SAUL CENTERS, INC. (BFS)

CIK: 0000907254. SIC: 6798 Real Estate Investment Trusts. Latest 10-K as of: 2026-02-27.

SIC breadcrumb: Finance, Insurance, And Real Estate > Holding And Other Investment Offices > SIC 6798 Real Estate Investment Trusts

SEC company page: https://www.sec.gov/edgar/browse/?CIK=907254. Latest filing source: 0000907254-26-000006.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-27. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000907254.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000907254.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0000907254-26-000032.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-05-07. Report date: 2026-03-31.

Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

This section should be read in conjunction with the consolidated financial statements of the Company and the accompanying notes in "Item 1. Financial Statements" of this report and the more detailed information contained in the Company's 2025 10-K. Historical results and percentage relationships set forth in Item 1 and this section should not be taken as indicative of future operations and financial results of the Company. Capitalized terms used but not otherwise defined in this section have the meanings given to them in Item 1 of this Quarterly Report on Form 10-Q (this "Report").

Forward-Looking Statements

Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are not guarantees of performance. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as "plans," "intends," "estimates," "anticipates," "expects," "believes" or similar expressions in this Report. Although management believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, our actual results could differ materially from those set forth in the forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. The following are some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements:

•the ability of our tenants to pay rent;

•our reliance on shopping center "anchor" tenants and other significant tenants;

•our substantial relationships with members of the Saul Organization;

•financing risks, such as increases in interest rates, restrictions imposed by our debt, our ability to meet existing financial covenants and our ability to consummate planned and additional financings on acceptable terms or at all;

•our development activities;

•our access to additional capital;

•our ability to successfully complete additional acquisitions, developments or redevelopments, or if they are consummated, whether such acquisitions, developments or redevelopments perform as expected;

•macroeconomic conditions, including geopolitical, global trade and international conflict disruptions, which may lead to a disruption of, or lack of access to, sources of funding and rising inflation;

•adverse trends in the retail, office and residential real estate sectors;

•risks relating to cybersecurity and potential future uses of artificial intelligence, including disruption to our business and operations, reputational risk, regulatory risk, and exposure to liabilities from tenants, employees, capital providers, and other third parties;

•risks generally incident to the ownership of real property, including adverse changes in economic conditions, changes in the investment climate for real estate, changes in real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal policies, the relative illiquidity of real estate and environmental risks; and

•risks related to our status as a REIT for federal income tax purposes, such as the existence of complex regulations relating to our status as a REIT, the effect of future changes to REIT requirements as a result of new legislation and the adverse consequences of any failure to qualify as a REIT.

Additional information related to these risks and uncertainties is included in "Risk Factors" (Part I, Item 1A of our 2025 10-K), "Quantitative and Qualitative Disclosures about Market Risk" (Part I, Item 3 of this Report and Part II, Item 7A of our 2025 10-K), and "Management's Discussion and Analysis of Financial Conditions and Results of Operations" (Part I, Item 2 of this Report).

General

The following discussion is based primarily on the consolidated financial statements of the Company as of and for the three months ended March 31, 2026.

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Overview

The Company's primary strategy is to continue to diversify its assets through development of transit-oriented, residential mixed-use projects and expansion of and additions to its grocery-anchored Shopping Centers in the Washington, DC/Baltimore metropolitan area. The Company's operating strategy also includes improvement of the operating performance of its assets, internal growth of its Shopping Centers through the addition of pad sites, and supplementing its development pipeline with selective redevelopment and renovations of its core Shopping Centers. The Company has a pipeline of entitled sites in its portfolio, some of which are currently Shopping Centers, for development of up to 2,800 apartment units and 860,000 square feet of retail and office space. All such sites are located proximate to Washington Metropolitan Area Transit Authority red line Metro stations in Montgomery County, Maryland. In addition, the Company recently entered into a lease with Publix to develop a new grocery store at Ashland Square, in Prince William County, Virginia. When complete, Ashland Square is expected to ultimately comprise approximately 124,000 square feet of retail space including the 50,325 square foot Publix, three existing pad sites, four additional pad sites and approximately 30,000 square feet of small shop space.

The Company intends to selectively add free-standing pad site buildings within its Shopping Center portfolio and replace underperforming tenants with tenants that generate strong traffic, including anchor stores such as grocery stores. The Company has executed leases or has leases under negotiation for eight more pad sites. There can be no assurance that any such leases will be executed on the anticipated terms or timing, or at all.

In recent years, there has been a limited amount of quality properties for sale. Management believes it will continue to be challenging to identify acquisition opportunities for investment in existing and new shopping centers and mixed-use properties into the near future. It is management's view that several of the sub-markets in which the Company operates have, or are expected to have in the future, attractive supply/demand characteristics. The Company will continue to evaluate acquisitions, and development and redevelopment opportunities as integral parts of its overall business plan.

Actions taken by the Federal government will likely continue to impact the office, retail and residential real estate markets in the Washington, DC/Baltimore metropolitan area over the coming years. Because the majority of the Company’s property net operating income is produced by our Shopping Centers, we continually monitor the implications of government policy changes, as well as shifts in consumer demand between on-line and in-store shopping, on future shopping center construction and retailer store expansion and closure plans. Based on our observations, we continue to adapt our marketing and merchandising strategies in ways that we believe maximize our future performance.  The Company's commercial leasing percentage, on a same property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, increased to 95.0% at March 31, 2026, from 93.9% at March 31, 2025.

The Company maintains a ratio of total debt to estimated total asset market value of under 50%, which positions us to obtain additional secured borrowings if necessary. As of March 31, 2026, including the $100.0 million hedged variable-rate debt, total fixed-rate debt, with staggered maturities from 2026 to 2041, represented approximately 88.8% of the Company's notes payable, thus mitigating refinancing risk. The Company's unhedged variable-rate debt consists of $182.0 million outstanding under the Credit Facility. Including fixed and variable rate debt, the Company's outstanding debt totaled approximately $1.62 billion with a weighted average remaining term of 8.6 years as of March 31, 2026. As of March 31, 2026, the Company has availability of approximately $105.3 million under the Credit Facility.

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Recent Developments

The Company is developing Twinbrook Quarter Phase I located in Rockville, Maryland. It includes 452 apartment units, an 81,000 square foot Wegmans supermarket, approximately 25,000 square feet of small shop space, and a 230,000 square foot office building. The office tower portion is not being constructed at this time. In connection with the development of the residential and retail portions of Twinbrook Quarter Phase I, we also invested in infrastructure and other items that will support both Twinbrook Quarter Phase I and other portions of the development of Twinbrook Quarter. Excluding imputed capitalized interest, the remaining investment to complete Twinbrook Quarter Phase I is not expected to exceed $8.5 million. A portion of the cost of the project is being financed by a $145.0 million construction-to-permanent loan. As of March 31, 2026, the outstanding balance of the loan was $140.7 million, net of unamortized deferred debt costs. The Milton at Twinbrook Quarter opened and residential tenants began moving in on October 1, 2024. As of May 4, 2026, 443 of the 452 (98.0%) residential units were leased and occupied. Of the approximately 106,000 square feet of ground floor retail, 101,400 square feet (95.7%) have been leased. The Wegmans supermarket at Twinbrook Quarter opened for business on June 25, 2025. As of May 4, 2026, including the Wegmans supermarket, approximately 88,500 square feet of the retail space is open and the remaining leased retail space is expected to open at various times during 2026 as tenants complete their buildouts. The development potential of all phases of the entire 18.4 acre Twinbrook Quarter site totals 1,865 residential units, 473,000 square feet of retail space, and 431,000 square feet of office space.

The Company is also developing Hampden House, a project located in downtown Bethesda, Maryland, which includes 366 apartment units and approximately 10,100 square feet of retail space. Excluding imputed capitalized interest, the remaining investment to complete the project is not expected to exceed $6.2 million. A portion of the cost of the project is being financed by a $133.0 million construction-to-permanent loan. As of March 31, 2026, the outstanding balance of the loan was $116.9 million, net of unamortized deferred debt costs. Hampden House opened and residential tenants began moving in on October 1, 2025. As of May 4, 2026, 167 of the 366 (45.6%) residential units are leased and occupied. Visual Comfort & Co. opened for business on March 9, 2026. As of May 4, 2026, including Visual Comfort & Co., approximately 8,600 square feet of the 10,100 (85.1%) square feet of retail space have been leased and the remaining tenant build-out is in progress.

During 2025, the Company entered into a lease with Publix for a new grocery store, which we will construct, at Ashland Square in Prince William County, Virginia. The Ashland Square property currently includes three pad sites with operating tenants. We have executed leases at Ashland Square for two additional pad sites. When complete, Ashland Square is expected to ultimately comprise approximately 124,000 square feet of retail space including the 50,325 square foot Publix, the three existing pad sites, four additional pad sites and app

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2026-02-27. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and related footnotes included elsewhere in this Annual Report on Form 10-K. We make statements in this section that are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this report entitled "Forward-Looking Statements." Certain risks may cause our actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a discussion of such risk factors, see "Item 1A. Risk Factors."

Overview

The Company's primary strategy is to continue to diversify its assets through development of transit-oriented, residential mixed-use projects and expansion of and additions to its grocery-anchored Shopping Centers in the Washington, DC/Baltimore metropolitan area. The Company's operating strategy also includes improvement of the operating performance of its assets, internal growth of its Shopping Centers through the addition of pad sites, and supplementing its development pipeline with selective redevelopment and renovations of its core Shopping Centers. The Company has a pipeline of entitled sites in its portfolio, some of which are currently Shopping Centers, for development of up to 2,500 apartment units and 850,000 square feet of retail and office space. All such sites are located proximate to Washington Metropolitan Area Transit Authority red line Metro stations in Montgomery County, Maryland. In addition, the Company recently entered into a lease with Publix to develop a new grocery store at Ashland Square in Prince William County, Virginia. When complete, Ashland Square is expected to ultimately comprise approximately 124,000 square feet of retail space including the 50,325 square foot Publix, three existing pad sites, four additional pad sites and approximately 30,000 square feet of small shop space.

The Company intends to selectively add free-standing pad site buildings within its Shopping Center portfolio and replace underperforming tenants with tenants that generate strong traffic, including anchor stores such as grocery stores. The Company has two executed leases and six leases are under negotiation for a total of eight more pad sites.

In recent years, there has been a limited amount of quality properties for sale. Management believes it will continue to be challenging to identify acquisition opportunities for investment in existing and new shopping center and mixed-use properties into the near future. It is management’s view that several of the sub-markets in which the Company operates have, or are expected to have in the future, attractive supply/demand characteristics. The Company will continue to evaluate acquisition, development and redevelopment as integral parts of its overall business plan.

Actions taken by the Federal government will likely continue to impact the office, retail and residential real estate markets in the Washington, DC/Baltimore metropolitan area over the coming years. Because the majority of the Company’s property net operating income is produced by our Shopping Centers, we continually monitor the implications of government policy changes, as well as shifts in consumer demand between on-line and in-store shopping, on future shopping center construction and retailer store expansion and closure plans. Based on our observations, we continue to adapt our marketing and merchandising strategies in ways to maximize our future performance.  The Company's commercial leasing percentage, on a same property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, decreased to 94.6% at December 31, 2025, from 95.2% at December 31, 2024.

The Company maintains a ratio of total debt to total asset value of under 50%, which allows us to obtain additional secured borrowings if necessary. As of December 31, 2025, including $100.0 million of hedged variable-rate debt, total fixed-rate debt with staggered maturities from 2026 to 2041 represented approximately 88.4% of the Company’s notes payable, thus minimizing refinancing risk. The Company’s unhedged variable-rate debt consists of $189.0 million outstanding under the New Credit Facility. As of December 31, 2025, the Company has availability of approximately $96.2 million under its New Credit Facility.

Although it is management’s present intention to concentrate future acquisition and development activities on transit-oriented, residential mixed-use properties and grocery-anchored shopping centers in the Washington, DC/Baltimore metropolitan area, the Company may, in the future, also acquire other types of real estate in other areas of the country as opportunities present themselves. The Company plans to continue to diversify in terms of property types, locations, size and market, and it does not set any limit on the amount or percentage of assets that may be invested in any one property or any one geographic area.

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Critical Accounting Policies

The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), which requires management to make certain estimates and assumptions that affect the reporting of financial position and results of operations. See Note 2 to the Consolidated Financial Statements in this report. The Company has identified the following policies that, due to estimates and assumptions inherent in those policies, involve a relatively high degree of judgment and complexity.

Real Estate Investments

Real estate investment properties are stated at historic cost less depreciation. Although the Company intends to own its real estate investment properties over a long term, from time to time it will evaluate its market position, market conditions, and other factors and may elect to sell properties that do not conform to the Company’s investment profile. Management believes that the Company’s real estate assets have generally appreciated in value since their acquisition or development and, accordingly, the aggregate current value exceeds their aggregate net book value and also exceeds the value of the Company’s liabilities as reported in the financial statements. Because the financial statements are prepared in conformity with GAAP, they do not report the current value of the Company’s real estate investment properties.

If there is an event or change in circumstance that indicates a potential impairment in the value of a real estate investment property, the Company prepares an analysis to determine whether the carrying amount of the real estate investment property exceeds its estimated fair value. The Company considers both quantitative and qualitative factors when identifying impairment indicators including recurring operating losses, significant decreases in occupancy, and significant adverse changes in market conditions, legal factors and business climate. If impairment indicators are present, the Company compares the projected cash flows of the property over its remaining useful life, on an undiscounted basis, to the carrying amount of that property. The Company assesses its undiscounted projected cash flows based upon estimated capitalization rates, historic operating results and market conditions that may affect the property. If the carrying amount is greater than the undiscounted projected cash flows, the Company would recognize an impairment loss equivalent to an amount required to adjust the carrying amount to its then estimated fair value. The fair value of any property is sensitive to the actual results of any of the aforementioned estimated factors, either individually or taken as a whole. Should the actual results differ from management’s projections, the valuation could be negatively or positively affected.

Accounts Receivable, Accrued Income, and Allowance for Doubtful Accounts

Accounts receivable are primarily comprised of rental and reimbursement billings due from tenants, and straight-line rent receivables representing the cumulative amount of adjustments necessary to present rental income on a straight-line basis. Individual leases are assessed for collectability and, upon the determination that the collection of rents is not probable, accrued rent and accounts receivable are charged off, and the charge off is reflected as an adjustment to rental revenue. Revenue from leases where collection is not probable is recorded on a cash basis until collectability is determined to be probable. We also assess whether operating lease receivables, at the portfolio level, are appropriately valued based upon an analysis of balances outstanding, effects of tenant bankruptcies, historical levels of bad debt and current economic trends. Evaluating and estimating uncollectable lease payments and related receivables requires a significant amount of judgment by management and is based on the best information available to management at the time of evaluation. Actual results could differ from these estimates.

Legal Contingencies

The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, which are generally covered by insurance. While the resolution of these matters cannot be predicted with certainty, the Company believes the final outcome of current matters will not have a material adverse effect on its financial position or the results of operations. Upon determination that a loss is probable to occur, the estimated amount of the loss is recorded in the financial statements. Both the amount of the loss and the point at which its occurrence is considered probable can be difficult to determine.

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Results of Operations

The following is a discussion of the components of revenue and expense for the entire Company. This section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed on February 28, 2025.

Net income for 2025 decreased to $49.2 million from $67.7 million in 2024. The $18.5 million decline in net income primarily resulted from the adverse impact of the initial operations of Twinbrook Quarter Phase I of $14.3 million and Hampden House of $5.1 million. Significant changes in revenue and expenses are discussed below.

Revenue

Year ended December 31,

Percentage Change

(Dollars in thousands)

2025

2024

2023

2025 from

2024

2024 from

2023

Base rent

$

237,426 

$

216,622 

$

208,295 

9.6 

%

4.0 

%

Expense recoveries

44,310 

40,826 

37,094 

8.5 

%

10.1 

%

Percentage rent

1,806 

1,853 

1,790 

(2.5)

%

3.5 

%

Other property revenue

2,545 

2,737 

2,412 

(7.0)

%

13.5 

%

Credit losses on operating lease receivables, net

(1,722)

(860)

(534)

100.2 

%

61.0 

%

Rental revenue

284,365 

261,178 

249,057 

8.9 

%

4.9 

%

Other revenue

5,478 

7,669 

8,150 

(28.6)

%

(5.9)

%

Total revenue

$

289,843 

$

268,847 

$

257,207 

7.8 

%

4.5 

%

Total revenue increased 7.8% in 2025 compared to 2024 as described below.

Base rent: Base rent includes $9.5 million and $(7.8) million for 2025 and 2024, respectively, to recognize base rent on a straight-line basis. In addition, base rent includes $0.6 million and $0.8 million for 2025 and 2024, respectively, to recognize income from the accretion of discounts related to in-place leases acquired in connection with purchased real estate investment properties. The $20.8 million increase in base rent in 2025 compared to 2024 was primarily attributable to (a) higher residential and commercial base rent related to Twinbrook Quarter Phase I of $11.0 million, (b) higher commercial base rent, exclusive of Twinbrook Quarter Phase I and Hampden House, of $7.7 million, (c) higher residential base rent, exclusive of Twinbrook Quarter Phase I and Hampden House, of $1.4 million and (d) higher residential and commercial base rent of Hampden House of $0.7 million.

Expense recoveries: The $3.5 million increase in expense recoveries in 2025 compared to 2024 is primarily attributable to an increase in recoverable property operating expenses.

Credit losses on operating lease receivables, net: Credit losses on operating lease receivables, net was a loss of $1.7 million during 2025. The loss is primarily due to higher reserves on lease receivables in 2025.

Other Revenue: The $2.2 million decrease in other revenue was primarily due to (a) lower lease termination fees of $2.6 million partially offset by (b) higher parking revenue of $0.4 million.

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Expenses

Year ended December 31,

Percentage Change

(Dollars in thousands)

2025

2024

2023

2025 from

2024

2024 from

2023

Property operating expenses

$

52,034 

$

41,719 

$

37,489 

24.7 

%

11.3 

%

Real estate taxes

32,446 

30,342 

29,650 

6.9 

%

2.3 

%

Interest expense, net and amortization of deferred debt costs

70,548 

53,696 

49,153 

31.4 

%

9.2 

%

Depreciation and amortization of deferred leasing costs

58,784 

50,502 

48,430 

16.4 

%

4.3 

%

General and administrative

26,932 

25,066 

23,459 

7.4 

%

6.9 

%

Total expenses

$

240,744 

$

201,325 

$

188,181 

19.6 

%

7.0 

%

Total expenses increased 19.6% in 2025 compared to 2024, primarily due to the initial operations of Twinbrook Quarter Phase I and Hampden House.

Property operating expenses: Property operating expenses increased $10.3 million in 2025 compared to 2024 primarily due to (a) the initial operations of Twinbrook Quarter Phase I of $4.3 million, (b) higher repairs and maintenance expenses, exclusive of Twinbrook Quarter Phase I and Hampden House, of $3.6 million, of which $2.2 million relates to snow removal costs, (c) higher utility expenses, exclusive of Twinbrook Quarter Phase I and Hampden House, of $1.0 million, (d) the initial operations of Hampden House of $0.9 million and (e) higher insurance costs, exclusive of Twinbrook Quarter Phase I and Hampden House of $0.3 million.

Real estate taxes: Real estate taxes increased $2.1 million in 2025 compared to 2024, primarily due to (a) the initial operations of Twinbrook Quarter Phase I of $1.1 million and Hampden House of $0.6 million and (b) higher tax assessments across the portfolio, exclusive of Twinbrook Quarter Phase I and Hampden House.

Interest expense, net and amortization of deferred debt costs: Interest expense, net and amortization of deferred debt costs increased 31.4% in 2025 compared to 2024 primarily due to (a) the initial operations of Twinbrook Quarter Phase I of $14.8 million and Hampden House of $2.8 million, (b) $2.1 million of higher interest incurred as a result of higher average outstanding debt and (c) higher amortization of deferred debt costs of $0.6 million partially offset by (d) $2.8 million of lower interest incurred as a result of lower average interest rates and (e) higher capitalized interest, exclusive of Twinbrook Quarter Phase I and Hampden House, prior to Hampden House opening on October 1, 2025, of $0.6 million.

Depreciation and amortization of deferred leasing costs: Depreciation and amortization of deferred leasing costs increased $8.3 million in 2025 compared to 2024 primarily due to Twinbrook Quarter Phase I of $6.7 million and Hampden House of $1.6 million as a result of being placed into service in 2024 and 2025, respectively.

General and administrative: General and administrative costs increased $1.9 million in 2025 compared to 2024 primarily due to higher employment costs of $1.9 million.

Same property revenue and same property net operating income

Same property revenue and same property net operating income are non-GAAP financial measures of performance intended to enhance period-to-period comparability by excluding the results of properties that were not in operation for the entirety of the comparable reporting periods.

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We define same property revenue as total revenue less straight-line base rent and above/below market lease amortization of leases acquired in connection with purchased real estate investment properties minus the revenue of properties not in operation for the entirety of the comparable reporting periods, and we define same property net operating income as net income plus (a) interest expense, net and amortization of deferred debt costs, (b) depreciation and amortization of deferred leasing costs, (c) general and administrative expenses, (d) change in fair value of derivatives, and (e) loss on the early extinguishment of debt minus (f) gains on sale of property, (g) straight-line base rent and above/below market lease amortization of leases acquired in connection with purchased real estate investment properties and (h) the operating income of properties that were not in operation for the entirety of the comparable periods.

Other REITs may use different methodologies for calculating same property revenue and same property net operating income. Accordingly, our same property revenue and same property net operating income may not be comparable to those of other REITs.

Same property revenue and same property net operating income are used by management to evaluate and compare the operating performance of our properties, and to determine trends in earnings, because these measures are not affected by the cost of our funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to ownership of our properties. We believe the exclusion of these items from revenue and operating income is useful because the resulting measures capture the actual revenue generated and actual expenses incurred by operating our properties.

Same property revenue and same property net operating income are measures of the operating performance of our properties but do not measure our performance as a whole. Such measures are therefore not substitutes for total revenue, net income or operating income as computed in accordance with GAAP.

The tables below provide reconciliations of property revenue and property net operating income under GAAP to same property revenue and same property net operating income for the indicated periods. Two properties, Twinbrook Quarter Phase I and Hampden House, were excluded from same property results.

Same property revenue

Year ended December 31,

(In thousands)

2025

2024

Total revenue

$

289,843 

$

268,847 

Revenue adjustments (1)

(10,044)

6,979 

Acquisitions, dispositions and development properties

(11,598)

(9,294)

Total same property revenue

$

268,201 

$

266,532 

Shopping Centers

$

187,615 

$

186,205 

Mixed-Use properties

80,586 

80,327 

Total same property revenue

$

268,201 

$

266,532 

Total Shopping Center revenue

$

187,615 

$

186,205 

Shopping Center acquisitions, dispositions and development properties

— 

— 

Total same Shopping Center revenue

$

187,615 

$

186,205 

Total Mixed-Use property revenue

$

92,184 

$

89,621 

Mixed-Use acquisitions, dispositions and development properties

(11,598)

(9,294)

Total same Mixed-Use revenue

$

80,586 

$

80,327 

(1) Revenue adjustments are straight-line base rent and above/below market lease amortization.

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The $1.7 million increase in same property revenue in 2025 compared to 2024 was primarily due to (a) higher property operating expense recoveries of $3.1 million, (b) higher residential base rent of $1.3 million and (c) higher commercial base rent of $1.3 million partially offset by (d) lower lease terminations fees of $2.6 million (e) higher credit losses on lease operating receivables, net, of $0.8 million and (f) lower other property revenue primarily attributable to insurance proceeds in the 2024 relating to lost rents because of a tenant that temporarily closed its operations of $0.5 million.

Mixed-Use same property revenue is composed of the following:

Year Ended December 31,

(Dollars In thousands)

2025

2024

Office mixed-use properties (1)

$

38,474 

$

39,839 

Residential mixed-use properties (residential activity) (2)

37,522 

35,994 

Residential mixed-use properties (retail activity) (3)

4,590 

4,494 

Total Mixed-Use same property revenue

$

80,586 

$

80,327 

(1)Includes Avenel Business Park, Clarendon Center – North and South Blocks, 601 Pennsylvania Avenue and Washington Square

(2)Includes Clarendon South Block, The Waycroft and Park Van Ness

(3)Includes The Waycroft and Park Van Ness

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Same property net operating income

Year Ended December 31,

(In thousands)

2025

2024

Net income

$

49,219 

$

67,703 

Interest expense, net and amortization of deferred debt costs

70,548 

53,696 

Depreciation and amortization of deferred leasing costs

58,784 

50,502 

General and administrative

26,932 

25,066 

Gains on dispositions of properties

(120)

(181)

Revenue adjustments (1)

(10,044)

6,979 

Total property net operating income

195,319

203,765

Acquisition, dispositions and development properties

(3,570)

(8,108)

Total same property net operating income

$

191,749 

$

195,657 

Shopping Centers

$

142,115 

$

144,699 

Mixed-Use properties

49,634 

50,958 

Total same property net operating income

$

191,749 

$

195,657 

Shopping Center property net operating income

$

142,115 

$

144,699 

Shopping Center acquisitions, dispositions and development properties

— 

— 

Total Shopping Center same property net operating income

$

142,115 

$

144,699 

Mixed-Use property net operating income

$

53,204 

$

59,066 

Mixed-Use acquisitions, dispositions and development properties

(3,570)

(8,108)

Total Mixed-Use same property net operating income

$

49,634 

$

50,958 

(1) Revenue adjustments are straight-line base rent and above/below market lease amortization.

During 2025, Shopping Center same property net operating income decreased $2.6 million, or 1.8%, and Mixed-Use same property net operating income decreased $1.3 million, or 2.6%. Shopping Center same property net operating income decreased primarily due to (a) lower lease termination fees of $2.7 million, (b) lower property operating expense recoveries, net of expenses, of $1.3 million, (c) higher credit losses on operating lease receivables, net, of $0.8 million and (d) lower other property revenue primarily attributable to insurance proceeds in the 2024 relating to lost rents because of a tenant that temporarily closed its operations of $0.6 million partially offset by (e) higher base rent of $2.8 million. Mixed-Use same property net operating income decreased primarily due to (a) lower commercial base rent of $1.5 million and (b) lower property operating expense recoveries, net of $1.2 million partially offset by (c) higher residential base rent of $1.3 million.

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Mixed-Use same property net operating income is composed of the following:

Year Ended December 31,

(In thousands)

2025

2024

Office mixed-use properties (1)

$

23,767 

$

25,701 

Residential mixed-use properties (residential activity) (2)

22,674 

22,032 

Residential mixed-use properties (retail activity) (3)

3,193 

3,225 

Total Mixed-Use same property net operating income

$

49,634 

$

50,958 

(1)Includes Avenel Business Park, Clarendon Center – North and South Blocks, 601 Pennsylvania Avenue and Washington Square

(2)Includes Clarendon South Block, The Waycroft and Park Van Ness

(3)Includes The Waycroft and Park Van Ness

Impact of Inflation

The impact of rising operating expenses due to inflation on the operating performance of the Company’s portfolio is partially mitigated by terms in substantially all of the Company’s retail and office leases, which contain provisions designed to increase revenues to offset the adverse impact of inflation on the Company’s results of operations. These provisions include upward periodic adjustments in base rent due from tenants, usually based on a stipulated increase, and, to a lesser extent, on the change in the consumer price index, commonly referred to as the CPI.

In addition, many of the Company’s properties are leased to retail and office tenants under long-term leases, which provide for reimbursement of operating expenses by tenants. These leases tend to reduce the Company’s exposure to rising property expenses due to inflation. Inflation and increased costs may have an adverse impact on the Company’s retail and office tenants if increases in their operating expenses exceed increases in their revenue. In a highly inflationary environment, we may not be able to raise apartment rental rates at or above the rate of inflation, which could reduce our profit margins.

Liquidity and Capital Resources

Cash and cash equivalents were $8.7 million and $10.3 million at December 31, 2025 and 2024, respectively. The changes in cash and cash equivalents during the years ended December 31, 2025 and 2024 were attributable to operating, investing and financing activities, as described below.

Year Ended December 31,

(In thousands)

2025

2024

Net cash provided by operating activities

$

99,796 

$

121,224 

Net cash used in investing activities

(95,814)

(188,732)

Net cash provided by (used in) financing activities

(5,540)

69,400 

Net increase (decrease) in cash and cash equivalents

$

(1,558)

$

1,892 

Operating Activities

Net cash provided by operating activities represents cash received primarily from rental revenue, plus other revenue, less property operating expenses, leasing costs, normal recurring general and administrative expenses and interest payments on outstanding debt.

Investing Activities

Net cash used in investing activities includes property acquisitions, developments, redevelopments, tenant improvements and other property capital expenditures. The $92.9 million decrease in cash used in investing activities is primarily due to (a) decreased development expenditures of $98.9 million partially offset by (b) increased additions to real estate investments throughout the portfolio of $5.9 million.

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Financing Activities

Net cash provided by (used in) financing activities represents (a) cash received from loan proceeds and issuance of common stock, preferred stock and limited partnership units minus (b) cash used to repay and curtail loans, redeem preferred stock and pay dividends and distributions to holders of common stock, preferred stock and limited partnership units. See Note 5 to the Consolidated Financial Statements for a discussion of financing activity.

Liquidity Requirements

Short-term liquidity requirements consist primarily of normal recurring operating expenses and capital expenditures, debt service requirements (including debt service relating to additional and replacement debt), distributions to common and preferred stockholders, distributions to unit holders, and amounts required for expansion and renovation of the Current Portfolio Properties and selective acquisition and development of additional properties. To qualify as a REIT for federal income tax purposes, the Company must distribute to its stockholders at least 90% of its “real estate investment trust taxable income,” as defined in the Code. The Company expects to meet these short-term liquidity requirements (other than amounts required for additional property acquisitions and developments) through cash provided from operations, available cash and its existing line of credit.

The Company is developing Twinbrook Quarter Phase I located in Rockville, Maryland. It includes 452 apartment units, an 81,000 square foot Wegmans supermarket, approximately 25,000 square feet of small shop space, and a 230,000 square foot office building. The office tower portion is not being constructed at this time. In connection with the development of the residential and retail portions of Twinbrook Quarter Phase I, we also invested in infrastructure and other items that will support both Twinbrook Quarter Phase I and other portions of the development of Twinbrook Quarter. Excluding imputed capitalized interest, the remaining investment to complete Twinbrook Quarter Phase I is not expected to exceed $9.9 million. A portion of the cost of the project is being financed by a $145.0 million construction-to-permanent loan. As of December 31, 2025, the outstanding balance of the loan was $139.3 million, net of unamortized deferred debt costs. The Milton at Twinbrook Quarter opened and residential tenants began moving in on October 1, 2024. As of February 23, 2026, 440 of the 452 (97.3%) residential units were leased and occupied. Of the approximately 106,000 square feet of ground floor retail, the base building is complete and 101,400 square feet (95.7%) has been leased. The Wegmans supermarket at Twinbrook Quarter opened for business on June 25, 2025. As of February 23, 2026, including the Wegmans supermarket, approximately 88,500 square feet of the retail space is open and the remaining leased retail space is expected to open at various times during 2026 as tenants complete their buildouts. The development potential of all phases of the entire 18.4 acre Twinbrook Quarter site totals 1,865 residential units, 473,000 square feet of retail space, and 431,000 square feet of office space.

The Company is also developing Hampden House, located in downtown Bethesda, Maryland, which includes 366 apartment units and 10,100 square feet of retail space. Excluding imputed capitalized interest, the remaining investment to complete the project is not expected to exceed $6.8 million. A portion of the cost of the project is being financed by a $133.0 million construction-to-permanent loan. As of December 31, 2025, the outstanding balance of the loan was $115.4 million, net of unamortized deferred debt costs. Hampden House opened and residential tenants began moving in on October 1, 2025. As of February 23, 2026, 130 of the 366 (35.5%) residential units are leased and occupied. Of the approximately 10,100 square feet of ground floor retail, 8,600 square feet (85.1%) has been leased and tenant build-outs are in progress.

During 2025, the Company entered into a lease with Publix for a new grocery store, which we will construct, at Ashland Square in Prince William County, Virginia. The Ashland Square property currently includes three pad sites with operating tenants. We have executed leases at Ashland Square for two additional pad sites. When complete, Ashland Square is expected to ultimately comprise approximately 124,000 square feet of retail space, including the 50,325 square foot Publix, the three existing pad sites, four additional pad sites and approximately 30,000 square feet of small shop space.

Long-term liquidity requirements consist primarily of obligations under our long-term debt and dividends paid to our preferred shareholders. The Company anticipates that long-term liquidity requirements will also include amounts required for property acquisitions and developments.

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The Company may also redevelop certain of the Current Portfolio Properties and may develop additional freestanding outparcels or expansions within certain of the Shopping Centers. Acquisition and development of properties are undertaken only after careful analysis and review, and management’s determination that such properties are expected to provide long-term earnings and cash flow growth. During the coming year, developments, expansions or acquisitions (if any) are expected to be funded with available cash, bank borrowings from the Company’s credit line, construction and permanent financing, proceeds from the operation of the Company’s Dividend Reinvestment and Share Purchase Plan or other external debt or equity capital resources available to the Company. Any future borrowings may be at the Saul Centers, Operating Partnership or Subsidiary Partnership level, and securities offerings may include (subject to certain limitations) the issuance of additional limited partnership interests in the Operating Partnership which can be converted into shares of Saul Centers common stock. The availability and terms of any such financing will depend upon market and other conditions.

Contractual Payment Obligations

As of December 31, 2025, the Company had unfunded contractual payment obligations totaling approximately $239.7 million, excluding operating obligations, due within the next 12 months. The table below shows the total contractual payment obligations as of December 31, 2025.

Payments Due By Period

(In thousands)

One Year or

Less

More Than One Year

Total

Notes Payable:

Interest

$

55,023 

$

481,255 

$

536,278 

Scheduled Principal

24,202 

444,245 

468,447 

Balloon Payments (1)

134,088 

1,023,283 

1,157,371 

Subtotal

213,313 

1,948,783 

2,162,096 

Corporate Headquarters Lease (2)

850 

142 

992 

Development and Predevelopment Obligations

13,457 

4,100 

17,557 

Tenant Improvements

12,030 

— 

12,030 

Total Contractual Obligations

$

239,650 

$

1,953,025 

$

2,192,675 

(1)Includes $289.0 million outstanding under the New Credit Facility. See Note 5 to the Consolidated Financial Statements.

(2)See Note 7 to Consolidated Financial Statements. Corporate Headquarters Lease amounts represent an allocation to the Company based upon employees’ time dedicated to the Company’s business as specified in the Shared Services Agreement. Future amounts are subject to change as the number of employees employed by each of the parties to the lease fluctuates.

Dividend Reinvestments

In December 1995, the Company established a Dividend Reinvestment and Stock Purchase Plan (the “Plan”) to allow its common stockholders and holders of limited partnership interests an opportunity to buy additional shares of common stock by reinvesting all or a portion of their dividends or distributions. The Plan provides for investing in newly issued shares of common stock at a 3% discount from market price without payment of any brokerage commissions, service charges or other expenses. All expenses of the Plan are paid by the Company. The Company issued 95,370 and 57,689 shares under the Plan at a weighted average discounted price of $30.77 and $37.50 per share during the years ended December 31, 2025 and 2024, respectively. The Company issued 603,868 and 431,495 limited partnership units under the Plan at a weighted average price of $30.95 and $38.20 per unit during the years ended December 31, 2025 and 2024, respectively. The Company also credited 9,174 and 7,539 shares to directors pursuant to the reinvestment of dividends specified by the Directors’ Deferred Compensation Plan at a weighted average discounted price of $31.49 and $37.50 per share, during the years ended December 31, 2025 and 2024, respectively.

Capital Strategy and Financing Activity

As a general policy, the Company intends to maintain a ratio of its total debt to total estimated asset value of 50% or less and to actively manage the Company’s leverage and debt expense on an ongoing basis in order to maintain prudent coverage of fixed charges. Asset value is the aggregate fair market value of the Current Portfolio Properties and any subsequently acquired properties as reasonably determined by management by reference to the properties’ aggregate cash flow. Given the Company’s current debt level, it is management’s belief that the ratio of the Company’s debt to total estimated asset value was below 50% as of December 31, 2025.

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The organizational documents of the Company do not limit the absolute amount or percentage of indebtedness that it may incur. The Board of Directors may, from time to time, reevaluate the Company’s debt capitalization policy in light of current economic conditions, relative costs of capital, market values of the Company property portfolio, opportunities for acquisition, development or expansion, and such other factors as the Board of Directors then deems relevant. The Board of Directors may modify the Company’s debt capitalization policy based on such a reevaluation without shareholder approval and may increase or decrease the Company’s debt to total asset ratio above or below 50% or may waive the policy for certain periods of time.

On July 30, 2025, the Company refinanced its existing $525.0 million (the “Existing Credit Facility”) comprised of a $425.0 million revolving credit facility (the “Existing Revolving Credit Facility”) and a $100.0 million term loan (the “Existing Term Loan”). The Company’s new $600.0 million credit facility (the "New Credit Facility") is comprised of a $460.0 million revolving credit facility (the "New Revolving Credit Facility") and a $140.0 million term loan (the "New Term Loan"). Except as set forth in the summary below, the terms of the New Credit Facility are substantially the same as the terms of the Existing Credit Facility.

(Dollars in thousands)

New Credit Facility

Existing Credit Facility

New Term Loan

New Revolving Credit Facility

Total

Existing Term Loan

Existing Revolving Credit Facility

Total

Facility Size

$

140,000 

$

460,000 

$

600,000 

$

100,000 

$

425,000 

$

525,000 

Maturity

July 28, 2028

July 30, 2029

February 26, 2027

August 29, 2025

Extension

Two for one year each

One for one year

None

One for one year

Interest Rate

SOFR

SOFR

SOFR+0.10%

SOFR+0.10%

Spread

1.30% to 1.90%

1.35% to

1.95%

1.30% to 1.90%

1.35% to

1.95%

Issue Letters of Credit

Yes

Yes

Guarantee

Saul Centers and certain subsidiaries of the Operating Partnership

Saul Centers and certain subsidiaries of the Operating Partnership

On December 15, 2025, the Company closed on a 14-year, non-recourse, $15.0 million mortgage secured by Ravenwood. The loan matures in 2040, bears interest at a fixed-rate of 5.58%, requires monthly principal and interest payments of $92,800 based on a 25-year amortization schedule and requires a final payment of $9.2 million at maturity. Proceeds were used to repay the remaining balance of approximately $10.0 million on the existing mortgage and reduce the outstanding balance of the New Credit Facility.

On December 17, 2025, the Company closed on a 15-year, non-recourse, $46.0 million mortgage secured by Lansdowne Town Center. The loan matures in 2041, bears interest at a fixed-rate of 5.74%, requires monthly principal and interest payments of $289,100 based on a 25-year amortization schedule and requires a final payment of $26.6 million at maturity. Proceeds were used to reduce the outstanding balance of the New Credit Facility.

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The Company's 2025 financing activity is described within Note 5 to the Consolidated Financial Statements. The following is a summary of notes payable as of December 31, 2025 and 2024.

December 31,

(Dollars in thousands)

2025

2024

Interest Rate *

Scheduled Maturity *

Ravenwood

$

— 

$

10,708 

6.18 

%

Jan-26

Clarendon Center

71,790 

76,873 

5.31 

%

Apr-26

Severna Park Marketplace

21,474 

22,998 

4.30 

%

Oct-26

Kentlands Square II

24,741 

26,455 

4.53 

%

Nov-26

Cranberry Square

11,676 

12,468 

4.70 

%

Dec-26

Hampshire-Langley

10,160 

10,878 

4.04 

%

Apr-28

Fixed rate portion of New Credit Facility

100,000 

100,000 

4.28 

%

Jul-28

Seabreeze Plaza

11,367 

12,038 

3.99 

%

Sep-28

Great Falls Center

28,923 

29,751 

3.91 

%

Sep-29

Shops at Fairfax / Boulevard

20,358 

21,424 

3.69 

%

Mar-30

Northrock

11,037 

11,597 

3.99 

%

Apr-30

Burtonsville Town Square

29,525 

30,874 

3.39 

%

Feb-32

Park Van Ness

56,701 

58,838 

4.88 

%

Sep-32

Washington Square

46,480 

48,400 

3.75 

%

Dec-32

BJ's Wholesale Club

14,518 

14,817 

6.07 

%

Mar-33

Broadlands Village

26,162 

27,101 

4.41 

%

Nov-33

The Glen

18,961 

19,612 

4.69 

%

Jan-34

Olde Forte Village

18,335 

18,964 

4.65 

%

Feb-34

Olney

13,018 

12,836 

8.00 

%

Apr-34

Shops at Monocacy

24,069 

24,886 

4.14 

%

Dec-34

Ashbrook Marketplace

18,967 

19,604 

3.80 

%

Aug-35

Kentlands

25,560 

26,456 

3.43 

%

Aug-35

The Waycroft

141,353 

145,306 

4.67 

%

Sep-35

Village Center

23,190 

23,838 

4.14 

%

Aug-37

Beacon Center / Seven Corners

133,201 

136,466 

5.05 

%

Oct-37

Avenel Business Park / Leesburg Pike Plaza / White Oak

97,086 

99,060 

6.38 

%

Oct-37

Thruway

68,626 

69,810 

6.41 

%

Oct-39

Ravenwood

15,000 

— 

5.58 

%

Jan-40

Ashburn Village

49,115 

50,000 

5.47 

%

Jan-40

Hampden House

117,871 

74,006 

3.90 

%

Mar-40

Lansdowne

46,000 

— 

5.74 

%

Jan-41

Twinbrook Quarter Phase I

141,554 

129,625 

3.83 

%

Dec-41

Total fixed rate

1,436,818 

1,365,689 

4.72 

%

9.52 

years

Variable rate loans:

Variable-rate portion of New Term Loan **

40,000 

— 

SOFR + 1.35%

Jul-28

Variable-rate portion of New Revolving Credit Facility**

149,000 

187,000 

SOFR + 1.40%

Jul-29

Total variable rate**

189,000 

187,000 

5.08 

%

3.37 

years

Total notes payable

$

1,625,818 

$

1,552,689 

4.76 

%

8.80 

years

*    Totals computed using weighted averages.

**    At December 31, 2025, the interest rate incurred on our variable rate debt is based on the 1-month Term Secured Overnight Financing Rate (“SOFR”) plus a spread.

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Funds From Operations

We use certain non-GAAP measures, in addition to certain performance metrics calculated under GAAP, because we believe these measures improve the understanding of our operating results. We believe these non-GAAP measures provide useful information to our Board, management and investors regarding certain trends relating to our financial condition and results of operations. Our management uses these non-GAAP measures to compare our performance to that of prior periods for trend analyses, as well as for determining management incentive compensation and budgeting, forecasting and planning purposes. We continually evaluate the usefulness, relevance, limitations, and calculation of our reported non-GAAP measures.

Funds From Operations (“FFO”)1 available to common stockholders and noncontrolling interests (after deducting preferred stock dividends) for 2025 totaled $96.7 million, a 9.5% decrease from 2024 FFO available to common stockholders and noncontrolling interests of $106.8 million. FFO available to common stockholders and noncontrolling interests was adversely impacted by $11.2 million, or $0.32 per basic and diluted share, due to the initial operations of Twinbrook Quarter Phase I and Hampden House. Exclusive of Twinbrook Quarter Phase I and Hampden House, FFO available to common stockholders and noncontrolling interest increased by $1.2 million primarily due to (a) higher commercial base rent of $7.7 million and (b) higher residential rent of $1.4 million partially offset by (c) lower lease termination fees of $2.6 million, (d) lower property operating expense recoveries, net of expenses of $2.5 million, (e) higher general and administrative expenses of $1.5 million, (f) higher credit losses on operating lease receivables, net, of $0.8 million and (g) lower other property revenue of $0.5 million. The following table presents a reconciliation from net income to FFO available to common stockholders and noncontrolling interests for the periods indicated:

Year ended December 31,

(In thousands, except per share amounts)

2025

2024

2023

Net income

$

49,219 

$

67,703 

$

69,026 

Subtract:

Gains on dispositions of properties

(120)

(181)

— 

Add:

Real estate depreciation and amortization

58,784 

50,502 

48,430 

FFO

107,883 

118,024 

117,456 

Subtract:

Preferred stock dividends

(11,194)

(11,194)

(11,194)

FFO available to common stockholders and noncontrolling interests

$

96,689 

$

106,830 

$

106,262 

Weighted average shares and units:

Basic

34,969 

34,508 

33,474 

Diluted (2)

34,990 

34,526 

34,066 

Basic FFO per share available to common stockholders and noncontrolling interests

$

2.76 

$

3.10 

$

3.17 

Diluted FFO per share available to common stockholders and noncontrolling interests.

$

2.76 

$

3.09 

$

3.12 

(1)The National Association of Real Estate Investment Trusts (“Nareit”) developed FFO as a relative non-GAAP financial measure of performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO is defined by Nareit as net income, computed in accordance with GAAP, plus real estate depreciation and amortization, and excluding impairment charges on depreciable real estate assets and gains or losses from property dispositions. FFO does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs, which is disclosed in the Company’s Consolidated Statements of Cash Flows for the applicable periods. There are no material legal or functional restrictions on the use of FFO. FFO should not be considered as an alternative to net income, its most directly comparable GAAP measure, as an indicator of the Company’s operating performance, or as an alternative to cash flows as a measure of liquidity. Management considers FFO a meaningful supplemental measure of operating performance because it primarily excludes the assumption that the value of the real estate assets diminishes predictably over time (i.e. depreciation), which is contrary to what we believe occurs with our assets, and because industry analysts have accepted it as a performance measure. FFO may not be comparable to similarly titled measures employed by other REITs.

(2)Beginning March 5, 2021, fully diluted shares and units includes 1,416,071 limited partnership units held in escrow related to the contribution of Twinbrook Quarter by 1592 Rockville Pike. Half of the units held in escrow were released on October 18, 2021. The remaining units held in escrow were released on October 18, 2023.

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Acquisitions and Redevelopments

Management anticipates that during the coming year, the Company may redevelop certain of the Current Portfolio Properties and may develop additional freestanding outparcels or expansions within certain of the Shopping Centers. Acquisition and development of properties are undertaken only after careful analysis and review, and management’s determination that such properties are expected to provide long-term earnings and cash flow growth. During the coming year, any developments, expansions or acquisitions are expected to be funded with bank borrowings from the Company’s New Credit Facility, construction financing, proceeds from the operation of the Company’s dividend reinvestment plan or other external capital resources available to the Company.

The Company has been selectively involved in acquisition, development, redevelopment and renovation activities. It continues to evaluate the acquisition of land parcels for retail and mixed-use development and acquisitions of operating properties for opportunities to enhance operating income and cash flow growth. The Company also continues to analyze redevelopment, renovation and expansion opportunities within the portfolio.

Restricted Stock Compensation

On May 17, 2024, following shareholder approval, the Company established the Saul Centers, Inc. 2024 Stock Incentive Plan (the “Incentive Plan”), under which various equity incentives may be granted. On May 9, 2025, the Company granted 59,500 shares of restricted stock to officers, that will vest on an annual basis over five years, 16,000 shares of restricted stock to non-employee directors, which will vest on an annual basis over three years, and 59,500 performance-based shares of restricted stock to officers, which will vest on the fifth anniversary of the grant date.

For accounting purposes, performance-based awards of restricted stock are not treated as granted until the Board establishes the target for those awards.

The Company uses the fair value method to value and account for restricted stock awards. The fair value of granted restricted stock is determined at the time of the grant using a discounted cash flow analysis, and the following assumptions: (1) Expected Dividend Yield determined by management after considering the Company’s current and historic dividend yield, the Company’s yield in relation to other retail REITs and the Company’s market yield at the grant date; (2) the closing price of the Company’s common stock on the date of the grant; (3) estimated forfeitures; and (4) a present value discount rate equal to the Expected Dividend Yield.

For the year ended December 31, 2025, restricted stock compensation expense totaled $1.3 million, which was included in general and administrative expense in the Consolidated Statement of Operations. As of December 31, 2025, the estimated future expense related to unvested restricted stock awards that are granted for accounting purposes was approximately $5.5 million.

As of December 31, 2025, (a) no expense has been recognized and (b) no estimate of future expense has been made for the 59,100 performance-based restricted stock awarded to officers where the accounting grant date has not occurred. If those awards had been granted for accounting purposes as of December 31, 2025, the additional estimated future expense would have been approximately $1.7 million, calculated using the fair value method and based on the closing share price of $31.53 on December 31, 2025, the final trading day of 2025.

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Portfolio Leasing Status

Commercial Properties

The following table sets forth average annualized base rent per square foot and average annualized effective rent per square foot for the Company's commercial properties (all properties except for the apartments within The Waycroft, Clarendon Center, Park Van Ness, The Milton at Twinbrook Quarter and Hampden House properties). For purposes of this table, annualized effective rent is annualized base rent minus amortized tenant improvements and amortized leasing commissions.

Average Annualized Commercial Rents per Square Foot

Year ended December 31,

2025

2024

2023

Base rent

$

22.53 

$

21.30 

$

20.79 

Effective rent

$

20.85 

$

19.70 

$

19.24 

The following chart sets forth certain information regarding commercial leases at our properties for the periods indicated. This section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024. Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed on February 28, 2025.

Total Properties

Total Square Footage

Percentage Leased

As of December 31,

Shopping

Centers

Mixed-Use

Shopping

Centers

Mixed-Use

Shopping

Centers

Mixed-Use

2025

50 

9 

7,814,783 

1,252,860 

95.6 

%

88.7 

%

2024

50 

8 

7,808,783 

1,242,809 

96.4 

%

87.9 

%

The overall commercial portfolio leased percentage, on a comparative same property basis, decreased to 94.6% at December 31, 2025 from 95.2% at December 31, 2024. Included in the 94.6% of space leased as of December 31, 2025, is approximately 197,718 square feet of space, representing 2.2% of total commercial square footage, that has not been occupied by the tenant. Collectively, these leases are expected to produce approximately $5.0 million of additional annualized base rent, an average of $25.50 per square foot, upon tenant occupancy and following any contractual rent concessions.

The Mixed-Use commercial leased percentage is composed of commercial leases at office mixed-use properties and residential mixed-use properties. On a comparable same property basis, excluding Hampden House, the Mixed-Use portfolio includes 174,819 square feet of leasable retail space and 1,067,990 square feet of leasable office space at December 31, 2025. On a comparative same property basis the leased percentage at office mixed-use properties increased to 87.3% at December 31, 2025 from 86.9% at December 31, 2024 and the retail leased percentage at residential mixed-use properties increased to 97.1% from 93.9% at December 31, 2025 and 2024.

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The following table shows selected data for leases executed in the indicated periods, excluding first generation and/or development leases. The information is based on executed leases without adjustment for the timing of occupancy, tenant defaults, or landlord concessions. The base rent for an expiring lease is the annualized contractual base rent, on a cash basis, as of the expiration date of the lease. The base rent for a new or renewed lease is the annualized contractual base rent, on a cash basis, as of the expected rent commencement date. Because tenants that execute leases may not ultimately take possession of their space or pay all of their contractual rent, the changes presented in the table provide information only about trends in market rental rates. The actual changes in rental income received by the Company may be different.

Commercial Property Leasing Activity

Average Base Rent per Square Foot

Year ended

December 31,

Square Feet

Number

of Leases

New/Renewed

Leases

Expiring

Leases

Shopping Centers

Mixed-Use

Shopping Centers

Mixed-Use

Shopping Centers

Mixed-Use

Shopping Centers

Mixed-Use

2025

1,264,000 

165,900 

252 

30 

$

22.86 

$

38.39 

$

20.94 

$

37.86 

2024

1,263,347 

141,350 

276 

21 

22.43 

45.29 

21.69 

46.29 

Additional information about commercial leasing activity during the three months ended December 31, 2025, is set forth below. The below information includes leases for space which had not been previously leased during the period of the Company's ownership, either as a result of acquisition or development.

Commercial Property Leasing Activity

New

Leases

First Generation/Development Leases

Renewed

Leases

Number of leases

20 

3 

56 

Square feet

83,911 

14,564 

213,365 

Per square foot average annualized:

Base rent

$

21.93 

$

60.08 

$

30.52 

Tenant improvements

(3.20)

(12.56)

(0.57)

Leasing costs

(0.78)

(2.10)

(0.15)

Rent concessions

(0.23)

(0.85)

— 

Effective rents

$

17.72 

$

44.57 

$

29.80 

As of December 31, 2025, 736,846 square feet of Commercial space was subject to leases scheduled to expire in 2026. Below is information about existing and estimated market base rents per square foot for that space.

Expiring Commercial Property Leases:

Total

Square feet

736,846 

Average base rent per square foot

$

20.20 

Estimated market base rent per square foot

$

20.91 

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Residential Properties

On a same property basis, excluding the apartments at Hampden House, the Residential portfolio was 97.7% leased at December 31, 2025, compared to 82.8% at December 31, 2024.

The following table shows the number of new or renewed leases, exclusive of first generation leases, as December 31, 2025.

Residential Property Leasing Activity

Average Rent per Square Foot

Year ended December 31,

Number of leases

New/Renewed Leases

Expiring Leases

2025

912 

$

3.74 

$

3.65 

2024

890 

$

3.69 

$

3.57