Press release·03/21/2025 13:43:06

Overview of the Company’s Financial Performance

Comstock Holding Companies, Inc. (CHCI) is a leading asset manager, developer, and operator of mixed-use and transit-oriented properties in the Washington, D.C. region. The company had a strong financial performance in 2024, with revenue increasing 14.7% to $51.3 million and net income increasing 87.3% to $14.6 million compared to 2023.

The company’s business model is asset-light and debt-free, allowing it to substantially mitigate risks typically associated with real estate development and operation. CHCI primarily operates under long-term asset management and property management agreements that provide recurring fee-based revenue streams. This approach helps drive consistent top-line growth and provides maximum flexibility to explore growth opportunities.

Revenue and Profit Trends

CHCI’s revenue is generated from three main business lines: asset management, property management, and parking management. In 2024, asset management fees accounted for 61.4% of total revenue, property management fees 22.6%, and parking management fees 16.0%.

The $6.6 million (14.7%) increase in revenue in 2024 was primarily driven by:

• $4.8 million (101.4%) increase in recurring, fee-based revenue from property and parking management services due to the continued expansion of the company’s managed portfolio.
• $3.1 million increase in supplemental fees from leasing activity and refinancing fees.
• $1.8 million increase in fee-based asset management services.
• $3.3 million decrease in incentive fees earned due to a deferred trigger event.

Operating costs and expenses increased 15.3% in 2024, primarily due to a $3.6 million increase in personnel expenses from increased headcount and employee compensation, as well as a $1.9 million increase in reimbursable/billable expenses.

The company recorded a $3.8 million income tax benefit in 2024, compared to a $0.4 million provision in 2023, primarily driven by a $6.5 million valuation allowance release. As of December 31, 2024, CHCI had $111.1 million of net operating loss carryforwards.

Adjusted EBITDA, a Non-GAAP Measure

To provide investors with additional information, CHCI presents Adjusted EBITDA, a non-GAAP financial measure. Adjusted EBITDA is defined as net income (loss) from continuing operations, excluding the impact of interest expense (net of interest income), income taxes, depreciation and amortization, stock-based compensation, and mark-to-market valuation gain (loss) on equity method investments in real estate ventures.

Adjusted EBITDA increased to $11.6 million in 2024, up from $10.4 million in 2023, primarily driven by significant increases in recurring fee-based property and parking management revenue and supplemental asset management fee revenue.

Managed Portfolio

CHCI’s managed portfolio primarily consists of high-quality, mixed-use real estate properties and developments strategically located adjacent to Metro rail stations. As of December 31, 2024, the portfolio included:

Type	# of Assets	Size/Scale	% Leased
Commercial	14	2.3 million sq ft	82%
Residential	6	1.8 million sq ft / ~1,700 units	96%
ParkX - Garages	32	22,000+ spaces	N/A
ParkX - Security & Other	20	~2,500 hrs/week	N/A
Total	72	N/A	N/A

In addition, the company manages assets under construction and in the development pipeline, which are expected to add significant scale to the portfolio in the next 12 to 24 months.

The company’s Anchor Portfolio, which includes the Reston Station and Loudoun Station developments, generated over $100 million in gross revenue for the property owners in 2024.

Strengths and Weaknesses

Strengths:

• Diversified revenue streams from asset management, property management, and parking management services
• Recurring, fee-based revenue model with long-term agreements
• Asset-light, debt-free business model that mitigates risks
• Experienced management team and talented staff of real estate professionals
• Strategic focus on high-quality, transit-oriented properties in the Washington, D.C. region
• Alignment of equity ownership with managed assets through the Anchor Portfolio

Weaknesses:

• Concentration of operations in the Washington, D.C. region, which could expose the company to regional economic fluctuations
• Reliance on the continued growth and development of the Anchor Portfolio assets
• Potential for increased competition in the real estate services industry

Outlook

CHCI’s management team is committed to executing the company’s goal of providing exceptional experiences to its clients while maximizing shareholder value. The company’s growth will continue to be fueled by the Anchor Portfolio, as development and construction efforts are completed, and the properties are leased, stabilized, and financed.

The long-term asset management agreements covering the Anchor Portfolio, combined with CHCI’s asset-light and debt-free business model, provide the company with visibility to future revenue and earnings growth while mitigating the risk of potential losses.

CHCI aspires to be among the most admired real estate asset managers, operators, and developers by creating extraordinary places, providing exceptional experiences, and generating excellent results for all stakeholders. The company’s commitment to this mission drives its ability to expand its managed portfolio of assets, grow revenue, and deliver value to its shareholders.