What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-13 compared with 2026-05-14 · 107 added, 46 removed, 154 unchanged (50% of the section changed)

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The following discussion and analysis should be read in conjunction with our consolidated financial statements, the related notes thereto, and Management’s Discussion and Analysis included in our 2025 Annual Report on Form 10-K, as well as our condensed consolidated financial statements and the related notes thereto included elsewhere in this document.

Unless otherwise indicated, references to “2026” refer to the three months ended March 31, 2026 and references to “2025” refer to the three months ended March 31, 2025.

Unless otherwise indicated, references to “2026” refer to the three and six months ended June 30, 2026 and references to “2025” refer to the three and six months ended June 30, 2025.

The following discussion may contain forward-looking statements that reflect our plans and expectations.

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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.

We are a leading asset manager, developer, and operator of mixed-use and transit-oriented properties in the Washington, D.C.

We have become one of the area’s premier real estate services company by creating extraordinary places, delivering exceptional experiences, and generating excellent results for all stakeholders.

We are a leading real estate company specializing in the development, acquisition, operation, and management of mixed-use, transit-oriented properties and data center developments.

We have become a premier real estate services company by creating extraordinary places, delivering exceptional experiences, and generating excellent results for all stakeholders.

We provide a comprehensive suite of real estate services to our asset-owning clients, including asset management, property management, development and construction management, and more.

Our client base is composed primarily of institutional real estate investors, high net worth family offices, financial institutions, and governmental bodies seeking to develop real estate they own through public-private partnerships.

We employ a talented staff of real estate professionals that are led by our seasoned management team and are tasked with delivering high-quality services to the premium, strategically located assets in our managed portfolio.

Our client base consists primarily of institutional real estate investors, high net worth family offices, financial institutions, and governmental bodies seeking to develop real estate they own through public-private partnerships.

We employ a talented staff of real estate professionals who are led by our seasoned management team and are tasked with delivering high-quality services to the premium, strategically located assets in our managed portfolio.

We primarily operate under long-term asset management and property management agreements that provide recurring fee-based revenue streams.

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We have directly aligned the equity ownership of our Company with the ownership interests of the affiliated assets that we manage in our Anchor Portfolio.

This relationship, along with the baseline cost-plus feature and supplemental performance-based revenue opportunities provided by the 2022 AMA, provides us with a stable business platform on which we can (i) produce consistent, positive financial results, (ii) mature and expand our real estate service offerings, (iii) diversify and grow our managed portfolio of assets, both organically and through additional third-party relationships, (iv) pursue strategic investments and complimentary acquisitions, and (v) deliver exceptional value to our shareholders.

This relationship, along with the baseline cost-plus feature and supplemental performance-based revenue opportunities provided by the 2022 AMA, provides us with a stable business platform on which we can (i) produce consistent, positive financial results, (ii) mature and expand our real estate service offerings, (iii) diversify and grow our managed portfolio of assets, both organically and through additional third-party relationships, (iv) pursue strategic investments and complementary acquisitions, and (v) deliver exceptional value to our shareholders.

We distinguish ourselves from industry peers through an established standard of excellence that extends from who we hire to how we deliver our comprehensive suite of real estate services.

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The focus of our managed portfolio revolves primarily around high quality, mixed-use real estate properties and developments that are strategically located adjacent to Metro rail stations, providing convenient access to public transportation.

Our Anchor Portfolio (see below for details) includes, or will soon include, millions of square feet of Trophy and Class A office towers, luxury multi-family residential buildings, luxury hotels with branded condominium residences, high-end retail and entertainment options, amenity-rich public spaces, and commercial parking garages to serve all the properties.

Our Anchor Portfolio (see below for details) includes millions of square feet of Trophy and Class A office towers, luxury multi-family residential buildings, luxury hotels with branded condominium residences, high-end retail and entertainment options, amenity-rich public spaces, and commercial parking garages to serve all the properties.

Over the twelve months of fiscal year 2025, Anchor Portfolio assets generated over $120.0 million of gross revenue for the property owners.

The following table summarizes the operating assets, categorized by asset type, that were included in our managed portfolio as of March 31, 2026:

The following table summarizes the operating assets, categorized by asset type, that were included in our managed portfolio as of June 30, 2026:

Type # of Assets Size/Scale % Leased

Commercial (1)

15 2.6 million sqft.

Commercial 18 4.2 million sqft.

Residential (1)

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42 10,300 hrs/week

Commercial % leased includes 2024 delivery of a new Trophy-class office tower located in The Row at Reston Station that is not yet stabilized.

The % leased for stabilized commercial assets is 93%.

Includes JW Marriott Residences Reston Station, luxury condominiums for which we provide property management services.

% leased includes Q2 2026 delivery of BLVD Haley, a luxury multifamily tower that is not yet stabilized.

The % leased for stabilized residential assets is 94%

Includes JW Marriott Reston Station, Virginia's first and only JW Marriott Hotel, and two Starbucks locations managed by ParkX.

# of assets includes 20 garages owned by unaffiliated third-party asset-owners

Includes porter/janitorial;

Includes porter/janitorial services;

# of assets excludes 48 properties where parking management services are also provided to avoid double-counting, therefore total # of assets where Security & Other services are provided is 90;

hours/week statistic represents estimated total amount billed across all managed properties where Security & Other services are provided.

In addition, we manage the following assets that are under construction and scheduled for delivery in the next 6 months:

• 1 commercial asset that represents approximately 6,000 square feet;

• 1 residential asset with 419 units representing approximately 430,000 square feet.

Our development pipeline currently includes 6 commercial assets that represent approximately 1.6 million square feet, 4 residential assets with more than 1,200 units that represent approximately 1.3 million square feet, and 1 dual-use hotel with 240 keys that represents approximately 220,000 square feet.

At full build out, our managed portfolio of assets is currently projected to total 113 assets that represent over 10 million square feet.

At full build out, our managed portfolio of assets is currently projected to total 119 assets that represent approximately 10.5 million square feet.

The following tables provide further details on the operating assets included in our managed portfolio:

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Other Portfolio Assets

Investment Assets

Name Asset Status Description

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and is the subject of a joint venture with Comstock Partners, LC and a third-party institutional fund advised by Benefit Street Partners, LLC.

Woodland Pointe Operating +

In Development Acquired in 2026, this 6.77-acre office campus is located in the heart of the Dulles Technology Corridor in Herndon, Va.

and is the subject of a joint venture with Comstock Partners, LC and a third-party preferred equity investor.

The property includes an existing 185,000 square foot office tower and there is a new 100,000-square-foot build-to-suit office building is planned for development.

Both buildings are leased to a single tenant (Peraton).

Other Managed Assets

Name Asset Status Description

ParkX Operating Parking garages & buildings/public spaces for which ParkX Management provides supplemental property management services that include parking management, security, porter/janitorial, and more.

Dulles Town Center Operating 1.4 million-square-foot regional shopping mall located in Dulles, Virginia;

responsibilities include property management, leasing, tenant relations, coordination of on-site activities and vendors, marketing oversight, and strategic asset direction services.

Comstock 41 - Additional Information

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(See Note 13 in the Notes to Consolidated Financial Statements for additional information).

Our management team is committed to executing our goal to provide exceptional experiences to those we do business with while maximizing shareholder value.

Our management team is committed to building on the reputation Comstock has earned as a leading commercial real estate developer and asset manager by creating extraordinary places, providing exceptional experiences, and generating excellent returns for all stakeholders.

We believe that we are properly staffed for current and foreseeable market conditions and will maintain the ability to manage risk and pursue additional growth as opportunities arise.

Our real estate development and asset management operations are primarily focused on the greater Washington, D.C.

Our asset management and property management operations are primarily focused on the greater Washington, D.C.

area, where we believe our decades 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.

Our growth will continue to be fueled by our Anchor Portfolio, which will continue to generate revenue as development and construction efforts are completed.

Importantly, the long-term asset management agreement covering the properties included in the Anchor Portfolio provides us with visibility to future revenue and earnings growth while mitigating the risk for potential losses.

Our fee-based, asset-light, debt-free business model will continue to generate cash and provide us with the flexibility and resources needed to capitalize on additional strategic growth opportunities as they arise.

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, grow revenue, and deliver value to our shareholders.

The foundation of our asset-light, debt-free business model is our Anchor Portfolio, which we believe will continue to generate revenue and fuel additional growth as future phases of our large-scale, mixed-use, transit oriented developments are completed and become stabilized.

The long-term asset management agreement covering the properties included in the Anchor Portfolio provides us with visibility into future earnings growth while mitigating the risks typically associated with real estate development and operation.

In addition, as our overall managed portfolio continues to expand through strategic acquisitions and management contracts with third-party owned assets, the recurring, fee-based real estate services we provide will further enhance our profitability.

The combination of our Anchor Portfolio and third-party owned assets generate revenue and operating cash that provide us with the flexibility and resources to capitalize on attractive real estate investment opportunities, including those outside of our core operations and region.

We employ a highly disciplined approach to evaluating acquisition and investment opportunities, which we pursue through the following growth platforms:

• Institutional Venture Platform ("IVP")

Pairs Comstock's operational expertise with the capital resources of our institutional partners to co-invest in real estate opportunities that have the potential to produce strong, risk-adjusted returns.

Assets acquired under the IVP are typically structured as a joint venture that recognizes the value of Comstock’s vertically integrated operating platform and track record of acquiring, rebranding, and managing properties.

We align our interests with our institutional partners to deliver a tailored investment solution designed to capitalize on value enhancement and market appreciation, thereby maximizing return on invested capital for all stakeholders.

• Data Center Platform ("DCP")

A logical expansion of our Institutional Venture Platform that focuses on low-risk, high-reward joint venture opportunities to facilitate and support the development of large-scale data center assets and related infrastructure.

Our initial focus is partnering with entities with strategic land rights and leveraging our vast experience with real estate entitlement to secure land option contracts that can be marketed to AI hyperscalers through powered land transactions.

This minimizes our capital commitments and maximizes our return on investment.

Overall, our capital allocation strategy for acquisitions and strategic investment focuses on minimizing initial asset-level capital deployment while ensuring that deployed capital is tied to identifiable avenues for revenue growth and positive projected returns.

Our vertically integrated operating platform presents us with multiple opportunities for incremental revenue streams due to the broad range of real estate services that we can provide to each asset that we manage.

We are committed to maintain our position as a leading real estate company through execution of a strategic growth plan that will continue to expand our managed portfolio of assets, grow revenue, and enhance value for our shareholders.

Results of Operations

The following tables set forth consolidated statement of operations data for the periods presented (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Revenue $ 22,581 $ 12,972 $ 40,027 $ 25,611

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Net income (loss) $ 8,845 $ 1,446 $ 10,834 $ 3,035

Comparison of the Three Months Ended March 31, 2026 and 2025

Comparison of the Three Months Ended June 30, 2026 and 2025

The following table summarizes revenue by line of business (in thousands):

Three Months Ended March 31,

Three Months Ended June 30,

2026 2025 Change

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Revenue increased 74.1% in 2026.

The $4.8 million comparative increase was driven by the continued expansion of our managed portfolio, resulting in a $2.6 million, or 89.6%, increase in recurring, fee-based property management services revenue from our Commercial, Residential, and ParkX operating subsidiaries and a $1.6 million increase in asset management services revenue.

ParkX alone executed 13 new service contracts in 2026, five of which were with third-party customers.

The $9.6 million comparative increase was driven by a $4.7 million increase in supplemental fee revenue, primarily stemming from significant leasing activity and a $0.8 million acquisition fee earned in the current period.

Also contributing to the increase was the continued expansion of our managed portfolio, resulting in a $2.6 million, or 78.1%, increase in recurring, fee-based property management services revenue from our Commercial, Residential, and ParkX operating subsidiaries and a $0.9 million increase in asset management services revenue.

Operating costs and expenses

The following table summarizes operating costs and expenses (in thousands):

Three Months Ended March 31, Change

Three Months Ended June 30, Change

2026 2025 $ %

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Operating costs and expenses increased 42.4% in 2026.

The $5.0 million comparative increase was primarily due to a $3.5 million increase in personnel expenses from increased headcount and employee compensation, including a $0.9 million increase in annual bonus expense.

The $4.7 million comparative increase was primarily due to a $3.4 million net increase in personnel expenses from increased headcount and employee compensation, including a $0.6 million increase in bonus and commissions expense.

Also contributing were a $0.4 million increase in reimbursable costs, a $0.2 million increase in stock-based compensation expense, and a $0.2 million of additional legal costs.

Other income (expense)

The following table summarizes other income (expense) (in thousands):

Three Months Ended March 31, Change

Three Months Ended June 30, Change

2026 2025 $ %

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Total other income (expense) $ 4,548 $ 302 $ 4,246 1406.0 %

Other income (expense) changed by $0.5 million in 2026, primarily driven by a $0.4 million unrealized gain on equity investments stemming from the mark-to-market valuation of the initial $1.5 million investment in Jericho Energy Ventures, Inc.

Other income (expense) changed by $4.2 million in 2026, primarily driven by the unrealized gain on equity investments stemming from the mark-to-market valuation of our Jericho Energy Ventures, Inc.

equity securities (see Note 4 in the Notes to Consolidated Financial Statements for additional information).

Provision for income tax was $2.3 million in 2026, compared to $0.6 million in 2025.

The $0.1 million decrease is primarily the result of higher stock compensation windfall adjustments.

The $1.7 million increase is primarily the result of higher taxable income and the tax impact from significant unrealized gains on equity investments.

Comparison of the Six Months Ended June 30, 2026 and 2025

The following table summarizes revenue by line of business (in thousands):

Six Months Ended June 30,

2026 2025 Change

Amount % Amount % $ %

Asset management $ 21,237 53.0 % $ 13,996 54.6 % $ 7,241 51.7 %

Property management (1)

7,481 18.7 % 5,861 22.9 % 1,620 27.6 %

ParkX management 11,309 28.3 % 5,754 22.5 % 5,555 96.5 %

Total revenue $ 40,027 100.0 % $ 25,611 100.0 % $ 14,416 56.3 %

CHCI Commercial and CHCI Residential

Revenue increased 56.3% in 2026.

The $14.4 million comparative increase was primarily driven by the continued expansion of our managed portfolio, resulting in a $5.2 million, or 83.4%, increase in recurring, fee-based property management services revenue from our Commercial, Residential, and ParkX operating subsidiaries and a $2.6 million increase in asset management services revenue.

Also contributing to the increase was a $4.6 million increase in supplemental fee revenue, stemming from a $4.2 million increase in leasing fee revenue and $1.3 million in acquisition fee revenue earned in the current period.

Operating costs and expenses

The following table summarizes operating costs and expenses (in thousands):

Six Months Ended June 30, Change

2026 2025 $ %

Cost of revenue $ 29,268 $ 20,789 $ 8,479 40.8 %

Selling, general, and administrative 2,428 1,144 1,284 112.2 %

Depreciation and amortization 145 158 (13) (8.2) %

Total operating costs and expenses $ 31,841 $ 22,091 $ 9,750 44.1 %

Operating costs and expenses increased 44.1% in 2026.

The $9.8 million comparative increase was primarily due to a $6.9 million net increase in personnel expenses from increased headcount and employee compensation, including a $1.5 million increase in bonus and commissions expense.

Also contributing were a $1.0 million increase in reimbursable costs, a $0.5 million increase in stock-based compensation expense, and a $0.4 million of additional legal costs.

Other income (expense)

The following table summarizes other income (expense) (in thousands):

Six Months Ended June 30, Change

2026 2025 $ %

Interest income $ 197 $ 404 $ (207) (51.2) %

Gain (loss) on real estate ventures 138 18 120 666.7 %

Gain (loss) on equity investments 4,696 — 4,696 N/M

Other income (expense), net 165 55 110 200.0 %

Total other income (expense) $ 5,196 $ 477 $ 4,719 989.3 %

Other income (expense) changed by $4.7 million in 2026, primarily driven by the unrealized gain on equity investments stemming from the mark-to-market valuation of our Jericho Energy Ventures, Inc.

equity securities (see Note 4 in the Notes to Consolidated Financial Statements for additional information).

Provision for income tax was $2.5 million in 2026, compared to $1.0 million in 2025.

The $1.5 million increase primarily stems from higher taxable income and the tax impact from significant unrealized gains on equity investments.

Non-GAAP Financial Measures

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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 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), the most directly comparable financial measure as measured in accordance with GAAP, to Adjusted EBITDA (in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2026 2025 2026 2025

Net income (loss) $ 8,845 $ 1,446 $ 10,834 $ 3,035

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Adjusted EBITDA $ 7,356 $ 2,222 $ 9,526 $ 4,272

The increase in Adjusted EBITDA for the three months ended March 31, 2026 is primarily driven by significant increases in recurring fee-based revenue from our three operating property management subsidiaries and higher asset management fee revenue from the continued expansion of our managed portfolio.

The increases in Adjusted EBITDA for the three and six months ended June 30, 2026 were primarily driven by the continued expansion of our managed portfolio that brought significant increases in recurring fee-based revenue from our three operating property management subsidiaries and higher asset management fee revenue.

Also contributing were significant increases in supplemental leasing fee revenue and acquisition fee revenue.

Liquidity and Capital Resources

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We assess our liquidity in terms of our cash and cash equivalents on hand and the ability to generate cash to fund our operating activities.

Our principal sources of liquidity as of March 31, 2026 were our cash and cash equivalents of $19.6 million and our $10.0 million of available borrowings on our Credit Facility.

Our principal sources of liquidity as of June 30, 2026 were our cash and cash equivalents of $25.3 million and our $10.0 million of available borrowings on our Credit Facility.

(See Note 6 in the Notes to Consolidated Financial Statements for additional information).

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.

Our primary sources of working capital are cash generated from operations and distributions from investments in real estate ventures.

Our primary capital needs are for working capital obligations and other general business purposes, including investments and capital expenditures.

Significant factors that could affect future liquidity include cash flows generated from operating activities, working capital management, the adequacy of available lines of credit, and required capital commitments related to investments.

(See Note 7 in the Notes to Consolidated Financial Statements for additional information).

We have historically financed our operations with internally generated funds and, more rarely and only when necessary, borrowings from our Credit Facility.

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The following table summarizes our cash flows for the periods indicated (in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

2026 2025 Change

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Operating Activities

The $6.3 million variance in net operating cash activity was driven by a $6.4 million incremental cash outflow stemming from changes to our net working capital, partially offset by a $0.1 million increase in net income after adjustments for non-cash items.

The net working capital decrease was primarily influenced by a decrease in related party accounts receivable collections and annual bonus payouts in January 2026.

The $5.6 million variance in net operating cash activity was driven by a $5.1 million increase in net income after adjustments for non-cash items and a $0.5 million incremental cash inflow stemming from changes to our net working capital.

The net working capital increase was primarily influenced by an increase in accounts receivable collections and decrease in prepaid expenses, partially offset by an increase in accrued personnel costs.

Investing Activities

The $4.7 million variance in net investing cash activity was driven by a $3.4 million increase in investments in real estate ventures due to the completed acquisition of The Reed.

The $13.1 million variance in net investing cash activity was driven by a $11.8 million increase in investments in real estate ventures due to the completed acquisitions of The Reed and Woodland Pointe.

Also contributing to the increase was the initial $1.5 million investment in Jericho Energy Ventures, Inc.

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Financing Activities

The $0.2 million variance in n et financing cash activity was driven by a $0.2 million increase in cash paid for taxes related to the net share settlement of equity awards.

The $0.1 million variance in n et financing cash activity was driven by a $0.2 million increase in cash paid for taxes related to the net share settlement of equity awards, partially offset by a $0.1 million increase in proceeds collected from the exercise of stock option awards.

Quantitative and Qualitative Disclosures About Market Risk

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis