Comstock Finalizes Significant Transactions to Promote Accelerated Growth
13 Junho 2022 - 09:00AM
Comstock Holding Companies, Inc. (Nasdaq: CHCI) (“Comstock” or
the “Company”) announced today it has completed two significant
transactions with CP Real Estate Services, LC (“CPRES”), an entity
owned by Christopher Clemente, Comstock’s Chief Executive Officer,
that will strengthen its balance sheet and position the Company for
future growth.
In the first transaction, the Company redeemed
all outstanding shares of Series C Preferred Stock previously held
by CPRES in exchange for one million shares of the Company’s Class
A Common Stock and $4 million. The total redemption value
represents a significant discount to Comstock when compared to the
stated value and liquidation preference of $17.2 million. In
subsequent private party transactions, CPRES plans to transfer
approximately three million shares of the Company’s Class A common
stock to Schar Holdings, LLC, an entity wholly owned by Dwight
Schar, the recently retired Chairman of NVR, Inc. (NYSE: NVR).
After all transactions are completed, Mr. Clemente and Mr. Schar
will each have an approximate 31% economic ownership interest in
Comstock.
In a separate transaction, the Company replaced
the 2019 asset management agreement with CPRES (“2019 AMA”) with a
modified asset management agreement directly with Comstock
Partners, LC (“2022 AMA”). Comstock Partners, LC (“Partners”) is an
entity owned equally by Mr. Clemente and Mr. Schar and controls the
Company’s Anchor Portfolio of assets that has been managed by the
Company since 2018. The 2022 AMA most notably introduces a new
mark-to-market incentive fee equal to up to 20% of the imputed
profit of each individual real estate asset above an 8% preferred
return on Partners’ invested capital. These incentive fees will be
due to the Company based on trigger events determined annually as
defined in the agreement, but generally as each Anchor Portfolio
asset is leased and stabilized. Other notable features of the 2022
AMA applicable to Anchor Portfolio assets is an extended term
through 2035, new supplemental revenue streams for certain leasing
activities, increased fees related to development of Anchor
Portfolio assets, and an increased termination fee.
The 2022 AMA covers all assets wholly owned by
Partners in the Washington, D.C. metropolitan region, including
stabilized buildings and development assets that, at full build
out, will include nearly 10 million square feet of
investment-grade, transit-oriented and mixed-use rental properties
to be held for investment. As currently planned the Anchor
Portfolio assets will encompass more than 4,000 multi-family rental
units, numerous Class-A and Trophy-Class office buildings, retail
assets, hotels, and multiple commercial parking garages located
adjacent to major stations on Metro’s Silver and Red Lines.
“I am thrilled to report that Dwight Schar, my
long-time partner in the Anchor Portfolio, will be a major
shareholder of Comstock as well,” said Christopher Clemente,
Comstock’s Chief Executive Officer. “Dwight’s deep knowledge of
real estate markets, strategic insight and business instincts have
contributed to his decades-long track record of driving growth in
his various businesses and will serve us well as we continue
Comstock’s mission of creating tremendous properties while
enhancing value for all stakeholders. The transactions announced
today further strengthen Comstock’s balance sheet and enhance our
ability to drive earnings. I am confident that our low-risk asset
management business model will continue to provide a predictable
source of future earnings growth, both through our management of
the Anchor Portfolio and through additional real estate
investments.”
Additional details related to the transactions
described herein may be found in the Company’s related Form 8-K. A
bio for Mr. Schar, as well as further details on Comstock’s
strategic approach to creating value, are included in the Company’s
latest investor presentation, which can be found in the “Events
& Presentations” section of the Company’s investor relations
website.
About Comstock
Comstock is a leading developer and manager of
mixed-use and transit-oriented properties in the Washington, D.C.
metropolitan area. As a vertically integrated and multi-faceted
asset management and real estate services company, Comstock has
designed, developed, constructed, acquired, and managed thousands
of residential units and millions of square feet of commercial and
mixed-use properties since 1985, and has been selected by multiple
jurisdictions as Master Developer of Public-Private Partnerships
responsible for development of some of the largest transit-oriented
developments in the Washington, D.C. region. Comstock provides a
wide array of real estate-related services that include asset
management, strategic capital markets advisory services,
development and construction management, marketing and leasing
services, office and retail property management, residential
property management, and commercial garage management. Comstock is
publicly traded on Nasdaq under the ticker symbol CHCI. For more
information, please visit: ComstockCompanies.com.
Cautionary Statement Regarding
Forward-Looking Statements
This release may include "forward-looking"
statements that are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by use of words such
as "anticipate," "believe," "estimate," "may," "intend," "expect,"
"will," "should," "seeks" or other similar expressions.
Forward-looking statements are based largely on our expectations
and involve inherent risks and uncertainties, many of which are
beyond our control. Any number of important factors could cause
actual results to differ materially from those in the
forward-looking statements. Additional information concerning
important risk factors and uncertainties can be found under the
heading "Risk Factors" in our latest Annual Report on Form 10-K, as
filed with the Securities and Exchange Commission. Comstock
specifically disclaims any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future developments or otherwise.
Investor Contact Christopher Guthrie, CFO
cguthrie@comstockcompanies.com703-230-1292
Media ContactShanna
Wilsonswilson@comstockcompanies.com917-674-3096
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