The following discussion and analysis should be read in conjunction with our Consolidated Financial Statements and the notes thereto and Management's Discussion and Analysis included in our 2021 Annual Report on Form 10-K and our Condensed Consolidated Financial Statements and the notes thereto included elsewhere in this document. Unless otherwise indicated, references to "2022" refer to the three or nine months endedSeptember 30, 2022 and references to "2021" refer to the three or nine months endedSeptember 30, 2021 . The following discussion may contain forward-looking statements that reflect our plans and expectations. Our actual results could differ materially from those anticipated by these forward-looking statements. We do not undertake, and specifically disclaim, any obligation to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements except as required by law. Overview
We are a leading developer, investor, and asset manager of mixed-use and
transit-oriented properties in the
vertically integrated and multi-faceted asset management and real estate
services company, we have designed, developed, constructed, acquired, and
managed thousands of residential units and millions of square feet of commercial
and mixed-use properties in since 1985.
We provide a broad range of asset management and real estate services, including services related to the acquisition, development, and operation of real estate assets. Our customers and partners are composed primarily of private and institutional owners, investors in commercial, residential, and mixed-use real estate, and various governmental bodies seeking to leverage the potential of public-private partnerships. Our revenue is primarily generated by fees from the asset management and real estate services that we provide. In addition, we invest capital both on our own account and on behalf of clients and institutional investors seeking above average risk-adjusted returns. These strategic real estate investments tend to focus on office, retail, residential and mixed-use properties in which we generally retain an economic interest while also providing property management and other real estate services. Our managed portfolio is currently composed of 40 operating assets, including 15 commercial assets totaling approximately 2.2 million square feet, 6 multifamily assets totaling 1,636 units, and 19 commercial garages with over 13,000 parking spaces. Included in our managed portfolio areReston Station andLoudoun Station , two of the largest transit-oriented, mixed-use developments in theWashington, D.C. metropolitan area. The following tables provide a high-level summary of our managed portfolio: Anchor PortfolioReston Station Mixed-use development on Metro'sSilver Line (Phase I); strategically located betweenTyson's Corner, Va. andDulles International Airport Loudoun Station Mixed-use development on Metro'sSilver Line (Phase II); first Metro-connected development inLoudoun County, Va. Herndon Station Mixed-use development in the historic
downtown portion of
focus of public-private partnership withTown of Herndon Investments/Assets Under ManagementThe Hartford Building Joint venture; 211,000 square foot
mixed-use building on Metro’s Orange
Line inArlington, Va. Joint venture; 15-story, luxury high-rise apartment building near BLVD Forty FourRockville Metro Station inMontgomery
County, Md.; adjacent to BLVD
Ansel Joint venture; 18-story, luxury high-rise apartment building near BLVD AnselRockville Metro Station inMontgomery
County, Md.; adjacent to BLVD
Forty Four InternationalGateway Various real-estate services provided for
two privately-owned mixed-use
buildings located inTyson's Corner, Va. Investors X Investment in company that owns residual homebuilding operations Additionally, we manage the following assets under construction: (i) one commercial asset totaling approximately 330,000 square feet, (ii) one multifamily asset with approximately 415 units and (iii) one hotel/condominium asset with approximately 240 keys and 95 condos. Our development pipeline consists of 13 assets consisting of approximately 1.5 million square feet of additional planned commercial development, approximately 2,600 multifamily units and one hotel asset that will include 140 keys. 17
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Substantially all the properties included in our managed portfolio are covered by long-term, full-service asset management agreements encompassing all aspects of design, development, construction, and operations management relating to the subject properties. The services we provide pursuant to the asset management agreements covering our managed portfolio vary by property and client. Anchoring our asset management services platform is a long-term full service asset management agreement with an affiliated company owned by our Chief Executive Officer,Christopher Clemente (the "2022 AMA"). The 2022 AMA encompasses the majority of the properties we currently manage, includingReston Station andLoudoun Station , two of the flagship properties that comprise our Anchor Portfolio. (See Note 14 in the Notes to Consolidated Financial Statements for additional information) CES Divestiture OnMarch 31, 2022 , we completed the sale ofComstock Environmental Services, LLC ("CES"), a subsidiary of Comstock, toAugust Mack Environmental, Inc. ("August Mack") in accordance with the Asset Purchase Agreement for approximately$1.4 million of total consideration, composed of$1.0 million in cash and$0.4 million of cash held in escrow that is subject to net working capital and other adjustments. We executed this divestiture to enhance its focus pursue continued future growth initiatives for its core asset management business. We have reflected CES as a discontinued operation in its consolidated statements of operations for all periods presented. Unless otherwise noted, all amounts and disclosures relate to our continuing operations. (See Note 3 in the Notes to Consolidated Financial Statements for additional information)
Series C Preferred Stock Redemption
OnJune 13, 2022 , we entered into a Share Exchange and Purchase Agreement ("SEPA") withCP Real Estate Services , LC ("CPRES"), an entity owned byMr. Clemente , to redeem all outstanding Series C preferred stock for (i) 1,000,000 shares of the our Class A common stock, par value$0.01 per share and (ii)$4.0 million in cash. The Series A common stock was valued at the consolidated closing bid price of Comstock shares on Nasdaq on the business day immediately preceding the entry into the SEPA. The$8.3 million fair value of the consideration paid upon redemption was less than the$10.3 million carrying value of the Series C preferred stock at the time of the transaction. This$2.0 million discount compared to the carrying value was added to net income for the three and nine months endedSeptember 30, 2022 to arrive at income available to common stockholders and calculate net income (loss) per share. (See Note 10 in the Notes to Consolidated Financial Statements for additional information)
COVID-19 Update
We continue to monitor the ongoing impact of the COVID-19 pandemic, including the effects of recent notable variants of the virus. While we have not experienced a significant impact on our business resulting from COVID-19 to date, future developments may have a negative impact on our results of operations and financial condition. 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 on the commercial real estate market in the greaterWashington, D.C. area remains uncertain, we believe that our Anchor Portfolio is well positioned to withstand any future potential negative impacts of the COVID-19 pandemic.
Outlook
Our management team is committed to executing our goal to provide exceptional experiences to those we do business with while maximizing shareholder value. We believe that we are properly staffed for current market conditions and the foreseeable future and feel that we will maintain the ability to manage risk and pursue opportunities for additional growth as market conditions warrant. Our real estate development and asset management operations are primarily focused on the greaterWashington, D.C. area, where we believe our 35-plus years 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. 18
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Results of Operations
The following tables set forth consolidated statement of operations data for the
periods presented (in thousands):
Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Revenue ...
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