Comstock Holding Companies, Inc. Investor Presentation JUNE 30, - - PowerPoint PPT Presentation

Comstock Holding Companies, Inc. Investor Presentation

JUNE 30, 2019

Market Leading, Mixed-Use & Transit-Oriented Portfolio in Washington, DC’s Dulles Corridor

DISCLOSURES

This release includes “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 identifjed 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. You should not place undue reliance on any forward-looking statement, which speaks only as of the date made. Additional information concerning important risks and uncertainties can be found under the heading “Risk Factors” in our most recent Annual Report on Form 10-K, as fjled with the Securities and Exchange Commission. Our actual results could differ materially from these projected or suggested by the forward-looking statements. Comstock claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 for all forward-looking statements contained herein. Comstock specifjcally disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. While every attempt has been made to ensure the accuracy of included measurements, all future development measurements are based on available information at the time of production of this Investor Presentation and therefore all square foot measurementsare subject to change without notice.

2 JUNE 30, 2019

A DIVERSIFIED REAL ESTATE OPERATOR

• Comstock is at the forefront of the

urban transformation of one of the most dynamic real estate markets in the nations, Washington, DC’s Dulles Corridor, where it controls a stabilized portfolio and fully entitled development pipeline that includes ~7 million square feet of mixed-use and transit-oriented properties located adjacent to key Metro Stations

• n the Silver Line (“Anchor Portfolio”)
• Comstock’s market leading position

in the Dulles Corridor, coupled with its multiple revenue sources and its profjts interest in the Anchor Portfolio provide a platform for additional growth and an opportunity to enhance shareholder value

• Comstock Holding Companies, Inc.

(NASDAQ: CHCI) is a diversifjed real estate developer and asset manager with a 30+ year track record of successfully investing in, developing, and operating residential, commercial, mixed-use, and transit-oriented real estate, delivering thousands of residential units and millions of square feet of mixed-use and transit-oriented assets while earning its reputation as a premier real estate developer and operator in the Washington, DC region

• Comstock acquires, develops, and

manages real estate for its own account, as fund sponsor, asset manager, and as managing partner

• f multiple Public-Private Partnerships

(“P3”), aligning its interests with stakeholders by investing alongside in the real estate acquisitions and developments that it sources

• Comstock creates value for all

stakeholders through the thoughtful design, development and operation

• f high-quality real estate assets,

with a focus on indenitfying unique

• pportunities that are well positioned

to capitalize on emerging trends and to produce above average returns

• Comstock participates in the value

created through its development and asset management services related to the Anchor Portfolio in the Dulles Corridor where Metro’s new Silver Line provides rail service connecting Reston to Tysons and Washington, DC and is currently being expanded to connect to Dulles International Airport and Eastern Loudoun County

A PLATFORM FOR GROWTH THAT CREATES VALUE FOR ALL STAKEHOLDERS

3 JUNE 30, 2019

RECAPITALIZATION PROVIDES CLEAN AND INVESTIBLE BALANCE SHEET

IN APRIL 2019, COMSTOCK ANNOUNCED COMPLETION OF A SERIES OF TRANSACTIONS THAT ACCOMPLISHED:

• Elimination of capital intensive,

for-sale homebuilding unit, reducing exposure to highly volatile for-sale market

• Complete divestment of all liabilities

associated with legacy homebuilding

• peration
• Transfer to Company of cashfmow

resulting from ~$18.5M of prior capital investments in homebuilding assets

• Entry into a new asset management

agreement (“2019 AMA”) that increases revenue opportunities associated with anchor portfolio of assets under management

• The 2019 AMA replaces original asset

management agreement (“2018 AMA”) and its cost-plus revenue feature with a modifjed market rate fee structure that preserves the stability of the cost-plus feature but removes the revenue cap element of the 2018 AMA

• The 2019 AMA covers a portfolio
• f nearly 7 million square feet of

investment-grade, transit-oriented and mixed-use assets encompassing more than 2,800 multi-family units, Class A and Trophy offjce, destination retail, hotels, and commercial parking garages located at two Metro stops

• n the new Silver Line in the Dulles

Corridor

• Assets under management (“AUM”)

have an estimated value of $2.5 to $3.0 Billion at full build out

4 JUNE 30, 2019

ENHANCED OPERATING PLATFORM

• Asset light, fee-based revenue model

increases return on invested capital while generating multiple new revenue sources

• 2019 AMA covers signifjcant portfolio
• f irreplaceable stabilized assets and

development pipeline at key Metro stations in Washington, DC’s Dulles Corridor

• 10-year term of anchor asset

management agreement provides reliable asset management fee-based revenue and upside participation while providing downside protection through cost-plus provision

• Asset management services

provided to family offjces, institutional investors, lenders,

• wners and municipalities with real

estate interests provides reliable long-term revenue opportunities, with “promote” providing upside participation

• Providing real estate related

services, including; development services, property management, loan originations, and fjnancial consulting services enhance revenue

• pportunities
• Providing development supply chain

services, including; entitlement management services, environmental consulting and environmental remediation services provides additional high-margin revenue

• pportunities
• Environmental remediation platform

generates healthy gross margins and is designed for growth with minimal capital outlay while highly fractured nature of industry provides potential acquisition opportunities

NEW STRATEGY GENERATES NEW REVENUE SOURCES

5 JUNE 30, 2019

ASSET MANAGEMENT REVENUE DETAILS

Wholly owned subsidiary, Comstock Asset Management, LC, manages the anchor portfolio including ~7M square feet of institutional quality mixed-use and transit-oriented assets (stabilized, under construction, and scheduled to begin construction during the next several years) in the Dulles Corridor of the Washington, DC region. The term of the Anchor Asset Management Agreement runs through 2027 Asset management fees are calculated as the greater of the annual operating costs of Comstock Holding Companies, Inc, plus $1,000,000 or the aggregate of the market rates fees, including:

• Asset management fee as a percentage of managed portfolio revenues
• Construction management fee as a percentage of development costs
• Property management fee as a percentage of revenue of managed properties
• Property management oversight fee as a percentage of managed portfolio revenues
• Acquisition fee as a percentage of the purchase price of any acquired asset
• Disposition fee as a percentage of the sales price of the disposition asset

In addition, a “Promote” incentive fee equal to a percentage of the free cashfmow generated by each managed asset above the applicable prescribed preferred return on invested capital

ANCHOR PORTFOLIO PROVIDES GROWTH OPPORTUNITY

6 JUNE 30, 2019

ASSET MANAGEMENT REVENUE DETAILS

Wholly owned subsidiary, Comstock Real Estate Services, LC generates fee-based revenue from its various business interests, which include:

• Equity Capital Investment origination fee equal to a percentage of equity capital raised from unrelated third parties to

benefjt capital stack of managed assets

• Debt Capital origination fee equal to a percentage of debt capital raised from unrelated third parties to benefjt capital

stack of managed assets

• Leasing fee based on the square feet of lease originations and lease renewals applicable to managed commercial assets
• Fees for provision of environmental consulting and remediation services in the Washington, DC metropolitan area and in

New Jersey and Pennsylvania

• Fees related to title insurance services provided through a joint venture with Superior Title
• Fees for fjnancial consulting services related to temporary employment services and recruiting services
• Additional growth will be generated through acquisitions, third party asset management, and real estate services

ANCHOR PORTFOLIO PROVIDES PLATFORM FOR GROWTH

7 JUNE 30, 2019

GROWTH OF STABILIZED AND DEVELOPMENT ASSETS UNDER MANAGEMENT

Q1 2018 CURRENT

COMMERCIAL 958,000 SF 2,350,000 SF MULTIFAMILY 2,000,000 SF 3,400,000 SF HOTELS 500,000 SF RETAIL 314,000 SF 450,000 SF TOTAL SF 3,272,000 SF 6,700,000 SF Number of commercial assets 7 13 Number of multifamily assets 6 (1,400 units) 10 (2,800 units) Number of hotel assets 0 (0 Keys) 2 (400 Keys) TOTAL number of assets 13 25

Figures are approximate and include future development assets. 8 JUNE 30, 2019

GROWTH OF STABILIZED AND DEVELOPMENT ASSETS UNDER MANAGEMENT

SQFT (millions) Under construction / Current development pipeline Operating

• 1.0

2.0 3.0 4.0 5.0 6.0 7.0 2019 2020 2021 2022 2023 2024 2025

Figures are approximate and include future development assets. 9 JUNE 30, 2019

RESHAPED MANAGEMENT TEAM COMBINES LOCAL EXPERTISE WITH INSTITUTIONAL ASSET MANAGEMENT EXPERIENCE

CHRIS CLEMENTE

Chairman & CEO 35 years industry experience

JOSEPH SQUERI

Director & EVP of Strategy and Corporate Development 32 years industry experience

CHRISTOPHER GUTHRIE

CFO & EVP 18 years industry experience

TIMOTHY STEFFAN

EVP of Asset Management, Leasing & Development 21 years industry experience

JUBAL THOMPSON

General Counsel & EVP 20 years industry experience

RANDI KILLEN

SVP of Human Resources 17 years industry experience

10 JUNE 30, 2019

MIKE DAUGARD

SVP of Acquisition 20 years industry experience

RESHAPED MANAGEMENT TEAM COMBINES LOCAL EXPERTISE WITH INSTITUTIONAL ASSET MANAGEMENT EXPERIENCE

MICHAEL GUALTIERI

SVP of Finance & Corporate Controller 15 years industry experience

TRACY SCHAR

SVP of Marketing & Brand Management 30 years industry experience

TRACY GRAVES

SVP Entitlements & Development 35 years industry experience

KRIS GREEN

VP of Residential Property Management 11 years industry experience

KIMBERLEY SINKOVIC

VP of Commercial Property Management 19 years industry experience

11 JUNE 30, 2019

IRREPLACEABLE LOCATIONS AT KEY METRO STATIONS ON DC’S NEW SILVER LINE

PORTFOLIO OVERVIEW

COMMERCIAL ASSETS 13 COMMERCIAL SF 2.4MM MULTIFAMILY ASSETS 10 MULTIFAMILY UNITS 2,800+ RETAIL SF 450K HOTEL SF 500K

HERNDON STATION

Figures are approximate and include future development assets. 12 JUNE 30, 2019

RESTON STATION

13 JUNE 30, 2019

COMMERCE DISTRICT METRO PLAZA

WIEHLE AVE D U L L E S T O L L R O A D

Reston Station is among the largest mixed-use, transit-oriented developments in the Washington D.C. MSA Located midway between Dulles Airport and Tyson’s Corner, the urban core of Reston Station sits atop the only fully integrated transit facility in Northern VA The Wiehle Reston-East Station is situated at center of Reston Station and accommodates upwards of 25,000 daily commuters The nearly 40 acre Reston Station neighborhood is being developed in four distinct districts:

• Metro Plaza District
• Promenade District
• Commerce District
• Comstock District

RESTON STATION ASSETS OVERVIEW

4.5–5MM SF MIXED USE DEVELOPMENT 2MM SF TROPHY-CLASS & CLASS-A OFFICE 210K SF RESTAURANTS, DESTINATION RETAIL 400+ KEYS FULL SERVICE & EXTENDED STAY HOTELS 1,600+ RESIDENTIAL UNITS 7,450+ PARKING SPACES

RESTON STATION REPRESENTS THE BEGINNING TRANSFORMATION OF DULLES CORRIDOR

14 JUNE 30, 2019