Saul Centers, Inc. Reports Second Quarter 2026 Earnings

BETHESDA, Md., Aug. 6, 2026 /PRNewswire/ -- Saul Centers, Inc. (NYSE: BFS) (the "Company"), an equity real estate investment trust ("REIT"), announced operating results for the quarter ended June 30, 2026 ("2026 Quarter").  Total revenue for the 2026 Quarter increased to $76.8 million from $70.8 million for the quarter ended June 30, 2025 ("2025 Quarter").  Net income decreased to $11.5 million for the 2026 Quarter from $14.2 million for the 2025 Quarter. During the 2026 Quarter, the Company continued to lease residential units at Hampden House. As of August 3, 2026, 235 of the 366 (64.2%) residential units were leased and occupied and 8,600 square feet of the 10,100 (85.1%) square feet of retail space is leased and occupied.

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 $4.0 million due to the initial operations of Hampden House, of which $2.9 million is related to interest expense, net and amortization of deferred debt costs. Exclusive of Hampden House, net income increased by $1.3 million primarily due to (a) higher residential base rent of $1.4 million and (b) higher commercial base rent of $1.2 million partially offset by (c) higher general and administrative costs of $0.4 million, (d) higher interest expense, net and amortization of deferred debt costs of $0.3 million and (e) higher depreciation and amortization of deferred leasing costs of $0.3 million. Net income available to common stockholders decreased to $6.0 million, or $0.24 per basic and diluted share, for the 2026 Quarter from $7.9 million, or $0.33 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 $1.9 million, or $0.08 per basic and diluted share, due to the initial operations of Hampden House.

Same property revenue increased $4.7 million, or 6.9%, and same property net operating income increased $3.4 million, or 6.9%, for the 2026 Quarter compared to the 2025 Quarter. Same property revenue was favorably impacted by $2.7 million due to the lease up of Twinbrook Quarter Phase I. Exclusive of Twinbrook Quarter Phase I, same property revenue increased $2.0 million primarily due to (a) higher commercial base rent of $1.3 million and (b) higher expense recoveries of $0.9 million. Same property net operating income was favorably impacted by $2.5 million due to the lease up of Twinbrook Quarter Phase I. Exclusive of Twinbrook Quarter Phase I, same property net operating income increased $0.9 million, primarily due to (a) higher commercial base rent of $1.3 million partially offset by (b) lower expense recoveries, net of expenses, of $0.4 million. Shopping Center same property net operating income for the 2026 Quarter totaled $36.6 million, a 3.6% increase compared to the 2025 Quarter. Shopping Center same property net operating income increased primarily due to higher base rent of $1.2 million.  Mixed-Use same property net operating income for the 2026 Quarter totaled $15.5 million, a 15.7% 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 $2.5 million. Exclusive of Twinbrook Quarter Phase I, Mixed-Use same property net operating income decreased by $0.4 million primarily due to lower expense recoveries, net of expenses, of $0.3 million. One property, Hampden House, which commenced operations on October 1, 2025, 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. 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) decreased to $24.8 million, or $0.69 per basic and diluted share, in the 2026 Quarter compared to $25.4 million, or $0.73 per basic and diluted share, in the 2025 Quarter. FFO is a non-GAAP supplemental earnings measure that management considers meaningful in measuring operating performance. A definition of FFO and reconciliation of net income to FFO is attached to this press release as page 9.  FFO available to common stockholders and noncontrolling interests was adversely impacted by $2.4 million, or $0.07 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 $1.8 million primarily due to (a) higher residential base rent of $1.4 million and (b) higher commercial base rent of $1.2 million partially offset by (c) higher general and administrative costs of $0.4 million and (d) higher interest expense, net and amortization of deferred debt costs of $0.3 million.

On a same property basis, excluding Hampden House, the Residential portfolio was 97.3% leased at June 30, 2026 compared to 90.5% at June 30, 2025. The 6.8 percentage point increase is primarily due to increased occupancy at The Milton at Twinbrook Quarter, which was 96.7% leased at June 30, 2026 compared to 77.0% at June 30, 2025. Excluding The Milton at Twinbrook Quarter and Hampden House, the Residential portfolio was 97.6% leased at June 30, 2026 compared to 96.6% at June 30, 2025.

For the six months ended June 30, 2026 ("2026 Period"), total revenue increased to $155.1 million from $142.7 million for the six months ended June 30, 2025 ("2025 Period").  Net income decreased to $23.6 million for the 2026 Period from $27.0 million for the 2025 Period.  The decrease in net income was primarily due to the initial operations of Hampden House, which adversely impacted net income by $8.8 million, of which $5.7 million is related to interest expense, net and amortization of deferred debt costs. Exclusive of Hampden House, net income increased $5.4 million primarily due to (a) higher residential base rent of $3.5 million and (b) higher commercial base rent of $2.8 million partially offset by (c) higher general and administrative costs of $0.8 million. Net income available to common stockholders decreased to $12.3 million, or $0.50 per basic and diluted share, for the 2026 Period compared to $14.9 million, or $0.62 per basic and diluted share, for the 2025 Period. Compared to the 2025 Period, net income available to common stockholders for the 2026 Period was adversely impacted by $4.2 million, or $0.18 per basic and diluted share, due to the initial operations of Hampden House.

Same property revenue increased $9.8 million, or 7.2%, and same property net operating income increased $7.7 million, or 7.9%, for the 2026 Period compared to the 2025 Period.  Same property revenue was favorably impacted by $5.8 million due to the lease up of Twinbrook Quarter Phase I. Exclusive of Twinbrook Quarter Phase I, same property revenue increased $4.0 million primarily due to (a) higher commercial base rent of $2.1 million, (b) higher expense recoveries of $1.6 million and (c) higher residential base rent of $0.3 million. Same property net operating income was favorably impacted by $5.6 million due to the lease up of Twinbrook Quarter Phase I. Exclusive of Twinbrook Quarter Phase I, same property net operating income increased $2.1 million, primarily due to higher commercial base rent of $2.1 million. Shopping Center same property net operating income increased $2.5 million, or 3.5%, and Mixed-Use same property net operating income increased $5.2 million, or 20.1%. Shopping Center same property net operating income increased primarily due to (a) higher base rent of $2.1 million and (b) lower credit loss on operating lease receivables, net, of $0.5 million. Mixed-Use same property net operating income was favorably impacted by $5.6 million due to the lease up of Twinbrook Quarter Phase I. Exclusive of Twinbrook Quarter Phase I, Mixed-Use same property net operating income decreased by $0.4 million primarily due to higher credit losses on operating lease receivables, net, of $0.4 million. One property, Hampden House, was excluded from same property results.

FFO available to common stockholders and noncontrolling interests, after deducting preferred stock dividends, totaled $49.9 million, or $1.40 per basic and diluted share, for the 2026 Period compared to $49.9 million, or $1.44 per basic and diluted share, for the 2025 Period. FFO available to common stockholders and noncontrolling interests was adversely impacted by $5.6 million, or $0.16 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 $5.6 million primarily due to (a) higher residential base rent of $3.5 million and (b) higher commercial base rent of $2.8 million partially offset by (c) higher general and administrative costs of $0.8 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 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 instability (such as the ongoing conflicts in the Middle East and Ukraine) and changes in tariff and trade policy, 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.

Consolidated Balance Sheets

(Unaudited)

2026

2025

24,777,583 and 24,551,168 shares issued and outstanding, respectively

Consolidated Statements of Operations

(Unaudited)

June 30,

June 30,

noncontrolling interests (1)

June 30,

June 30,

June 30,

June 30,

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

June 30,

June 30,

Reconciliation of net income to same property net operating income (2)

June 30,

June 30,

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

June 30,

June 30,

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SOURCE Saul Centers, Inc.