BETHESDA, Md., May 7, 2026 /PRNewswire/ -- Saul Centers, Inc. (NYSE: BFS) (the "Company"), an equity real estate investment trust ("REIT"), announced operating results for the quarter ended March 31, 2026 ("2026 Quarter"). Total revenue for the 2026 Quarter increased to $78.3 million from $71.9 million for the quarter ended March 31, 2025 ("2025 Quarter"). Net income decreased to $12.0 million for the 2026 Quarter from $12.8 million for the 2025 Quarter. On October 1, 2025, the Company opened Hampden House, comprised of 366 apartment units and approximately 10,100 square feet of retail space adjacent to the Bethesda Metro Station in Bethesda, Maryland. As of May 4, 2026, 167 of the 366 (45.6%) residential units were 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 approximately 10,100 (85.1%) square feet of retail space have been leased and the remaining tenant build-out is in progress.
Concurrent with the opening of Hampden House on October 1, 2025, interest, real estate taxes, depreciation and all other costs associated with the residential portion and the majority of the retail portion of the property began to be charged to expense, while revenue continues to grow as occupancy increases. As a result, compared to the 2025 Quarter, net income for the 2026 Quarter was adversely impacted by $4.8 million, of which $2.8 million was a reduction in capitalized interest, due to the initial operations of Hampden House. Exclusive of Hampden House, net income increased by $4.0 million primarily due to (a) higher residential base rent of $2.1 million, (b) higher commercial base rent of $1.5 million and (c) lower credit losses on operating lease receivables, net, of $0.3 million. Net income available to common stockholders decreased to $6.3 million, or $0.26 per basic and diluted share, for the 2026 Quarter from $7.0 million, or $0.29 per basic and diluted share, for the 2025 Quarter. Compared to the 2025 Quarter, net income available to common stockholders for the 2026 Quarter was adversely impacted by $1.7 million, or $0.07 per basic and diluted share, due to the initial operations of Hampden House.
Same property revenue increased $5.1 million, or 7.4%, and same property net operating income increased $4.3 million, or 9.0%, for the 2026 Quarter compared to the 2025 Quarter. Same property revenue was favorably impacted by $3.2 million due to the lease up of Twinbrook Quarter Phase I. Exclusive of Twinbrook Quarter Phase I, same property revenue increased $1.9 million, or 2.8%, primarily due to (a) higher commercial base rent of $0.8 million, (b) higher expense recoveries of $0.7 million and (c) lower credit losses on operating lease receivables, net of $0.3 million. Exclusive of Twinbrook Quarter Phase I, same property net operating income increased $1.2 million, or 2.5%, primarily due to (a) higher base rent of $1.0 million and (b) lower credit losses on operating lease receivables, net, of $0.3 million. Shopping Center same property net operating income for the 2026 Quarter totaled $36.5 million, a 3.4% increase compared to the 2025 Quarter. Shopping Center same property net operating income increased primarily due to (a) higher base rent of $0.9 million and (b) lower credit losses on operating lease receivables, net, of $0.4 million. Mixed-Use same property net operating income for the 2026 Quarter totaled $15.6 million, a 24.9% increase compared to the 2025 Quarter. Mixed-Use same property net operating income increased primarily due to the lease up of Twinbrook Quarter Phase I of $3.1 million. Exclusive of Twinbrook Quarter Phase I, Mixed-Use same property net operating income was unchanged at $12.7 million. One property, Hampden House, was excluded from same property results. Reconciliations of (a) total revenue to same property revenue and (b) net income to same property net operating income are attached to this press release.
Same property revenue and same property net operating income are non-GAAP financial measures of performance that management believes improve the comparability of reporting periods by excluding the results of properties that were not in operation for the entirety of the comparable reporting periods. We define same property revenue as total revenue less straight-line base rent and amortization of above/below market premiums and discounts related to 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 property dispositions, (g) straight-line base rent, (h) amortization of above/below market premiums and discounts related to leases acquired in connection with purchased real estate investment properties and (i) the net operating income of properties that were not in operation for the entirety of the comparable periods.
Funds from operations ("FFO") available to common stockholders and noncontrolling interests (after deducting preferred stock dividends) increased to $25.2 million, or $0.71 per basic and diluted share, in the 2026 Quarter compared to $24.6 million, or $0.71 per basic and diluted share, in the 2025 Quarter. FFO is a non-GAAP supplemental earnings measure that the Company considers meaningful in measuring its operating performance. A reconciliation and definition of net income to FFO is attached to this press release. FFO available to common stockholders and noncontrolling interests was adversely impacted by $3.2 million, or $0.09 per basic and diluted share, due to the initial operations of Hampden House. Exclusive of Hampden House, FFO available to common stockholders and noncontrolling interests increased by $3.8 million primarily due to (a) higher residential base rent of $2.1 million and (b) higher commercial base rent of $1.5 million.
On a same property basis, excluding Hampden House, the Residential portfolio was 97.6% leased at March 31, 2026 compared to 90.4% at March 31, 2025. The 7.2% increase is primarily due to increased occupancy at The Milton at Twinbrook Quarter, which was 98.0% leased at March 31, 2026 compared to 70.8% at March 31, 2025. Excluding The Milton at Twinbrook Quarter and Hampden House, the Residential portfolio was 97.4% leased at March 31, 2026 compared to 99.3% at March 31, 2025.
Saul Centers, Inc. is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland, which currently operates and manages a real estate portfolio of 62 properties, which includes (a) 50 community and neighborhood shopping centers and nine mixed-use properties with approximately 10.6 million square feet of leasable area and (b) three non-operating land and development properties. Over 85% of the Saul Centers' property net operating income is generated by properties in the Washington, D.C./Baltimore metropolitan area.
Safe Harbor Statement
Certain matters discussed within this press release may be deemed to be forward-looking statements within the meaning of the federal securities laws. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. These factors include, but are not limited to, the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2025 and other periodic or current reports filed with the SEC and include the following: (i) 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, (ii) the ability of our tenants to pay rent, (iii) our reliance on shopping center "anchor" tenants and other significant tenants, (iv) our substantial relationships with members of the B. F. Saul Company and certain other affiliated entities, each of which is controlled by B. Francis Saul II and his family members, (v) 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, (vi) our access to additional capital, (vii) our development activities, (viii) our ability to successfully complete additional acquisitions, developments or redevelopments, or if they are consummated, whether such acquisitions, developments or redevelopments perform as expected, (ix) adverse trends in the retail, office and residential real estate sectors, (x) 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, (xi) 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 (xii) 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. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this press release. Except as may be required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events or otherwise. You should carefully review the risks and risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2025 and other periodic or current reports filed with the SEC.
Saul Centers, Inc.
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands, except per share amounts) March 31, December 31,
2026 2025
Assets
Real estate investments
Land $595,514 $595,514
Buildings and equipment 2,165,566 2,162,135
Construction in progress 113,892 109,950
2,874,972 2,867,599
Accumulated depreciation (826,852) (812,035)
Total real estate investments, net 2,048,120 2,055,564
Cash and cash equivalents 9,326 8,741
Accounts receivable and accrued income, net 61,252 60,799
Deferred leasing costs, net 25,835 25,847
Other assets 12,319 11,727
Total assets $2,156,852 $2,162,678
Liabilities
Mortgage notes payable, net $1,062,935 $1,063,530
Revolving credit facility payable, net 137,979 144,678
Term loan facility payable, net 138,980 138,870
Construction loans payable, net 257,659 254,724
Accounts payable, accrued expenses and other liabilities 41,219 36,617
Deferred income 20,195 22,840
Dividends and distributions payable 24,411 24,162
Total liabilities 1,683,378 1,685,421
Equity
Preferred stock, 1,000,000 shares authorized:
Series D Cumulative Redeemable, 30,000 shares issued and outstanding 75,000 75,000
Series E Cumulative Redeemable, 44,000 shares issued and outstanding 110,000 110,000
Common stock, $0.01 par value, 50,000,000 shares authorized, 246 245
24,595,080 and 24,551,168 shares issued and outstanding, respectively
Additional paid-in capital 461,101 459,222
Distributions in excess of accumulated earnings (345,859) (337,708)
Accumulated other comprehensive income 1,375 1,061
Total Saul Centers, Inc. equity 301,863 307,820
Noncontrolling interests 171,611 169,437
Total equity 473,474 477,257
Total liabilities and equity $2,156,852 $2,162,678
Saul Centers, Inc.
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
March 31,
(In thousands, except per share amounts) 2026 2025
Revenues
Rental revenue $76,822 $70,547
Other 1,437 1,309
Total revenue 78,259 71,856
Expenses
Property operating expenses 15,739 13,742
Real estate taxes 8,464 7,984
Interest expense, net and amortization of deferred debt costs 19,650 16,747
Depreciation and amortization of deferred leasing costs 15,916 14,523
General and administrative 6,447 6,012
Total expenses 66,216 59,008
Net income 12,043 12,848
Noncontrolling interests
Income attributable to noncontrolling interests (2,925) (3,049)
Net income attributable to Saul Centers, Inc. 9,118 9,799
Preferred stock dividends (2,798) (2,798)
Net income available to common stockholders $6,320 $7,001
Per share net income available to common stockholders
Basic and diluted: $0.26 $0.29
Reconciliation of net income to FFO available to common stockholders and
noncontrolling interests (1)
Three Months Ended
March 31,
(In thousands, except per share amounts) 2026 2025
Net income $12,043 $12,848
Add:
Real estate depreciation and amortization 15,916 14,523
FFO 27,959 27,371
Subtract:
Preferred stock dividends (2,798) (2,798)
FFO available to common stockholders and noncontrolling interests $25,161 $24,573
Weighted average shares and units:
Basic 35,525 34,686
Diluted 35,567 34,707
Basic and diluted FFO per share available to common stockholders $0.71 $0.71
and noncontrolling interests
(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 real estate assets and gains or losses from real estate 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. 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 the Company believes occurs with its 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.
Reconciliation of revenue to same property revenue (2)
Three Months Ended
March 31,
(In thousands) 2026 2025
Total revenue $78,259 $71,856
Revenue adjustments (1) (2,407) (2,356)
Acquisitions, dispositions and development properties (1,216)
Total same property revenue $74,636 $69,500
Shopping Centers $49,798 $47,998
Mixed-Use properties 24,838 21,502
Total same property revenue $74,636 $69,500
Total Shopping Center revenue $49,798 $47,998
Shopping Center acquisitions, dispositions and development properties
Total Shopping Center same property revenue $49,798 $47,998
Total Mixed-Use property revenue $26,054 $21,502
Mixed-Use acquisitions, dispositions and development properties (1,216)
Total Mixed-Use same property revenue $24,838 $21,502
(1)
Revenue adjustments are straight-line base rent and above/below market lease amortization.
(2) Same property revenue is a non-GAAP financial measure of performance that management believes improves the comparability of reporting periods by excluding the results of properties that were not in
operation for the entirety of the comparable reporting periods. We define same property revenue as total revenue less straight-line base rent and amortization of above/below market premiums and
discounts related to 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.
Same property revenue is a measure of the operating performance of the Company's properties but does not measure the Company's performance as a whole. Same property revenue should not be considered as
an alternative to total revenue, its most directly comparable GAAP measure, as an indicator of the Company's operating performance. Management considers same property revenue a meaningful supplemental
measure of operating performance because it is not affected by the cost of the Company's 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 the Company's properties. Management believes the exclusion of these items from
same property revenue is useful because the resulting measure captures the actual revenue generated by operating the Company's properties. Other REITs may use different methodologies for calculating
same property revenue. Accordingly, the Company's same property revenue may not be comparable to those of other REITs.
Mixed-Use same property revenue is composed of the following:
Three Months Ended
March 31,
(In thousands) 2026 2025
Residential Mixed-Use properties (residential activity) (1) $13,193 $10,596
Office Mixed-Use properties (2) 10,439 9,781
Residential Mixed-Use properties (retail activity) (3) 1,206 1,125
Total Mixed-Use same property revenue $24,838 $21,502
(1) Includes Clarendon South Block, The Waycroft, Park Van Ness and The Milton at Twinbrook Quarter.
(2) Includes Avenel Business Park, Clarendon Center - North and South Blocks, 601 Pennsylvania Avenue and Washington Square.
(3) Includes The Waycroft, Park Van Ness and Twinbrook Quarter Phase I.
Reconciliation of net income to same property net operating income (2)
Three Months Ended
March 31,
(In thousands) 2026 2025
Net income $12,043 $12,848
Interest expense, net and amortization of deferred debt costs 19,650 16,747
Depreciation and amortization of deferred leasing costs 15,916 14,523
General and administrative 6,447 6,012
Revenue adjustments (1) (2,407) (2,356)
Total property net operating income 51,649 47,774
Acquisitions, dispositions, and development properties 439
Total same property net operating income $52,088 $47,774
Shopping Centers $36,478 $35,273
Mixed-Use properties 15,610 12,501
Total same property net operating income $52,088 $47,774
Shopping Center property net operating income $36,478 $35,273
Shopping Center acquisitions, dispositions and development properties
Total Shopping Center same property net operating income $36,478 $35,273
Mixed-Use property net operating income $15,171 $12,501
Mixed-Use acquisitions, dispositions and development properties 439
Total Mixed-Use same property net operating income $15,610 $12,501
(1)
Revenue adjustments are straight-line base rent and above/below market lease amortization.
(2) Same property net operating income is a non-GAAP financial measure of performance that management believes improves the comparability of reporting periods by excluding the results of properties that
were not in operation for the entirety of the comparable reporting periods. 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 property dispositions, (g) straight-line base rent, (h) amortization of above/below market premiums and discounts related to leases acquired in connection with purchased real estate
investment properties and (i) the net operating income of properties that were not in operation for the entirety of the comparable periods. Same property net operating income is a measure of the
operating performance of the Company's properties but does not measure the Company's performance as a whole. Same property net operating income 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. Management considers same property net operating income a meaningful supplemental measure of operating
performance because it is not affected by the cost of the Company's 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 the Company's properties. Management believes the exclusion of these items from property net operating
income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred by operating the Company's properties. Other REITs may use different methodologies for
calculating same property net operating income. Accordingly, same property net operating income may not be comparable to those of other REITs.
Mixed-Use same property net operating income is composed of the following:
Three Months Ended
March 31,
(In thousands) 2026 2025
Residential Mixed-Use properties (residential activity) (1) $8,018 $5,732
Office Mixed-Use properties (2) 6,749 5,964
Residential Mixed-Use properties (retail activity) (3) 843 805
Total Mixed-Use same property net operating income $15,610 $12,501
(1) Includes Clarendon South Block, The Waycroft, Park Van Ness and The Milton at Twinbrook Quarter.
(2) Includes Avenel Business Park, Clarendon Center - North and South Blocks, 601 Pennsylvania Avenue and Washington Square.
(3) Includes The Waycroft, Park Van Ness and Twinbrook Quarter Phase I.
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SOURCE Saul Centers, Inc.
Carlos L. Heard, (301) 986-7737