Saul Centers, Inc. Reports Second Quarter 2025 Earnings
BETHESDA, Md., Aug. 7, 2025 /PRNewswire/ -- Saul Centers, Inc. (NYSE:BFS), an equity real estate investment trust ("REIT"), announced operating results for the quarter ended June 30, 2025 ("2025 Quarter"). Total revenue for the 2025 Quarter increased to $70.8 million from $66.9 million for the quarter ended June 30, 2024 ("2024 Quarter"). Net income decreased to $14.2 million for the 2025 Quarter from $19.5 million for the 2024 Quarter. During the 2025 Quarter, the Company continued to lease residential units and work on retail spaces at Twinbrook Quarter Phase I. On June 25, 2025, Wegmans commenced operations, and as of August 4, 2025, 389 of the 452 (86.1%) residential units were leased and occupied.
Concurrent with the initial delivery of Twinbrook Quarter Phase I on October 1, 2024, 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 2024 Quarter, net income for the 2025 Quarter was adversely impacted by $5.4 million, of which $3.5 million was a reduction in capitalized interest, due to the initial operations of Twinbrook Quarter Phase I. Net income available to common stockholders decreased to $7.9 million, or $0.33 per basic and diluted share, for the 2025 Quarter from $11.6 million, or $0.48 per basic and diluted share, for the 2024 Quarter. As compared to the 2024 Quarter, net income available to common stockholders for the 2025 Quarter was adversely impacted by $2.9 million, or $0.12 per basic and diluted share, due to the initial operations of Twinbrook Quarter Phase I.
Same property revenue decreased $1.5 million, or 2.2%, and same property net operating income decreased $2.2 million, or 4.3%, for the 2025 Quarter compared to the 2024 Quarter. The $1.5 million decrease in same property revenue for the 2025 Quarter compared to the 2024 Quarter was primarily due to (a) lower lease termination fees of $2.0 million partially offset by (b) higher expense recoveries of $0.3 million. Shopping Center same property net operating income for the 2025 Quarter totaled $35.3 million, a decrease of $2.1 million compared to the 2024 Quarter. Shopping Center same property net operating income decreased primarily due to to lower lease termination fees of $2.1 million. One property, Twinbrook Quarter Phase I, 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 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 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 property dispositions, (g) straight-line base rent, (h) above/below market lease amortization of 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) decreased to $25.4 million, or $0.73 per basic and diluted share, in the 2025 Quarter compared to $28.5 million, or $0.83 per basic and diluted share, in the 2024 Quarter. FFO is a non-GAAP supplemental earnings measure that the Company considers meaningful in measuring its operating performance. A reconciliation 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 Twinbrook Quarter Phase I.
As of June 30, 2025, 94.0% of the commercial portfolio was leased compared to 95.8% as of June 30, 2024. As of June 30, 2025, excluding The Milton at Twinbrook Quarter, the residential portfolio was 99.0% leased compared to 99.4% as of June 30, 2024.
For the six months ended June 30, 2025 ("2025 Period"), total revenue increased to $142.7 million from $133.6 million for the six months ended June 30, 2024 ("2024 Period"). Net income decreased to $27.0 million for the 2025 Period from $37.8 million for the 2024 Period. The decrease in net income was primarily due to the initial operations of Twinbrook Quarter Phase I, which adversely impacted net income by $11.6 million, of which $7.1 million was a reduction of capitalized interest. Exclusive of Twinbrook Quarter Phase I, net income increased by $0.9 million primarily due to (a) higher commercial base rent of $4.3 million and (b) higher residential base rent of $0.7 million partially offset by (c) lower lease termination fees of $2.1 million, (d) lower expense recoveries, net of expenses, of $1.1 million, (e) lower other property revenue of $0.5 million and (f) higher general and administrative costs of $0.4 million. Net income available to common stockholders decreased to $14.9 million, or $0.62 per basic and diluted share, for the 2025 Period compared to $22.5 million, or $0.93 per basic and diluted share, for the 2024 Period. As compared to the 2024 Period, net income available to common stockholders for the 2025 Period was adversely impacted by $6.4 million, or $0.26 per basic and diluted share, due to the initial operations of Twinbrook Quarter Phase I.
Same property revenue increased $0.3 million, or 0.2%, and same property net operating income decreased $2.4 million, or 2.4%, for the 2025 Period compared to the 2024 Period. Shopping Center same property net operating income decreased by $2.6 million to $70.6 million primarily due to lower lease termination fees of $2.3 million. One property, Twinbrook Quarter Phase I, was excluded from same property results.
FFO available to common stockholders and noncontrolling interests, after deducting preferred stock dividends, decreased to $49.9 million, or $1.44 per basic and diluted share, in the 2025 Period from $56.0 million, or $1.63 per basic and diluted share, in the 2024 Period. FFO available to common stockholders and noncontrolling interests was adversely impacted by $7.3 million, or $0.21 per basic and diluted share, due to the initial operations of Twinbrook Quarter Phase I. Exclusive of Twinbrook Quarter Phase I, FFO available to common stockholders and noncontrolling interests increased by $1.2 million primarily due to (a) higher commercial base rent of $4.3 million and (b) higher residential base rent of $0.7 million partially offset by (c) lower lease termination fees of $2.1 million, (d) lower expense recoveries, net of expenses, of $1.1 million and (e) lower other property revenue of $0.5 million.
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 eight mixed-use properties with approximately 10.2 million square feet of leasable area and (b) four non-operating land and development properties. Over 85% of the Saul Centers' property net operating income is generated by properties in the metropolitan Washington, D.C./Baltimore 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, 2024 and include the following: (i) the ability of our tenants to pay rent, (ii) our reliance on shopping center "anchor" tenants and other significant tenants, (iii) 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, (iv) risks of financing, 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, (v) our development activities, (vi) our access to additional capital, (vii) our ability to successfully complete additional acquisitions, developments or redevelopments, or if they are consummated, whether such acquisitions, developments or redevelopments perform as expected, (viii) adverse trends in the retail, office and residential real estate sectors, (ix) risks relating to cybersecurity, including disruption to our business and operations and exposure to liabilities from tenants, employees, capital providers, and other third parties, (x) 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 (xi) 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 the 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, 2024.
Saul Centers, Inc.
Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands, except per share amounts)
June 30,
2025
December 31,
2024
Assets
Real estate investments
Land
$ 556,499
$ 562,047
Buildings and equipment
1,924,757
1,903,907
Construction in progress
356,511
326,193
2,837,767
2,792,147
Accumulated depreciation
(789,860)
(767,842)
Total real estate investments, net
2,047,907
2,024,305
Cash and cash equivalents
5,303
10,299
Accounts receivable and accrued income, net
52,621
50,949
Deferred leasing costs, net
26,579
25,907
Other assets
7,274
14,944
Total assets
$ 2,139,684
$ 2,126,404
Liabilities
Mortgage notes payable, net
$ 1,030,839
$ 1,047,832
Revolving credit facility payable, net
200,876
186,489
Term loan facility payable, net
99,754
99,679
Construction loans payable, net
233,210
198,616
Accounts payable, accrued expenses and other liabilities
45,156
46,162
Deferred income
17,887
23,033
Dividends and distributions payable
23,688
23,469
Total liabilities
1,651,410
1,625,280
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,
24,471,554 and 24,302,576 shares issued and outstanding, respectively
245
243
Additional paid-in capital
456,120
454,086
Distributions in excess of accumulated earnings
(320,255)
(306,541)
Accumulated other comprehensive income
1,268
2,966
Total Saul Centers, Inc. equity
322,378
335,754
Noncontrolling interests
165,896
165,370
Total equity
488,274
501,124
Total liabilities and equity
$ 2,139,684
