Comstock(CHCI) - 2023 Q3 - Quarterly Report

Revenue Growth and Performance - Revenue increased by 12.9% in 2023, driven by a $1.7 million increase primarily from the expansion of the managed portfolio and a$0.9 million increase in incentive fees[150] - The company’s asset management revenue grew by 12.9% to $10.6 million, contributing 73.3$33.7 million in 2023, driven by a $3.7 million increase, primarily from portfolio expansion and higher incentive fees[155] - Asset management revenue grew by 7.5$22.5 million, contributing 66.8% of total revenue[155] - Property management revenue increased by 13.2% to $7.7 million, representing 22.9$3.5 million, accounting for 10.3% of total revenue[155] Managed Portfolio and Asset Details - The managed portfolio includes 46 assets, with 17 assets in the development pipeline representing 5.8 million square feet, projected to grow to 65 assets and nearly 10 million square feet at full build-out[141][137] - Commercial properties in the managed portfolio total 13 assets with 2.0 million square feet, 92% leased, while residential properties include 6 assets with 97% leased units[142] - The company’s Anchor Portfolio includes Reston Station, Loudoun Station, and Herndon Station, strategically located along Metro’s Silver Line[138] Operating Costs and Expenses - Operating costs and expenses increased by 3.0% in 2023, primarily due to a $0.1 million increase in recoverable costs and rent expense[152] - Operating costs and expenses rose by 12.0$26.5 million, mainly due to a $1.5 million increase in personnel expenses[157] Net Income and Financial Performance - Net income from continuing operations for Q3 2023 was$4.7 million, compared to $3.7 million in Q3 2022[149] - Adjusted EBITDA for the nine months ended September 30, 2023, was$8.3 million, compared to $7.1 million in 2022[169] Discontinued Operations and Asset Management Agreement - The company completed the sale of Comstock Environmental Services, LLC (CES) on March 31, 2022, reflecting it as a discontinued operation in financial statements[144] - On June 13, 2022, the company executed a new asset management agreement (2022 AMA) extending through 2035, increasing base fees and introducing a mark-to-market incentive fee[145] Other Income and Expenses - Other income (expense) decreased by$0.7 million, primarily due to a $1.0 million net decrease in mark-to-market valuations of real estate ventures[158] - Provision for income tax increased by$0.2 million to $0.3 million in 2023, driven by higher pre-tax income and a higher estimated tax rate[154] Cash Flow and Liquidity - Net cash used in operating activities was$0.4 million in 2023, a $2.2 million decrease from 2022, primarily due to changes in net working capital[174] - The company had$10.9 million in cash and cash equivalents and $10.0 million in available borrowings on its credit facility as of September 30, 2023[163] Parking Management Revenue - Parking management revenue increased by 37.0$1.3 million in Q3 2023, driven by higher activity in managed parking assets[150]