COMSTOCK HOMEBUILDING TOOK COMPETITION in the Washington, D.C. market to a new level on Dec. 14, 2004, with its initial public offering (IPO). By all accounts, Comstock's IPO—the first by a builder since WCI Communities' in March 2002—has been a success. The offer generated more than $70 million in new capital for the builder/developer, which will use the cash to add to its land pipeline.

The IPO appears that much more successful when judged against the factors that opposed Comstock, namely its size and lack of geographic diversity: The company closed just 328 units in 2004, mostly in the Washington market.

But Comstock turned those factors into positives during presentations to potential investors, arguing that the Washington job market will continue to be among the nation's strongest and that the company's condominium and mixed-use developments position it well for rapid growth in the land-constrained market.

At least one analyst agrees. The federal government helps stabilize the area's economy, says Todd Vencil, a home building analyst with BB&T Capital Markets Equity Research. “If you have most of your eggs in one basket, D.C. is a good place to have them.”

Vencil sees significant growth potential for the builder, too. BB&T has set a $27, 12-month price target for Comstock's stock (at press time, the stock closed at $27) based on the company's backlog and planned communities. BB&T forecasts that the company will close 1,000 units by 2006.

Learn more about markets featured in this article: Washington, DC.