UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

ANNUAL REPORT ON FORMAnnual Report on Form 10-K

For the Fiscal Year Ended December 31, 20212022

Some of the matters disclosed in this Annual Report on Form 10-K may include forward-looking statements. Any forward-looking statements are based on current management expectations that involve substantial risks and uncertainties, which could cause actual results to differ materially from the results expressed in, or implied by, these forward-looking statements. These statements do not relate strictly to historical or current facts, and can be identified by the use of words such as “anticipate,” “believe,” “estimate,” “may,” “likely,” “intend,” “expect,” “will,” “should,” “seeks” or other words and terms of similar meaning used in conjunction with a discussion of future operating or financial performance.

The Company acknowledges the importance of communicating future expectations to investors, however there will always remain future events and circumstances that are unable to be accurately predicted or controlled. When considering forward-looking statements, investors should keep in mind the risks and uncertainties that may cause actual results to differ materially from the expectations described, and consequently should place no undue reliance on any of these statements. There are several factors that may affect the accuracy of the forward-looking statements, including, but not limited to: general economic and market conditions, including inflation and interest rate levels; changes in the real estate markets; inherent risks in investment in real estate; the ability to attract and retain clients; the ability to compete in the markets in which the Company operates; regulatory actions; fluctuations in operating results; shortages and increased costs of labor or materials; adverse weather conditions and natural disasters; public health emergencies, including potential risks and uncertainties relating to the coronavirus (COVID-19) pandemic; the ability to raise debt and equity capital and grow operations on a profitable basis; and continuing relationships with affiliates. The factors can apply both directly to the Company orand generally to the real estate industry as a whole.

Forward-looking statements speak only as of the date of this Form 10-K. Except as required under federal securities laws and the rules and regulations of the Securities and Exchange Commission ("SEC"), the Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances arising after the date of this Annual Report on Form 10-K, whether as a result of new information, future events, or otherwise.otherwise, except as required by law.

PART I

ITEMItem 1. BUSINESSBusiness

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.

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 provide a broad rangesuite of asset management, property management, development and construction management, and other real estate services to our customers and partners,asset-owning clients, composed primarily of private and institutional owners, investors in commercial, residential, and mixed-use real estate investors, high net worth family offices, and various governmental bodies seekingwith surplus real estate holdings. Our primary focus is the continued growth of our managed portfolio; however, the fundamental strength of our balance sheet permits us to leverage the potential of public-private partnerships.

We aspire to be among the most admired real estate industry through exemplary conduct, superb systems,asset managers, operators, and an ongoingdevelopers by creating extraordinary places, providing exceptional experiences, and generating excellent results for all stakeholders. Our commitment to excellence that is guided bythis mission drives our vast expertise in all the areas in which we operate.ability to expand our managed portfolio of assets, grow revenue, and deliver value to our shareholders.

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”). 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 Anchor Portfolio is a long-term agreement with an original term of ten years that provides for significant financial payments to Comstock in the case of early terminationservices, including 10 commercial parking garages owned by the asset owner. For further information, see Note 14 in the Notes to Consolidated Financial Statementsunaffiliated parties and managed by ParkX.

In addition, in our development pipeline we currently have 16 commercial assets totalingthat represent approximately 2.22.3 million square feet, 6 multifamily assets totaling 1,636approximately 3,100 residential units and 14 commercial garages with over 11,000 parking spaces. Additionally, we have 18 development pipeline assets consisting ofthat represent approximately 2.03.2 million square feet, of additional planned commercial development, approximately 1,900 multifamily units and 2 hotel assets that will include approximately 460380 keys. Further details on the variousAt full build out, our managed portfolio of assets we manage are as follows:will total 57 properties representing nearly 10 million square feet.

Anchor Portfolio

The Metro Plaza District is structuredlocated adjacent to accommodate up toWiehle Reston-East Metro Station and contains approximately 1.4 million square feet of mixed-use development, spread across five buildings, highlighted by the following properties for which construction has been completed:

The Reston Station Metro Plaza District also includes one of the largest underground commuter parking garages and bus transit facilities in the region. The 1.7 million square foot subterranean garage and transit facility is the subject of a public-private partnership between affiliates of the Companya Comstock affiliate and Fairfax County, Virginia. 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 approximately 1,500parking spaces for retail, office, and commuter uses, operated by a Comstock subsidiary, a Tesla Super Charging Station and numerous other electric vehicle charging stations, numeroussecure bicycle parking and storage facilities, substantial storm water management vaults, and state-of-the-art water treatment systems.

The Reston Row District is currently being developed on approximately 9 acres adjacent to the Metro Plaza District. This newest phase of the Reston Station development has entitlements in place that allowallowing for approximately 1.41.5 million square feet of mixed-use development, including Class-Atwo Trophy-Class office buildings, more than 500 multifamily units, over 100,000 square feet of retail, and hotel uses. The Reston Row District is situated onMarriott 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.

The Commerce District has entitlements in place that allow for approximately 1.4 million square feet of mixed-use development, in addition to four existing Class-A office buildings that include a total of approximately 590,000 square feet. The Commerce District property is situatedlocated on approximately 16 acres located adjacent to the south entrance to the Wiehle Reston-East Metro Station, and lies directly across the Dulles Toll Road from the Metro Plaza DistrictDistrict. It has entitlements in place that allow for approximately 1.5 million square feet of Reston Station andnew mixed-use development surrounding the Reston Station Transit Facility.four existing stabilized Class-A office buildings that represent a total of approximately 590,000 square feet. We are currently leasing and managing the four existing office buildings and one existing retail building while also finalizing plans for the permitted new buildingsdevelopment.

The Midline District, located directly across Wiehle Avenue from the Reston Row District and the Metro Plaza District, has entitlements in place that will include up to 1.4allow for approximately 1.2 million square feet of office, retail, hotelnew mixed-use development on approximately 8 acres. We are currently updating the entitlements secured by the previous owner and residential uses.plan to commence development and leasing operations after receiving the necessary permits for the new development.

The West District at Reston Stationcurrently consists of approximately 311 acres of land located adjacent to the Reston Row District that is owned by our affiliates and approximately 13 surrounding acres of land owned by others. Our portion of the WestMetro Plaza District wasand includes a previously developed by an affiliate with a 90,000 square foot office building owned by one of our affiliates and was entitledan apartment building owned by a third party. In 2022, our affiliate acquired an existing 58,000 square foot office building on an adjacent parcel that is planned for demolition and will be incorporated into the West District's development of an additional residential building of upplans, which are planned to approximately 260,000 square feet. An adjoining parcelcommence after entitlements are secured. It is anticipated that entitlements will allow for five mixed-use buildings in the West District, is owned by an entity not affiliated with Comstock and has been developed with anincluding the aforementioned existing 421-unit residential apartment building. Two additional existing office buildings owned by entities not affiliated with Comstock and a medical facility owned and operated by Kaiser Permanente are also included in the West District.

Other Portfolio Assets

In early 2018, we transitioned our business strategy from being focusedthe 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. This shift took us from an approach that among other things, was capital-intensive and required us to maintain a significant on-balance sheet land inventory to one that is asset-light and debt-free, thereby substantially reducing the risk typically associated with a much lower risk profile.

We believe that our management team’s extensive experience in managing such a large-scale, diverse and large-scale portfolio of developments and stabilized assets and assets in development provides us with the knowledge base necessaryand tools required to distinguishexecute our unique business focus and strategy, which is primarily focused on:

OurWe primarily operate under long-term asset management agreements that provide a highly visible and reliable source of revenue and position us to enhance bottom line resultsgrow as our Anchor Portfolio and other assets under management expand. Our Anchor Portfolio provides a stable,consistent revenue pursuant to the cost-plus fee structure foundation pursuant toof the 2019 AMA.2022 AMA, also providing multiple stable sources for performance-based incentive fees that may further drive incremental top-line growth. This approach enableskey aspect of our business model has enabled us to generate consistent, positive financial results and earnings through the development and management of, and the provision of additional services relatedin every quarter since transforming to our

We are a developer, operator, and asset manager of high quality, mixed-use and transit-oriented development properties with a focus on select transitioning “sub-urban” markets in the greater Washington D.C. metropolitan area. 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 short-term demand resulting from a flight to quality, and perceived safety prompted by the COVID-19 pandemic. These areas also feature strong long-term trends such as economic growth and attractive demographic attributes, as well as superior transportation infrastructure that caters to the preferences of multifamily, office and retail tenants.

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,

Google, and Amazon to the Dulles Corridor and the Rosslyn-Ballston Corridor in Northern Virginia. In 2018, Northern Virginia was selected by Amazon asThese areas are home to significant data infrastructure, capable of serving the location forgrowing needs of technology companies and the federal government. Specifically, with its highly publicized “HQ2” second headquarters. Amazon’s HQ2 has recently begun operations and is reportedly expected to create 25,000 or more new jobs over the next several years as its 5 million square foot complex develops in Arlington County at the eastern endvast network of the Rosslyn-Ballston Corridor. Meanwhile, Amazon Web Services has focused its expansion inhigh-capacity data centers, the Dulles Corridor toin Loudoun County reportedly hosts upwards of 70% of the west, where itworld’s internet traffic and has been increasing its office and data center presence in recent years.become known as the “Internet Capital of the World”. We believe Amazon’s presence in these corridors, along with the continued growth and investment by otherof these large technology companies will continue to benefit Northern Virginia’s employment market, which has experienced market leading job growth infurther driving demand for the Washington, D.C. region.

OurWe have worked closely with our affiliates have been selected byto 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, developments that include transit facilitiestransit-oriented developments. Our knowledge and other publiclong 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 elements through public-private partnerships at a time when local jurisdictions are focused on public-private partnerships as a means of leveraging private sector capabilities to meet public infrastructure development needs.and enhance their surrounding communities. In addition, recent changes to the Comprehensive Land Use Planscomprehensive land use plans of Fairfax County and Loudoun County that encourage high-density and mixed-use development proximate to the new Silver Line Metro Stations in the Dulles Corridor, resultingmay further result in compelling growth opportunities adjacent to the terminus station of Phase I of the Silver Line that opened in 2014 and the terminus station of Phase II of the Silver Line that is scheduled to open in mid-2022.

We provide a variety of fee-based real estate services, such as capital markets, brokerage and title insurance. Providing these supplemental services serves as a catalyst for identifying additional strategic institutional 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. Our acquisition joint venture opportunities.strategy is currently focused on value-add, core, and core-plus opportunities, as well as other opportunistic asset acquisitions.

Environmental

Our transit-oriented developments promote the use of mass transit, ride sharing, and alternate modes of transportation. We continue to expand the availability of electronic vehicle charging stations and bike racks at our properties in hopes of encouragingto promote the reduction of congestion emissions, and our overall carbon footprint. In recognition of the positive impacts resulting from Comstock’s Reston StationStation’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.

Our Chief Executive Officer and Chairman of the Board, Christopher Clemente, has licensed his ownership interest in the “Comstock” brand and trademark to us in perpetuity. We have registered our trademarks and routinely take steps, and

occasionally take legal action, to protect against brand infringement from third parties. Mr. Clemente has retained the right to continue to use the “Comstock” brand and trademark including for real estate development projects in our current or future markets that are unrelated to the Company but, currently, substantially all of Mr. Clemente’s real estate development business is conducted with Comstock, pursuant to the 20192022 AMA.

We are also subject to a variety of local, state, and federal statutes, ordinances, rules and regulations concerning protection of the environment. Some of the laws to which we and our properties are subject to may impose requirements concerning development in waters of the United States, including wetlands, the closure of water supply wells, management of asbestos-containing materials, exposure to radon and similar issues. 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.property

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.

PART II

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 did not repurchase any securities under our share repurchase program or issue any unregistered securities during the year ended December 31, 2021.2022.

As of December 31, 2021,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”). All 41 properties included in our managed portfolio comprised 34 operatinghave 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.

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, including 14 commercial assets totaling approximately 2.2 million square feet, 6 multifamily assets totaling 1,636 units,grow revenue, and 14 commercial garages with over 11,000 parking spaces. Additionally, we have: (i) one commercial asset currently under-construction and scheduled for delivery in 2022 totaling approximately 250,000 square feet that is 100.0% pre-leased; and (ii) 18 development pipeline assets consisting of approximately 2.0 million square feet of additional planned commercial development, approximately 1,900 multifamily units and 2 hotel assets that will include 460 keys.deliver value to our shareholders.

COVID-19 Update

Comparison of the Years Ended December 31, 20212022 and December 31, 20202021

Revenue

Operating costs and expenses increased 31.2%20.5% in 2021.2022. The $6.2$5.3 million comparative increase was primarily due to a $3.9$5.4 million increase in payroll costs, drivenpersonnel expenses stemming from increased headcount and employee compensation increases (including bonus expense), partially offset by the $1.5 million impact of the PPP Loan received in 2020 that reduced the prior year balance. Also contributing to the increase was a $0.9 million increasedecrease in co-broker fees incurred inexpenses stemming from the 2021 due to increased capital markets activity, as well as a $0.5 million increase in rent expense due to a rate increase at our corporate headquarters location.Reston Station refinancing transaction.

Other income (expense) decreased 50.2% in 2021. The $0.2 million comparative decrease was primarily due to achanged by $0.1 million decrease in interest expense as a result2022, primarily driven by primarily driven by higher mark-to-market valuations of replacing a higher interest rate loanthe fixed-rate debt associated with a lower interest credit facility,our equity method investments in the current period, as well as $0.1 million net decrease in lossesgains on equity method investments.the performance of our title insurance joint venture with Superior Title Services, Inc., driven by higher volume as compared to the prior period.

We define Adjusted EBITDA as net income (loss) from continuing operations, excluding the impact of interest expense (net of interest income), income taxes, depreciation and amortization, stock-based compensation, and gain (loss) on equity method investments.

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

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

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

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

Our principal sources of liquidity as of December 31, 20212022 were our cash and cash equivalents of $15.8$11.7 million and our $4.5$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 primary capital needs are for working capital obligations and other general corporate purposes, including investments and capital expenditures. Our primary sources of working capital are cash from operations and distributions from investments in real estate ventures. We have historically financed our operations with internally generated funds and borrowings from our credit facilities. For furtheradditional information, on our debt and credit facilities, 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.

Income taxes

In JuneFor the years ended December 31, 2022 and 2021, based onwe recorded net decreases to our recent financial performance and current forecasts of future operating results, we determined that it was more likely than not that a portion of the deferred tax assets related to our net operating loss ("NOL") carryforwards would be utilized in future periods. As a result, we recorded an $11.3valuation allowance of $1.4 million income tax benefit in the second quarter of 2021 that represented a partial release of our valuation allowance.and $13.0 million, respectively. .

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ GRANT THORNTON LLP

COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity

COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

COMSTOCK HOLDING COMPANIES, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

On June 13, 2022, the continuedCompany completed two separate significant transactions to further deleverage its balance sheet and enhance its long-term revenue outlook and growth and future prospects ofpotential. The first one with CP Real Estate Services, LC (“CPRES”), an entity owned by Christopher Clemente, Comstock’s Chief Executive Officer, redeemed all outstanding Series C preferred stock at a significant discount to carrying value. Secondly, the Company executed a new asset management business. Accordingly, theagreement with Comstock Partners, LC ("CP"), an entity controlled by Mr. Clemente and wholly owned by Mr. Clemente and certain family members, which covers its Anchor Portfolio of assets (the "2022 AMA"). (See Notes 10 and 14 for additional information).

The Company has reflected CES as a discontinued operation in its consolidated statements of operations for all periods presented,operates through four primarily real estate-focused subsidiaries – CHCI Asset Management, LC (“CAM”); CHCI Residential Management, LC; CHCI Commercial Management, LC; and have also designated CES assets and liabilities as held for sale in its consolidated balance sheets. Unless otherwise noted, all amounts and disclosures relate to the Company's continuing operations. For additional information, see Note 3.Park X Management, LC.

Use of Estimates

Fiscal Year

Segment Information

Prior to June 30, 2021, the Company operated its business through 2two segments: Asset Management and Real Estate Services. Given the classification of CES which included all material operations of the Company's Real Estate Services segment, as a discontinued operation, (see Note 3), the Company now manages its business as 1one reportable operating segment.