial Statements for additional information). Outlook 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 fee-based, asset-light, and substantially debt-free business model allows us to mitigate many of the risks that are typically associated with real estate development.
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, predictable top-line growth and provides us with a streamlined balance sheet that grants us maximum flexibility to explore potential growth opportunities outside of our core business operations.
Our asset management services platform is anchored by a long-term full-service asset management agreement with a Comstock affiliate (the "2022 AMA" - see below for additional details) that extends through 2035 and covers most of the properties we currently manage, including two of the largest transit-oriented, mixed-use developments in the Washington, D.C. area: Reston Station and Loudoun Station.
Our asset management services platform is anchored by a long-term, full-service asset management agreement with an affiliate that includes a cost-plus fee structure and covers all of the properties in our Anchor Portfolio (the "2022 AMA" - see below for additional details).
Other income (expense) The following table summarizes other income (expense) (in thousands): Year Ended December 31, Change 2022 2021 $ % Interest expense $ (222) $ (235) $ 13 (5.5) % Gain (loss) on real estate ventures 121 (14) 135 N/M Other income 2 6 (4) (66.7) % Total other income (expense) $ (99) $ (243) $ 144 (59.3) % Other income (expense) changed by $0.1 million in 2022, primarily driven by primarily driven by higher mark-to-market valuations of the fixed-rate debt associated with our equity method investments in the current period, as well as gains on the performance of our title insurance joint venture with Superior Title Services, Inc., driven by higher volume as compared to the prior period.
Other income (expense) The following table summarizes other income (expense) (in thousands): Year Ended December 31, Change 2023 2022 $ % Interest income (expense), net $ 96 $ (222) $ 318 (143.2) % Gain (loss) on real estate ventures (1,187) 121 (1,308) N/M Other income (expense), net 79 2 77 N/M Total other income (expense) $ (1,012) $ (99) $ (913) N/M Other income (expense) changed by $(0.9) million in 2023, primarily driven by primarily driven by a $1.3 million net decrease in mark-to-market valuations of equity method investments in real estate ventures, primarily due to the increased interest rate environment.
The $5.3 million comparative increase was primarily due to a $5.4 million increase in personnel expenses stemming from increased headcount and employee compensation increases (including bonus expense), partially offset by a $0.9 million decrease in co-broker expenses stemming from the 2021 Reston Station refinancing transaction.
The $4.2 million comparative increase was primarily due to a $2.6 million increase in personnel expenses from increased headcount and employee compensation.
Also contributing to the increase was the growth and improved performance of our managed portfolio, which included additional properties in 2022 and produced $2.2 million of additional asset management fees, $0.6 million of additional property management fees, a $1.3 million increase in recorded leasing fees, and a $2.8 million increase in reimbursable staffing charges.
The $5.4 million comparative increase was primarily driven by the continued expansion of our managed portfolio, which included 8 additional assets in 2023. Recurring asset management and property management fee-based revenue increased by a combined $3.0 million, or 12.6%, and reimbursable staffing charges increased $2.1 million, or 25.3%.
Recent Developments CES Divestiture On March 31, 2022, we completed the sale of Comstock Environmental Services, LLC ("CES"), a wholly owned subsidiary, to August Mack Environmental, Inc. ("August Mack"). This strategic divestiture was based on the continued growth and future prospects of our asset management business.
We intend to maintain a limited financial role in any future development activities that may occur at this site and plan to only offer fee-based development and asset management services to any affiliate or suitable third-party financial sponsor of any potential future developments. 12 Table of Contents Significant Developments CES Divestiture On March 31, 2022, we completed the sale of Comstock Environmental Services, LLC ("CES"), a wholly owned subsidiary, to August Mack Environmental, Inc.
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.
Adjusted EBITDA may differ from similarly titled measures presented by other companies.
These increases were partially offset by a $3.1 million decrease in loan origination fees, primarily related to the 2021 refinancing of the Reston Station office portfolio. 11 Table of Contents Operating costs and expenses The following table summarizes operating costs and expenses (in thousands): Year Ended December 31, Change 2022 2021 $ % Cost of revenue $ 29,371 $ 24,649 $ 4,722 19.2 % Selling, general, and administrative 1,784 1,285 499 38.8 % Depreciation and amortization 206 94 112 119.1 % Total operating costs and expenses $ 31,361 $ 26,028 $ 5,333 20.5 % Operating costs and expenses increased 20.5% in 2022.
Incentive fee revenue also increased 22.7% to $4.8 million, however that increase was offset by a $0.8 million decrease in supplemental leasing, acquisition, and development fee revenue due to higher transactional volume in 2022. 14 Table of Contents Operating costs and expenses The following table summarizes operating costs and expenses (in thousands): Year Ended December 31, Change 2023 2022 $ % Cost of revenue $ 33,040 $ 29,371 $ 3,669 12.5 % Selling, general, and administrative 2,305 1,784 521 29.2 % Depreciation and amortization 212 206 6 2.9 % Total operating costs and expenses $ 35,557 $ 31,361 $ 4,196 13.4 % Operating costs and expenses increased 13.4% in 2023.
Overview Comstock is a leading real estate asset manager and developer of mixed-use and transit-oriented properties in the Washington, D.C. region. Since 1985, we have acquired, developed, operated, and sold millions of square feet of residential, commercial, and mixed-use properties.
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.
For the year ended December 31, 2022, we recognized revenue from Incentive Fees of $3.9 million, stemming from an operating asset triggering event on October 1, 2022 that is the first in series of annual operating asset triggering events that are scheduled each October 1 through 2024. Income taxes Income taxes are accounted for under the asset and liability method.
These operating asset triggering events are part of a series of annual operating asset triggering events that began on October 1, 2022, and are scheduled each October 1 through 2024.
Outlook Our management team is committed to executing on the Company's mission to create extraordinary places for people to live, work, and play. We believe that we are properly staffed for current market conditions and have the ability to manage risk while pursuing opportunities for additional growth as opportunities arise.
We believe that we are properly staffed for current market conditions and feel that we will maintain the ability to manage risk and pursue additional growth across each of our operational subsidiaries. Given current market conditions, we feel more opportunities to acquire distressed properties at below market prices may arise.
Removed
We benefit from our market-leading position in Northern Virginia's Dulles Corridor, one of the nation’s fastest growing real estate markets that is undergoing an urban transformation thanks to the recently completed construction of a Metro commuter rail connecting Dulles International Airport and the surrounding areas to Washington, D.C. and beyond.
Added
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.
Removed
Our primary focus is the continued growth of our managed portfolio; however, the fundamental strength of our balance sheet permits us to also explore strategic investment opportunities, typically in the form of a minority capital co-investment in select stabilized assets that complement our existing portfolio.
Added
We distinguish ourselves from industry peers through an established standard of excellence that extends from who we hire to how we deliver our broad suite of real estate services.
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As a vertically integrated real estate services company, we self-perform all property management activity through three wholly owned operational subsidiaries: CHCI Commercial Management, LC (“CHCI Commercial”); CHCI Residential Management, LC (“CHCI Residential”); and ParkX Management, LC (“ParkX”).
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We are able 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.
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(See Notes 10 and 14 in the Notes to Consolidated Financial Statements for additional information) COVID-19 Update The impact of the COVID-19 pandemic has caused uncertainty and business disruptions to both the real estate market in the greater Washington, D.C. region and the U.S. economy as a whole.
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Managed Portfolio The following table summarizes the operating assets that are included in our managed portfolio: Type # of Assets Size/Scale % Leased Commercial 13 2.0 million sqft. 92% Residential 6 1.8 million sqft. / ~1,700 units 97% Parking 30 1 18,000+ spaces Total 49 1 Total includes 13 commercial parking garages owned by unaffiliated parties and managed by ParkX.
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While we have not experienced a significant impact on our business resulting from COVID-19 to date, the extent to which it will impact our financial results will depend on future developments, which cannot be predicted. We continue to monitor the ongoing impact of the COVID-19 pandemic, including the potential effects of notable variants of the COVID-19 virus.
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In addition, we manage the following assets that are under construction and scheduled for delivery in the next 12 to 24 months: • 3 commercial assets that represent approximately 600,000 square feet; • 1 residential asset with 420 units representing approximately 430,000 square feet; 11 Table of Contents • 1 JW Marriott-branded hotel/condominium with 243 keys and 95 residential units representing a total of approximately 520,000 square feet; and • 2 commercial parking garages with approximately 2,900 spaces.
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The health and safety of our employees, customers, and the communities in which we operate remains our top priority. Although the long-term impact of the COVID-19 pandemic remains uncertain, we believe that our business model is well-positioned to withstand any future potential negative impacts from the pandemic.
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Our development pipeline currently includes 5 commercial assets that represent approximately 1.5 million square feet, 6 residential assets with 2,599 units that represent approximately 2.8 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 68 assets representing nearly 10 million square feet.
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The $8.2 million comparative increase was primarily driven by a $3.9 million increase in incentive fees, which were earned pursuant to the terms of the 2022 AMA.
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The following tables provide further details on our managed portfolio: Anchor Portfolio Name 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 fully integrated mixed-use, transit-oriented development located at the terminus station, Metro's Ashburn Station on the Silver Line in Ashburn, Va (Loudoun County, Va.) Herndon Station In Development Located in the Historic Downtown District of the Town of Herndon, Va., this planned mixed-use development is subject of a public-private partnership with the Town of Herndon Other Portfolio Assets Name 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.
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Income taxes Provision for from income tax was $0.1 million in 2022, compared to a tax benefit of $11.2 million in 2021.
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The premier office tower in the Ballston Corridor submarket of Arlington County, Va.
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The significant benefit in 2021 was primarily due to the partial $11.3 million release of a deferred tax asset valuation allowance, which was derived from our ability to consistently deliver positive net income from continuing operations and our expectation that we will continue to generate future taxable income.
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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.
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We have minority voting and economic interests in our investments in real estate ventures and do not control the activities that most significantly impact the economic performance.
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The two-building complex is the premier residential offering in Rockville Town Center.
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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.
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The two-building complex is the premier residential offering in Rockville Town Center.
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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 are currently being monetized through market-rate sales expected to be completed in 2024 Parking Operating Commercial parking garages & spaces managed by ParkX Management, LC located at affiliated properties and third-party locations Comstock 41 - Additional Information Given its proximity to BLVD 44, we plan to explore rezoning opportunities at Comstock 41 that would allow for potential relocation of moderately-priced dwelling units from BLVD 44 to Comstock 41 as well as utilization of excess parking capacity at both BLVD 44 and BLVD Ansel.
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In conjunction with the acquisition, we entered into a contingent fee agreement with BLVD 44 should these pursuits prove successful (See Note 14 in the Notes to Consolidated Financial Statements for additional information).
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Our commitment to this mission drives our ability to expand our managed portfolio of assets, grow revenue, and deliver value to our shareholders.
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Our real estate development and asset management operations are primarily located in 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.
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We plan to pursue further expansion of our wholly owned property management subsidiaries to increase recurring, fee-based revenue streams as we continue to develop additional relationships with new customers that require the expert real estate asset management, development management, construction management and other services that we routinely provide.
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We remain well-positioned to capitalize on such opportunities due to our asset-light, debt-free business model that has strengthened our balance sheet and provided us with the flexibility to pursue unique growth opportunities across all facets of our vertically integrated operating platform. COVID-19 Update On May 11, 2023, the U.S.
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Department of Health and Human Services declared an end to the public health emergency for COVID-19. While we never experienced any significant impacts on our business resulting from COVID-19, future regional or global health emergencies may have a negative impact on our results of operations and financial condition.
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Also driving the variance were a $0.4 million increase in rent expense stemming from the corporate headquarters lease expansion that was executed in 2022, a $0.3 million increase in regulatory and compliance costs, and a $0.2 million increase in IT expenditures.
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The decrease was partially offset by a $0.3 million increase in interest income (expense) that stemmed from interest earned on money market sweep accounts in 2023 and the full pay down of our outstanding debt in 2022. Income taxes Provision for income tax was $0.4 million in 2023, compared to 0.1 million in 2022.
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The $0.3 million increase was primarily due to higher pre-tax book income given that valuation allowance releases and the net total of book-to-tax adjustments were comparatively flat. As of December 31, 2023, we had $122.8 million of net operating loss (“NOL") carryforwards.
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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 15 Table of Contents in isolation, or as a substitute for other financial performance measures presented in accordance with GAAP.
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Subsequent to these scheduled triggering events, and in accordance with terms pursuant to the 2022 AMA, incentive fees may be recognized on assets currently under development upon the achievement of future triggering events tied to various metrics that indicate stabilization, such as occupancy and leasing rates. (See Note 14 in the Notes to Consolidated Financial Statements for additional information).

Other CHCI 10-K year-over-year comparisons