Comstock Holding Companies Inc. (CHCI) is a Reston, Virginia-headquartered real estate development and services company focused on multifamily, commercial and mixed-use projects in Virginia suburbs outside of Washington, D.C.. The company also acquires and operates stabilized real estate assets in partnership with institutional investors. 

CHCI is best known for the Reston Station and Loudoun Station mixed-use, transit-oriented developments, and it is the parent company of the Comstock Environmental engineering and consulting firm. Last April, Comstock Environmental acquired Green Street Environmental, a Baltimore-based environmental firm providing Indoor Air Quality (IAQ) Services, environmental due diligence and remediation services. 

The Right Focus

In 2018, the company announced it would wind-down its subsidiary for-sale homebuilding operation and shift its activities into commercial real estate development, asset management and real estate-related services.

CHCI’s pivot away from the homebuilding market has allowed it to concentrate on its transit-oriented developments, which bring apartment units, offices and retail into state-of-the-art facilities. The latest chapter in this business story occurred in December when CHCI and the Town of Herndon, Virginia, closed on the transfer of land in the historic downtown area that will lead to Comstock’s redevelopment of a 4.7-acre parcel. When Comstock’s work is completed, the area will have 273 residential apartments, 17,300 square feet of boutique restaurant and café space, a 16,265 square feet arts center, three public plazas with outdoor seating and dedicated art, and a seven-level parking garage with 726 spaces.

“We are excited to have completed this important part of the process and look forward to redeveloping this key piece of downtown Herndon into a vibrant mixed-use development,” said Christopher Clemente, CEO of Comstock. “The closing represents an important milestone for this public-private partnership and positions the partnership to focus on finalizing the details regarding the financing of the development.”

The company has also been adding Class-A office properties to its portfolio with five acquisitions over a 13-month period, with the most recent being the 126,000-square-foot 11480 Commerce Park Drive in Reston, whose tenants include Young America’s Foundation, Dev Technology and the American Academy of Audiology. CHCI’s transactions have been all-cash, off-market deals.

Positive Returns

In the past year, CHCI has gained 58%, far out pacing the 16% gain on the S&P 500.

In its Q3 earnings report published in November, CHCI’s total revenue totaled $7.3 million, up 29% from $5.7 million during the same period of the prior year. Revenue from its asset management operations was $5.9, a 24% rise from $4.7 million one year before. And revenue from real estate services was $1.4 million, up by 52% from $900,000 in Q3 2019.

CHCI’s Q3 income was $400,000, compared to a $600,000 loss one year earlier. The Q3 operating income was $500,000, compared to $200,000 in the previous year. 

“The growth of Comstock’s top and bottom lines so far this year is the result of the financial stability provided by our long-term asset management agreements, the quality of, and demand for, the properties we develop and manage, and the dedication of our team of commercial real estate professionals” said Clemente. “We continue to focus on executing our strategic plan that’s designed to continue expanding assets under management through acquisitions and through the thoughtful development of our mixed-use and transit-oriented pipeline in one of the best real estate markets in the nation.”

POWR Ratings

CHCI has an overall rating of B, which equates to Buy in our proprietary POWR Ratings. Within the individual POWR Rating grades, it receives B’s for Growth, Sentiment and Quality. 

CHCI also ranks #1 in the Real Estate Services category, scoring higher than nationally-focused companies including Colliers International Group Inc. (CIGI), RE/MAX Holdings (RMAX) and CoStar Group Inc. (CSGP).

Bottom Line

CHCI is a reliable and sturdy stock that has weathered the pandemic-induced recession. As the company continues in its winning formula, this will continue to be a welcome addition in any portfolio.

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CHCI shares were trading at $3.56 per share on Friday afternoon, up $0.08 (+2.30%). Year-to-date, CHCI has gained 12.30%, versus a 3.72% rise in the benchmark S&P 500 index during the same period.

About the Author: Phil Hall

Phil is an experienced financial journalist responsible for generating original content on the weekly Fairfield County Business Journal and Westchester County Business Journal, plus their respective daily online news sites, podcasts and video interview series.  He is the winner of 2018, 2019 and 2020 Connecticut Press Club Awards and 2019 and 2020 Connecticut Society of Professional Journalists Award for editorial output. More...

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