10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

For The Quarterly Period Ended September 30, 2017

Commission File Number 1-12254

SAUL CENTERS, INC.

(Exact name of registrant as specified in its charter)

Maryland	52-1833074
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

7501 Wisconsin Avenue, Bethesda, Maryland 20814

(Address of principal executive office) (Zip Code)

Registrant’s telephone number, including area code (301) 986-6200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days.    YES   x    NO  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES   x    NO   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o	(Do not check if a smaller reporting company)
		Smaller reporting company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     YES  o    NO  x

Number of shares of common stock, par value $0.01 per share outstanding as of October 31, 2017: 21.9 million.

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SAUL CENTERS, INC.

Table of Contents

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
(a) Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016	4
(b) Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016	5
(c) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2017 and 2016	6
(d) Consolidated Statement of Equity for the nine months ended September 30, 2017	7
(e) Consolidated Statements of Cash Flows for the three and nine months ended September 30, 2017 and 2016	8
(f) Notes to Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(a) Critical Accounting Policies	29
(b) Results of Operations:
Same Property Revenue	31
Same Property Operating Income	32
Three months ended September 30, 2017 compared to three months ended September 30, 2016	32
Nine months ended September 30, 2017 compared to nine months ended September 30, 2016	33
(c) Liquidity and Capital Resources	35
Item 3. Quantitative and Qualitative Disclosures About Market Risk	42
Item 4. Controls and Procedures	42
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	43
Item 1A. Risk Factors	43
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3. Defaults Upon Senior Securities	43
Item 4. Mine Safety Disclosures	43
Item 5. Other Information	43
Item 6. Exhibits	44
Signatures	45

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PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments necessary for the fair presentation of the financial position and results of operations of Saul Centers, Inc. for the interim periods have been included. All such adjustments are of a normal recurring nature. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements of Saul Centers, Inc. for the year ended December 31, 2016, which are included in its Annual Report on Form 10-K. The results of operations for interim periods are not necessarily indicative of results to be expected for the year.

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Saul Centers, Inc.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)	September 30, 2017			December 31, 2016
	(Unaudited)
Assets
Real estate investments
Land	$	450,256		$	422,546
Buildings and equipment	1,257,886			1,214,697
Construction in progress	80,163			63,570
	1,788,305			1,700,813
Accumulated depreciation	(478,284		)	(458,279		)
	1,310,021			1,242,534
Cash and cash equivalents	9,385			8,322
Accounts receivable and accrued income, net	55,619			52,774
Deferred leasing costs, net	27,679			25,983
Prepaid expenses, net	8,901			5,057
Other assets	12,123			8,355
Total assets	$	1,423,728		$	1,343,025
Liabilities
Notes payable	$	873,538		$	783,400
Revolving credit facility payable	88,608			48,217
Construction loan payable	—			68,672
Dividends and distributions payable	18,143			17,953
Accounts payable, accrued expenses and other liabilities	24,267			20,838
Deferred income	31,040			30,696
Total liabilities	1,035,596			969,776
Equity
Preferred stock, 1,000,000 shares authorized:
Series C Cumulative Redeemable, 72,000 shares issued and outstanding	180,000			180,000
Common stock, $0.01 par value, 40,000,000 shares authorized, 21,985,890 and 21,704,359 shares issued and outstanding, respectively	220			217
Additional paid-in capital	344,820			328,171
Accumulated deficit	(194,659		)	(188,584		)
Accumulated other comprehensive loss	(925		)	(1,299		)
Total Saul Centers, Inc. equity	329,456			318,505
Noncontrolling interest	58,676			54,744
Total equity	388,132			373,249
Total liabilities and equity	$	1,423,728		$	1,343,025

The Notes to Financial Statements are an integral part of these statements.

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Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollars in thousands, except per share amounts)	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Revenue
Base rent	$	45,385		$	43,151		$	135,436		$	128,338
Expense recoveries	9,447			8,561			26,378			26,011
Percentage rent	67			57			968			1,016
Other	1,338			1,464			7,828			7,504
Total revenue	56,237			53,233			170,610			162,869
Operating expenses
Property operating expenses	7,418			6,685			20,543			20,740
Provision for credit losses	52			391			602			1,207
Real estate taxes	6,834			6,195			20,124			18,266
Interest expense and amortization of deferred debt costs	11,821			11,524			35,585			34,268
Depreciation and amortization of deferred leasing costs	11,363			11,626			34,396			33,478
General and administrative	4,363			4,033			13,178			12,500
Acquisition related costs	—			57			—			57
Total operating expenses	41,851			40,511			124,428			120,516
Operating income	14,386			12,722			46,182			42,353
Change in fair value of derivatives	(1		)	1			(2		)	(9		)
Net Income	14,385			12,723			46,180			42,344
Noncontrolling interests
Income attributable to noncontrolling interests	(2,902		)	(2,484		)	(9,483		)	(8,530		)
Net income attributable to Saul Centers, Inc.	11,483			10,239			36,697			33,814
Preferred stock dividends	(3,093		)	(3,093		)	(9,281		)	(9,281		)
Net income attributable to common stockholders	$	8,390		$	7,146		$	27,416		$	24,533
Per share net income attributable to common stockholders
Basic and diluted	$	0.38		$	0.33		$	1.25		$	1.14
Dividends declared per common share outstanding	$	0.51		$	0.47		$	1.53		$	1.41

The Notes to Financial Statements are an integral part of these statements.

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Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(Dollars in thousands)	2017			2016			2017			2016
Net income	$	14,385		$	12,723		$	46,180		$	42,344
Other comprehensive income
Change in unrealized loss on cash flow hedge	171			431			503			(383		)
Total comprehensive income	14,556			13,154			46,683			41,961
Comprehensive income attributable to noncontrolling interests	(2,946		)	(2,596		)	(9,612		)	(8,432		)
Total comprehensive income attributable to Saul Centers, Inc.	11,610			10,558			37,071			33,529
Preferred stock dividends	(3,093		)	(3,093		)	(9,281		)	(9,281		)
Total comprehensive income attributable to common stockholders	$	8,517		$	7,465		$	27,790		$	24,248

The Notes to Financial Statements are an integral part of these statements.

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Saul Centers, Inc.

CONSOLIDATED STATEMENT OF EQUITY

(Unaudited)

(Dollars in thousands, except per share amounts)	Preferred Stock		Common Stock		Additional Paid-in Capital		Accumulated Deficit			Accumulated Other Comprehensive (Loss)			Total Saul Centers, Inc.			Noncontrolling Interest			Total
Balance, December 31, 2016	$	180,000	$	217	$	328,171	$	(188,584	)	$	(1,299	)	$	318,505		$	54,744		$	373,249
Issuance of common stock:
183,020 shares pursuant to dividend reinvestment plan	—		2		10,825		—			—			10,827			—			10,827
98,511 shares due to exercise of stock options and issuance of directors’ deferred stock	—		1		5,824		—			—			5,825			—			5,825
Issuance of 95,755 partnership units pursuant to dividend reinvestment plan	—		—		—		—			—			—			5,798			5,798
Net income	—		—		—		36,697			—			36,697			9,483			46,180
Change in unrealized loss on cash flow hedge	—		—		—		—			374			374			129			503
Series C preferred stock distributions	—		—		—		(6,188		)	—			(6,188		)	—			(6,188		)
Common stock distributions	—		—		—		(22,279		)	—			(22,279		)	(7,640		)	(29,919		)
Distributions payable on Series C preferred stock ($42.97/share)	—		—		—		(3,094		)	—			(3,094		)	—			(3,094		)
Distributions payable common stock ($0.51/share) and distributions payable partnership units ($0.51/unit)	—		—		—		(11,211		)	—			(11,211		)	(3,838		)	(15,049		)
Balance, September 30, 2017	$	180,000	$	220	$	344,820	$	(194,659	)	$	(925	)	$	329,456		$	58,676		$	388,132

The Notes to Financial Statements are an integral part of these statements.

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Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Nine months ended September 30,
(Dollars in thousands)	2017			2016
Cash flows from operating activities:
Net income	$	46,180		$	42,344
Adjustments to reconcile net income to net cash provided by operating activities:
Change in fair value of derivatives	2			9
Depreciation and amortization of deferred leasing costs	34,396			33,478
Amortization of deferred debt costs	1,043			1,003
Non cash compensation costs of stock grants and options	1,349			1,282
Provision for credit losses	602			1,207
Decrease in accounts receivable and accrued income	(2,901		)	(3,018		)
Additions to deferred leasing costs	(3,654		)	(3,721		)
Decrease in prepaid expenses	(3,947		)	(3,922		)
Increase in other assets	(817		)	(1,358		)
Increase in accounts payable, accrued expenses and other liabilities	2,991			3,294
Decrease in deferred income	(801		)	(247		)
Net cash provided by operating activities	74,443			70,351
Cash flows from investing activities:
Acquisitions of real estate investments	(79,499		)	(10,341		)
Additions to real estate investments	(12,389		)	(11,271		)
Additions to development and redevelopment projects	(14,286		)	(23,073		)
Proceeds from sale of property (1)	6,688			—
Net cash used in investing activities	(99,486		)	(44,685		)
Cash flows from financing activities:
Proceeds from notes payable	40,000			—
Repayments on notes payable	(20,303		)	(18,359		)
Proceeds from revolving credit facility	55,000			32,000
Repayments on revolving credit facility	(15,000		)	(37,000		)
Proceeds from construction loan	1,437			23,126
Additions to deferred debt costs	(2,069		)	—
Proceeds from the issuance of:
Common stock	15,303			17,898
Partnership units	5,798			5,144
Distributions to:
Series C preferred stockholders	(9,281		)	(9,281		)
Common stockholders	(33,350		)	(29,306		)
Noncontrolling interests	(11,429		)	(10,055		)
Net cash provided by (used in) financing activities	26,106			(25,833		)
Net increase (decrease) in cash and cash equivalents	1,063			(167		)
Cash and cash equivalents, beginning of period	8,322			10,003
Cash and cash equivalents, end of period	$	9,385		$	9,836
Supplemental disclosure of cash flow information:
Cash paid for interest	$	36,889		$	34,835
Increase (decrease) in accrued real estate investments and development costs	$	992		$	(6,351	)

(1) Proceeds from sale of property excludes $1,275 of seller financing in connection with the sale of the Company's Great Eastern property.

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Notes to Consolidated Financial Statements (Unaudited)

1. Organization, Formation and Structure

Saul Centers, Inc. (“Saul Centers”) was incorporated under the Maryland General Corporation Law on June 10, 1993, and operates as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). The Company is required to annually distribute at least 90% of its REIT taxable income (excluding net capital gains) to its stockholders and meet certain organizational and other requirements. Saul Centers has made and intends to continue to make regular quarterly distributions to its stockholders. Saul Centers, together with its wholly-owned subsidiaries and the limited partnerships of which Saul Centers or one of its subsidiaries is the sole general partner, are referred to collectively as the “Company.” B. Francis Saul II serves as Chairman of the Board of Directors and Chief Executive Officer of Saul Centers.

Saul Centers was formed to continue and expand the shopping center business previously owned and conducted by the B. F. Saul Real Estate Investment Trust, the B. F. Saul Company and certain other affiliated entities, each of which is controlled by B. Francis Saul II and his family members (collectively, the “Saul Organization”). On August 26, 1993, members of the Saul Organization transferred to Saul Holdings Limited Partnership, a newly formed Maryland limited partnership (the “Operating Partnership”), and two newly formed subsidiary limited partnerships (the “Subsidiary Partnerships,” and, collectively with the Operating Partnership, the “Partnerships”), shopping center and mixed-use properties and the management functions related to the transferred properties. Since its formation, the Company has developed and purchased additional properties.

The following table lists the significant properties acquired, in development and disposed since December 31, 2015.

Name of Property	Location	Type	Year of Acquisition/ Development/Disposition
Acquisitions
700 N. Glebe Road	Arlington, VA	Development	2016
Burtonsville Town Square	Burtonsville, MD	Shopping Center	2017
Developments
Park Van Ness	Washington, DC	Mixed-Use	2013-2016
750 N. Glebe Road	Arlington, VA	Mixed-Use	2017
Dispositions
Crosstown Business Center	Tulsa, OK	Mixed-Use	2016
Great Eastern	District Heights, MD	Shopping Center	2017

As of September 30, 2017, the Company’s properties (the “Current Portfolio Properties”) consisted of 49 shopping center properties (the “Shopping Centers”), six mixed-use properties, which are comprised of office, retail and multi-family residential uses (the “Mixed-Use Properties”) and three (non-operating) development properties.

2. Summary of Significant Accounting Policies

Nature of Operations

The Company, which conducts all of its activities through its subsidiaries, the Operating Partnership and Subsidiary Partnerships, engages in the ownership, operation, management, leasing, acquisition, renovation, expansion, development and financing of community and neighborhood shopping centers and mixed-use properties, primarily in the Washington, DC/Baltimore metropolitan area.

Because the properties are located primarily in the Washington, DC/Baltimore metropolitan area, the Company is subject to a concentration of credit risk related to these properties. A majority of the Shopping Centers are anchored by one or more major tenants. As of September 30, 2017, 32 of the Shopping Centers were anchored by a grocery store and offer primarily day-to-day necessities and services. Excluding the impact of a $3.6 million termination fee from Albertson's/Safeway, two tenants individually accounted for 2.5% or more of the Company’s total revenue for the nine months endedSeptember 30, 2017. Giant Food, a tenant at ten Shopping Centers and Capital One, a tenant at 18 properties, individually accounted for 4.6% and 2.8%, respectively, of the Company's total revenue for the nine months endedSeptember 30, 2017.

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Notes to Consolidated Financial Statements (Unaudited)

Principles of Consolidation

The accompanying consolidated financial statements of the Company include the accounts of Saul Centers and its subsidiaries, including the Operating Partnership and Subsidiary Partnerships, which are majority owned by Saul Centers. All significant intercompany balances and transactions have been eliminated in consolidation.

The Operating Partnership is a variable interest entity ("VIE") of the Company because the limited partners do not have substantive kick-out or participating rights. The Company is the primary beneficiary of the Operating Partnership because it has the power to direct the activities of the Operating Partnership and the rights to absorb 74.3% of the net income of the Operating Partnership. Because the Operating Partnership was previously consolidated into the financial statements of the Company, classification of it as a VIE had no impact on the consolidated financial statements of the Company.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments necessary for the fair presentation of the financial position and results of operations of Saul Centers, Inc. for the interim periods have been included. All such adjustments are of a normal recurring nature. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements of Saul Centers, Inc. for the year ended December 31, 2016, which are included in its Annual Report on Form 10-K. The results of operations for interim periods are not necessarily indicative of results to be expected for the year.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Accounts Receivable, Accrued Income and Allowance for Doubtful Accounts

Accounts receivable primarily represent amounts currently due from tenants in accordance with the terms of the respective leases. Receivables are reviewed monthly and reserves are established with a charge to current period operations when, in the opinion of management, collection of the receivable is doubtful. Accounts receivable in the accompanying financial statements are shown net of an allowance for doubtful accounts of approximately $0.3 million and $2.0 million at September 30, 2017 and December 31, 2016, respectively.

In addition to rents due currently, accounts receivable includes approximately $44.0 million and $43.1 million, at September 30, 2017 and December 31, 2016, respectively, net of allowance for doubtful accounts totaling $0.1 million and $0.5 million, respectively, representing minimum rental income accrued on a straight-line basis to be paid by tenants over the remaining term of their respective leases.

Assets Held for Sale

The Company considers properties to be assets held for sale when all of the following criteria are met:

• management commits to a plan to sell a property;

• it is unlikely that the disposal plan will be significantly modified or discontinued;

• the property is available for immediate sale in its present condition;

• actions required to complete the sale of the property have been initiated;

• sale of the property is probable and the Company expects the completed sale will occur within one year; and

• the property is actively being marketed for sale at a price that is reasonable given its current market value.

The Company must make a determination as to the point in time that it is probable that a sale will be consummated, which generally occurs when an executed sales contract has no contingencies and the prospective buyer has significant funds at risk to ensure performance. Upon designation as an asset held for sale, the Company records the carrying value of each property at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and ceases depreciation. As of September 30, 2017, the Company had no assets designated as held-for-sale.

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Notes to Consolidated Financial Statements (Unaudited)

Cash and Cash Equivalents

Cash and cash equivalents include short-term investments. Short-term investments include money market accounts and other investments which generally mature within three months, measured from the acquisition date, and/or are readily convertible to cash.

Construction In Progress

Construction in progress includes land, preconstruction and development costs of active projects. Preconstruction costs include legal, zoning and permitting costs and other project carrying costs incurred prior to the commencement of construction. Development costs include direct construction costs and indirect costs incurred subsequent to the start of construction such as architectural, engineering, construction management and carrying costs consisting of interest, real estate taxes and insurance. Construction in progress as of September 30, 2017 and December 31, 2016, is composed of the following:

(in thousands)	September 30, 2017		December 31, 2016
Glebe Road	$	73,514	$	58,147
Other	6,649		5,423
Total	$	80,163	$	63,570

Deferred Debt Costs

Deferred debt costs consist of fees and costs incurred to obtain long-term financing, construction financing and the revolving line of credit. These fees and costs are being amortized on a straight-line basis over the terms of the respective loans or agreements, which approximates the effective interest method. Deferred debt costs totaled $6.8 million and $7.5 million, net of accumulated amortization of $8.3 million and $7.3 million, at September 30, 2017 and December 31, 2016, respectively, and are reflected as a reduction of the related debt in the Consolidated Balance Sheets. At September 30, 2017, deferred debt costs totaling $1.7 million, related to the Glebe Road construction loan, which has no outstanding balance, are included in Other Assets in the Consolidated Balance Sheet.

Deferred Income

Deferred income consists of payments received from tenants prior to the time they are earned and recognized by the Company as revenue, including tenant prepayment of rent for future periods, real estate taxes when the taxing jurisdiction has a fiscal year differing from the calendar year, reimbursements specified in the lease agreement and tenant construction work provided by the Company. In addition, deferred income includes the fair value of certain below market leases.

Deferred Leasing Costs

Deferred leasing costs consist of commissions paid to third-party leasing agents, internal direct costs such as employee compensation and payroll-related fringe benefits directly related to time spent performing leasing-related activities for successful commercial leases, amounts attributed to in-place leases associated with acquired properties and lease inducement costs. Leasing related activities include evaluating the prospective tenant’s financial condition, evaluating and recording guarantees, collateral and other security arrangements, negotiating lease terms, preparing lease documents and closing the transaction. Unamortized deferred leasing costs are charged to expense if the applicable lease is terminated prior to expiration of the initial lease term. Deferred leasing costs are amortized over the term of the lease or remaining term of acquired leases. Collectively, deferred leasing costs totaled $27.7 million and $26.0 million, net of accumulated amortization of $34.0 million and $30.4 million, as of September 30, 2017 and December 31, 2016, respectively. Amortization expense, included in depreciation and amortization of deferred leasing costs in the consolidated statements of operations, totaled $4.1 million and $4.4 million for the nine months endedSeptember 30, 2017 and 2016, respectively.

Derivative Financial Instruments

The Company may, when appropriate, employ derivative instruments, such as interest-rate swaps, to mitigate the risk of interest rate fluctuations. The Company does not enter into derivative or other financial instruments for trading or speculative purposes. Derivative financial instruments are carried at fair value as either assets or liabilities in the consolidated balance sheets. For those derivative instruments that qualify and are designated as hedging instruments, the Company designates the hedging instrument, based upon the exposure being hedged, as a fair value hedge or a cash flow hedge. For those derivative instruments that qualify and are designated as hedging instruments, the effective portion of the gain or loss on the hedge instruments is reported as a component of accumulated other comprehensive income (loss) and recognized in earnings within

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Notes to Consolidated Financial Statements (Unaudited)

the same line item associated with the forecasted transaction in the same period or periods during which the hedged transaction affects earnings. Any ineffective portion of the change in fair value of a derivative instrument is immediately recognized in earnings. For derivative instruments that do not qualify, or that qualify and are not designated, as hedging instruments, changes in fair value are immediately recognized in earnings.

Derivative financial instruments expose us to credit risk in the event of non-performance by the counterparties under the terms of the derivative instrument. The Company minimizes its credit risk on these transactions by dealing with major, creditworthy financial institutions as determined by management, and therefore, it believes that the likelihood of realizing losses from counterparty non-performance is remote.

Income Taxes

The Company made an election to be treated, and intends to continue operating so as to qualify, as a REIT under the Code, commencing with its taxable year ended December 31, 1993. A REIT generally will not be subject to federal income taxation, provided that distributions to its stockholders equal or exceed its REIT taxable income and it complies with certain other requirements. Therefore, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

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 such matters will not have a material adverse effect on its financial position or results of operations. Upon determination that a loss is probable to occur and can be reasonably estimated, 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.

Postemployment Benefits

From time to time, the Company may enter into an arrangement with an employee at the time of the employee’s separation from service whereby the employee will receive certain payments in exchange for certain releases, covenants not to compete, or other promises. If no future services are required in order for the employee to receive the payments, the Company estimates the amount of payments to be made over the life of the arrangement and records that amount as an expense as of the date of the arrangement with a corresponding liability representing the amount to be paid in the future.

Predevelopment Expenses

Predevelopment expenses represent certain costs incurred by the Company in connection with active development and redevelopment projects and include, for example, costs related to the early termination of tenant leases and demolition of existing structures.

Real Estate Investment Properties

The Company purchases real estate investment properties from time to time and records assets acquired and liabilities assumed, including land, buildings, and intangibles related to in-place leases and customer relationships, based on their relative fair values. The fair value of buildings generally is determined as if the buildings were vacant upon acquisition and subsequently leased at market rental rates and considers the present value of all cash flows expected to be generated by the property including an initial lease up period. From time to time the Company may purchase a property for future development purposes. The Company determines the fair value of above and below market intangibles associated with in-place leases by assessing the net effective rent and remaining term of the lease relative to market terms for similar leases at acquisition taking into consideration the remaining contractual lease period, renewal periods, and the likelihood of the tenant exercising its renewal options. The fair value of below market lease intangibles is recorded as deferred income and accreted as additional revenue over the remaining contractual lease period and any renewal option periods included in the valuation analysis. The fair value of above market lease intangibles is recorded as a deferred asset and amortized as a reduction of revenue over the remaining contractual lease term. The Company determines the fair value of at-market in-place leases considering the cost of acquiring similar leases, the foregone rents associated with the lease-up period and carrying costs associated with the lease-up period. Intangible assets associated with at-market in-place leases are amortized as additional expense over the remaining contractual lease term. To the extent customer relationship intangibles are present in an acquisition, the fair values of the intangibles are amortized over the lives of the customer relationships. The Company has never recorded a customer

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Notes to Consolidated Financial Statements (Unaudited)

relationship intangible asset. Effective with the adoption of ASU 2017-01 in January 2017, acquisition-related transaction costs are generally capitalized to the basis of the acquired asset.

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 value of the real estate investment property exceeds its estimated fair value. The Company considers both quantitative and qualitative factors including recurring operating losses, significant decreases in occupancy, and significant adverse changes in 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 value 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 value 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 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. The Company did not recognize an impairment loss on any of its real estate during the nine months endedSeptember 30, 2017 and 2016.

Interest, real estate taxes, development-related salary costs and other carrying costs are capitalized on projects under development and construction. Upon substantial completion of construction and the placement of the assets into service, rental income, real estate tax expense, property operating expenses (consisting of payroll, repairs and maintenance, utilities, insurance and other property related expenses) and depreciation are included in current operations and capitalization of interest ceases. Property operating expenses are charged to operations as incurred. Interest capitalized totaled $2.5 million and $1.8 million for the nine months endedSeptember 30, 2017 and 2016, respectively. Commercial development projects are considered substantially complete and available for occupancy upon completion of tenant improvements, but no later than one year from the cessation of major construction activity. Multi-family residential development projects are considered substantially complete and available for occupancy upon receipt of the certificate of occupancy from the appropriate licensing authority. Substantially completed portions of a project are accounted for as separate projects.

Depreciation is calculated using the straight-line method and estimated useful lives of generally between 35 and 50 years for base buildings, or a shorter period if management determines that the building has a shorter useful life, and up to 20 years for certain other improvements that extend the useful lives. Leasehold improvement expenditures are capitalized when certain criteria are met, including when the Company supervises construction and will own the improvements. Tenant improvements are amortized, over the shorter of the lives of the related leases or the useful life of the improvements, using the straight-line method. Depreciation expense in the Consolidated Statements of Operations totaled $30.3 million and $29.0 million for the nine months endedSeptember 30, 2017 and 2016, respectively. Repairs and maintenance expense totaled $8.5 million and $9.2 million for the nine months endedSeptember 30, 2017 and 2016, respectively, and is included in property operating expenses in the Consolidated Statements of Operations.

Revenue Recognition

Rental and interest income are accrued as earned. Recognition of rental income commences when control of the space has been given to the tenant. When rental payments due under leases vary from a straight-line basis because of free rent periods or scheduled rent increases, income is recognized on a straight-line basis. Expense recoveries represent a portion of property operating expenses billed to tenants, including common area maintenance, real estate taxes and other recoverable costs, and are recognized in the period in which the expenses are incurred. Rental income based on a tenant’s revenue (“percentage rent”) is accrued when a tenant reports sales that exceed a breakpoint specified in the lease agreement.

Stock-based Employee Compensation, Stock Plan and Deferred Compensation Plan for Directors

The Company uses the fair value method to value and account for employee stock options. The fair value of options granted is determined at the time of each award using the Black-Scholes model, a widely used method for valuing stock-based employee compensation, and the following assumptions: (1) Expected Volatility determined using the most recent trading history of the Company’s common stock (month-end closing prices) corresponding to the average expected term of the options; (2) Average Expected Term of the options is based on prior exercise history, scheduled vesting and the expiration date; (3) Expected Dividend Yield determined by management after considering the Company’s current and historic dividend yield rates, the Company’s yield in relation to other retail REITs and the Company’s market yield at the grant date; and (4) a Risk-free Interest Rate based upon the market yields of US Treasury obligations with maturities corresponding to the average expected term of the options at the grant date. The Company amortizes the value of options granted ratably over the vesting period and includes the amounts as compensation expense in general and administrative expenses.

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Notes to Consolidated Financial Statements (Unaudited)

The Company has a stock plan, which was originally approved in 2004, amended in 2008 and 2013 and which expires in 2023, for the purpose of attracting and retaining executive officers, directors and other key personnel (the “Stock Plan”). Pursuant to the Stock Plan, the Compensation Committee established a Deferred Compensation Plan for Directors for the benefit of its directors and their beneficiaries, which replaced a previous Deferred Compensation and Stock Plan for Directors. A director may make an annual election to defer all or part of his or her director’s fees and has the option to have the fees paid in cash, in shares of common stock or in a combination of cash and shares of common stock upon separation from the Board. If the director elects to have fees paid in stock, fees earned during a calendar quarter are aggregated and divided by the closing market price of the Company’s common stock on the first trading day of the following quarter to determine the number of shares to be credited to the director. As of September 30, 2017, the director's deferred fee accounts comprise 181,899 shares.

The Compensation Committee has also approved an annual award of shares of the Company’s common stock as additional compensation to each director serving on the Board of Directors as of the record date for the Annual Meeting of Stockholders. The shares are awarded as of each Annual Meeting of Stockholders, and their issuance may not be deferred.

Noncontrolling Interests

Saul Centers is the sole general partner of the Operating Partnership, owning a 74.3% common interest as of September 30, 2017. Noncontrolling interests in the Operating Partnership is comprised of limited partnership units owned by the Saul Organization. Noncontrolling interests reflected on the accompanying consolidated balance sheets is increased for earnings allocated to limited partnership interests and distributions reinvested in additional units, and is decreased for limited partner distributions. Noncontrolling interests reflected on the consolidated statements of operations represents earnings allocated to limited partnership interests.

Per Share Data

Per share data for net income (basic and diluted) is computed using weighted average shares of common stock. Convertible limited partnership units and employee stock options are the Company’s potentially dilutive securities. For all periods presented, the convertible limited partnership units are non-dilutive. The following table sets forth, for the indicated periods, weighted averages of the number of common shares outstanding, basic and dilutive, the effect of dilutive options and the number of options which are not dilutive because the average price of the Company's common stock was less than the exercise prices. The treasury stock method was used to measure the effect of the dilution.

	As of or for the three months ended September 30,		As of or for the nine months ended September 30,
(In thousands)	2017	2016	2017	2016
Weighted average common stock outstanding-Basic	21,942	21,597	21,844	21,448
Effect of dilutive options	86	182	105	96
Weighted average common stock outstanding-Diluted	22,028	21,779	21,949	21,544
Non-dilutive options	—	—	—	172
Years non-dilutive options were issued				2007, 2015, and 2016

Recently Issued Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

No. 2014-09, “Revenue from Contracts with Customers” and subsequently issued several related ASUs (collectively

“ASU 2014-09”). ASU 2014-09 will replace most existing revenue recognition guidance and will require an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.

ASU 2014-09 is effective for annual periods beginning after December 15, 2017, and interim periods within those years and early adoption is not permitted. ASU 2014-09 must be applied retrospectively by either restating prior periods or by recognizing the cumulative effect as of the first date of application. We believe that the adoption of ASU 2014-09 will not have a material impact on our consolidated financial statements because the majority of our revenue is not within the scope of the guidance; however, we continue to evaluate that assessment. We have not yet selected a transition method.

In February 2016, the FASB issued ASU 2016-02, ‘‘Leases’’ (“ASU 2016-02”). ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, interim periods within those years, and requires a modified retrospective transition approach for all leases existing at the

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Notes to Consolidated Financial Statements (Unaudited)

date of initial application, with an option to use certain practical expedients for those existing leases. We are evaluating the impact that ASU 2016-02 will have on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, "Compensation-Stock Compensation" ("ASU 2016-09"). ASU 2016-09 simplifies the accounting for several aspects of share-based payments including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those years. The transition method varies based on the specific amendment. The adoption of ASU 2016-09 effective January 1, 2017, did not have a material impact on the Company's consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments-Credit Losses" ("ASU 2016-13"). ASU 2016-13 replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of information to support credit loss estimates. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those years. We are evaluating the impact that

ASU 2016-13 will have on our consolidated financial statements and related disclosures.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230) - Restricted Cash”

(“ASU 2016-18”). ASU 2016-18 requires that the Statement of Cash Flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. We are currently evaluating the impact ASU 2016-18 will have on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, "Clarifying the Definition of a Business" ("ASU 2017-01").  ASU 2017-01 provides that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. ASU 2017-01 is effective prospectively for annual periods beginning after December 15, 2017, and interim periods within those years. Early application is permitted for transactions for which the acquisition date occurs before the effective date provided the transaction has not been reported in the financial statements. The Company adopted ASU 2017-01 effective January 1, 2017, the effect of which, for asset acquisitions, was (a) the capitalization of acquisition costs, instead of expense, and (b) recordation of acquired assets and assumed liabilities at relative fair value, instead of fair value. 

Reclassifications

Certain reclassifications have been made to the prior year financial statements to conform to the presentation used for the nine months endedSeptember 30, 2017.

3. Real Estate Acquired and Sold

700 N. Glebe Road

In August 2016, the Company purchased for $7.2 million, including acquisition costs, 700 N. Glebe Road in Arlington, Virginia. The property is contiguous with three other properties owned by the Company.

Thruway Pad

In August 2016, the Company purchased for $3.1 million, a retail pad site with an occupied bank building in

Winston Salem, North Carolina, and incurred acquisition costs of $60,400. The property is contiguous with and an expansion of the Company's Thruway asset.

Beacon Center

In November 2016, the Company purchased for $22.5 million the land underlying Beacon Center. The land was previously leased by the Company with an annual rent of approximately $60,000. The purchase price was funded in part by an $11.25 million increase to the existing mortgage collateralized by Beacon Center and in part by the revolving credit facility.

Southdale

In November 2016, the Company purchased for $15.0 million the land underlying Southdale. The land was previously leased by the Company with an annual rent of approximately $60,000. The purchase price was funded by the revolving credit facility.

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Notes to Consolidated Financial Statements (Unaudited)

Burtonsville Town Square

In January 2017, the Company purchased for $76.4 million, including acquisition costs, Burtonsville Town Square located in Burtonsville, Maryland.

Olney Shopping Center

In March 2017, the Company purchased for $3.0 million the land underlying Olney Shopping Center. The land was previously leased by the Company with an annual rent of approximately $56,000. The purchase price was funded by the revolving credit facility.

Crosstown Business Center

In December 2016, the Company sold for $5.4 million the197,100 square foot Crosstown Business Center located in Tulsa, Oklahoma and recognized a $1.0 million gain.

Great Eastern Shopping Center

In September 2017, the Company sold for $8.5 million the 255,400 square foot Great Eastern Shopping Center located in District Heights, Maryland. The Company provided $1.28 million second trust financing to the buyer, which bears interest at a fixed rate of 6%, matures in March 2018 and can be extended for six months at the option of the buyer. A $0.5 million gain realized on the sale was deferred and will be recognized when the loan is repaid by the buyer.

Allocation of Purchase Price of Real Estate Acquired

The Company allocates the purchase price of real estate investment properties to various components, such as land, buildings and intangibles related to in-place leases and customer relationships, based on their relative fair values or fair values. See Note 2. Summary of Significant Accounting Policies-Real Estate Investment Properties.

During 2016, the Company purchased two properties at a cost of $10.3 million and incurred acquisition costs of $60,400. Of the total purchase price, $9.4 million was allocated to land, $0.9 million was allocated to buildings, $0.1 million was allocated to in-place leases and ($0.1) million was allocated to below market rent.

During 2017, the Company purchased one property at a cost of $76.4 million, including acquisition costs. Of the total purchase price, $45.8 million was allocated to building, $28.4 million was allocated to land, $0.6 million was allocated to above-market leases, $2.2 million was allocated to in-place leases and $(0.6) million was allocated to below market rent.

4. Noncontrolling Interests - Holders of Convertible Limited Partnership Units in the Operating Partnership

As of September 30, 2017, the Saul Organization holds a 25.7% limited partnership interest in the Operating Partnership represented by approximately 7.5 million convertible limited partnership units. These units are convertible into shares of Saul Centers’ common stock, at the option of the unit holder, on a one-for-one basis provided that, in accordance with the Saul Centers, Inc. Articles of Incorporation, the rights may not be exercised at any time that the Saul Organization beneficially owns, directly or indirectly, in the aggregate more than 39.9% of the value of the outstanding common stock and preferred stock of Saul Centers (the “Equity Securities”). As of September 30, 2017, approximately 750,000 units were convertible into shares of Saul Centers common stock.

The impact of the Saul Organization’s approximately 25.7% limited partnership interest in the Operating Partnership is reflected as Noncontrolling Interests in the accompanying consolidated financial statements. Fully converted partnership units and diluted weighted average common stock outstanding for the three months endedSeptember 30, 2017 and 2016, were approximately 29.5 million and 29.2 million, respectively, and for the nine months endedSeptember 30, 2017 and 2016, were approximately 29.4 million and 28.9 million, respectively.

5. Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs

The principal amount of the Company’s outstanding debt totaled approximately $968.9 million at September 30, 2017, of which approximately $865.7 million was fixed-rate debt and approximately $103.2 million was variable rate debt, including

$89.0 million outstanding on the Company's unsecured revolving credit facility. The carrying value of the properties collateralizing the notes payable totaled approximately $1.0 billion as of September 30, 2017.

At September 30, 2017, the Company had a $275.0 million unsecured revolving credit facility, which can be used for working capital, property acquisitions, development projects or letters of credit. The revolving credit facility matures on June 23, 2018, and may be extended by the Company for one additional year subject to the Company’s satisfaction of certain conditions. Saul Centers and certain consolidated subsidiaries of the Operating Partnership have guaranteed the payment

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Notes to Consolidated Financial Statements (Unaudited)

obligations of the Operating Partnership under the revolving credit facility. Letters of credit may be issued under the revolving credit facility. On September 30, 2017, based on the value of the Company’s unencumbered properties, approximately $185.8 million was available under the line, $89.0 million was outstanding and approximately $185,000 was committed for letters of credit. The interest rate under the facility is variable and equals the sum of one-month LIBOR and a margin that is based on the Company’s leverage ratio, and which can range from 145 basis points to 200 basis points. As of September 30, 2017, the margin was 145 basis points.

Effective September 1, 2017, the Company's $71.6 million construction-to-permanent loan, which is fully drawn and secured by Park Van Ness, converted to permanent financing. The loan matures in 2032, bears interest at a fixed rate of 4.88%, requires monthly principal and interest payments of $413,460 based on a 25-year amortization schedule and requires a final payment of $39.6 million at maturity.

On January 18, 2017, the Company closed on a 15-year, non-recourse $40.0 million mortgage loan secured by Burtonsville Town Square. The loan matures in 2032, bears interest at a fixed rate of 3.39%, requires monthly principal and interest payments of $197,900 based on a 25-year amortization schedule and requires a final payment of $20.3 million at maturity.

On August 14, 2017, the Company closed on a $157.0 million construction-to-permanent loan, the proceeds of which will be used to partially fund the Glebe Road development project. The loan matures in 2035, bears interest at a fixed rate of 4.67%, requires interest only payments, which will be funded by the loan, until conversion to permanent. The conversion is expected in the fourth quarter of 2021, and thereafter, monthly principal and interest payments of $887,900 based on a 25-year amortization schedule will be required.

Saul Centers is a guarantor of the revolving credit facility, of which the Operating Partnership is the borrower. The Operating Partnership is the guarantor of (a) a portion of the Metro Pike Center bank loan (approximately $7.8 million of the $14.2 million outstanding balance at September 30, 2017) and (b) a portion of the Park Van Ness loan (approximately $53.7 million of the $71.6 million outstanding balance at September 30, 2017), which guarantee, subject to the achievement of certain leasing and cash flow levels, may be reduced and eventually eliminated. The fixed-rate notes payable are all non-recourse.

At December 31, 2016, the principal amount of the Company’s outstanding debt totaled approximately $907.8 million, of which $844.3 million was fixed rate debt and $63.5 million was variable rate debt, including $49.0 million outstanding on the Company’s unsecured revolving credit facility. The carrying value of the properties collateralizing the notes payable totaled $957.2 million as of December 31, 2016.

At September 30, 2017, the scheduled maturities of debt, including scheduled principal amortization, for years ending December 31, were as follows:

(In thousands)	Balloon Payments			Scheduled Principal Amortization		Total
October 1 through December 31, 2017	$	—		$	7,386	$	7,386
2018	130,799		(a)	29,015		159,814
2019	60,793			27,769		88,562
2020	61,163			25,182		86,345
2021	11,012			24,836		35,848
2022	36,502			25,277		61,779
Thereafter	405,693			123,478		529,171
Principal amount	$	705,962		$	262,943	968,905
Unamortized deferred debt costs						6,759
Net						$	962,146

(a) Includes $89.0 million outstanding under the line of credit.

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Notes to Consolidated Financial Statements (Unaudited)

Interest expense and amortization of deferred debt costs for the three and nine months ended September 30, 2017 and 2016, were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2017			2016			2017			2016
Interest incurred	$	12,370		$	11,691		$	37,037		$	35,027
Amortization of deferred debt costs	351			339			1,043			1,003
Capitalized interest	(900		)	(506		)	(2,495		)	(1,762		)
	$	11,821		$	11,524		$	35,585		$	34,268

6. Equity

The consolidated statements of operations for the nine months endedSeptember 30, 2017 and 2016, reflect noncontrolling interests of $9.5 million and $8.5 million, respectively, representing the Saul Organization’s share of net income for each period.

The Company has outstanding 7.2 million depositary shares, each representing 1/100th of a share of 6.875% Series C Cumulative Redeemable Preferred Stock. The depositary shares may be redeemed on or after February 12, 2018 at the Company’s option, in whole or in part, at the $25.00 liquidation preference plus accrued but unpaid dividends. The depositary shares pay an annual dividend of $1.71875 per share, equivalent to 6.875% of the $25.00 liquidation preference. The Series C preferred stock has no stated maturity, is not subject to any sinking fund or mandatory redemption and is not convertible into any other securities of the Company except in connection with certain changes of control or delisting events. Investors in the depositary shares generally have no voting rights, but will have limited voting rights if the Company fails to pay dividends for six or more quarters (whether or not declared or consecutive) and in certain other events.

7. Related Party Transactions

The Chairman and Chief Executive Officer, the President, the Executive Vice President-Chief Legal and Administrative Officer and the Senior Vice President-Chief Accounting Officer of the Company are also officers of various members of the Saul Organization and their management time is shared with the Saul Organization. Their annual compensation is fixed by the Compensation Committee of the Board of Directors, with the exception of the Senior Vice President-Chief Accounting Officer whose share of annual compensation allocated to the Company is determined by the shared services agreement (described below).

The Company participates in a multiemployer 401K plan with entities in the Saul Organization which covers those full-time employees who meet the requirements as specified in the plan. Company contributions, which are included in general and administrative expense or property operating expenses in the consolidated statements of operations, at the discretionary amount of up to six percent of the employee’s cash compensation, subject to certain limits, were $270,600 and $255,000 for the nine months endedSeptember 30, 2017 and 2016, respectively. All amounts contributed by employees and the Company are fully vested.

The Company also participates in a multiemployer nonqualified deferred compensation plan with entities in the Saul Organization which covers those full-time employees who meet the requirements as specified in the plan. According to the plan, which can be modified or discontinued at any time, participating employees defer 2% of their compensation in excess of a specified amount. For the nine months endedSeptember 30, 2017 and 2016, the Company contributed $154,300 and $129,000, respectively, which is the sum of accrued earnings and three times the amount deferred by employees and is included in general and administrative expense. All amounts contributed by employees and the Company are fully vested. The cumulative unfunded liability under this plan was $2.3 million and $2.1 million, at September 30, 2017 and December 31, 2016, respectively, and is included in accounts payable, accrued expenses and other liabilities in the consolidated balance sheets.

The Company has entered into a shared services agreement (the “Agreement”) with the Saul Organization that provides for the sharing of certain personnel and ancillary functions such as computer hardware, software, and support services and certain direct and indirect administrative personnel. The method for determining the cost of the shared services is provided for in the Agreement and is based upon head count, estimates of usage or estimates of time incurred, as applicable. The terms of the Agreement and the payments made thereunder are deemed reasonable by management and are reviewed annually by the Audit Committee of the Board of Directors, which consists entirely of independent directors. Billings by the Saul Organization for the Company’s share of these ancillary costs and expenses for the nine months endedSeptember 30, 2017 and 2016, which

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Notes to Consolidated Financial Statements (Unaudited)

included rental expense for the Company’s headquarters lease, totaled approximately $6.3 million and $5.5 million, respectively. The amounts are generally expensed as incurred and are primarily reported as general and administrative expenses in the consolidated financial statements. As of September 30, 2017 and December 31, 2016, accounts payable, accrued expenses and other liabilities included approximately $744,200 and $860,700, respectively, representing amounts due to the Saul Organization for the Company’s share of these ancillary costs and expenses.

The Company previously entered into a shared third-party predevelopment cost agreement with the B. F. Saul Real Estate Investment Trust (the "Trust"), a member of the Saul Organization, which related to the sharing of third-party predevelopment costs incurred in connection with the planning of the future redevelopment of certain adjacent real estate assets in the Twinbrook area of Rockville, Maryland. On December 8, 2016, the Company entered into a replacement agreement with the Trust which extended the expiration date to December 31, 2017 and provides for automatic twelve month renewals unless either party provides notice of termination. The costs will be shared on a pro rata basis based on the acreage owned by each entity and neither party is obligated to advance funds to the other.

In August 2016, the Company entered into an agreement to acquire from the Trust, for an initial purchase price of

$8.8 million, land in Loudoun County, Virginia, which is zoned for retail development. The parties have agreed to a closing date in early 2018, at which time the Company will exchange limited partnership units for the land. The Company intends to construct a shopping center and, subsequent to stabilization, may be obligated to issue additional limited partnership units to the Trust.

The Company subleases its corporate headquarters space from a member of the Saul Organization. The lease commenced in March 2002, expires in 2022, and provides for base rent increases of 3% per year, with payment of a pro-rata share of operating expenses over a base year amount. The Agreement requires each party to pay an allocation of total rental payments based on a percentage proportionate to the number of employees employed by each party. The Company’s rent expense for its headquarters location was $578,200 and $617,100 for the nine months endedSeptember 30, 2017 and 2016, respectively, and is included in general and administrative expense.

The B. F. Saul Insurance Agency of Maryland, Inc., a subsidiary of the B. F. Saul Company and a member of the Saul Organization, is a general insurance agency that receives commissions and fees in connection with the Company’s insurance program. Such commissions and fees amounted to $173,800 and $279,100 for the nine months endedSeptember 30, 2017 and 2016, respectively.

8. Stock Option Plans

The Company has established two stock incentive plans, the 1993 plan and the 2004 plan, as amended, (together, the “Plans”). Under the Plans, options were granted at an exercise price not less than the market value of the common stock on the date of grant and expire ten years from the date of grant. Officer options vest ratably over four years following the grant and are charged to expense using the straight-line method over the vesting period. Director options vest immediately and are charged to expense as of the date of grant.

The following table summarizes the amount and activity of each grant with outstanding unexercised options, the total value and variables used in the computation and the amount expensed and included in general and administrative expense in the Consolidated Statements of Operations for the nine months endedSeptember 30, 2017.

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Notes to Consolidated Financial Statements (Unaudited)

	Directors
Grant date	4/25/2008			4/24/2009			5/7/2010			5/13/2011			5/4/2012			5/10/2013			5/9/2014			5/8/2015			5/6/2016			5/5/2017			Subtotals
Total grant	30,000			32,500			32,500			32,500			35,000			35,000			30,000			35,000			32,500			27,500			322,500
Vested	30,000			32,500			32,500			32,500			35,000			35,000			30,000			35,000			32,500			27,500			322,500
Exercised	20,000			27,500			25,000			22,500			22,500			22,500			17,500			12,500			7,500			—			177,500
Forfeited	7,500			—			2,500			2,500			—			—			—			—			—			—			12,500
Exercisable at September 30, 2017	2,500			5,000			5,000			7,500			12,500			12,500			12,500			22,500			25,000			27,500			132,500
Remaining unexercised	2,500			5,000			5,000			7,500			12,500			12,500			12,500			22,500			25,000			27,500			132,500
Exercise price	$	50.15		$	32.68		$	38.76		$	41.82		$	39.29		$	44.42		$	47.03		$	51.07		$	57.74		$	59.41
Volatility	0.237			0.344			0.369			0.358			0.348			0.333			0.173			0.166			0.166			0.173
Expected life (years)	7.0			6.0			5.0			5.0			5.0			5.0			5.0			5.0			5.0			5.0
Assumed yield	4.09		%	4.54		%	4.23		%	4.16		%	4.61		%	4.53		%	4.48		%	4.54		%	3.75		%	3.45		%
Risk-free rate	3.49		%	2.19		%	2.17		%	1.86		%	0.78		%	0.82		%	1.63		%	1.50		%	1.23		%	1.89		%
Total value at grant date	$	254,700		$	222,950		$	287,950		$	297,375		$	257,250		$	278,250		$	109,500		$	125,300		$	151,125		$	165,550		$	2,149,950
Expensed in previous years	254,700			222,950			287,950			297,375			257,250			278,250			109,500			125,300			151,125			—			1,984,400
Expensed in 2017	—			—			—			—			—			—			—			—			—			165,550			165,550
Future expense	—			—			—			—			—			—			—			—			—			—			—
	Officers
Grant date	5/13/2011			5/4/2012			5/10/2013			5/9/2014			5/8/2015			5/6/2016			5/5/2017			Subtotal									Grand  Totals
Total grant	162,500			242,500			202,500			170,000			190,000			194,000			205,000			1,366,500									1,689,000
Vested	118,750			107,500			171,875			126,875			94,375			48,500			—			667,875									990,375
Exercised	96,100			91,830			83,000			35,000			8,981			625			—			315,536									493,036
Forfeited	43,750			135,000			30,625			1,875			3,125			1,875			—			216,250									228,750
Exercisable at September 30, 2017	22,650			15,670			88,875			91,875			85,394			47,875			—			352,339									484,839
Remaining unexercised	22,650			15,670			88,875			133,125			177,894			191,500			205,000			834,714									967,214
Exercise price	$	41.82		$	39.29		$	44.42		$	47.03		$	51.07		$	57.74		$	59.41
Volatility	0.330			0.315			0.304			0.306			0.298			0.185			0.170
Expected life (years)	8.0			8.0			8.0			7.0			7.0			7.0			7.0
Assumed yield	4.81		%	5.28		%	5.12		%	4.89		%	4.94		%	3.80		%	3.50		%
Risk-free rate	2.75		%	1.49		%	1.49		%	2.17		%	1.89		%	1.55		%	2.17		%
Gross value at grant date	$	1,366,625		$	1,518,050		$	1,401,300		$	1,349,800		$	1,584,600		$	1,136,840		$	1,324,300		$	9,681,515								$	11,831,465
Estimated forfeitures	367,937			845,100			211,925			168,749			141,780			86,628			91,642			1,913,761									1,913,761
Expensed in previous years	998,688			672,950			1,031,134			787,392			601,180			175,032			—			4,266,376									6,250,776
Expensed in 2017	—			—			158,241			221,454			270,531			196,911			128,400			975,537									1,141,087
Future expense	—			—			—			172,205			571,109			678,269			1,104,258			2,525,841									2,525,841
Weighted average term of remaining future expense (in years)				2.7

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Notes to Consolidated Financial Statements (Unaudited)

The table below summarizes the option activity for the nine months endedSeptember 30, 2017:

	Number of Shares		Weighted Average Exercise Price per share		Aggregate Intrinsic Value
Outstanding at January 1	833,630		$	49.92	$	13,913,891
Granted	232,500		59.41		581,250
Exercised	(95,166	)	47.03		1,403,256
Expired/Forfeited	(3,750	)	53.73
Outstanding at September 30	967,214		52.47		9,130,494
Exercisable at September 30	484,839		48.70		6,402,577

The intrinsic value measures the price difference between the options’ exercise price and the closing share price quoted by the New York Stock Exchange as of the date of measurement. The intrinsic value for shares exercised during the period was calculated by using the closing share price on the date of exercise. At September 29, 2017, the final trading day of the third quarter, the closing share price of $61.91 was used in the calculation of the aggregate intrinsic value of options exercisable and outstanding at that date. The weighted average remaining contractual life of the Company’s outstanding and exercisable options is 7.7 years and 6.7 years, respectively.

9. Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair value. The aggregate fair value of the notes payable with fixed-rate payment terms was determined using Level 3 data in a discounted cash flow approach, which is based upon management’s estimate of borrowing rates and loan terms currently available to the Company for fixed-rate financing and, assuming long-term interest rates of approximately 3.95% and 4.25%, would be approximately $928.0 million and $897.2 million, respectively, compared to the principal balance of $865.7 million and $844.3 million at September 30, 2017 and December 31, 2016, respectively. A change in any of the significant inputs may lead to a change in the Company’s fair value measurement of its debt.

The Company carries its interest rate swap at fair value. The Company has determined the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy with the exception of the impact of counter-party risk, which was determined using Level 3 inputs and is not significant. Derivative instruments are classified within Level 2 of the fair value hierarchy because their values are determined using third-party pricing models which contain inputs that are derived from observable market data. Where possible, the values produced by the pricing models are verified by market prices. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, measure of volatility, and correlations of such inputs. The swap agreement terminates on July 1, 2020. As of September 30, 2017, the fair value of the interest-rate swap was approximately $1.5 million and is included in “Accounts payable, accrued expenses and other liabilities” in the consolidated balance sheets. The decrease in value from inception of the swap is reflected in “Other Comprehensive Income” in the Consolidated Statements of Comprehensive Income. Amounts recognized in earnings are included in Changes in Fair Value of Derivatives in the Consolidated Statements of Operations.

	Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands)	2017			2016		2017			2016
Change in fair value:
Recognized in earnings	$	(1	)	$	1	$	(2	)	$	(9	)
Recognized in other comprehensive income	171			431		503			(383		)
	$	170		$	432	$	501		$	(392	)

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Notes to Consolidated Financial Statements (Unaudited)

10. Commitments and Contingencies

Neither the Company nor the current portfolio properties are subject to any material litigation, nor, to management’s knowledge, is any material litigation currently threatened against the Company, other than routine litigation and administrative proceedings arising in the ordinary course of business. Management believes that these items, individually or in the aggregate, will not have a material adverse impact on the Company or the current portfolio properties.

11. Business Segments

The Company has two reportable business segments: Shopping Centers and Mixed-Use Properties. The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2). The Company evaluates performance based upon income and cash flows from real estate of the combined properties in each segment. All of our properties within each segment generate similar types of revenues and expenses related to tenant rent, reimbursements and operating expenses. Although services are provided to a range of tenants, the types of services provided to them are similar within each segment. The properties in each portfolio have similar economic characteristics and the nature of the products and services provided to our tenants and the method to distribute such services are consistent throughout the portfolio. Certain reclassifications have been made to prior year information to conform to the 2017 presentation.

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Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands)	Shopping Centers			Mixed-Use Properties			Corporate and Other			Consolidated Totals
Three months ended September 30, 2017
Real estate rental operations:
Revenue	$	40,834		$	15,395		$	8		$	56,237
Expenses	(8,799		)	(5,505		)	—			(14,304		)
Income from real estate	32,035			9,890			8			41,933
Interest expense and amortization of deferred debt costs	—			—			(11,821		)	(11,821		)
General and administrative	—			—			(4,363		)	(4,363		)
Subtotal	32,035			9,890			(16,176		)	25,749
Depreciation and amortization of deferred leasing costs	(7,457		)	(3,906		)	—			(11,363		)
Change in fair value of derivatives	—			—			(1		)	(1		)
Net income (loss)	$	24,578		$	5,984		$	(16,177	)	$	14,385
Capital investment	$	3,503		$	8,161		$	—		$	11,664
Total assets	$	983,369		$	431,182		$	9,177		$	1,423,728
Three months ended September 30, 2016
Real estate rental operations:
Revenue	$	38,738		$	14,484		$	11		$	53,233
Expenses	(8,330		)	(4,941		)	—			(13,271		)
Income from real estate	30,408			9,543			11			39,962
Interest expense and amortization of deferred debt costs	—			—			(11,524		)	(11,524		)
General and administrative	—			—			(4,033		)	(4,033		)
Acquisition related costs	(57		)	—			—			(57		)
Subtotal	30,351			9,543			(15,546		)	24,348
Depreciation and amortization of deferred leasing costs	(7,732		)	(3,894		)	—			(11,626		)
Change in fair value of derivatives	—			—			1			1
Net income (loss)	$	22,619		$	5,649		$	(15,545	)	$	12,723
Capital investment	$	13,854		$	4,399		$	—		$	18,253
Total assets	$	938,124		$	363,439		$	9,441		$	1,311,004

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Notes to Consolidated Financial Statements (Unaudited)

(Dollars in thousands)	Shopping Centers			Mixed-Use Properties			Corporate and Other			Consolidated Totals
Nine months ended September 30, 2017
Real estate rental operations:
Revenue	$	124,854		$	45,725		$	31		$	170,610
Expenses	(25,876		)	(15,393		)	—			(41,269		)
Income from real estate	98,978			30,332			31			129,341
Interest expense and amortization of deferred debt costs	—			—			(35,585		)	(35,585		)
General and administrative	—			—			(13,178		)	(13,178		)
Subtotal	98,978			30,332			(48,732		)	80,578
Depreciation and amortization of deferred leasing costs	(22,649		)	(11,747		)	—			(34,396		)
Change in fair value of derivatives	—			—			(2		)	(2		)
Net income (loss)	$	76,329		$	18,585		$	(48,734	)	$	46,180
Capital investment	$	87,788		$	18,386		$	—		$	106,174
Total assets	$	983,369		$	431,182		$	9,177		$	1,423,728
Nine months ended September 30, 2016
Real estate rental operations:
Revenue	$	120,861		$	41,972		$	36		$	162,869
Expenses	(26,519		)	(13,694		)	—			(40,213		)
Income from real estate	94,342			28,278			36			122,656
Interest expense and amortization of deferred debt costs	—			—			(34,268		)	(34,268		)
General and administrative	—			—			(12,500		)	(12,500		)
Acquisition related costs	(57		)	—			—			(57		)
Subtotal	94,285			28,278			(46,732		)	75,831
Depreciation and amortization of deferred leasing costs	(22,774		)	(10,704		)	—			(33,478		)
Change in fair value of derivatives	—			—			(9		)	(9		)
Net income (loss)	$	71,511		$	17,574		$	(46,741	)	$	42,344
Capital investment	$	20,258		$	24,427		$	—		$	44,685
Total assets	$	938,124		$	363,439		$	9,441		$	1,311,004

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Notes to Consolidated Financial Statements (Unaudited)

12. Subsequent Events

The Company has reviewed operating activities for the period subsequent to September 30, 2017, and prior to the date the financial statements are issued or are available to be issued, and determined there are no subsequent events required to be disclosed.

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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 Form 10-K for the year ended December 31, 2016. Historical results and percentage relationships set forth in Item 1 and this section should not be taken as indicative of future operations of the Company. Capitalized terms used but not otherwise defined in this section have the meanings given to them in Item 1 of this Form 10-Q.

Forward-Looking Statements

This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are generally characterized by terms such as “believe,” “expect” and “may.”

Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, the Company’s actual results could differ materially from those given in the forward-looking statements as a result of changes in factors which include, among others, the following:

• continuing risks related to the challenging domestic and global credit markets and their effect on discretionary spending;

• risks that the Company’s tenants will not pay rent;

• risks related to the Company’s reliance on shopping center “anchor” tenants and other significant tenants;

• risks related to the Company’s substantial relationships with members of the Saul Organization;

• risks of financing, such as increases in interest rates, restrictions imposed by the Company’s debt, the Company’s ability to meet existing financial covenants and the Company’s ability to consummate planned and additional financings on acceptable terms;

• risks related to the Company’s development activities;

• risks that the Company’s growth will be limited if the Company cannot obtain additional capital;

• risks that planned and additional acquisitions or redevelopments may not be consummated, or if they are consummated, that they will not perform as expected;

• 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;

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

• such other risks as described in Part I, Item 1A of the Company’s Form 10-K for the year ended December 31, 2016.

General

The following discussion is based primarily on the consolidated financial statements of the Company as of and for the three and nine months ended September 30, 2017.

Overview

The Company’s principal business activity is the ownership, management and development of income-producing properties. The Company’s long-term objectives are to increase cash flow from operations and to maximize capital appreciation of its real estate investments.

The Company’s primary operating strategy is to focus on its community and neighborhood shopping center business and its transit-centric, primarily residential mixed-use properties to achieve both cash flow growth and capital appreciation. Management believes there is potential for long-term growth in cash flow as existing leases for space in the Shopping Centers and Mixed-Use properties expire and are renewed, or newly-available or vacant space is leased. The Company intends to renegotiate leases where possible and seek new tenants for available space in order to optimize the mix of uses to improve foot traffic through the Shopping Centers. As leases expire, management expects to revise rental rates, lease terms and conditions, relocate existing tenants, reconfigure tenant spaces and introduce new tenants with the goals of increasing occupancy, improving overall retail sales, and ultimately increasing cash flow as economic conditions improve. In those circumstances in

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which leases are not otherwise expiring, or in connection with renovations or relocations, management selectively attempts to increase cash flow through a variety of means, including recapturing leases with below market rents and re-leasing at market rates, as well as replacing financially troubled tenants. When possible, management also will seek to include scheduled increases in base rent, as well as percentage rental provisions, in its leases.

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 Clarendon Center and Park Van Ness apartments). For purposes of this table, annualized effective rent is annualized base rent minus amortized tenant improvements and amortized leasing commissions.

	Nine months ended September 30,
	2017		2016		2015		2014		2013
Base rent	$	19.32	$	18.67	$	18.47	$	18.06	$	17.72
Effective rent	$	17.51	$	16.87	$	16.78	$	16.41	$	15.83

The Company’s redevelopment and renovation objective is to selectively and opportunistically redevelop and renovate its properties, by replacing leases that have below market rents with strong, traffic-generating anchor stores such as supermarkets and drug stores, as well as other desirable local, regional and national tenants. The Company’s strategy remains focused on continuing the operating performance and internal growth of its existing Shopping Centers, while enhancing this growth with selective retail redevelopments and renovations.

In 2016, the Company completed development of Park Van Ness, a 271-unit residential project with approximately 9,000 square feet of street-level retail, below street-level structured parking, and amenities including a community room, landscaped courtyards, a fitness room, a wi-fi lounge/business center, and a rooftop pool and deck. The structure comprises 11 levels, five of which on the east side are below street level. Because of the change in grade from the street eastward to Rock Creek Park, apartments on all 11 levels have park or city views. The street level retail space is 100% leased to a grocery/gourmet food market and an upscale Italian restaurant. As of September 30, 2017, 254 apartments (93.7%) were leased. The total cost of the project, excluding predevelopment expense and land, which the Company has owned, was approximately $93.0 million, a portion of which was financed with a $71.6 million construction-to-permanent loan.

From 2014 through 2016, in separate transactions, the Company purchased four adjacent properties, with approximately 23,700 square feet of retail space, at 750 N. Glebe Road in Arlington, Virginia, for an aggregate $54.0 million. Combined, the properties total 2.8 acres. Effective August 1, 2016, these properties were vacant and removed from service. The Company previously received zoning and site plan approval from Arlington County, Virginia for the development of approximately 490 residential units and approximately 62,000 square feet of retail space. The demolition of the existing structures was completed during the first quarter of 2017 and excavation, sheeting and shoring, which commenced during the second quarter of 2017, is approximately 70% complete as of October 31, 2017. The development is scheduled for substantial completion in early 2020. The total cost of the project, including acquisition of land, is expected to be approximately $275.0 million. The Company closed on a $157.0 million construction-to-permanent loan, the proceeds of which will be used to partially finance the project. During the second quarter of 2017, the Company executed a 41,500 square foot anchor-lease with Target and leases for an aggregate of 7,800 square feet of retail shop space, resulting in approximately 80% of the retail space being leased.

Albertson's/Safeway, a tenant at eight of the Company's shopping centers, closed two Safeway stores located at the Company's properties during the June 2016 quarter. The stores that closed were located in Broadlands Village, Loudoun County, Virginia and Briggs Chaney Plaza, Montgomery County, Maryland. The lease at Briggs Chaney remains in full force and effect and Albertson’s/Safeway has executed a sublease with a replacement grocer, Global Food, for that space, which commenced operations in March 2017. In February 2017, the Company terminated the lease with Albertson's/Safeway at Broadlands and received a $3.6 million termination fee which was recognized as revenue in the first quarter. The termination fee revenue will be partially offset by the loss of approximately $1.6 million of rental revenue over the course of 2017. The Company has executed a lease with Aldi Food Market for 20,000 square feet of this space which is under construction and expected to open in late 2017. We continue to actively market the balance of the former Safeway space.

In January 2017, the Company purchased for $76.4 million, including acquisition costs, Burtonsville Town Square, a 121,000 square foot shopping center located in Burtonsville, Maryland. Burtonsville Town Square is 100% leased and anchored by Giant Food and CVS Pharmacy. It has expansion development potential of up to 18,000 square feet of additional retail space. The purchase was funded with a new $40.0 million mortgage loan and through the Company's revolving credit facility.

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During the three months ended June 30, 2017, the Company executed termination agreements with two significant tenants: Kmart at Kentlands Square II and No Excuse Workout at Great Eastern. Kmart closed its 104,000 square foot store at Kentlands in September 2017, and the Company will gain possession on October 31, 2017, allowing the Company the opportunity to release or reposition the space. As a result of the termination, the mortgage loan agreement requires that Saul Centers guarantee approximately $9.2 million of that loan effective October 31, 2017 (the termination date), which will be reduced upon satisfaction of conditions stated in the loan documents. Annual revenue to the Company under the Kmart lease totaled approximately $1.3 million. The Company terminated its 113,000 square foot lease with No Excuse Workout as a result of the tenant's failure to pay a material portion of required rent for more than 18 months. The termination reduced the Company's overall leasing percentage by 1.2% as of June 30, 2017, however, it did not have an impact on operating income in 2017 compared to 2016 because the Company had fully reserved the unpaid tenant rents in both periods.

In September 2017, the Company sold for $8.5 million the 255,400 square foot Great Eastern Shopping Center located in District Heights, Maryland. The Company provided $1.28 million second trust financing to the buyer, which bears interest at a fixed rate of 6%, matures in March 2018 and can be extended for six months at the option of the buyer. A $0.5 million gain realized on the sale was deferred and will be recognized when the loan is repaid by the buyer.

The Company's tenants were impacted by winter weather during the first quarter of 2016, as heavy snowfall in the Mid-Atlantic states during that period hindered the ability of customers to shop. The cost of removing snow from the Company's properties during the three months ended March 31, 2016, was approximately $2.3 million, while the mild first quarter of 2017 resulted in snow removal costs of only $0.6 million. Approximately 60% of these costs were billed to tenants.

The recent period of economic expansion has now run in excess of five years. While economic conditions within the local Washington, DC metropolitan area have remained relatively stable, issues facing the Federal government relating to taxation, spending and interest rate policy will likely impact the office, retail and residential real estate markets over the coming years. Because the majority of the Company’s property 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 plans. Based on our observations, we continue to adapt our marketing and merchandising strategies in a way to maximize our future performance.  The Company’s overall leasing percentage, on a comparative same property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, was 95.4% at September 30, 2017, compared to 95.3% at September 30, 2016.

The Company maintains a ratio of total debt to total asset value of under 50%, which allows the Company to obtain additional secured borrowings if necessary. As of September 30, 2017, amortizing fixed-rate debt with staggered maturities from 2018 to 2035 represented approximately 89.3% of the Company’s notes payable, thus minimizing refinancing risk in any given year. The Company has a commitment from a lender to refinance the only fixed-rate mortgage scheduled to mature in 2018. The new $60.0 million loan will bear interest at a fixed rate of 3.75%, require monthly principal and interest payments of $308,500 based on a 25-year amortization schedule and mature in 2032. The new loan is expected to close during the fourth quarter, subject to normal closing conditions, and proceeds will be used to repay the remaining balance of approximately $28.0 million on the existing mortgage and reduce the outstanding balance of the revolving credit facility. As of

September 30, 2017, the Company’s variable-rate debt consisted of a $14.2 million bank term loan secured by Metro Pike Center and $89.0 million outstanding under the revolving credit facility. As of September 30, 2017, the Company has availability of approximately $185.8 million under its $275.0 million unsecured revolving line of credit.

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

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Critical Accounting Policies

The Company’s 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. If judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied resulting in a different presentation of the financial statements. The Company has identified the following policies that, due to estimates and assumptions inherent in these 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.

The Company purchases real estate investment properties from time to time and records assets acquired and liabilities assumed, including land, buildings, and intangibles related to in-place leases and customer relationships, based on their relative fair values. The fair value of buildings generally is determined as if the buildings were vacant upon acquisition and subsequently leased at market rental rates and considers the present value of all cash flows expected to be generated by the property including an initial lease up period. The fair value of above and below market intangibles associated with in-place leases is determined by assessing the net effective rent and remaining term of the in-place lease relative to market terms for similar leases at acquisition taking into consideration the remaining contractual lease period, renewal periods, and the likelihood of the tenant exercising its renewal options. The fair value of below market lease intangibles is recorded as deferred income and accreted as additional lease revenue over the remaining contractual lease period and any renewal option periods included in the valuation analysis. The fair value of above market lease intangibles is recorded as a deferred asset and amortized as a reduction of revenue over the remaining contractual lease term. The fair value of at-market in-place leases is determined considering the cost of acquiring similar leases, the foregone rents associated with the lease-up period and carrying costs associated with the lease-up period. Intangible assets associated with at-market in-place leases are amortized as additional expense over the remaining contractual lease term. To the extent customer relationship intangibles are present in an acquisition, the fair value of the intangibles are amortized over the life of the customer relationship.

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 value of the real estate investment property exceeds its estimated fair value. The Company considers both quantitative and qualitative factors including recurring operating losses, significant decreases in occupancy, and significant adverse changes in legal factors and business climate. If impairment indicators are present, the projected cash flows of the property over its remaining useful life, on an undiscounted basis, are compared to the carrying value 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 value is greater than the undiscounted projected cash flows, an impairment loss is recognized 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.

When incurred, the Company capitalizes the cost of improvements that extend the useful life of property and equipment. All repair and maintenance expenditures are expensed when incurred. Leasehold improvements expenditures are capitalized when certain criteria are met, including when we supervise construction and will own the improvement. Tenant improvements that we own are depreciated over the life of the respective lease or the estimated useful life of the improvements, whichever is shorter.

Interest, real estate taxes, development-related salary costs and other carrying costs are capitalized on projects under construction. Upon substantial completion of construction and the placement of assets into service, rental income, direct operating expenses, and depreciation associated with such properties are included in current operations and capitalization of interest ceases. Commercial development projects are substantially complete and available for occupancy upon completion of tenant improvements, but no later than one year from the cessation of major construction activity. Residential development projects are considered substantially complete and available for occupancy upon receipt of the certificate of occupancy from the

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appropriate licensing authority. Substantially completed portions of a project are accounted for as separate projects. Depreciation is calculated using the straight-line method and estimated useful lives generally between 35 and 50 years for base buildings, or a shorter period if management determines that the building has a shorter useful life, and up to 20 years for certain other improvements.

Deferred Leasing Costs

Certain initial direct costs incurred by the Company in negotiating and consummating successful Commercial leases are capitalized and amortized over the initial base term of the leases. Deferred leasing costs consist of commissions paid to third-party leasing agents as well as internal direct costs such as employee compensation and payroll-related fringe benefits directly related to time spent performing successful leasing-related activities. Such activities include evaluating prospective tenants’ financial condition, evaluating and recording guarantees, collateral and other security arrangements, negotiating lease terms, preparing lease documents and closing transactions. In addition, deferred leasing costs include amounts attributed to in-place leases associated with acquired properties.

Revenue Recognition

Rental and interest income is accrued as earned. Recognition of rental income commences when control of the space has been given to the tenant. When rental payments due under leases vary from a straight-line basis because of free rent periods or scheduled rent increases, income is recognized on a straight-line basis. Expense recoveries represent a portion of property operating expenses billed to tenants, including common area maintenance, real estate taxes and other recoverable costs. Expense recoveries are recognized in the period in which the expenses are incurred. Rental income based on a tenant’s revenue, known as percentage rent, is recognized when a tenant reports sales that exceed a breakpoint specified in the lease agreement.

Allowance for Doubtful Accounts - Current and Deferred Receivables

Accounts receivable primarily represent amounts accrued and unpaid from tenants in accordance with the terms of the respective leases, subject to the Company’s revenue recognition policy. Receivables are reviewed monthly and reserves are established with a charge to current period operations when, in the opinion of management, collection of the receivable is doubtful. In addition to rents due currently, accounts receivable include amounts representing minimum rental income accrued on a straight-line basis to be paid by tenants over the remaining term of their respective leases. Reserves are established with a charge to income for tenants whose rent payment history or financial condition casts doubt upon the tenant’s ability to perform under its lease obligations.

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.

Results of Operations

Same property revenue and same property operating income are non-GAAP financial measures of performance and improve the comparability of these measures by excluding the results of properties which were not in operation for the entirety of the comparable reporting periods.

We define same property revenue as total revenue minus the sum of interest income and revenue of properties not in operation for the entirety of the comparable reporting periods, and we define same property operating income as net income plus the sum of interest expense and amortization of deferred debt costs, depreciation and amortization, general and administrative expense, loss on the early extinguishment of debt (if any), predevelopment expense and acquisition related costs, minus the sum of interest income, the change in the fair value of derivatives, gains on property dispositions (if any) and the results of properties which 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 operating income. Accordingly, our same property revenue and same property operating income may not be comparable to those of other REITs.

Same property revenue and same property 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

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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 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 total revenue and net income under GAAP to same property revenue and operating income for the indicated periods. The same property results include (a) 48 Shopping Centers in each period and (b) six Mixed-Use properties and five Mixed-Use properties for the three- and nine-months ended September 30, 2017, respectively.

Same property revenue

(in thousands)	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Total revenue	$	56,237		$	53,233		$	170,610		$	162,869
Less: Interest income	(9		)	(12		)	(31		)	(36		)
Less: Acquisitions, dispositions and development properties	(1,351		)	(580		)	(10,336		)	(3,314		)
Total same property revenue	$	54,877		$	52,641		$	160,243		$	159,519
Shopping Centers	$	39,483		$	38,331		$	120,569		$	119,161
Mixed-Use properties	15,394			14,310			39,674			40,358
Total same property revenue	$	54,877		$	52,641		$	160,243		$	159,519

The $2.2 million increase in same property revenue for the three months ended September 30, 2017 (the "2017 Quarter") compared to the three months ended September 30, 2016 (the "2016 Quarter"), was primarily due to (a) an increase in base rent, exclusive of the impact of the Kmart termination at Kentlands ($1.9 million) and (b) an increase in expense recoveries ($0.8 million) partially offset by (c) the impact of the Kmart termination ($0.3 million) and (d) lower parking income at 601 Pennsylvania Avenue as a result of a garage refurbishment project ($0.2 million).

The $0.7 million increase in same property revenue for the nine months ended September 30, 2017 (the "2017 Period"), compared to the nine months ended September 30, 2016 (the "2016 Period"), was primarily due to (a) higher base rent, exclusive of the impact of the Kmart termination at Kentlands ($1.1 million) and (b) higher other income ($0.3 million) partially offset by (c) the impact of the Kmart termination ($0.4 million) and (d) lower parking income at 601 Pennsylvania Avenue as a result of a garage refurbishment project ($0.3 million).

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Same property operating income

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2017			2016			2017			2016
Net income	$	14,385		$	12,723		$	46,180		$	42,344
Add: Interest expense and amortization of deferred debt costs	11,821			11,524			35,585			34,268
Add: Depreciation and amortization of deferred leasing costs	11,363			11,626			34,396			33,478
Add: General and administrative	4,363			4,033			13,178			12,500
Add: Acquisition related costs	—			57			—			57
Add: Change in fair value of derivatives	1			(1		)	2			9
Less: Interest income	(9		)	(12		)	(31		)	(36		)
Property operating income	41,924			39,950			129,310			122,620
Less: Acquisitions, dispositions & development property	1,060			192			6,737			862
Total same property operating income	$	40,864		$	39,758		$	122,573		$	121,758
Shopping Centers	$	30,971		$	30,290		$	95,866		$	93,733
Mixed-Use properties	9,893			9,468			26,707			28,025
Total same property operating income	$	40,864		$	39,758		$	122,573		$	121,758

The $1.1 million increase in same property operating income in the 2017 Quarter compared to the 2016 Quarter was primarily due to (a) higher base rent, exclusive of the impact of the Kmart termination at Kentlands ($1.9 million) partially offset by (b) the impact of the Kmart termination ($0.3 million), (c) higher property operating expenses net of recoveries ($0.3 million) and (d) higher real estate taxes net of recoveries ($0.2 million).

The $0.8 million increase in same property operating income for the 2017 Period compared to the 2016 Period was primarily due to (a) higher base rent, exclusive of the impact of the Kmart termination at Kentlands ($1.1 million), (b) lower provision for credit losses ($0.4 million) and (c) higher other income ($0.3 million) partially offset by (d) the impact of the Kmart termination ($0.3 million), (e) lower parking income at 601 Pennsylvania Avenue as a result of a garage refurbishment project ($0.3 million) and (f) higher real estate taxes net of recoveries ($0.2 million).

Three months ended September 30, 2017 compared to the three months endedSeptember 30, 2016

Revenue

	Three months ended September 30,				2016 to 2017 Change
(Dollars in thousands)	2017		2016		Amount			Percent
Base rent	$	45,385	$	43,151	$	2,234		5.2	%
Expense recoveries	9,447		8,561		886			10.3	%
Percentage rent	67		57		10			17.5	%
Other	1,338		1,464		(126		)	(8.6	)%
Total revenue	$	56,237	$	53,233	$	3,004		5.6	%

Base rent includes $(96,800) and $221,500 for the 2017 Quarter and 2016 Quarter, respectively, to recognize base rent on a straight-line basis. In addition, base rent includes $357,500 and $428,600, for the 2017 Quarter and 2016 Quarter, respectively, to recognize income from the amortization of in-place leases acquired in connection with purchased real estate investment properties.

Total revenue increased 5.6% in the 2017 Quarter compared to the 2016 Quarter primarily due to revenues generated by (a) Park Van Ness ($1.4 million) and (b) Burtonsville Town Square ($1.2 million).

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Operating Expenses

	Three months ended September 30,				2016 to 2017 Change
(Dollars in thousands)	2017		2016		Amount			Percent
Property operating expenses	$	7,418	$	6,685	$	733		11.0	%
Provision for credit losses	52		391		(339		)	(86.7	)%
Real estate taxes	6,834		6,195		639			10.3	%
Interest expense and amortization of deferred debt costs	11,821		11,524		297			2.6	%
Depreciation and amortization of deferred leasing costs	11,363		11,626		(263		)	(2.3	)%
General and administrative	4,363		4,033		330			8.2	%
Acquisition related costs	—		57		(57		)	(100.0	)%
Total operating expenses	$	41,851	$	40,511	$	1,340		3.3	%

Total operating expenses increased 3.3% in the 2017 Quarter compared to the 2016 Quarter.

Property Operating Expenses. Property operating expenses increased 11.0% in the 2016 Quarter primarily due to increased maintenance and repair costs throughout the portfolio ($0.7 million).

Provision for credit losses. The provision for credit losses for the 2017 Quarter represents 0.09% of the Company’s revenue, a decrease from 0.73% for the 2016 Quarter.

Real Estate taxes. Real estate taxes increased 10.3% in the 2017 Quarter primarily due to (a) Park Van Ness ($0.2 million), (b) Burtonsville Town Square ($0.1 million) and (c) small increases at several properties throughout the portfolio.

Interest expense and amortization of deferred debt costs. Interest expense increased 2.6% in the 2017 Quarter primarily due to (a) additional debt incurred in connection with the acquisition of Burtonsville Town Square ($0.6 million), (b) higher interest expense related to Park Van Ness ($0.1 million), partially offset by (c) higher capitalized interest ($0.4 million).

Depreciation and amortization of deferred leasing costs. Depreciation and amortization of deferred leasing costs decreased 2.3% in the 2017 Quarter primarily due to (a) lower depreciation expense related to Glebe Road ($0.6 million) partially offset by increased depreciation at (b) Park Van Ness ($0.1 million) and (c) Burtonsville Town Square ($0.2 million).

General and administrative expense. General and administrative expense increased 8.2% in the 2017 Quarter primarily due to (a) higher compensation expense ($0.2 million) and (b) higher state and local taxes ($0.1 million).

Nine months endedSeptember 30, 2017 compared to the nine months endedSeptember 30, 2016

Revenue

	Nine Months Ended   September 30,				2016 to 2017 Change
(Dollars in thousands)	2017		2016		Amount			Percent
Base rent	$	135,436	$	128,338	$	7,098		5.5	%
Expense recoveries	26,378		26,011		367			1.4	%
Percentage rent	968		1,016		(48		)	(4.7	)%
Other	7,828		7,504		324			4.3	%
Total revenue	$	170,610	$	162,869	$	7,741		4.8	%

Base rent includes $0.4 million and $1.1 million for the 2017 Period and the 2016 Period, respectively, to recognize base rent on a straight-line basis. In addition, base rent includes $1.3 million and $1.3 million for the 2017 Period and the 2016 Period, respectively, to recognize income from the amortization of in-place leases acquired in connection with purchased real estate investment properties.

Total revenue increased 4.8% in the 2017 Period compared to the 2016 Period.

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Base Rent. The $7.1 million increase in base rent in the 2017 Period compared to 2016 Period is primarily attributable to (a) a $0.65 per square foot increase in commercial base rent ($4.2 million) and (b) residential base rent ($4.1 million) partially offset by (c) a 85,686 square foot decrease in commercial leased space ($1.2 million).

Expense Recoveries. Expense recoveries increased 1.4% in the 2017 Period primarily due to acquired properties.

Other revenue. Other revenue increased $0.3 million in the 2017 Period compared to the 2016 Period due to acquired properties.

Operating Expenses

	Nine Months Ended   September 30,				2016 to 2017 Change
(Dollars in thousands)	2017		2016		Amount			Percent
Property operating expenses	$	20,543	$	20,740	$	(197	)	(0.9	)%
Provision for credit losses	602		1,207		(605		)	(50.1	)%
Real estate taxes	20,124		18,266		1,858			10.2	%
Interest expense and amortization of deferred debt costs	35,585		34,268		1,317			3.8	%
Depreciation and amortization of deferred leasing costs	34,396		33,478		918			2.7	%
General and administrative	13,178		12,500		678			5.4	%
Acquisition related costs	—		57		(57		)	(100.0	)%
Total operating expenses	$	124,428	$	120,516	$	3,912		3.2	%

Total operating expenses increased 3.2% in the 2017 Period compared to the 2016 Period.

Property Operating Expenses. Property operating expenses decreased 0.9% in the 2017 Period primarily due to (a) lower snow removal costs ($1.7 million) partially offset by (b) the operation of Park Van Ness ($0.7 million), (c) Burtonsville Town Square ($0.2 million) and (d) increased maintenance and repair costs throughout the portfolio ($0.7 million).

Provision for credit losses. The provision for credit losses for the 2017 Period represents 0.35% of the Company’s revenue, a decrease from 0.74% for the 2016 Period.

Real Estate Taxes. Real estate taxes increased 10.2% in the 2017 Period primarily due to (a) Park Van Ness ($0.7 million), (b) 601 Pennsylvania Avenue ($0.2 million), (c) Burtonsville Town Square ($0.2 million), and (d) increased assessed values of several properties.

Interest and amortization of deferred debt costs. Interest and amortization of deferred debt costs increased 3.8% to $35.6 million in the 2017 Period primarily due to (a) Burtonsville Town Square ($1.6 million) and (b) Park Van Ness ($0.6 million) partially offset by (c) increased capitalized interest ($0.7 million).

Depreciation and amortization of deferred leasing costs. The increase in depreciation and amortization to $34.4 million in the 2017 Period from $33.5 million in the 2016 Period was due primarily to (a) Park Van Ness ($1.1 million) and (b) Burtonsville Town Square ($1.1 million) partially offset by (c) the net impact of other asset acquisitions and disposals ($0.3 million), (d) lower depreciation expense related to Glebe Road ($0.8 million) and (e) lower amortization of deferred leasing costs ($0.3 million).

General and administrative expense. The 5.4% increase in general and administrative expense was primarily due to

(a) increased salary and benefit expense ($0.6 million) and (b) state and local tax expense ($0.1 million).

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Liquidity and Capital Resources

Cash and cash equivalents totaled $9.4 million and $9.8 million at September 30, 2017 and 2016, respectively. The Company’s cash flow is affected by its operating, investing and financing activities, as described below.

	Nine Months Ended September 30,
(In thousands)	2017			2016
Net cash provided by operating activities	$	74,443		$	70,351
Net cash used in investing activities	(99,486		)	(44,685		)
Net cash provided by (used in) financing activities	26,106			(25,833		)
Increase (decrease) in cash and cash equivalents	$	1,063		$	(167	)

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 debt outstanding.

Investing Activities

Net cash used in investing activities includes property acquisitions, developments, redevelopments, tenant improvements and other property capital expenditures. The $54.8 million increase in cash used in investing activities is primarily due to higher acquisition expenditures ($69.2 million) partially offset by lower development expenditures ($8.8 million).

Financing Activities

Net cash provided by financing activities for the nine months endedSeptember 30, 2017 primarily reflects:

• proceeds from notes payable totaling $40.0 million;

• advances from the revolving credit facility totaling $55.0 million;

• proceeds of $5.8 million from the issuance of limited partnership units in the Operating Partnership pursuant to our Dividend Reinvestment and Stock Purchase Plan ("DRIP");

• proceeds of $15.3 million from the issuance of common stock pursuant to our DRIP, directors’ Deferred Compensation Plan and the exercise of stock options; and

• advances of $1.4 million from the Park Van Ness construction loan;

which was partially offset by:

• repayment of notes payable totaling $20.3 million;

• revolving credit facility principal payments of $15.0 million;

• distributions to common stockholders totaling $33.4 million;

• distributions to holders of convertible limited partnership units in the Operating Partnership totaling $11.4 million; and

• distributions to preferred stockholders totaling $9.3 million.

Net cash used in financing activities for the nine months endedSeptember 30, 2016 primarily reflects:

• revolving credit facility principal payments of $37.0 million;

• repayment of notes payable totaling $18.4 million;

• distributions to common stockholders totaling $29.3 million;

• distributions to holders of convertible limited partnership units in the Operating Partnership totaling $10.1 million; and

• distributions to preferred stockholders totaling $9.3 million;

which was partially offset by:

• advances from the revolving credit facility totaling $32.0 million;

• proceeds of $5.1 million from the issuance of limited partnership units in the Operating Partnership pursuant to our DRIP;

• proceeds of $17.9 million from the issuance of common stock pursuant to our DRIP, directors’ Deferred Compensation Plan and the exercise of stock options; and

• advances of $23.1 million from the Park Van Ness construction loan.

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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. In order 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.

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. The Company is in the early stages of the development of a primarily residential project with street-level retail at 750 N. Glebe Road in Arlington, Virginia, the cost of which will be approximately $275.0 million. The Company closed on a $157.0 million construction-to-permanent loan, the proceeds of which will be used to partially finance the project. The remaining costs are expected to be funded through working capital, including the Company's existing line of credit. 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 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.

As of September 30, 2017, the scheduled maturities of debt, including scheduled principal amortization, for years ending December 31, were as follows:

(In thousands)	Balloon Payments			Scheduled Principal Amortization		Total
October 1 through December 31, 2017	$	—		$	7,386	$	7,386
2018	130,799		(a)	29,015		159,814
2019	60,793			27,769		88,562
2020	61,163			25,182		86,345
2021	11,012			24,836		35,848
2022	36,502			25,277		61,779
Thereafter	405,693			123,478		529,171
Principal amount	$	705,962		$	262,943	968,905
Unamortized deferred debt expense						6,759
Net						$	962,146

(a) Includes $89.0 million outstanding under the line of credit.

Management believes that the Company’s capital resources, which at September 30, 2017 included cash balances of approximately $9.4 million and borrowing availability of approximately $185.8 million on its unsecured revolving credit facility, will be sufficient to meet its liquidity needs for the foreseeable future.

Dividend Reinvestments

In December 1995, the Company established a DRIP 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 DRIP 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 DRIP are paid by the

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Company. The Company issued 177,335 and 136,623 shares under the DRIP at a weighted average discounted price of $59.14 and $54.58 per share, during the nine months endedSeptember 30, 2017 and 2016, respectively. The Company issued 95,755 and 93,867 limited partnership units under the DRIP at a weighted average price of $60.55 and $54.80 per unit during the nine months endedSeptember 30, 2017 and 2016, respectively. The Company also credited 5,685 and 5,998 shares to directors pursuant to the reinvestment of dividends specified by the Directors’ Deferred Compensation Plan at a weighted average discounted price of $59.80 and $54.82 per share, during the nine months endedSeptember 30, 2017 and 2016, respectively.

Capital Strategy and Financing Activity

As a general policy, the Company intends to maintain a ratio of its total debt to total 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 asset value was below 50% as of September 30, 2017.

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 strategy in light of current economic conditions, relative costs of capital, market values of the Company’s 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 consequently, 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. The Company selectively continues to refinance or renegotiate the terms of its outstanding debt in order to achieve longer maturities, and obtain generally more favorable loan terms, whenever management determines the financing environment is favorable.

The Company maintains an unsecured revolving credit facility which was amended and restated in June 2014. The facility provides working capital and funds for acquisitions, certain developments, redevelopments and letters of credit, expires on June 23, 2018, and provides for an additional one-year extension at the Company’s option, subject to the Company’s satisfaction of certain conditions. As of September 30, 2017, $89.0 million was outstanding, approximately $185.8 million was available under the line and approximately $185,000 was committed for letters of credit. The interest rate under the facility is variable and equals the sum of one-month LIBOR and a margin that is based on the Company’s leverage ratio, and which can range from 145 basis points to 200 basis points. Based on the leverage ratio as of September 30, 2017, the margin was 145 basis points.

The facility requires the Company and its subsidiaries to maintain compliance with certain financial covenants. The material covenants require the Company, on a consolidated basis, to:

• maintain tangible net worth, as defined in the loan agreement, of at least $542.1 million plus 80% of the Company’s net equity proceeds received after March 2014;

• limit the amount of debt as a percentage of gross asset value, as defined in the loan agreement, to less than 60% (leverage ratio);

• limit the amount of debt so that interest coverage will exceed 2.0x on a trailing four-quarter basis (interest expense coverage); and

• limit the amount of debt so that interest, scheduled principal amortization and preferred dividend coverage exceeds 1.3x on a trailing four-quarter basis (fixed charge coverage).

As of September 30, 2017, the Company was in compliance with all such covenants.

Effective September 1, 2017, the Company's $71.6 million construction-to-permanent loan, which is fully drawn and secured by Park Van Ness, converted to permanent financing. The loan matures in 2032, bears interest at a fixed rate of 4.88%, requires monthly principal and interest payments of $413,460 based on a 25-year amortization schedule and requires a final payment of $39.6 million at maturity.

On January 18, 2017, the Company closed on a 15-year, non-recourse $40.0 million mortgage loan secured by Burtonsville Town Square. The loan matures in 2032, bears interest at a fixed rate of 3.39%, requires monthly principal and interest payments of $197,900 based on a 25-year amortization schedule and requires a final payment of $20.3 million at maturity.

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On August 14, 2017, the Company closed on a $157.0 million construction-to-permanent loan, the proceeds of which will be used to partially fund the Glebe Road development project. The loan matures in 2035, bears interest at a fixed rate of 4.67%, requires interest only payments, which will be funded by the loan, until conversion to permanent. The conversion is expected in the fourth quarter of 2021, and thereafter, monthly principal and interest payments of $887,900 based on a 25-year amortization schedule will be required.

The Company has a commitment from a lender to refinance the only fixed-rate mortgage scheduled to mature in 2018. The new $60.0 million loan will bear interest at a fixed rate of 3.75%, require monthly principal and interest payments of $308,500 based on a 25-year amortization schedule and mature in 2032. It is expected to close during the fourth quarter, subject to normal closing conditions, and proceeds will be used to repay the remaining balance of the approximately $28.0 million on the existing mortgage and reduce the outstanding balance of the revolving credit facility.

Saul Centers is a guarantor of the revolving credit facility, of which the Operating Partnership is the borrower. The Operating Partnership is the guarantor of (a) a portion of the Metro Pike Center bank loan (approximately $7.8 million of the $14.2 million outstanding at September 30, 2017) and (b) a portion of the Park Van Ness loan (approximately $53.7 million of the $71.6 million outstanding balance at September 30, 2017), which guarantee will be reduced and eventually eliminated subject to the achievement of certain leasing and cash flow levels. The fixed-rate notes payable are non-recourse.

Preferred Stock

The Company has outstanding 7.2 million depositary shares, each representing 1/100th of a share of 6.875% Series C Cumulative Redeemable Preferred Stock. The depositary shares may be redeemed at the Company’s option, in whole or in part, at the $25.00 liquidation preference plus accrued but unpaid dividends on or after February 12, 2018. The depositary shares pay an annual dividend of $1.71875 per share, equivalent to 6.875% of the $25.00 liquidation preference. The Series C preferred stock has no stated maturity, is not subject to any sinking fund or mandatory redemption and is not convertible into any other securities of the Company except in connection with certain changes of control or delisting events. Investors in the depositary shares generally have no voting rights, but will have limited voting rights if the Company fails to pay dividends for six or more quarters (whether or not declared or consecutive) and in certain other events.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that are reasonably likely to have a current or future material effect on the Company’s financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

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Funds From Operations

Funds From Operations (FFO)¹ available to common stockholders and noncontrolling interests for the nine months endedSeptember 30, 2017, totaled $71.3 million, an increase of 7.1% compared to the nine months endedSeptember 30, 2016.

The following table presents a reconciliation from net income to FFO available to common stockholders and noncontrolling interests for the periods indicated:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share amounts)	2017			2016			2017			2016
Net income	$	14,385		$	12,723		$	46,180		$	42,344
Add:
Real estate depreciation and amortization	11,363			11,626			34,396			33,478
FFO	25,748			24,349			80,576			75,822
Subtract:
Preferred stock dividends	(3,093		)	(3,093		)	(9,281		)	(9,281		)
FFO available to common stockholders and noncontrolling interests	$	22,655		$	21,256		$	71,295		$	66,541
Weighted average shares:
Diluted weighted average common stock	22,028			21,779			21,949			21,544
Convertible limited partnership units	7,521			7,391			7,491			7,360
Average shares and units used to compute FFO per share	29,549			29,170			29,440			28,904
FFO per share available to common stockholders and noncontrolling interests	$	0.77		$	0.73		$	2.42		$	2.30

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 extraordinary items, 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 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.

Acquisitions and Redevelopments

During the remainder of the year, the Company will continue its redevelopment activities at Glebe Road, 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 balance of the year, any developments, expansions or acquisitions are expected to be funded with bank borrowings from the Company’s credit line, 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. The following describes the acquisition, development, redevelopment and renovation activities of the Company in 2016 and the nine months endedSeptember 30, 2017.

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Park Van Ness

In 2016, the Company completed development of Park Van Ness, a 271-unit residential project with approximately 9,000 square feet of street-level retail, below street-level structured parking, and amenities including a community room, landscaped courtyards, a fitness room, a wi-fi lounge/business center, and a rooftop pool and deck. The structure comprises 11 levels, five of which on the east side are below street level. Because of the change in grade from the street eastward to Rock Creek Park, apartments on all 11 levels have park or city views. The street level retail space is 100% leased to a grocery/gourmet food market and an upscale Italian restaurant. As of September 30, 2017, 254 apartments (93.7%) were leased. The total cost of the project, excluding predevelopment expense and land (which the Company has owned), was approximately $93.0 million, a portion of which was financed with a $71.6 million construction-to-permanent loan.

750 N. Glebe Road

From 2014 through 2016, the Company purchased four adjacent properties for an aggregate $54.0 million located on N. Glebe Road in Arlington, Virginia. The properties comprise 2.8 acres of land. Effective August 1, 2016, the properties were vacant and removed from service. In 2016, the Company received zoning and site plan approval from Arlington County, Virginia for the development of approximately 490 residential units and approximately 62,000 square feet of retail space. The demolition of the existing structures was completed during the first quarter of 2017 and excavation, sheeting and shoring, which commenced during the second quarter of 2017, is approximately 70% complete as of October 31, 2017. The development is scheduled for substantial completion in early 2020. The total cost of the project, including acquisition of land, is expected to be approximately $275.0 million. The Company closed on a $157.0 million construction-to-permanent loan, the proceeds of which will be used to partially finance the project. During the second quarter of 2017, the Company executed a 41,500 square foot anchor-lease with Target and leases for an aggregate of 7,800 square feet of retail shop space, resulting in approximately 80% of the retail space being leased.

Thruway Pad

In August 2016, the Company purchased for $3.1 million, a retail pad site with an occupied 4,200 square foot bank building in Winston Salem, North Carolina, and incurred acquisition costs of $60,400. The property is contiguous with and an expansion of the Company's Thruway Shopping Center.

Ashbrook Marketplace

In August 2016, the Company entered into an agreement to acquire from B. F. Saul Real Estate Investment Trust (the “Trust”), for an initial purchase price of $8.8 million, approximately 14.3 acres of land located at the intersection of Ashburn Village Boulevard and Russell Branch Parkway in Loudoun County, Virginia. The land is zoned for up to 115,000 square feet of retail development. In order to allow the Company time to pre-lease and complete project plans and specifications, the parties have agreed to a closing date in early 2018, at which time the Company will exchange limited partnership units for the land. The number of limited partnership units to be exchanged will be based on the initial purchase price and the average share value (as defined in the agreement) of the Company’s common stock at the time of the exchange. The Company intends to construct a shopping center and, upon stabilization, may be obligated to issue additional limited partnership units to the Trust. Pre-leasing efforts and project engineering and architectural plans are in process.

Burtonsville Town Square

In January 2017, the Company purchased for $76.4 million, including acquisition costs, Burtonsville Town Square, a 121,000 square foot shopping center located in Burtonsville, Maryland. Burtonsville Town Square is 100% leased and anchored by Giant Food and CVS Pharmacy. It has expansion development potential of up to 18,000 square feet of additional retail space. The purchase was funded with a new $40.0 million mortgage loan and through the Company's revolving credit facility. The mortgage bears interest at 3.39%, requires monthly principal and interest payments of $197,900 based upon a 25-year amortization schedule, and has a 15-year maturity.

Olney Shopping Center

In March 2017, the Company purchased for $3.0 million the land underlying Olney Shopping Center. The land was previously leased by the Company with an annual rent of approximately $56,000. The purchase price was funded by the revolving credit facility.

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Portfolio Leasing Status

The following chart sets forth certain information regarding Commercial leases at our properties.

	Total Properties		Total Square Footage		Percent Leased
	Shopping Centers	Mixed-Use	Shopping Centers	Mixed-Use	Shopping Centers		Mixed-Use
September 30, 2017	49	6	7,747,798	1,076,838	95.7	%	93.4	%
September 30, 2016	49	7	7,882,032	1,273,335	95.7	%	88.7	%

As of September 30, 2017, 95.5% of the Commercial portfolio was leased, compared to 94.7% at September 30, 2016. On a same property basis, 95.4% of the Commercial portfolio was leased, compared to 95.3% at September 30, 2016. As of September 30, 2017, the Clarendon Center apartments were 96.3% leased compared to 96.7% at September 30, 2016. As of September 30, 2017, the Park Van Ness apartments were 93.7% leased compared to 61.3% at September 30, 2016.

The following table shows selected data for leases executed in the indicated periods. 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.

			Average Base Rent per Square Foot
Three months ended September 30,	Square Feet	Number of Leases	New/Renewed Leases		Expiring Leases
2017	320,490	70	$	23.64	$	22.19
2016	529,313	79	15.19		14.20

Additional information about the 2017 leasing activity 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 a result of acquisition or development.

	New Leases			Renewed Leases
Number of leases	13			57
Square feet	26,678			293,812
Per square foot average annualized:
Base rent	$	25.87		$	23.44
Tenant improvements	(1.82		)	(0.03		)
Leasing costs	(0.36		)	(0.02		)
Rent concessions	(0.07		)	(0.01		)
Effective rents	$	23.62		$	23.38

During the three months ended September 30, 2017, the Company entered into 141 new or renewed apartment leases. The average monthly rent per square foot for the 135 leases for units which were previously occupied decreased to $3.57 from $3.61. During the three months ended September 30, 2016, the Company entered into 158 new or renewed apartment leases. The average monthly rent per square foot for the 86 leases for units which were previously occupied increased to $3.64 from $3.61.

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As of December 31, 2016, 952,517 square feet of Commercial space was subject to leases scheduled to expire in 2017. Of those leases, as of September 30, 2017, leases representing 203,964 square feet of Commercial space have not yet renewed and are scheduled to expire over the next three months. Below is information about existing and estimated market base rents per square foot for that space.

Expiring Leases:	Total
Square feet	203,964
Average base rent per square foot	$	19.59
Estimated market base rent per square foot	$	19.57

Item 3.    Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to certain financial market risks, the most predominant being fluctuations in interest rates. Interest rate fluctuations are monitored by management as an integral part of the Company’s overall risk management program, which recognizes the unpredictability of financial markets and seeks to reduce the potentially adverse effect on the Company’s results of operations.

The Company may, where appropriate, employ derivative instruments, such as interest rate swaps, to mitigate the risk of interest rate fluctuations. The Company does not enter into derivatives or other financial instruments for trading or speculative purposes. On June 29, 2010, the Company entered into an interest rate swap agreement with a $45.6 million notional amount to manage the interest rate risk associated with $45.6 million of variable-rate debt. The swap agreement was effective July 1, 2010, terminates on July 1, 2020 and effectively fixes the interest rate on the debt at 5.83%. The fair value of the swap at September 30, 2017 was approximately $1.5 million and is reflected in accounts payable, accrued expenses and other liabilities in the consolidated balance sheet.

The Company is exposed to interest rate fluctuations which will affect the amount of interest expense of its variable rate debt and the fair value of its fixed rate debt. As of September 30, 2017, the Company had variable rate indebtedness totaling $103.2 million. If the interest rates on the Company’s variable rate debt instruments outstanding at September 30, 2017 had been one percentage point higher, our annual interest expense relating to these debt instruments would have increased by $1.0 million based on those balances. As of September 30, 2017, the Company had fixed-rate indebtedness totaling $865.7 million with a weighted average interest rate of 5.38%. If interest rates on the Company’s fixed-rate debt instruments at September 30, 2017 had been one percentage point higher, the fair value of those debt instruments on that date would have been approximately $44.3 million  less than the carrying value.

Item 4. Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in the Company’s reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chairman and Chief Executive Officer, its Senior Vice President-Chief Financial Officer, Secretary and Treasurer, and its Senior Vice President-Chief Accounting Officer as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rule 13a-15(e) promulgated under the Exchange Act. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The Company carried out an evaluation under the supervision and with the participation of the Company’s management, including its Chairman and Chief Executive Officer, its Senior Vice President-Chief Financial Officer, Secretary and Treasurer, and its Senior Vice President-Chief Accounting Officer of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of September 30, 2017. Based on the foregoing, the Company’s Chairman and Chief Executive Officer, its Senior Vice President-Chief Financial Officer, Secretary and Treasurer and its Senior Vice President-Chief Accounting Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2017.

During the quarter ended September 30, 2017, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

The Company has no material updates to the risk factors presented in Item 1A. Risk Factors in the 2016 Annual Report of the Company on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

B. Francis Saul II, the Company’s Chairman of the Board and Chief Executive Officer, his spouse and entities affiliated with Mr. Saul II, through participation in the Company’s Dividend Reinvestment and Stock Purchase Plan for the

July 31, 2017 dividend distribution acquired 55,763 shares of common stock at a price of $57.40 per share and

16,021 limited partnership units at a price of $58.13 per unit.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information

None

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Item 6. Exhibits

10.	(a)	Promissory Note, dated as of August 14, 2017, by 750 North Glebe LLC to The Northwestern Mutual Life Insurance Company is filed herewith.
	(b)	Deed of Trust and Security Agreement, dated as of August 14, 2017, by 750 North Glebe LLC to Eric J. Ekeroth as trustee for the benefit of The Northwestern Mutual Life Insurance Company, as beneficiary, is filed herewith.
31.		Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer and Chief Financial Officer (filed herewith).
32.		Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer (filed herewith).
99.	(a)	Schedule of Portfolio Properties (filed herewith).
101.		The following financial statements from the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2017, formatted in Extensible Business Reporting Language (“XBRL”): (i) consolidated balance sheets, (ii) consolidated statements of operations, (iii) consolidated statements of changes in stockholders’ equity and comprehensive income, (iv) consolidated statements of cash flows, and (v) the notes to the consolidated financial statements.

-44-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SAUL CENTERS, INC. (Registrant)
Date: November 2, 2017	/s/ J. Page Lansdale
	J. Page Lansdale, President and Chief Operating Officer
Date: November 2, 2017	/s/ Scott V. Schneider
	Scott V. Schneider Senior Vice President, Chief Financial Officer (principal financial officer)
Date: November 2, 2017	/s/ Joel A. Friedman
	Joel A. Friedman Senior Vice President, Chief Accounting Officer (principal accounting officer)

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EX-10.A

Exhibit 10.(a)

EX-10.B

Exhibit 10.(b)

EX-31

Exhibit 31

CERTIFICATIONS

I, B. Francis Saul II, certify that:

1. I have reviewed this report on Form 10-Q of Saul Centers, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal period that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 2, 2017

/s/ B. Francis Saul II____

B. Francis Saul II

Chairman and Chief Executive Officer

CERTIFICATIONS

I, Scott V. Schneider, certify that:

1. I have reviewed this report on Form 10-Q of Saul Centers, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal period that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 2, 2017

/s/ Scott V. Schneider_

Scott V. Schneider

Senior Vice President,

Chief Financial Officer,

Secretary and Treasurer

EX-32

Exhibit 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, B. Francis Saul II, the Chairman and Chief Executive Officer of Saul Centers, Inc. (the “Company”), has executed this certification in connection with the filing with the Securities and Exchange Commission of the Company’s Quarterly Report on Form 10-Q for the period ending September 30, 2017 (the “Report”). The undersigned hereby certifies that:

(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:November 2, 2017/s/ B. Francis Saul II______________________

Name: B. Francis Saul II

Title: Chairman and Chief Executive Officer

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Scott V. Schneider, the Chief Financial Officer of Saul Centers, Inc. (the “Company”), has executed this certification in connection with the filing with the Securities and Exchange Commission of the Company’s Quarterly Report on Form 10-Q for the period ending September 30, 2017 (the “Report”). The undersigned hereby certifies that:

(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:November 2, 2017/s/ Scott V. Schneider_________

Name: Scott V. Schneider

Title: Senior Vice President,

Chief Financial Officer, Secretary and

Treasurer

EX-99.A

																			Exhibit 99 (a)
Saul Centers, Inc.
Schedule of Current Portfolio Properties
September 30, 2017
						Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of September 30,										(1)
		Property		Location					2017		2016		2015		2014		2013		Anchor / Significant Tenants
Shopping Centers
	Ashburn Village			Ashburn, VA		221,585	1994-2006	26.4	93	%	91	%	95	%	94	%	93	%	Giant Food, Hallmark Cards, McDonald's, Burger King, Dunkin Donuts, Kinder Care
	Ashland Square Phase I			Dumfries, VA		23,120	2007	2.0	100	%	100	%	100	%	100	%	100	%	Capital One Bank, CVS Pharmacy, The All American Steakhouse
	Beacon Center			Alexandria, VA		358,071	1972 (1993/99/07)	32.3	100	%	100	%	100	%	100	%	100	%	Lowe's Home Improvement Center, Giant Food, Home Goods, Outback Steakhouse, Marshalls, Party Depot, Panera Bread, TGI Fridays, Starbucks, Famous Dave's, Chipotle, Capital One Bank
	BJ's Wholesale Club			Alexandria, VA		115,660	2008	9.6	100	%	100	%	100	%	100	%	100	%	BJ's Wholesale Club
	Boca Valley Plaza			Boca Raton, FL		121,269	2004	12.7	95	%	99	%	100	%	89	%	91	%	Publix, Wells Fargo, Palm Beach Fitness, Anthony's Clothing
	Boulevard			Fairfax, VA		49,140	1994 (1999/09)	5.0	100	%	100	%	100	%	95	%	100	%	Panera Bread, Party City, Petco, Capital One Bank
	Briggs Chaney MarketPlace			Silver Spring, MD		194,258	2004	18.2	98	%	100	%	99	%	99	%	99	%	Global Food, Ross Dress For Less, Family Dollar, Advance Auto Parts, McDonald's, Wendy's
	Broadlands Village			Ashburn, VA		174,734	2003/4/6	24.0	76	%	99	%	98	%	95	%	88	%	Aldi Grocery, The All American Steakhouse, Bonefish Grill, Dollar Tree, Starbucks, Minnieland Day Care, Capital One Bank
	Burtonsville Town Square			Burtonsville, MD		121,132	2017	26.3	100	%	N/A		N/A		N/A		N/A		Giant Food, Petco, Starbucks, Green Turtle, Capital One Bank
	Countryside Marketplace			Sterling, VA		138,229	2004	16.0	94	%	94	%	93	%	93	%	90	%	Safeway, CVS Pharmacy, Starbucks, McDonald's
	Cranberry Square			Westminster, MD		141,450	2011	18.9	100	%	100	%	97	%	98	%	95	%	Giant Food, Staples, Party City, Pier 1 Imports, Jos. A. Bank, Wendy's, Giant Gas Station
	Cruse MarketPlace			Cumming, GA		78,686	2004	10.6	89	%	92	%	92	%	88	%	84	%	Publix, Subway, Orange Theory
	Flagship Center			Rockville, MD		21,500	1972, 1989	0.5	100	%	100	%	100	%	100	%	100	%	Capital One Bank
	French Market			Oklahoma City, OK		246,148	1974 (1984/98)	13.8	97	%	98	%	97	%	100	%	96	%	Burlington Coat Factory, Bed Bath & Beyond, Staples, Petco, The Tile Shop, Lakeshore Learning Center, Dollar Tree, Verizon, Raising Cane's
	Germantown			Germantown, MD		18,982	1992	2.7	100	%	100	%	100	%	81	%	81	%	CVS Pharmacy, Jiffy Lube
	The Glen			Woodbridge, VA		136,440	1994 (2005)	14.7	98	%	94	%	95	%	96	%	97	%	Safeway Marketplace, The All American Steakhouse, Panera Bread, Five Guys, Chipotle
	Great Falls Center			Great Falls, VA		91,666	2008	11.0	100	%	98	%	99	%	98	%	95	%	Safeway, CVS Pharmacy, Capital One Bank, Starbucks, Subway, Long & Foster
	Hampshire Langley			Takoma Park, MD		131,700	1972 (1979)	9.9	100	%	100	%	100	%	100	%	100	%	Mega Mart, Starbucks, Chuck E. Cheese's, Sardi's Chicken, Capital One Bank
	Hunt Club Corners			Apopka, FL		105,812	2006	13.9	93	%	93	%	94	%	94	%	94	%	Publix, Pet Supermarket, Sprint
	Jamestown Place			Altamonte Springs, FL		96,341	2005	10.9	95	%	95	%	90	%	88	%	86	%	Publix, Carrabas Italian Grill
	Kentlands Square I			Gaithersburg, MD		114,381	2002	11.5	98	%	100	%	100	%	100	%	100	%	Lowe's Home Improvement Center, Chipotle
	Saul Centers, Inc.
	Schedule of Current Portfolio Properties
	September 30, 2017
						Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of September 30,										(1)
		Property		Location					2017		2016		2015		2014		2013		Anchor / Significant Tenants
	Shopping Centers (continued)
	Kentlands Square II			Gaithersburg, MD		246,965	2011	23.4	99	%	100	%	99	%	99	%	96	%	Giant Food, Kmart, Party City, Panera Bread, Not Your Average Joe's, Hallmark, Chick-Fil-A, Coal Fire Pizza, Tommy Joe's, Cava Mezza Grill, Zengo Cycle, Fleet Feet
	Kentlands Place			Gaithersburg, MD		40,697	2005	3.4	93	%	100	%	100	%	100	%	100	%	Elizabeth Arden's Red Door Salon, Bonefish Grill
	Lansdowne Town Center			Leesburg, VA		189,422	2006	23.4	96	%	85	%	97	%	94	%	94	%	Harris Teeter, CVS Pharmacy, Panera Bread, Not Your Average Joe's, Starbucks, Capital One Bank, Ford's Fish Shack, Fusion Learning
	Leesburg Pike Plaza			Baileys Crossroads, VA		97,752	1966 (1982/95)	9.4	95	%	95	%	100	%	96	%	100	%	CVS Pharmacy, Party Depot, FedEx Office, Verizon Wireless, Capital One Bank
	Lumberton Plaza			Lumberton, NJ		192,718	1975 (1992/96)	23.3	84	%	91	%	91	%	95	%	94	%	Aldi Grocery, Rite Aid, Virtua Health Center, Family Dollar, Retro Fitness, Big Lots, Pet Valu
	Metro Pike Center			Rockville, MD		67,488	2010	4.6	71	%	69	%	77	%	83	%	91	%	McDonald's, Dunkin Donuts, 7-Eleven
	Shops at Monocacy			Frederick, MD		109,144	2004	13.0	100	%	100	%	100	%	97	%	93	%	Giant Food, Giant Gas Station, Panera Bread, Five Guys, California Tortilla, Firehouse Subs, Comcast, Capital One Bank
	Northrock			Warrenton, VA		100,032	2009	15.4	99	%	95	%	94	%	91	%	85	%	Harris Teeter, Longhorn Steakhouse, Ledo's Pizza, Capital One Bank, Jos. A Bank, Novant Health
	Olde Forte Village			Ft. Washington, MD		143,577	2003	16.0	99	%	97	%	97	%	97	%	97	%	Safeway, Advance Auto Parts, Dollar Tree, McDonald's, Wendy's, Ledo's Pizza, Capital One Bank
	Olney			Olney, MD		53,765	1975 (1990)	3.7	94	%	91	%	96	%	94	%	94	%	Rite Aid, Olney Grill, Ledo's Pizza, Popeye's, Sardi's Fusion Restaurant
	Orchard Park			Dunwoody, GA		87,365	2007	10.5	100	%	97	%	98	%	98	%	94	%	Kroger, Subway, Jett Ferry Dental
	Palm Springs Center			Altamonte Springs, FL		126,446	2005	12.0	100	%	100	%	98	%	98	%	98	%	Safeway, Duffy's Sports Grill, Toojay's Deli, The Tile Shop, Rockler Tools, Humana Health
	Ravenwood			Baltimore, MD		93,328	1972 (2006)	8.0	100	%	100	%	99	%	96	%	94	%	Giant Food, Starbucks, Sleepy's, Dominos, Bank of America
	11503 Rockville Pk / 5541 Nicholson Ln			Rockville, MD		40,249	2010 / 2012	3.0	61	%	63	%	63	%	63	%	70	%	Dr. Boyd's Pet Resort, Metropolitan Emergency Animal Clinic
	1500/1580/1582/1584 Rockville Pike			Rockville, MD		110,128	2012/2014	10.3	96	%	87	%	90	%	99	%	100	%	Party City, CVS Pharmacy, Sheffield Furniture
	Seabreeze Plaza			Palm Harbor, FL		146,673	2005	18.4	98	%	98	%	93	%	97	%	91	%	Publix, Earth Origins Health Food, Petco, Planet Fitness, Vision Works
	Marketplace at Sea Colony			Bethany Beach, DE		21,677	2008	5.1	100	%	100	%	95	%	95	%	91	%	Seacoast Realty, Armand's Pizza, Candy Kitchen, Summer Salts, Fin's Alehouse
	Seven Corners			Falls Church, VA		573,481	1973 (1994-7/07)	31.6	100	%	100	%	100	%	100	%	100	%	The Home Depot, Shoppers Food & Pharmacy, Michaels Arts & Crafts, Barnes & Noble, Ross Dress For Less, Ski Chalet, Off-Broadway Shoes, JoAnn Fabrics, Dress Barn, Starbucks, Dogfishhead Ale House, Red Robin Gourmet Burgers, Chipotle, Wendy's, Burlington Coat Factory, Capital One Bank
	Severna Park Marketplace			Severna Park, MD		254,011	2011	20.6	100	%	98	%	100	%	100	%	100	%	Giant Food, Kohl's, Office Depot, A.C. Moore, Goodyear, Chipotle, McDonald's, Jos. A. Bank, Radio Shack, Five Guys, Unleashed (Petco), Mod Pizza, Jersey Mike's
	Saul Centers, Inc.
	Schedule of Current Portfolio Properties
	September 30, 2017
						Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of September 30,										(1)
		Property		Location					2017		2016		2015		2014		2013		Anchor / Significant Tenants
	Shopping Centers (continued)
	Shops at Fairfax			Fairfax, VA		68,762	1975 (1993/99)	6.7	97	%	97	%	100	%	96	%	100	%	Super H Mart
	Smallwood Village Center			Waldorf, MD		173,341	2006	25.1	83	%	69	%	69	%	72	%	74	%	Safeway, CVS Pharmacy, Family Dollar
	Southdale			Glen Burnie, MD		484,035	1972 (1986)	39.6	98	%	98	%	95	%	89	%	97	%	The Home Depot, Michaels Arts & Crafts, Marshalls, PetSmart, Value City Furniture, Athletic Warehouse, Starbucks, Gallo Clothing, Office Depot, The Tile Shop, Mercy Health Care, Massage Envy, Potbelly, Capital One Bank
	Southside Plaza			Richmond, VA		371,761	1972	32.8	91	%	91	%	98	%	98	%	98	%	Community Supermarket, Maxway, Citi Trends, City of Richmond, McDonald's, Burger King, Kool Smiles, Falla's
	South Dekalb Plaza			Atlanta, GA		163,418	1976	14.6	89	%	88	%	90	%	93	%	94	%	Maxway, Big Lots, Emory Clinic, Dollar Tree, Shoe Land
	Thruway			Winston-Salem, NC		366,693	1972 (1997)	31.5	96	%	98	%	96	%	96	%	95	%	Harris Teeter, Trader Joe's, Stein Mart, Talbots, Hanes Brands, Jos. A. Bank, Bonefish Grill, Chico's, Ann Taylor Loft, Rite Aid, FedEx Office, Plow & Hearth, New Balance, Aveda Salon, Christies Hallmark, Carter's Kids, McDonald's, Chick-Fil-A, Wells Fargo Bank, Francesca's Collections, Great Outdoor Provision Company, White House / Black Market, Soma, J Crew
	Village Center			Centreville, VA		146,032	1990	17.2	98	%	95	%	94	%	98	%	98	%	Giant Food, Tuesday Morning, Starbucks, McDonald's, Pet Supplies Plus, Bikram Yoga, Capital One Bank
	Westview Village			Frederick, MD		97,858	2009	11.6	95	%	100	%	95	%	90	%	87	%	Silver Diner, Sleepy's, Music & Arts, Firehouse Subs, CiCi's Pizza, Café Rio, Five Guys, Regus, Krispy Kreme
	White Oak			Silver Spring, MD		480,676	1972 (1993)	27.9	99	%	100	%	99	%	100	%	100	%	Giant Food, Sears, Walgreens, Boston Market, Sarku
				Total Shopping Centers	(3)	7,747,798		753.0	95.8	%	95.7	%	96.1	%	95.7	%	95.4	%
Saul Centers, Inc.
Schedule of Current Portfolio Properties
September 30, 2017
						Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of September 30,										(1)
		Property		Location					2017		2016		2015		2014		2013		Anchor / Significant Tenants
Mixed-Use Properties
	Avenel Business Park			Gaithersburg, MD		390,683	1981-2000	37.1	86	%	85	%	85	%	90	%	91	%	General Services Administration, Gene Dx, Inc., American Type Culture Collection, Inc.
	Clarendon Center-North Block			Arlington, VA		108,387	2010	0.6	100	%	99	%	96	%	96	%	96	%	Pete's New Haven Pizza, AT&T Mobility, Dunkin Donuts, Airline Reporting Corporation
	Clarendon Center-South Block			Arlington, VA		104,894	2010	1.3	100	%	100	%	100	%	100	%	100	%	Trader Joe's, Circa, Burke & Herbert Bank, Bracket Room, Winston Partners, Keppler Speakers Bureau, ECG Management Co., Leadership Institute, Capital One Bank
	Clarendon Center Residential-South Block (244 units)					188,671	2010		96	%	97	%	97	%	100	%	98	%
	Park Van Ness- Residential (271 units)			Washington, DC		214,600	2016	1.4	94	%	61	%	N/A		N/A		N/A
	Park Van Ness-Retail			Washington, DC		8,847	2016		100	%	100	%	N/A		N/A		N/A		Soapstone Market, Sfoglina Pasta House
	601 Pennsylvania Ave.			Washington, DC		227,651	1973 (1986)	1.0	100	%	99	%	98	%	95	%	95	%	National Gallery of Art, America's Health Insurance Plans, Credit Union National Assn., Southern Company, HQ Global, Freedom Forum, Capital Grille, Michael Best & Friedrich LLP
	Washington Square			Alexandria, VA		236,376	1975 (2000)	2.0	93	%	89	%	93	%	93	%	89	%	Vanderweil Engineering, Freeman Expositions, Cooper Carry, Marketing General, Alexandria Economic Development, Trader Joe's, FedEx Office, Talbots, Sunday in Saigon Restaurant, Starbucks, National Pace Association, Virginia ABC, Academy of Managed Care Pharmacy
				Total Mixed-Use Properties	(3)	1,480,109		43.4	93.4	%	88.7	%	91.1	%	93.6	%	91.0	%	(2)
				Total Portfolio	(3)	9,227,907		796.4	95.5	%	94.8	%	95.4	%	95.4	%	94.8	%	(2)
Land and Development Parcels
	Ashland Square Phase II			Manassas, VA			2004	17.3	Marketing to grocers and other retail businesses, with a development timetable yet to be finalized.
	N. Glebe Road			Arlington, VA			2014-2016	2.8	Construction of a 490-unit residential project with 62,000 square feet of retail space is currently in process.
	New Market			New Market, MD			2005	35.5	Parcel will accommodate retail development in excess of 120,000 SF near I-70, east of Frederick, Maryland. A development timetable has not been determined.
				Total Development Properties				55.6
		(1	)	Percentage leased is a percentage of rentable square feet leased for commercial space and a percentage of units leased for apartments. Includes only operating properties owned as of September 30, 2017. As such, prior year totals do not agree to prior year tables.
		(2	)	Total percentage leased is for commercial space only.
		(3	)	Prior year leased percentages for Total Shopping Centers, Total Mixed-Use Properties and Total Portfolio have been recalculated to exclude the impact of properties sold or removed from service and, therefore, the percentages reported in this table may be different than the percentages previously reported.

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Document and Entity Information - shares shares in Millions	9 Months Ended
	Sep. 30, 2017	Oct. 31, 2017
Document And Entity Information [Abstract]
Entity Registrant Name	SAUL CENTERS INC
Entity Central Index Key	0000907254
Trading Symbol	BFS
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		21.9

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Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Real estate investments
Land	$ 450,256	$ 422,546
Buildings and equipment	1,257,886	1,214,697
Construction in progress	80,163	63,570
Real estate investments	1,788,305	1,700,813
Accumulated depreciation	(478,284)	(458,279)
Real estate investments, net	1,310,021	1,242,534
Cash and cash equivalents	9,385	8,322
Accounts receivable and accrued income, net	55,619	52,774
Deferred leasing costs, net	27,679	25,983
Prepaid expenses, net	8,901	5,057
Other assets	12,123	8,355
Total assets	1,423,728	1,343,025
Liabilities
Notes payable	873,538	783,400
Revolving credit facility payable	88,608	48,217
Construction loan payable	0	68,672
Dividends and distributions payable	18,143	17,953
Accounts payable, accrued expenses and other liabilities	24,267	20,838
Deferred income	31,040	30,696
Total liabilities	1,035,596	969,776
Equity
Preferred stock, 1,000,000 shares authorized: Series C Cumulative Redeemable, 72,000 shares issued and outstanding	180,000	180,000
Common stock, $0.01 par value, 40,000,000 shares authorized, 21,985,890 and 21,704,359 shares issued and outstanding, respectively	220	217
Additional paid-in capital	344,820	328,171
Accumulated deficit	(194,659)	(188,584)
Accumulated other comprehensive loss	(925)	(1,299)
Total Saul Centers, Inc. equity	329,456	318,505
Noncontrolling interest	58,676	54,744
Total equity	388,132	373,249
Total liabilities and equity	$ 1,423,728	$ 1,343,025

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
Cumulative redeemable preferred stock, shares issued (in shares)	72,000	72,000
Cumulative redeemable preferred stock, shares outstanding (in shares)	72,000	72,000
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	40,000,000	40,000,000
Common stock, shares issued (in shares)	21,985,890	21,704,359
Common stock, shares outstanding (in shares)	21,985,890	21,704,359

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Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Revenue
Base rent	$ 45,385	$ 43,151	$ 135,436	$ 128,338
Expense recoveries	9,447	8,561	26,378	26,011
Percentage rent	67	57	968	1,016
Other	1,338	1,464	7,828	7,504
Total revenue	56,237	53,233	170,610	162,869
Operating expenses
Property operating expenses	7,418	6,685	20,543	20,740
Provision for credit losses	52	391	602	1,207
Real estate taxes	6,834	6,195	20,124	18,266
Interest expense and amortization of deferred debt costs	11,821	11,524	35,585	34,268
Depreciation and amortization of deferred leasing costs	11,363	11,626	34,396	33,478
General and administrative	4,363	4,033	13,178	12,500
Acquisition related costs	0	57	0	57
Total operating expenses	41,851	40,511	124,428	120,516
Operating income	14,386	12,722	46,182	42,353
Change in fair value of derivatives	(1)	1	(2)	(9)
Net income (loss)	14,385	12,723	46,180	42,344
Noncontrolling interests
Income attributable to noncontrolling interests	(2,902)	(2,484)	(9,483)	(8,530)
Net income attributable to Saul Centers, Inc.	11,483	10,239	36,697	33,814
Preferred stock dividends	(3,093)	(3,093)	(9,281)	(9,281)
Net income attributable to common stockholders	$ 8,390	$ 7,146	$ 27,416	$ 24,533
Per share net income attributable to common stockholders
Basic and diluted (in usd per share)	$ 0.38	$ 0.33	$ 1.25	$ 1.14
Dividends declared per common share outstanding (in usd per share)	$ 0.51	$ 0.47	$ 1.53	$ 1.41

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 14,385	$ 12,723	$ 46,180	$ 42,344
Other comprehensive income
Change in unrealized loss on cash flow hedge	171	431	503	(383)
Total comprehensive income	14,556	13,154	46,683	41,961
Comprehensive income attributable to noncontrolling interests	(2,946)	(2,596)	(9,612)	(8,432)
Total comprehensive income attributable to Saul Centers, Inc.	11,610	10,558	37,071	33,529
Preferred stock dividends	(3,093)	(3,093)	(9,281)	(9,281)
Total comprehensive income attributable to common stockholders	$ 8,517	$ 7,465	$ 27,790	$ 24,248

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Consolidated Statement of Equity - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands	Total	Dividend Paid	Dividend Distributions Payable	Series C Preferred Stock Dividend Paid	Series C Preferred Stock Dividend Distributions Payable	Total Saul Centers, Inc.	Total Saul Centers, Inc. Dividend Paid	Total Saul Centers, Inc. Dividend Distributions Payable	Total Saul Centers, Inc. Series C Preferred Stock Dividend Paid	Total Saul Centers, Inc. Series C Preferred Stock Dividend Distributions Payable	Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Deficit Dividend Paid	Accumulated Deficit Dividend Distributions Payable	Accumulated Deficit Series C Preferred Stock Dividend Paid	Accumulated Deficit Series C Preferred Stock Dividend Distributions Payable	Accumulated Other Comprehensive (Loss)	Noncontrolling Interest	Noncontrolling Interest Dividend Paid	Noncontrolling Interest Dividend Distributions Payable
Beginning Balance at Dec. 31, 2016	$ 373,249					$ 318,505					$ 180,000	$ 217	$ 328,171	$ (188,584)					$ (1,299)	$ 54,744
Issuance of common stock:
183,020 shares pursuant to dividend reinvestment plan	10,827					10,827						2	10,825
98,511 shares due to exercise of stock options and issuance of directors’ deferred stock	5,825					5,825						1	5,824
Issuance of 95,755 partnership units pursuant to dividend reinvestment plan	5,798																			5,798
Net income	46,180					36,697								36,697						9,483
Change in unrealized loss on cash flow hedge	503					374													374	129
Preferred stock distributions				$ (6,188)	$ (3,094)				$ (6,188)	$ (3,094)							$ (6,188)	$ (3,094)
Common stock distributions		$ (29,919)					$ (22,279)								$ (22,279)						$ (7,640)
Common stock distributions			$ (15,049)					$ (11,211)								$ (11,211)						$ (3,838)
Ending Balance at Sep. 30, 2017	$ 388,132					$ 329,456					$ 180,000	$ 220	$ 344,820	$ (194,659)					$ (925)	$ 58,676

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Consolidated Statement of Equity (Parenthetical)	9 Months Ended
	Sep. 30, 2017 $ / shares shares
Shares pursuant to dividend reinvestment plan (in shares) | shares	183,020
Shares due to exercise of employee stock options and issuance of directors' deferred stock (in shares) | shares	98,511
Issuance of partnership units pursuant to dividend reinvestment plan (in shares) | shares	95,755
Distributions payable common stock, per share (in usd per share)	$ 1.53
Dividend Distributions Payable
Distributions payable common stock, per share (in usd per share)	0.51
Distributions partnership units, per unit (in usd per share)	0.51
Dividend Distributions Payable | Series C Preferred Stock
Distributions payable on Series C preferred stock, per share (in usd per share)	$ 42.97

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Consolidated Statements of Cash Flows $ in Thousands	9 Months Ended
	Sep. 30, 2017 USD ($)		Sep. 30, 2016 USD ($)
Cash flows from operating activities:
Net income	$ 46,180		$ 42,344
Adjustments to reconcile net income to net cash provided by operating activities:
Change in fair value of derivatives	2		9
Depreciation and amortization of deferred leasing costs	34,396		33,478
Amortization of deferred debt costs	1,043		1,003
Non cash compensation costs of stock grants and options	1,349		1,282
Provision for credit losses	602		1,207
Decrease in accounts receivable and accrued income	(2,901)		(3,018)
Additions to deferred leasing costs	(3,654)		(3,721)
Decrease in prepaid expenses	(3,947)		(3,922)
Increase in other assets	(817)		(1,358)
Increase in accounts payable, accrued expenses and other liabilities	2,991		3,294
Decrease in deferred income	(801)		(247)
Net cash provided by operating activities	74,443		70,351
Cash flows from investing activities:
Acquisitions of real estate investments	(79,499)		(10,341)
Additions to real estate investments	(12,389)		(11,271)
Additions to development and redevelopment projects	(14,286)		(23,073)
Proceeds from sale of property (1)	6,688	[1]	0	[1]
Net cash used in investing activities	(99,486)		(44,685)
Cash flows from financing activities:
Proceeds from notes payable	40,000		0
Repayments on notes payable	(20,303)		(18,359)
Proceeds from revolving credit facility	55,000		32,000
Repayments on revolving credit facility	(15,000)		(37,000)
Proceeds from construction loan	1,437		23,126
Additions to deferred debt costs	(2,069)		0
Proceeds from the issuance of:
Common stock	15,303		17,898
Partnership units	5,798		5,144
Distributions to:
Series C preferred stockholders	(9,281)		(9,281)
Common stockholders	(33,350)		(29,306)
Noncontrolling interests	(11,429)		(10,055)
Net cash provided by (used in) financing activities	26,106		(25,833)
Net increase (decrease) in cash and cash equivalents	1,063		(167)
Cash and cash equivalents, beginning of period	8,322		10,003
Cash and cash equivalents, end of period	9,385		9,836
Supplemental disclosure of cash flow information:
Cash paid for interest	36,889		34,835
Increase (decrease) in accrued real estate investments and development costs	992		$ (6,351)
Great Eastern Shopping Center
Second trust financing	$ 1,275

[1] Proceeds from sale of property excludes $1,275 of seller financing in connection with the sale of the Company's Great Eastern property.

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Organization, Formation and Structure

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Formation and Structure

Organization, Formation and Structure

Saul Centers, Inc. (“Saul Centers”) was incorporated under the Maryland General Corporation Law on June 10, 1993, and operates as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). The Company is required to annually distribute at least 90% of its REIT taxable income (excluding net capital gains) to its stockholders and meet certain organizational and other requirements. Saul Centers has made and intends to continue to make regular quarterly distributions to its stockholders. Saul Centers, together with its wholly-owned subsidiaries and the limited partnerships of which Saul Centers or one of its subsidiaries is the sole general partner, are referred to collectively as the “Company.” B. Francis Saul II serves as Chairman of the Board of Directors and Chief Executive Officer of Saul Centers.

Saul Centers was formed to continue and expand the shopping center business previously owned and conducted by the B. F. Saul Real Estate Investment Trust, the B. F. Saul Company and certain other affiliated entities, each of which is controlled by B. Francis Saul II and his family members (collectively, the “Saul Organization”). On August 26, 1993, members of the Saul Organization transferred to Saul Holdings Limited Partnership, a newly formed Maryland limited partnership (the “Operating Partnership”), and two newly formed subsidiary limited partnerships (the “Subsidiary Partnerships,” and, collectively with the Operating Partnership, the “Partnerships”), shopping center and mixed-use properties and the management functions related to the transferred properties. Since its formation, the Company has developed and purchased additional properties.

The following table lists the significant properties acquired, in development and disposed since December 31, 2015.

Name of Property	Location	Type	Year of Acquisition/ Development/Disposition
Acquisitions
700 N. Glebe Road	Arlington, VA	Development	2016
Burtonsville Town Square	Burtonsville, MD	Shopping Center	2017
Developments
Park Van Ness	Washington, DC	Mixed-Use	2013-2016
750 N. Glebe Road	Arlington, VA	Mixed-Use	2017
Dispositions
Crosstown Business Center	Tulsa, OK	Mixed-Use	2016
Great Eastern	District Heights, MD	Shopping Center	2017

As of September 30, 2017, the Company’s properties (the “Current Portfolio Properties”) consisted of 49 shopping center properties (the “Shopping Centers”), six mixed-use properties, which are comprised of office, retail and multi-family residential uses (the “Mixed-Use Properties”) and three (non-operating) development properties.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Nature of Operations

The Company, which conducts all of its activities through its subsidiaries, the Operating Partnership and Subsidiary Partnerships, engages in the ownership, operation, management, leasing, acquisition, renovation, expansion, development and financing of community and neighborhood shopping centers and mixed-use properties, primarily in the Washington, DC/Baltimore metropolitan area.

Because the properties are located primarily in the Washington, DC/Baltimore metropolitan area, the Company is subject to a concentration of credit risk related to these properties. A majority of the Shopping Centers are anchored by one or more major tenants. As of September 30, 2017, 32 of the Shopping Centers were anchored by a grocery store and offer primarily day-to-day necessities and services. Excluding the impact of a $3.6 million termination fee from Albertson's/Safeway, two tenants individually accounted for 2.5% or more of the Company’s total revenue for the nine months endedSeptember 30, 2017. Giant Food, a tenant at ten Shopping Centers and Capital One, a tenant at 18 properties, individually accounted for 4.6% and 2.8%, respectively, of the Company's total revenue for the nine months endedSeptember 30, 2017.

Principles of Consolidation

The accompanying consolidated financial statements of the Company include the accounts of Saul Centers and its subsidiaries, including the Operating Partnership and Subsidiary Partnerships, which are majority owned by Saul Centers. All significant intercompany balances and transactions have been eliminated in consolidation.

The Operating Partnership is a variable interest entity ("VIE") of the Company because the limited partners do not have substantive kick-out or participating rights. The Company is the primary beneficiary of the Operating Partnership because it has the power to direct the activities of the Operating Partnership and the rights to absorb 74.3% of the net income of the Operating Partnership. Because the Operating Partnership was previously consolidated into the financial statements of the Company, classification of it as a VIE had no impact on the consolidated financial statements of the Company.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments necessary for the fair presentation of the financial position and results of operations of Saul Centers, Inc. for the interim periods have been included. All such adjustments are of a normal recurring nature. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements of Saul Centers, Inc. for the year ended December 31, 2016, which are included in its Annual Report on Form 10-K. The results of operations for interim periods are not necessarily indicative of results to be expected for the year.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Accounts Receivable, Accrued Income and Allowance for Doubtful Accounts

Accounts receivable primarily represent amounts currently due from tenants in accordance with the terms of the respective leases. Receivables are reviewed monthly and reserves are established with a charge to current period operations when, in the opinion of management, collection of the receivable is doubtful. Accounts receivable in the accompanying financial statements are shown net of an allowance for doubtful accounts of approximately $0.3 million and $2.0 million at September 30, 2017 and December 31, 2016, respectively.

In addition to rents due currently, accounts receivable includes approximately $44.0 million and $43.1 million, at September 30, 2017 and December 31, 2016, respectively, net of allowance for doubtful accounts totaling $0.1 million and $0.5 million, respectively, representing minimum rental income accrued on a straight-line basis to be paid by tenants over the remaining term of their respective leases.

Assets Held for Sale

The Company considers properties to be assets held for sale when all of the following criteria are met:

• management commits to a plan to sell a property;

• it is unlikely that the disposal plan will be significantly modified or discontinued;

• the property is available for immediate sale in its present condition;

• actions required to complete the sale of the property have been initiated;

• sale of the property is probable and the Company expects the completed sale will occur within one year; and

• the property is actively being marketed for sale at a price that is reasonable given its current market value.

The Company must make a determination as to the point in time that it is probable that a sale will be consummated, which generally occurs when an executed sales contract has no contingencies and the prospective buyer has significant funds at risk to ensure performance. Upon designation as an asset held for sale, the Company records the carrying value of each property at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and ceases depreciation. As of September 30, 2017, the Company had no assets designated as held-for-sale.

Cash and Cash Equivalents

Cash and cash equivalents include short-term investments. Short-term investments include money market accounts and other investments which generally mature within three months, measured from the acquisition date, and/or are readily convertible to cash.

Construction In Progress

Construction in progress includes land, preconstruction and development costs of active projects. Preconstruction costs include legal, zoning and permitting costs and other project carrying costs incurred prior to the commencement of construction. Development costs include direct construction costs and indirect costs incurred subsequent to the start of construction such as architectural, engineering, construction management and carrying costs consisting of interest, real estate taxes and insurance. Construction in progress as of September 30, 2017 and December 31, 2016, is composed of the following:

(in thousands)	September 30, 2017		December 31, 2016
Glebe Road	$	73,514	$	58,147
Other	6,649		5,423
Total	$	80,163	$	63,570

Deferred Debt Costs

Deferred debt costs consist of fees and costs incurred to obtain long-term financing, construction financing and the revolving line of credit. These fees and costs are being amortized on a straight-line basis over the terms of the respective loans or agreements, which approximates the effective interest method. Deferred debt costs totaled $6.8 million and $7.5 million, net of accumulated amortization of $8.3 million and $7.3 million, at September 30, 2017 and December 31, 2016, respectively, and are reflected as a reduction of the related debt in the Consolidated Balance Sheets. At September 30, 2017, deferred debt costs totaling $1.7 million, related to the Glebe Road construction loan, which has no outstanding balance, are included in Other Assets in the Consolidated Balance Sheet.

Deferred Income

Deferred income consists of payments received from tenants prior to the time they are earned and recognized by the Company as revenue, including tenant prepayment of rent for future periods, real estate taxes when the taxing jurisdiction has a fiscal year differing from the calendar year, reimbursements specified in the lease agreement and tenant construction work provided by the Company. In addition, deferred income includes the fair value of certain below market leases.

Deferred Leasing Costs

Deferred leasing costs consist of commissions paid to third-party leasing agents, internal direct costs such as employee compensation and payroll-related fringe benefits directly related to time spent performing leasing-related activities for successful commercial leases, amounts attributed to in-place leases associated with acquired properties and lease inducement costs. Leasing related activities include evaluating the prospective tenant’s financial condition, evaluating and recording guarantees, collateral and other security arrangements, negotiating lease terms, preparing lease documents and closing the transaction. Unamortized deferred leasing costs are charged to expense if the applicable lease is terminated prior to expiration of the initial lease term. Deferred leasing costs are amortized over the term of the lease or remaining term of acquired leases. Collectively, deferred leasing costs totaled $27.7 million and $26.0 million, net of accumulated amortization of $34.0 million and $30.4 million, as of September 30, 2017 and December 31, 2016, respectively. Amortization expense, included in depreciation and amortization of deferred leasing costs in the consolidated statements of operations, totaled $4.1 million and $4.4 million for the nine months endedSeptember 30, 2017 and 2016, respectively.

Derivative Financial Instruments

The Company may, when appropriate, employ derivative instruments, such as interest-rate swaps, to mitigate the risk of interest rate fluctuations. The Company does not enter into derivative or other financial instruments for trading or speculative purposes. Derivative financial instruments are carried at fair value as either assets or liabilities in the consolidated balance sheets. For those derivative instruments that qualify and are designated as hedging instruments, the Company designates the hedging instrument, based upon the exposure being hedged, as a fair value hedge or a cash flow hedge. For those derivative instruments that qualify and are designated as hedging instruments, the effective portion of the gain or loss on the hedge instruments is reported as a component of accumulated other comprehensive income (loss) and recognized in earnings within the same line item associated with the forecasted transaction in the same period or periods during which the hedged transaction affects earnings. Any ineffective portion of the change in fair value of a derivative instrument is immediately recognized in earnings. For derivative instruments that do not qualify, or that qualify and are not designated, as hedging instruments, changes in fair value are immediately recognized in earnings.

Derivative financial instruments expose us to credit risk in the event of non-performance by the counterparties under the terms of the derivative instrument. The Company minimizes its credit risk on these transactions by dealing with major, creditworthy financial institutions as determined by management, and therefore, it believes that the likelihood of realizing losses from counterparty non-performance is remote.

Income Taxes

The Company made an election to be treated, and intends to continue operating so as to qualify, as a REIT under the Code, commencing with its taxable year ended December 31, 1993. A REIT generally will not be subject to federal income taxation, provided that distributions to its stockholders equal or exceed its REIT taxable income and it complies with certain other requirements. Therefore, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

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 such matters will not have a material adverse effect on its financial position or results of operations. Upon determination that a loss is probable to occur and can be reasonably estimated, 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.

Postemployment Benefits

From time to time, the Company may enter into an arrangement with an employee at the time of the employee’s separation from service whereby the employee will receive certain payments in exchange for certain releases, covenants not to compete, or other promises. If no future services are required in order for the employee to receive the payments, the Company estimates the amount of payments to be made over the life of the arrangement and records that amount as an expense as of the date of the arrangement with a corresponding liability representing the amount to be paid in the future.

Predevelopment Expenses

Predevelopment expenses represent certain costs incurred by the Company in connection with active development and redevelopment projects and include, for example, costs related to the early termination of tenant leases and demolition of existing structures.

Real Estate Investment Properties

The Company purchases real estate investment properties from time to time and records assets acquired and liabilities assumed, including land, buildings, and intangibles related to in-place leases and customer relationships, based on their relative fair values. The fair value of buildings generally is determined as if the buildings were vacant upon acquisition and subsequently leased at market rental rates and considers the present value of all cash flows expected to be generated by the property including an initial lease up period. From time to time the Company may purchase a property for future development purposes. The Company determines the fair value of above and below market intangibles associated with in-place leases by assessing the net effective rent and remaining term of the lease relative to market terms for similar leases at acquisition taking into consideration the remaining contractual lease period, renewal periods, and the likelihood of the tenant exercising its renewal options. The fair value of below market lease intangibles is recorded as deferred income and accreted as additional revenue over the remaining contractual lease period and any renewal option periods included in the valuation analysis. The fair value of above market lease intangibles is recorded as a deferred asset and amortized as a reduction of revenue over the remaining contractual lease term. The Company determines the fair value of at-market in-place leases considering the cost of acquiring similar leases, the foregone rents associated with the lease-up period and carrying costs associated with the lease-up period. Intangible assets associated with at-market in-place leases are amortized as additional expense over the remaining contractual lease term. To the extent customer relationship intangibles are present in an acquisition, the fair values of the intangibles are amortized over the lives of the customer relationships. The Company has never recorded a customer relationship intangible asset. Effective with the adoption of ASU 2017-01 in January 2017, acquisition-related transaction costs are generally capitalized to the basis of the acquired asset.

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 value of the real estate investment property exceeds its estimated fair value. The Company considers both quantitative and qualitative factors including recurring operating losses, significant decreases in occupancy, and significant adverse changes in 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 value 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 value 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 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. The Company did not recognize an impairment loss on any of its real estate during the nine months endedSeptember 30, 2017 and 2016.

Interest, real estate taxes, development-related salary costs and other carrying costs are capitalized on projects under development and construction. Upon substantial completion of construction and the placement of the assets into service, rental income, real estate tax expense, property operating expenses (consisting of payroll, repairs and maintenance, utilities, insurance and other property related expenses) and depreciation are included in current operations and capitalization of interest ceases. Property operating expenses are charged to operations as incurred. Interest capitalized totaled $2.5 million and $1.8 million for the nine months endedSeptember 30, 2017 and 2016, respectively. Commercial development projects are considered substantially complete and available for occupancy upon completion of tenant improvements, but no later than one year from the cessation of major construction activity. Multi-family residential development projects are considered substantially complete and available for occupancy upon receipt of the certificate of occupancy from the appropriate licensing authority. Substantially completed portions of a project are accounted for as separate projects.

Depreciation is calculated using the straight-line method and estimated useful lives of generally between 35 and 50 years for base buildings, or a shorter period if management determines that the building has a shorter useful life, and up to 20 years for certain other improvements that extend the useful lives. Leasehold improvement expenditures are capitalized when certain criteria are met, including when the Company supervises construction and will own the improvements. Tenant improvements are amortized, over the shorter of the lives of the related leases or the useful life of the improvements, using the straight-line method. Depreciation expense in the Consolidated Statements of Operations totaled $30.3 million and $29.0 million for the nine months endedSeptember 30, 2017 and 2016, respectively. Repairs and maintenance expense totaled $8.5 million and $9.2 million for the nine months endedSeptember 30, 2017 and 2016, respectively, and is included in property operating expenses in the Consolidated Statements of Operations.

Revenue Recognition

Rental and interest income are accrued as earned. Recognition of rental income commences when control of the space has been given to the tenant. When rental payments due under leases vary from a straight-line basis because of free rent periods or scheduled rent increases, income is recognized on a straight-line basis. Expense recoveries represent a portion of property operating expenses billed to tenants, including common area maintenance, real estate taxes and other recoverable costs, and are recognized in the period in which the expenses are incurred. Rental income based on a tenant’s revenue (“percentage rent”) is accrued when a tenant reports sales that exceed a breakpoint specified in the lease agreement.

Stock-based Employee Compensation, Stock Plan and Deferred Compensation Plan for Directors

The Company uses the fair value method to value and account for employee stock options. The fair value of options granted is determined at the time of each award using the Black-Scholes model, a widely used method for valuing stock-based employee compensation, and the following assumptions: (1) Expected Volatility determined using the most recent trading history of the Company’s common stock (month-end closing prices) corresponding to the average expected term of the options; (2) Average Expected Term of the options is based on prior exercise history, scheduled vesting and the expiration date; (3) Expected Dividend Yield determined by management after considering the Company’s current and historic dividend yield rates, the Company’s yield in relation to other retail REITs and the Company’s market yield at the grant date; and (4) a Risk-free Interest Rate based upon the market yields of US Treasury obligations with maturities corresponding to the average expected term of the options at the grant date. The Company amortizes the value of options granted ratably over the vesting period and includes the amounts as compensation expense in general and administrative expenses.

The Company has a stock plan, which was originally approved in 2004, amended in 2008 and 2013 and which expires in 2023, for the purpose of attracting and retaining executive officers, directors and other key personnel (the “Stock Plan”). Pursuant to the Stock Plan, the Compensation Committee established a Deferred Compensation Plan for Directors for the benefit of its directors and their beneficiaries, which replaced a previous Deferred Compensation and Stock Plan for Directors. A director may make an annual election to defer all or part of his or her director’s fees and has the option to have the fees paid in cash, in shares of common stock or in a combination of cash and shares of common stock upon separation from the Board. If the director elects to have fees paid in stock, fees earned during a calendar quarter are aggregated and divided by the closing market price of the Company’s common stock on the first trading day of the following quarter to determine the number of shares to be credited to the director. As of September 30, 2017, the director's deferred fee accounts comprise 181,899 shares.

The Compensation Committee has also approved an annual award of shares of the Company’s common stock as additional compensation to each director serving on the Board of Directors as of the record date for the Annual Meeting of Stockholders. The shares are awarded as of each Annual Meeting of Stockholders, and their issuance may not be deferred.

Noncontrolling Interests

Saul Centers is the sole general partner of the Operating Partnership, owning a 74.3% common interest as of September 30, 2017. Noncontrolling interests in the Operating Partnership is comprised of limited partnership units owned by the Saul Organization. Noncontrolling interests reflected on the accompanying consolidated balance sheets is increased for earnings allocated to limited partnership interests and distributions reinvested in additional units, and is decreased for limited partner distributions. Noncontrolling interests reflected on the consolidated statements of operations represents earnings allocated to limited partnership interests.

Per Share Data

Per share data for net income (basic and diluted) is computed using weighted average shares of common stock. Convertible limited partnership units and employee stock options are the Company’s potentially dilutive securities. For all periods presented, the convertible limited partnership units are non-dilutive. The following table sets forth, for the indicated periods, weighted averages of the number of common shares outstanding, basic and dilutive, the effect of dilutive options and the number of options which are not dilutive because the average price of the Company's common stock was less than the exercise prices. The treasury stock method was used to measure the effect of the dilution.

	As of or for the three months ended September 30,		As of or for the nine months ended September 30,
(In thousands)	2017	2016	2017	2016
Weighted average common stock outstanding-Basic	21,942	21,597	21,844	21,448
Effect of dilutive options	86	182	105	96
Weighted average common stock outstanding-Diluted	22,028	21,779	21,949	21,544
Non-dilutive options	—	—	—	172
Years non-dilutive options were issued				2007, 2015, and 2016

Recently Issued Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

No. 2014-09, “Revenue from Contracts with Customers” and subsequently issued several related ASUs (collectively

“ASU 2014-09”). ASU 2014-09 will replace most existing revenue recognition guidance and will require an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.

ASU 2014-09 is effective for annual periods beginning after December 15, 2017, and interim periods within those years and early adoption is not permitted. ASU 2014-09 must be applied retrospectively by either restating prior periods or by recognizing the cumulative effect as of the first date of application. We believe that the adoption of ASU 2014-09 will not have a material impact on our consolidated financial statements because the majority of our revenue is not within the scope of the guidance; however, we continue to evaluate that assessment. We have not yet selected a transition method.

In February 2016, the FASB issued ASU 2016-02, ‘‘Leases’’ (“ASU 2016-02”). ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, interim periods within those years, and requires a modified retrospective transition approach for all leases existing at the date of initial application, with an option to use certain practical expedients for those existing leases. We are evaluating the impact that ASU 2016-02 will have on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, "Compensation-Stock Compensation" ("ASU 2016-09"). ASU 2016-09 simplifies the accounting for several aspects of share-based payments including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those years. The transition method varies based on the specific amendment. The adoption of ASU 2016-09 effective January 1, 2017, did not have a material impact on the Company's consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments-Credit Losses" ("ASU 2016-13"). ASU 2016-13 replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of information to support credit loss estimates. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those years. We are evaluating the impact that

ASU 2016-13 will have on our consolidated financial statements and related disclosures.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230) - Restricted Cash”

(“ASU 2016-18”). ASU 2016-18 requires that the Statement of Cash Flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. We are currently evaluating the impact ASU 2016-18 will have on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, "Clarifying the Definition of a Business" ("ASU 2017-01").  ASU 2017-01 provides that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. ASU 2017-01 is effective prospectively for annual periods beginning after December 15, 2017, and interim periods within those years. Early application is permitted for transactions for which the acquisition date occurs before the effective date provided the transaction has not been reported in the financial statements. The Company adopted ASU 2017-01 effective January 1, 2017, the effect of which, for asset acquisitions, was (a) the capitalization of acquisition costs, instead of expense, and (b) recordation of acquired assets and assumed liabilities at relative fair value, instead of fair value. 

Reclassifications

Certain reclassifications have been made to the prior year financial statements to conform to the presentation used for the nine months endedSeptember 30, 2017.

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Real Estate Acquired and Sold

9 Months Ended

Sep. 30, 2017

Business Combinations [Abstract]

Real Estate Acquired and Sold

Real Estate Acquired and Sold

700 N. Glebe Road

In August 2016, the Company purchased for $7.2 million, including acquisition costs, 700 N. Glebe Road in Arlington, Virginia. The property is contiguous with three other properties owned by the Company.

Thruway Pad

In August 2016, the Company purchased for $3.1 million, a retail pad site with an occupied bank building in

Winston Salem, North Carolina, and incurred acquisition costs of $60,400. The property is contiguous with and an expansion of the Company's Thruway asset.

Beacon Center

In November 2016, the Company purchased for $22.5 million the land underlying Beacon Center. The land was previously leased by the Company with an annual rent of approximately $60,000. The purchase price was funded in part by an $11.25 million increase to the existing mortgage collateralized by Beacon Center and in part by the revolving credit facility.

Southdale

In November 2016, the Company purchased for $15.0 million the land underlying Southdale. The land was previously leased by the Company with an annual rent of approximately $60,000. The purchase price was funded by the revolving credit facility.

Burtonsville Town Square

In January 2017, the Company purchased for $76.4 million, including acquisition costs, Burtonsville Town Square located in Burtonsville, Maryland.

Olney Shopping Center

In March 2017, the Company purchased for $3.0 million the land underlying Olney Shopping Center. The land was previously leased by the Company with an annual rent of approximately $56,000. The purchase price was funded by the revolving credit facility.

Crosstown Business Center

In December 2016, the Company sold for $5.4 million the197,100 square foot Crosstown Business Center located in Tulsa, Oklahoma and recognized a $1.0 million gain.

Great Eastern Shopping Center

In September 2017, the Company sold for $8.5 million the 255,400 square foot Great Eastern Shopping Center located in District Heights, Maryland. The Company provided $1.28 million second trust financing to the buyer, which bears interest at a fixed rate of 6%, matures in March 2018 and can be extended for six months at the option of the buyer. A $0.5 million gain realized on the sale was deferred and will be recognized when the loan is repaid by the buyer.

Allocation of Purchase Price of Real Estate Acquired

The Company allocates the purchase price of real estate investment properties to various components, such as land, buildings and intangibles related to in-place leases and customer relationships, based on their relative fair values or fair values. See Note 2. Summary of Significant Accounting Policies-Real Estate Investment Properties.

During 2016, the Company purchased two properties at a cost of $10.3 million and incurred acquisition costs of $60,400. Of the total purchase price, $9.4 million was allocated to land, $0.9 million was allocated to buildings, $0.1 million was allocated to in-place leases and ($0.1) million was allocated to below market rent.

During 2017, the Company purchased one property at a cost of $76.4 million, including acquisition costs. Of the total purchase price, $45.8 million was allocated to building, $28.4 million was allocated to land, $0.6 million was allocated to above-market leases, $2.2 million was allocated to in-place leases and $(0.6) million was allocated to below market rent.

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Noncontrolling Interests - Holders of Convertible Limited Partnership Units in the Operating Partnership

9 Months Ended

Sep. 30, 2017

Noncontrolling Interest [Abstract]

Noncontrolling Interests - Holders of Convertible Limited Partnership Units in the Operating Partnership

Noncontrolling Interests - Holders of Convertible Limited Partnership Units in the Operating Partnership

As of September 30, 2017, the Saul Organization holds a 25.7% limited partnership interest in the Operating Partnership represented by approximately 7.5 million convertible limited partnership units. These units are convertible into shares of Saul Centers’ common stock, at the option of the unit holder, on a one-for-one basis provided that, in accordance with the Saul Centers, Inc. Articles of Incorporation, the rights may not be exercised at any time that the Saul Organization beneficially owns, directly or indirectly, in the aggregate more than 39.9% of the value of the outstanding common stock and preferred stock of Saul Centers (the “Equity Securities”). As of September 30, 2017, approximately 750,000 units were convertible into shares of Saul Centers common stock.

The impact of the Saul Organization’s approximately 25.7% limited partnership interest in the Operating Partnership is reflected as Noncontrolling Interests in the accompanying consolidated financial statements. Fully converted partnership units and diluted weighted average common stock outstanding for the three months endedSeptember 30, 2017 and 2016, were approximately 29.5 million and 29.2 million, respectively, and for the nine months endedSeptember 30, 2017 and 2016, were approximately 29.4 million and 28.9 million, respectively.

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Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs

Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs

The principal amount of the Company’s outstanding debt totaled approximately $968.9 million at September 30, 2017, of which approximately $865.7 million was fixed-rate debt and approximately $103.2 million was variable rate debt, including

$89.0 million outstanding on the Company's unsecured revolving credit facility. The carrying value of the properties collateralizing the notes payable totaled approximately $1.0 billion as of September 30, 2017.

At September 30, 2017, the Company had a $275.0 million unsecured revolving credit facility, which can be used for working capital, property acquisitions, development projects or letters of credit. The revolving credit facility matures on June 23, 2018, and may be extended by the Company for one additional year subject to the Company’s satisfaction of certain conditions. Saul Centers and certain consolidated subsidiaries of the Operating Partnership have guaranteed the payment obligations of the Operating Partnership under the revolving credit facility. Letters of credit may be issued under the revolving credit facility. On September 30, 2017, based on the value of the Company’s unencumbered properties, approximately $185.8 million was available under the line, $89.0 million was outstanding and approximately $185,000 was committed for letters of credit. The interest rate under the facility is variable and equals the sum of one-month LIBOR and a margin that is based on the Company’s leverage ratio, and which can range from 145 basis points to 200 basis points. As of September 30, 2017, the margin was 145 basis points.

Effective September 1, 2017, the Company's $71.6 million construction-to-permanent loan, which is fully drawn and secured by Park Van Ness, converted to permanent financing. The loan matures in 2032, bears interest at a fixed rate of 4.88%, requires monthly principal and interest payments of $413,460 based on a 25-year amortization schedule and requires a final payment of $39.6 million at maturity.

On January 18, 2017, the Company closed on a 15-year, non-recourse $40.0 million mortgage loan secured by Burtonsville Town Square. The loan matures in 2032, bears interest at a fixed rate of 3.39%, requires monthly principal and interest payments of $197,900 based on a 25-year amortization schedule and requires a final payment of $20.3 million at maturity.

On August 14, 2017, the Company closed on a $157.0 million construction-to-permanent loan, the proceeds of which will be used to partially fund the Glebe Road development project. The loan matures in 2035, bears interest at a fixed rate of 4.67%, requires interest only payments, which will be funded by the loan, until conversion to permanent. The conversion is expected in the fourth quarter of 2021, and thereafter, monthly principal and interest payments of $887,900 based on a 25-year amortization schedule will be required.

Saul Centers is a guarantor of the revolving credit facility, of which the Operating Partnership is the borrower. The Operating Partnership is the guarantor of (a) a portion of the Metro Pike Center bank loan (approximately $7.8 million of the $14.2 million outstanding balance at September 30, 2017) and (b) a portion of the Park Van Ness loan (approximately $53.7 million of the $71.6 million outstanding balance at September 30, 2017), which guarantee, subject to the achievement of certain leasing and cash flow levels, may be reduced and eventually eliminated. The fixed-rate notes payable are all non-recourse.

At December 31, 2016, the principal amount of the Company’s outstanding debt totaled approximately $907.8 million, of which $844.3 million was fixed rate debt and $63.5 million was variable rate debt, including $49.0 million outstanding on the Company’s unsecured revolving credit facility. The carrying value of the properties collateralizing the notes payable totaled $957.2 million as of December 31, 2016.

At September 30, 2017, the scheduled maturities of debt, including scheduled principal amortization, for years ending December 31, were as follows:

(In thousands)	Balloon Payments			Scheduled Principal Amortization		Total
October 1 through December 31, 2017	$	—		$	7,386	$	7,386
2018	130,799		(a)	29,015		159,814
2019	60,793			27,769		88,562
2020	61,163			25,182		86,345
2021	11,012			24,836		35,848
2022	36,502			25,277		61,779
Thereafter	405,693			123,478		529,171
Principal amount	$	705,962		$	262,943	968,905
Unamortized deferred debt costs						6,759
Net						$	962,146

(a) Includes $89.0 million outstanding under the line of credit.

Interest expense and amortization of deferred debt costs for the three and nine months ended September 30, 2017 and 2016, were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2017			2016			2017			2016
Interest incurred	$	12,370		$	11,691		$	37,037		$	35,027
Amortization of deferred debt costs	351			339			1,043			1,003
Capitalized interest	(900		)	(506		)	(2,495		)	(1,762		)
	$	11,821		$	11,524		$	35,585		$	34,268

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Equity

9 Months Ended

Sep. 30, 2017

Equity [Abstract]

Equity

Equity

The consolidated statements of operations for the nine months endedSeptember 30, 2017 and 2016, reflect noncontrolling interests of $9.5 million and $8.5 million, respectively, representing the Saul Organization’s share of net income for each period.

The Company has outstanding 7.2 million depositary shares, each representing 1/100th of a share of 6.875% Series C Cumulative Redeemable Preferred Stock. The depositary shares may be redeemed on or after February 12, 2018 at the Company’s option, in whole or in part, at the $25.00 liquidation preference plus accrued but unpaid dividends. The depositary shares pay an annual dividend of $1.71875 per share, equivalent to 6.875% of the $25.00 liquidation preference. The Series C preferred stock has no stated maturity, is not subject to any sinking fund or mandatory redemption and is not convertible into any other securities of the Company except in connection with certain changes of control or delisting events. Investors in the depositary shares generally have no voting rights, but will have limited voting rights if the Company fails to pay dividends for six or more quarters (whether or not declared or consecutive) and in certain other events.

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Related Party Transactions

9 Months Ended

Sep. 30, 2017

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

The Chairman and Chief Executive Officer, the President, the Executive Vice President-Chief Legal and Administrative Officer and the Senior Vice President-Chief Accounting Officer of the Company are also officers of various members of the Saul Organization and their management time is shared with the Saul Organization. Their annual compensation is fixed by the Compensation Committee of the Board of Directors, with the exception of the Senior Vice President-Chief Accounting Officer whose share of annual compensation allocated to the Company is determined by the shared services agreement (described below).

The Company participates in a multiemployer 401K plan with entities in the Saul Organization which covers those full-time employees who meet the requirements as specified in the plan. Company contributions, which are included in general and administrative expense or property operating expenses in the consolidated statements of operations, at the discretionary amount of up to six percent of the employee’s cash compensation, subject to certain limits, were $270,600 and $255,000 for the nine months endedSeptember 30, 2017 and 2016, respectively. All amounts contributed by employees and the Company are fully vested.

The Company also participates in a multiemployer nonqualified deferred compensation plan with entities in the Saul Organization which covers those full-time employees who meet the requirements as specified in the plan. According to the plan, which can be modified or discontinued at any time, participating employees defer 2% of their compensation in excess of a specified amount. For the nine months endedSeptember 30, 2017 and 2016, the Company contributed $154,300 and $129,000, respectively, which is the sum of accrued earnings and three times the amount deferred by employees and is included in general and administrative expense. All amounts contributed by employees and the Company are fully vested. The cumulative unfunded liability under this plan was $2.3 million and $2.1 million, at September 30, 2017 and December 31, 2016, respectively, and is included in accounts payable, accrued expenses and other liabilities in the consolidated balance sheets.

The Company has entered into a shared services agreement (the “Agreement”) with the Saul Organization that provides for the sharing of certain personnel and ancillary functions such as computer hardware, software, and support services and certain direct and indirect administrative personnel. The method for determining the cost of the shared services is provided for in the Agreement and is based upon head count, estimates of usage or estimates of time incurred, as applicable. The terms of the Agreement and the payments made thereunder are deemed reasonable by management and are reviewed annually by the Audit Committee of the Board of Directors, which consists entirely of independent directors. Billings by the Saul Organization for the Company’s share of these ancillary costs and expenses for the nine months endedSeptember 30, 2017 and 2016, which included rental expense for the Company’s headquarters lease, totaled approximately $6.3 million and $5.5 million, respectively. The amounts are generally expensed as incurred and are primarily reported as general and administrative expenses in the consolidated financial statements. As of September 30, 2017 and December 31, 2016, accounts payable, accrued expenses and other liabilities included approximately $744,200 and $860,700, respectively, representing amounts due to the Saul Organization for the Company’s share of these ancillary costs and expenses.

The Company previously entered into a shared third-party predevelopment cost agreement with the B. F. Saul Real Estate Investment Trust (the "Trust"), a member of the Saul Organization, which related to the sharing of third-party predevelopment costs incurred in connection with the planning of the future redevelopment of certain adjacent real estate assets in the Twinbrook area of Rockville, Maryland. On December 8, 2016, the Company entered into a replacement agreement with the Trust which extended the expiration date to December 31, 2017 and provides for automatic twelve month renewals unless either party provides notice of termination. The costs will be shared on a pro rata basis based on the acreage owned by each entity and neither party is obligated to advance funds to the other.

In August 2016, the Company entered into an agreement to acquire from the Trust, for an initial purchase price of

$8.8 million, land in Loudoun County, Virginia, which is zoned for retail development. The parties have agreed to a closing date in early 2018, at which time the Company will exchange limited partnership units for the land. The Company intends to construct a shopping center and, subsequent to stabilization, may be obligated to issue additional limited partnership units to the Trust.

The Company subleases its corporate headquarters space from a member of the Saul Organization. The lease commenced in March 2002, expires in 2022, and provides for base rent increases of 3% per year, with payment of a pro-rata share of operating expenses over a base year amount. The Agreement requires each party to pay an allocation of total rental payments based on a percentage proportionate to the number of employees employed by each party. The Company’s rent expense for its headquarters location was $578,200 and $617,100 for the nine months endedSeptember 30, 2017 and 2016, respectively, and is included in general and administrative expense.

The B. F. Saul Insurance Agency of Maryland, Inc., a subsidiary of the B. F. Saul Company and a member of the Saul Organization, is a general insurance agency that receives commissions and fees in connection with the Company’s insurance program. Such commissions and fees amounted to $173,800 and $279,100 for the nine months endedSeptember 30, 2017 and 2016, respectively.

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Stock Option Plans

9 Months Ended

Sep. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Option Plans

Stock Option Plans

The Company has established two stock incentive plans, the 1993 plan and the 2004 plan, as amended, (together, the “Plans”). Under the Plans, options were granted at an exercise price not less than the market value of the common stock on the date of grant and expire ten years from the date of grant. Officer options vest ratably over four years following the grant and are charged to expense using the straight-line method over the vesting period. Director options vest immediately and are charged to expense as of the date of grant.

The following table summarizes the amount and activity of each grant with outstanding unexercised options, the total value and variables used in the computation and the amount expensed and included in general and administrative expense in the Consolidated Statements of Operations for the nine months endedSeptember 30, 2017.

	Directors
Grant date	4/25/2008			4/24/2009			5/7/2010			5/13/2011			5/4/2012			5/10/2013			5/9/2014			5/8/2015			5/6/2016			5/5/2017			Subtotals
Total grant	30,000			32,500			32,500			32,500			35,000			35,000			30,000			35,000			32,500			27,500			322,500
Vested	30,000			32,500			32,500			32,500			35,000			35,000			30,000			35,000			32,500			27,500			322,500
Exercised	20,000			27,500			25,000			22,500			22,500			22,500			17,500			12,500			7,500			—			177,500
Forfeited	7,500			—			2,500			2,500			—			—			—			—			—			—			12,500
Exercisable at September 30, 2017	2,500			5,000			5,000			7,500			12,500			12,500			12,500			22,500			25,000			27,500			132,500
Remaining unexercised	2,500			5,000			5,000			7,500			12,500			12,500			12,500			22,500			25,000			27,500			132,500
Exercise price	$	50.15		$	32.68		$	38.76		$	41.82		$	39.29		$	44.42		$	47.03		$	51.07		$	57.74		$	59.41
Volatility	0.237			0.344			0.369			0.358			0.348			0.333			0.173			0.166			0.166			0.173
Expected life (years)	7.0			6.0			5.0			5.0			5.0			5.0			5.0			5.0			5.0			5.0
Assumed yield	4.09		%	4.54		%	4.23		%	4.16		%	4.61		%	4.53		%	4.48		%	4.54		%	3.75		%	3.45		%
Risk-free rate	3.49		%	2.19		%	2.17		%	1.86		%	0.78		%	0.82		%	1.63		%	1.50		%	1.23		%	1.89		%
Total value at grant date	$	254,700		$	222,950		$	287,950		$	297,375		$	257,250		$	278,250		$	109,500		$	125,300		$	151,125		$	165,550		$	2,149,950
Expensed in previous years	254,700			222,950			287,950			297,375			257,250			278,250			109,500			125,300			151,125			—			1,984,400
Expensed in 2017	—			—			—			—			—			—			—			—			—			165,550			165,550
Future expense	—			—			—			—			—			—			—			—			—			—			—
	Officers
Grant date	5/13/2011			5/4/2012			5/10/2013			5/9/2014			5/8/2015			5/6/2016			5/5/2017			Subtotal									Grand  Totals
Total grant	162,500			242,500			202,500			170,000			190,000			194,000			205,000			1,366,500									1,689,000
Vested	118,750			107,500			171,875			126,875			94,375			48,500			—			667,875									990,375
Exercised	96,100			91,830			83,000			35,000			8,981			625			—			315,536									493,036
Forfeited	43,750			135,000			30,625			1,875			3,125			1,875			—			216,250									228,750
Exercisable at September 30, 2017	22,650			15,670			88,875			91,875			85,394			47,875			—			352,339									484,839
Remaining unexercised	22,650			15,670			88,875			133,125			177,894			191,500			205,000			834,714									967,214
Exercise price	$	41.82		$	39.29		$	44.42		$	47.03		$	51.07		$	57.74		$	59.41
Volatility	0.330			0.315			0.304			0.306			0.298			0.185			0.170
Expected life (years)	8.0			8.0			8.0			7.0			7.0			7.0			7.0
Assumed yield	4.81		%	5.28		%	5.12		%	4.89		%	4.94		%	3.80		%	3.50		%
Risk-free rate	2.75		%	1.49		%	1.49		%	2.17		%	1.89		%	1.55		%	2.17		%
Gross value at grant date	$	1,366,625		$	1,518,050		$	1,401,300		$	1,349,800		$	1,584,600		$	1,136,840		$	1,324,300		$	9,681,515								$	11,831,465
Estimated forfeitures	367,937			845,100			211,925			168,749			141,780			86,628			91,642			1,913,761									1,913,761
Expensed in previous years	998,688			672,950			1,031,134			787,392			601,180			175,032			—			4,266,376									6,250,776
Expensed in 2017	—			—			158,241			221,454			270,531			196,911			128,400			975,537									1,141,087
Future expense	—			—			—			172,205			571,109			678,269			1,104,258			2,525,841									2,525,841
Weighted average term of remaining future expense (in years)				2.7

The table below summarizes the option activity for the nine months endedSeptember 30, 2017:

	Number of Shares		Weighted Average Exercise Price per share		Aggregate Intrinsic Value
Outstanding at January 1	833,630		$	49.92	$	13,913,891
Granted	232,500		59.41		581,250
Exercised	(95,166	)	47.03		1,403,256
Expired/Forfeited	(3,750	)	53.73
Outstanding at September 30	967,214		52.47		9,130,494
Exercisable at September 30	484,839		48.70		6,402,577

The intrinsic value measures the price difference between the options’ exercise price and the closing share price quoted by the New York Stock Exchange as of the date of measurement. The intrinsic value for shares exercised during the period was calculated by using the closing share price on the date of exercise. At September 29, 2017, the final trading day of the third quarter, the closing share price of $61.91 was used in the calculation of the aggregate intrinsic value of options exercisable and outstanding at that date. The weighted average remaining contractual life of the Company’s outstanding and exercisable options is 7.7 years and 6.7 years, respectively.

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair value. The aggregate fair value of the notes payable with fixed-rate payment terms was determined using Level 3 data in a discounted cash flow approach, which is based upon management’s estimate of borrowing rates and loan terms currently available to the Company for fixed-rate financing and, assuming long-term interest rates of approximately 3.95% and 4.25%, would be approximately $928.0 million and $897.2 million, respectively, compared to the principal balance of $865.7 million and $844.3 million at September 30, 2017 and December 31, 2016, respectively. A change in any of the significant inputs may lead to a change in the Company’s fair value measurement of its debt.

The Company carries its interest rate swap at fair value. The Company has determined the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy with the exception of the impact of counter-party risk, which was determined using Level 3 inputs and is not significant. Derivative instruments are classified within Level 2 of the fair value hierarchy because their values are determined using third-party pricing models which contain inputs that are derived from observable market data. Where possible, the values produced by the pricing models are verified by market prices. Valuation models require a variety of inputs, including contractual terms, market prices, yield curves, credit spreads, measure of volatility, and correlations of such inputs. The swap agreement terminates on July 1, 2020. As of September 30, 2017, the fair value of the interest-rate swap was approximately $1.5 million and is included in “Accounts payable, accrued expenses and other liabilities” in the consolidated balance sheets. The decrease in value from inception of the swap is reflected in “Other Comprehensive Income” in the Consolidated Statements of Comprehensive Income. Amounts recognized in earnings are included in Changes in Fair Value of Derivatives in the Consolidated Statements of Operations.

	Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands)	2017			2016		2017			2016
Change in fair value:
Recognized in earnings	$	(1	)	$	1	$	(2	)	$	(9	)
Recognized in other comprehensive income	171			431		503			(383		)
	$	170		$	432	$	501		$	(392	)

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Neither the Company nor the current portfolio properties are subject to any material litigation, nor, to management’s knowledge, is any material litigation currently threatened against the Company, other than routine litigation and administrative proceedings arising in the ordinary course of business. Management believes that these items, individually or in the aggregate, will not have a material adverse impact on the Company or the current portfolio properties.

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Business Segments

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Business Segments

Business Segments

The Company has two reportable business segments: Shopping Centers and Mixed-Use Properties. The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2). The Company evaluates performance based upon income and cash flows from real estate of the combined properties in each segment. All of our properties within each segment generate similar types of revenues and expenses related to tenant rent, reimbursements and operating expenses. Although services are provided to a range of tenants, the types of services provided to them are similar within each segment. The properties in each portfolio have similar economic characteristics and the nature of the products and services provided to our tenants and the method to distribute such services are consistent throughout the portfolio. Certain reclassifications have been made to prior year information to conform to the 2017 presentation.

(Dollars in thousands)	Shopping Centers			Mixed-Use Properties			Corporate and Other			Consolidated Totals
Three months ended September 30, 2017
Real estate rental operations:
Revenue	$	40,834		$	15,395		$	8		$	56,237
Expenses	(8,799		)	(5,505		)	—			(14,304		)
Income from real estate	32,035			9,890			8			41,933
Interest expense and amortization of deferred debt costs	—			—			(11,821		)	(11,821		)
General and administrative	—			—			(4,363		)	(4,363		)
Subtotal	32,035			9,890			(16,176		)	25,749
Depreciation and amortization of deferred leasing costs	(7,457		)	(3,906		)	—			(11,363		)
Change in fair value of derivatives	—			—			(1		)	(1		)
Net income (loss)	$	24,578		$	5,984		$	(16,177	)	$	14,385
Capital investment	$	3,503		$	8,161		$	—		$	11,664
Total assets	$	983,369		$	431,182		$	9,177		$	1,423,728
Three months ended September 30, 2016
Real estate rental operations:
Revenue	$	38,738		$	14,484		$	11		$	53,233
Expenses	(8,330		)	(4,941		)	—			(13,271		)
Income from real estate	30,408			9,543			11			39,962
Interest expense and amortization of deferred debt costs	—			—			(11,524		)	(11,524		)
General and administrative	—			—			(4,033		)	(4,033		)
Acquisition related costs	(57		)	—			—			(57		)
Subtotal	30,351			9,543			(15,546		)	24,348
Depreciation and amortization of deferred leasing costs	(7,732		)	(3,894		)	—			(11,626		)
Change in fair value of derivatives	—			—			1			1
Net income (loss)	$	22,619		$	5,649		$	(15,545	)	$	12,723
Capital investment	$	13,854		$	4,399		$	—		$	18,253
Total assets	$	938,124		$	363,439		$	9,441		$	1,311,004

(Dollars in thousands)	Shopping Centers			Mixed-Use Properties			Corporate and Other			Consolidated Totals
Nine months ended September 30, 2017
Real estate rental operations:
Revenue	$	124,854		$	45,725		$	31		$	170,610
Expenses	(25,876		)	(15,393		)	—			(41,269		)
Income from real estate	98,978			30,332			31			129,341
Interest expense and amortization of deferred debt costs	—			—			(35,585		)	(35,585		)
General and administrative	—			—			(13,178		)	(13,178		)
Subtotal	98,978			30,332			(48,732		)	80,578
Depreciation and amortization of deferred leasing costs	(22,649		)	(11,747		)	—			(34,396		)
Change in fair value of derivatives	—			—			(2		)	(2		)
Net income (loss)	$	76,329		$	18,585		$	(48,734	)	$	46,180
Capital investment	$	87,788		$	18,386		$	—		$	106,174
Total assets	$	983,369		$	431,182		$	9,177		$	1,423,728
Nine months ended September 30, 2016
Real estate rental operations:
Revenue	$	120,861		$	41,972		$	36		$	162,869
Expenses	(26,519		)	(13,694		)	—			(40,213		)
Income from real estate	94,342			28,278			36			122,656
Interest expense and amortization of deferred debt costs	—			—			(34,268		)	(34,268		)
General and administrative	—			—			(12,500		)	(12,500		)
Acquisition related costs	(57		)	—			—			(57		)
Subtotal	94,285			28,278			(46,732		)	75,831
Depreciation and amortization of deferred leasing costs	(22,774		)	(10,704		)	—			(33,478		)
Change in fair value of derivatives	—			—			(9		)	(9		)
Net income (loss)	$	71,511		$	17,574		$	(46,741	)	$	42,344
Capital investment	$	20,258		$	24,427		$	—		$	44,685
Total assets	$	938,124		$	363,439		$	9,441		$	1,311,004

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Subsequent Events

9 Months Ended

Sep. 30, 2017

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

The Company has reviewed operating activities for the period subsequent to September 30, 2017, and prior to the date the financial statements are issued or are available to be issued, and determined there are no subsequent events required to be disclosed.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements of the Company include the accounts of Saul Centers and its subsidiaries, including the Operating Partnership and Subsidiary Partnerships, which are majority owned by Saul Centers. All significant intercompany balances and transactions have been eliminated in consolidation.

Consolidation, Variable Interest Entity

The Operating Partnership is a variable interest entity ("VIE") of the Company because the limited partners do not have substantive kick-out or participating rights. The Company is the primary beneficiary of the Operating Partnership because it has the power to direct the activities of the Operating Partnership and the rights to absorb 74.3% of the net income of the Operating Partnership. Because the Operating Partnership was previously consolidated into the financial statements of the Company, classification of it as a VIE had no impact on the consolidated financial statements of the Company.

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments necessary for the fair presentation of the financial position and results of operations of Saul Centers, Inc. for the interim periods have been included. All such adjustments are of a normal recurring nature. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements of Saul Centers, Inc. for the year ended December 31, 2016, which are included in its Annual Report on Form 10-K. The results of operations for interim periods are not necessarily indicative of results to be expected for the year.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Accounts Receivable, Accrued Income and Allowance for Doubtful Accounts

Accounts Receivable, Accrued Income and Allowance for Doubtful Accounts

Accounts receivable primarily represent amounts currently due from tenants in accordance with the terms of the respective leases. Receivables are reviewed monthly and reserves are established with a charge to current period operations when, in the opinion of management, collection of the receivable is doubtful.

Assets Held for Sale

Assets Held for Sale

The Company considers properties to be assets held for sale when all of the following criteria are met:

• management commits to a plan to sell a property;

• it is unlikely that the disposal plan will be significantly modified or discontinued;

• the property is available for immediate sale in its present condition;

• actions required to complete the sale of the property have been initiated;

• sale of the property is probable and the Company expects the completed sale will occur within one year; and

• the property is actively being marketed for sale at a price that is reasonable given its current market value.

The Company must make a determination as to the point in time that it is probable that a sale will be consummated, which generally occurs when an executed sales contract has no contingencies and the prospective buyer has significant funds at risk to ensure performance. Upon designation as an asset held for sale, the Company records the carrying value of each property at the lower of its carrying value or its estimated fair value, less estimated costs to sell, and ceases depreciation.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include short-term investments. Short-term investments include money market accounts and other investments which generally mature within three months, measured from the acquisition date, and/or are readily convertible to cash.

Construction In Progress

Construction In Progress

Construction in progress includes land, preconstruction and development costs of active projects. Preconstruction costs include legal, zoning and permitting costs and other project carrying costs incurred prior to the commencement of construction. Development costs include direct construction costs and indirect costs incurred subsequent to the start of construction such as architectural, engineering, construction management and carrying costs consisting of interest, real estate taxes and insurance.

Deferred Debt Costs

Deferred Debt Costs

Deferred debt costs consist of fees and costs incurred to obtain long-term financing, construction financing and the revolving line of credit. These fees and costs are being amortized on a straight-line basis over the terms of the respective loans or agreements, which approximates the effective interest method.

Deferred Income

Deferred Income

Deferred income consists of payments received from tenants prior to the time they are earned and recognized by the Company as revenue, including tenant prepayment of rent for future periods, real estate taxes when the taxing jurisdiction has a fiscal year differing from the calendar year, reimbursements specified in the lease agreement and tenant construction work provided by the Company. In addition, deferred income includes the fair value of certain below market leases.

Deferred Leasing Costs

Deferred Leasing Costs

Deferred leasing costs consist of commissions paid to third-party leasing agents, internal direct costs such as employee compensation and payroll-related fringe benefits directly related to time spent performing leasing-related activities for successful commercial leases, amounts attributed to in-place leases associated with acquired properties and lease inducement costs. Leasing related activities include evaluating the prospective tenant’s financial condition, evaluating and recording guarantees, collateral and other security arrangements, negotiating lease terms, preparing lease documents and closing the transaction. Unamortized deferred leasing costs are charged to expense if the applicable lease is terminated prior to expiration of the initial lease term. Deferred leasing costs are amortized over the term of the lease or remaining term of acquired leases.

Derivative Financial Instruments

Derivative Financial Instruments

The Company may, when appropriate, employ derivative instruments, such as interest-rate swaps, to mitigate the risk of interest rate fluctuations. The Company does not enter into derivative or other financial instruments for trading or speculative purposes. Derivative financial instruments are carried at fair value as either assets or liabilities in the consolidated balance sheets. For those derivative instruments that qualify and are designated as hedging instruments, the Company designates the hedging instrument, based upon the exposure being hedged, as a fair value hedge or a cash flow hedge. For those derivative instruments that qualify and are designated as hedging instruments, the effective portion of the gain or loss on the hedge instruments is reported as a component of accumulated other comprehensive income (loss) and recognized in earnings within the same line item associated with the forecasted transaction in the same period or periods during which the hedged transaction affects earnings. Any ineffective portion of the change in fair value of a derivative instrument is immediately recognized in earnings. For derivative instruments that do not qualify, or that qualify and are not designated, as hedging instruments, changes in fair value are immediately recognized in earnings.

Derivative financial instruments expose us to credit risk in the event of non-performance by the counterparties under the terms of the derivative instrument. The Company minimizes its credit risk on these transactions by dealing with major, creditworthy financial institutions as determined by management, and therefore, it believes that the likelihood of realizing losses from counterparty non-performance is remote.

Income Taxes

Income Taxes

The Company made an election to be treated, and intends to continue operating so as to qualify, as a REIT under the Code, commencing with its taxable year ended December 31, 1993. A REIT generally will not be subject to federal income taxation, provided that distributions to its stockholders equal or exceed its REIT taxable income and it complies with certain other requirements. Therefore, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

Legal Contingencies

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 such matters will not have a material adverse effect on its financial position or results of operations. Upon determination that a loss is probable to occur and can be reasonably estimated, 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.

Postemployment Benefits

Postemployment Benefits

From time to time, the Company may enter into an arrangement with an employee at the time of the employee’s separation from service whereby the employee will receive certain payments in exchange for certain releases, covenants not to compete, or other promises. If no future services are required in order for the employee to receive the payments, the Company estimates the amount of payments to be made over the life of the arrangement and records that amount as an expense as of the date of the arrangement with a corresponding liability representing the amount to be paid in the future.

Predevelopment Expenses

Predevelopment Expenses

Predevelopment expenses represent certain costs incurred by the Company in connection with active development and redevelopment projects and include, for example, costs related to the early termination of tenant leases and demolition of existing structures.

Real Estate Investment Properties

Real Estate Investment Properties

The Company purchases real estate investment properties from time to time and records assets acquired and liabilities assumed, including land, buildings, and intangibles related to in-place leases and customer relationships, based on their relative fair values. The fair value of buildings generally is determined as if the buildings were vacant upon acquisition and subsequently leased at market rental rates and considers the present value of all cash flows expected to be generated by the property including an initial lease up period. From time to time the Company may purchase a property for future development purposes. The Company determines the fair value of above and below market intangibles associated with in-place leases by assessing the net effective rent and remaining term of the lease relative to market terms for similar leases at acquisition taking into consideration the remaining contractual lease period, renewal periods, and the likelihood of the tenant exercising its renewal options. The fair value of below market lease intangibles is recorded as deferred income and accreted as additional revenue over the remaining contractual lease period and any renewal option periods included in the valuation analysis. The fair value of above market lease intangibles is recorded as a deferred asset and amortized as a reduction of revenue over the remaining contractual lease term. The Company determines the fair value of at-market in-place leases considering the cost of acquiring similar leases, the foregone rents associated with the lease-up period and carrying costs associated with the lease-up period. Intangible assets associated with at-market in-place leases are amortized as additional expense over the remaining contractual lease term. To the extent customer relationship intangibles are present in an acquisition, the fair values of the intangibles are amortized over the lives of the customer relationships. The Company has never recorded a customer relationship intangible asset. Effective with the adoption of ASU 2017-01 in January 2017, acquisition-related transaction costs are generally capitalized to the basis of the acquired asset.

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 value of the real estate investment property exceeds its estimated fair value. The Company considers both quantitative and qualitative factors including recurring operating losses, significant decreases in occupancy, and significant adverse changes in 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 value 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 value 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 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. The Company did not recognize an impairment loss on any of its real estate during the nine months endedSeptember 30, 2017 and 2016.

Interest, real estate taxes, development-related salary costs and other carrying costs are capitalized on projects under development and construction. Upon substantial completion of construction and the placement of the assets into service, rental income, real estate tax expense, property operating expenses (consisting of payroll, repairs and maintenance, utilities, insurance and other property related expenses) and depreciation are included in current operations and capitalization of interest ceases. Property operating expenses are charged to operations as incurred. Interest capitalized totaled $2.5 million and $1.8 million for the nine months endedSeptember 30, 2017 and 2016, respectively. Commercial development projects are considered substantially complete and available for occupancy upon completion of tenant improvements, but no later than one year from the cessation of major construction activity. Multi-family residential development projects are considered substantially complete and available for occupancy upon receipt of the certificate of occupancy from the appropriate licensing authority. Substantially completed portions of a project are accounted for as separate projects.

Depreciation is calculated using the straight-line method and estimated useful lives of generally between 35 and 50 years for base buildings, or a shorter period if management determines that the building has a shorter useful life, and up to 20 years for certain other improvements that extend the useful lives. Leasehold improvement expenditures are capitalized when certain criteria are met, including when the Company supervises construction and will own the improvements. Tenant improvements are amortized, over the shorter of the lives of the related leases or the useful life of the improvements, using the straight-line method.

Revenue Recognition

Revenue Recognition

Rental and interest income are accrued as earned. Recognition of rental income commences when control of the space has been given to the tenant. When rental payments due under leases vary from a straight-line basis because of free rent periods or scheduled rent increases, income is recognized on a straight-line basis. Expense recoveries represent a portion of property operating expenses billed to tenants, including common area maintenance, real estate taxes and other recoverable costs, and are recognized in the period in which the expenses are incurred. Rental income based on a tenant’s revenue (“percentage rent”) is accrued when a tenant reports sales that exceed a breakpoint specified in the lease agreement.

Stock-based Employee Compensation, Stock Plan and Deferred Compensation Plan for Directors

Stock-based Employee Compensation, Stock Plan and Deferred Compensation Plan for Directors

The Company uses the fair value method to value and account for employee stock options. The fair value of options granted is determined at the time of each award using the Black-Scholes model, a widely used method for valuing stock-based employee compensation, and the following assumptions: (1) Expected Volatility determined using the most recent trading history of the Company’s common stock (month-end closing prices) corresponding to the average expected term of the options; (2) Average Expected Term of the options is based on prior exercise history, scheduled vesting and the expiration date; (3) Expected Dividend Yield determined by management after considering the Company’s current and historic dividend yield rates, the Company’s yield in relation to other retail REITs and the Company’s market yield at the grant date; and (4) a Risk-free Interest Rate based upon the market yields of US Treasury obligations with maturities corresponding to the average expected term of the options at the grant date. The Company amortizes the value of options granted ratably over the vesting period and includes the amounts as compensation expense in general and administrative expenses.

The Company has a stock plan, which was originally approved in 2004, amended in 2008 and 2013 and which expires in 2023, for the purpose of attracting and retaining executive officers, directors and other key personnel (the “Stock Plan”). Pursuant to the Stock Plan, the Compensation Committee established a Deferred Compensation Plan for Directors for the benefit of its directors and their beneficiaries, which replaced a previous Deferred Compensation and Stock Plan for Directors. A director may make an annual election to defer all or part of his or her director’s fees and has the option to have the fees paid in cash, in shares of common stock or in a combination of cash and shares of common stock upon separation from the Board. If the director elects to have fees paid in stock, fees earned during a calendar quarter are aggregated and divided by the closing market price of the Company’s common stock on the first trading day of the following quarter to determine the number of shares to be credited to the director. As of September 30, 2017, the director's deferred fee accounts comprise 181,899 shares.

The Compensation Committee has also approved an annual award of shares of the Company’s common stock as additional compensation to each director serving on the Board of Directors as of the record date for the Annual Meeting of Stockholders. The shares are awarded as of each Annual Meeting of Stockholders, and their issuance may not be deferred

Noncontrolling Interests

Noncontrolling Interests

Saul Centers is the sole general partner of the Operating Partnership, owning a 74.3% common interest as of September 30, 2017. Noncontrolling interests in the Operating Partnership is comprised of limited partnership units owned by the Saul Organization. Noncontrolling interests reflected on the accompanying consolidated balance sheets is increased for earnings allocated to limited partnership interests and distributions reinvested in additional units, and is decreased for limited partner distributions. Noncontrolling interests reflected on the consolidated statements of operations represents earnings allocated to limited partnership interests.

Per Share Data

Per Share Data

Per share data for net income (basic and diluted) is computed using weighted average shares of common stock. Convertible limited partnership units and employee stock options are the Company’s potentially dilutive securities. For all periods presented, the convertible limited partnership units are non-dilutive. The following table sets forth, for the indicated periods, weighted averages of the number of common shares outstanding, basic and dilutive, the effect of dilutive options and the number of options which are not dilutive because the average price of the Company's common stock was less than the exercise prices. The treasury stock method was used to measure the effect of the dilution.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

No. 2014-09, “Revenue from Contracts with Customers” and subsequently issued several related ASUs (collectively

“ASU 2014-09”). ASU 2014-09 will replace most existing revenue recognition guidance and will require an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.

ASU 2014-09 is effective for annual periods beginning after December 15, 2017, and interim periods within those years and early adoption is not permitted. ASU 2014-09 must be applied retrospectively by either restating prior periods or by recognizing the cumulative effect as of the first date of application. We believe that the adoption of ASU 2014-09 will not have a material impact on our consolidated financial statements because the majority of our revenue is not within the scope of the guidance; however, we continue to evaluate that assessment. We have not yet selected a transition method.

In February 2016, the FASB issued ASU 2016-02, ‘‘Leases’’ (“ASU 2016-02”). ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, interim periods within those years, and requires a modified retrospective transition approach for all leases existing at the date of initial application, with an option to use certain practical expedients for those existing leases. We are evaluating the impact that ASU 2016-02 will have on our consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, "Compensation-Stock Compensation" ("ASU 2016-09"). ASU 2016-09 simplifies the accounting for several aspects of share-based payments including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those years. The transition method varies based on the specific amendment. The adoption of ASU 2016-09 effective January 1, 2017, did not have a material impact on the Company's consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13, "Financial Instruments-Credit Losses" ("ASU 2016-13"). ASU 2016-13 replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of information to support credit loss estimates. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those years. We are evaluating the impact that

ASU 2016-13 will have on our consolidated financial statements and related disclosures.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 230) - Restricted Cash”

(“ASU 2016-18”). ASU 2016-18 requires that the Statement of Cash Flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling beginning-of-period and end-of-period total amounts shown on the statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. We are currently evaluating the impact ASU 2016-18 will have on our consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, "Clarifying the Definition of a Business" ("ASU 2017-01").  ASU 2017-01 provides that when substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. ASU 2017-01 is effective prospectively for annual periods beginning after December 15, 2017, and interim periods within those years. Early application is permitted for transactions for which the acquisition date occurs before the effective date provided the transaction has not been reported in the financial statements. The Company adopted ASU 2017-01 effective January 1, 2017, the effect of which, for asset acquisitions, was (a) the capitalization of acquisition costs, instead of expense, and (b) recordation of acquired assets and assumed liabilities at relative fair value, instead of fair value. 

Reclassifications

Reclassifications

Certain reclassifications have been made to the prior year financial statements to conform to the presentation used for the nine months endedSeptember 30, 2017.

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Organization, Formation and Structure (Tables)

9 Months Ended

Sep. 30, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Properties Acquired, in Development and Disposed

The following table lists the significant properties acquired, in development and disposed since December 31, 2015.

Name of Property	Location	Type	Year of Acquisition/ Development/Disposition
Acquisitions
700 N. Glebe Road	Arlington, VA	Development	2016
Burtonsville Town Square	Burtonsville, MD	Shopping Center	2017
Developments
Park Van Ness	Washington, DC	Mixed-Use	2013-2016
750 N. Glebe Road	Arlington, VA	Mixed-Use	2017
Dispositions
Crosstown Business Center	Tulsa, OK	Mixed-Use	2016
Great Eastern	District Heights, MD	Shopping Center	2017

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2017

Accounting Policies [Abstract]

Schedule of Construction in Progress

Construction in progress as of September 30, 2017 and December 31, 2016, is composed of the following:

(in thousands)	September 30, 2017		December 31, 2016
Glebe Road	$	73,514	$	58,147
Other	6,649		5,423
Total	$	80,163	$	63,570

Basic and Diluted Shares Outstanding

The following table sets forth, for the indicated periods, weighted averages of the number of common shares outstanding, basic and dilutive, the effect of dilutive options and the number of options which are not dilutive because the average price of the Company's common stock was less than the exercise prices. The treasury stock method was used to measure the effect of the dilution.

	As of or for the three months ended September 30,		As of or for the nine months ended September 30,
(In thousands)	2017	2016	2017	2016
Weighted average common stock outstanding-Basic	21,942	21,597	21,844	21,448
Effect of dilutive options	86	182	105	96
Weighted average common stock outstanding-Diluted	22,028	21,779	21,949	21,544
Non-dilutive options	—	—	—	172
Years non-dilutive options were issued				2007, 2015, and 2016

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Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs (Tables)

9 Months Ended

Sep. 30, 2017

Debt Disclosure [Abstract]

Scheduled Maturities of Debt, Including Scheduled Principal Amortization

At September 30, 2017, the scheduled maturities of debt, including scheduled principal amortization, for years ending December 31, were as follows:

(In thousands)	Balloon Payments			Scheduled Principal Amortization		Total
October 1 through December 31, 2017	$	—		$	7,386	$	7,386
2018	130,799		(a)	29,015		159,814
2019	60,793			27,769		88,562
2020	61,163			25,182		86,345
2021	11,012			24,836		35,848
2022	36,502			25,277		61,779
Thereafter	405,693			123,478		529,171
Principal amount	$	705,962		$	262,943	968,905
Unamortized deferred debt costs						6,759
Net						$	962,146

(a) Includes $89.0 million outstanding under the line of credit.

Interest Expense and Amortization of Deferred Debt Costs

Interest expense and amortization of deferred debt costs for the three and nine months ended September 30, 2017 and 2016, were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands)	2017			2016			2017			2016
Interest incurred	$	12,370		$	11,691		$	37,037		$	35,027
Amortization of deferred debt costs	351			339			1,043			1,003
Capitalized interest	(900		)	(506		)	(2,495		)	(1,762		)
	$	11,821		$	11,524		$	35,585		$	34,268

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Stock Option Plans (Tables)

9 Months Ended

Sep. 30, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock Options Issued

The following table summarizes the amount and activity of each grant with outstanding unexercised options, the total value and variables used in the computation and the amount expensed and included in general and administrative expense in the Consolidated Statements of Operations for the nine months endedSeptember 30, 2017.

	Directors
Grant date	4/25/2008			4/24/2009			5/7/2010			5/13/2011			5/4/2012			5/10/2013			5/9/2014			5/8/2015			5/6/2016			5/5/2017			Subtotals
Total grant	30,000			32,500			32,500			32,500			35,000			35,000			30,000			35,000			32,500			27,500			322,500
Vested	30,000			32,500			32,500			32,500			35,000			35,000			30,000			35,000			32,500			27,500			322,500
Exercised	20,000			27,500			25,000			22,500			22,500			22,500			17,500			12,500			7,500			—			177,500
Forfeited	7,500			—			2,500			2,500			—			—			—			—			—			—			12,500
Exercisable at September 30, 2017	2,500			5,000			5,000			7,500			12,500			12,500			12,500			22,500			25,000			27,500			132,500
Remaining unexercised	2,500			5,000			5,000			7,500			12,500			12,500			12,500			22,500			25,000			27,500			132,500
Exercise price	$	50.15		$	32.68		$	38.76		$	41.82		$	39.29		$	44.42		$	47.03		$	51.07		$	57.74		$	59.41
Volatility	0.237			0.344			0.369			0.358			0.348			0.333			0.173			0.166			0.166			0.173
Expected life (years)	7.0			6.0			5.0			5.0			5.0			5.0			5.0			5.0			5.0			5.0
Assumed yield	4.09		%	4.54		%	4.23		%	4.16		%	4.61		%	4.53		%	4.48		%	4.54		%	3.75		%	3.45		%
Risk-free rate	3.49		%	2.19		%	2.17		%	1.86		%	0.78		%	0.82		%	1.63		%	1.50		%	1.23		%	1.89		%
Total value at grant date	$	254,700		$	222,950		$	287,950		$	297,375		$	257,250		$	278,250		$	109,500		$	125,300		$	151,125		$	165,550		$	2,149,950
Expensed in previous years	254,700			222,950			287,950			297,375			257,250			278,250			109,500			125,300			151,125			—			1,984,400
Expensed in 2017	—			—			—			—			—			—			—			—			—			165,550			165,550
Future expense	—			—			—			—			—			—			—			—			—			—			—
	Officers
Grant date	5/13/2011			5/4/2012			5/10/2013			5/9/2014			5/8/2015			5/6/2016			5/5/2017			Subtotal									Grand  Totals
Total grant	162,500			242,500			202,500			170,000			190,000			194,000			205,000			1,366,500									1,689,000
Vested	118,750			107,500			171,875			126,875			94,375			48,500			—			667,875									990,375
Exercised	96,100			91,830			83,000			35,000			8,981			625			—			315,536									493,036
Forfeited	43,750			135,000			30,625			1,875			3,125			1,875			—			216,250									228,750
Exercisable at September 30, 2017	22,650			15,670			88,875			91,875			85,394			47,875			—			352,339									484,839
Remaining unexercised	22,650			15,670			88,875			133,125			177,894			191,500			205,000			834,714									967,214
Exercise price	$	41.82		$	39.29		$	44.42		$	47.03		$	51.07		$	57.74		$	59.41
Volatility	0.330			0.315			0.304			0.306			0.298			0.185			0.170
Expected life (years)	8.0			8.0			8.0			7.0			7.0			7.0			7.0
Assumed yield	4.81		%	5.28		%	5.12		%	4.89		%	4.94		%	3.80		%	3.50		%
Risk-free rate	2.75		%	1.49		%	1.49		%	2.17		%	1.89		%	1.55		%	2.17		%
Gross value at grant date	$	1,366,625		$	1,518,050		$	1,401,300		$	1,349,800		$	1,584,600		$	1,136,840		$	1,324,300		$	9,681,515								$	11,831,465
Estimated forfeitures	367,937			845,100			211,925			168,749			141,780			86,628			91,642			1,913,761									1,913,761
Expensed in previous years	998,688			672,950			1,031,134			787,392			601,180			175,032			—			4,266,376									6,250,776
Expensed in 2017	—			—			158,241			221,454			270,531			196,911			128,400			975,537									1,141,087
Future expense	—			—			—			172,205			571,109			678,269			1,104,258			2,525,841									2,525,841
Weighted average term of remaining future expense (in years)				2.7

Summary of Option Activity

The table below summarizes the option activity for the nine months endedSeptember 30, 2017:

	Number of Shares		Weighted Average Exercise Price per share		Aggregate Intrinsic Value
Outstanding at January 1	833,630		$	49.92	$	13,913,891
Granted	232,500		59.41		581,250
Exercised	(95,166	)	47.03		1,403,256
Expired/Forfeited	(3,750	)	53.73
Outstanding at September 30	967,214		52.47		9,130,494
Exercisable at September 30	484,839		48.70		6,402,577

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Disclosures [Abstract]

Changes in Fair Value of Derivatives

	Three Months Ended September 30,					Nine Months Ended September 30,
(In thousands)	2017			2016		2017			2016
Change in fair value:
Recognized in earnings	$	(1	)	$	1	$	(2	)	$	(9	)
Recognized in other comprehensive income	171			431		503			(383		)
	$	170		$	432	$	501		$	(392	)

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Business Segments (Tables)

9 Months Ended

Sep. 30, 2017

Segment Reporting [Abstract]

Business Segments

(Dollars in thousands)	Shopping Centers			Mixed-Use Properties			Corporate and Other			Consolidated Totals
Three months ended September 30, 2017
Real estate rental operations:
Revenue	$	40,834		$	15,395		$	8		$	56,237
Expenses	(8,799		)	(5,505		)	—			(14,304		)
Income from real estate	32,035			9,890			8			41,933
Interest expense and amortization of deferred debt costs	—			—			(11,821		)	(11,821		)
General and administrative	—			—			(4,363		)	(4,363		)
Subtotal	32,035			9,890			(16,176		)	25,749
Depreciation and amortization of deferred leasing costs	(7,457		)	(3,906		)	—			(11,363		)
Change in fair value of derivatives	—			—			(1		)	(1		)
Net income (loss)	$	24,578		$	5,984		$	(16,177	)	$	14,385
Capital investment	$	3,503		$	8,161		$	—		$	11,664
Total assets	$	983,369		$	431,182		$	9,177		$	1,423,728
Three months ended September 30, 2016
Real estate rental operations:
Revenue	$	38,738		$	14,484		$	11		$	53,233
Expenses	(8,330		)	(4,941		)	—			(13,271		)
Income from real estate	30,408			9,543			11			39,962
Interest expense and amortization of deferred debt costs	—			—			(11,524		)	(11,524		)
General and administrative	—			—			(4,033		)	(4,033		)
Acquisition related costs	(57		)	—			—			(57		)
Subtotal	30,351			9,543			(15,546		)	24,348
Depreciation and amortization of deferred leasing costs	(7,732		)	(3,894		)	—			(11,626		)
Change in fair value of derivatives	—			—			1			1
Net income (loss)	$	22,619		$	5,649		$	(15,545	)	$	12,723
Capital investment	$	13,854		$	4,399		$	—		$	18,253
Total assets	$	938,124		$	363,439		$	9,441		$	1,311,004

(Dollars in thousands)	Shopping Centers			Mixed-Use Properties			Corporate and Other			Consolidated Totals
Nine months ended September 30, 2017
Real estate rental operations:
Revenue	$	124,854		$	45,725		$	31		$	170,610
Expenses	(25,876		)	(15,393		)	—			(41,269		)
Income from real estate	98,978			30,332			31			129,341
Interest expense and amortization of deferred debt costs	—			—			(35,585		)	(35,585		)
General and administrative	—			—			(13,178		)	(13,178		)
Subtotal	98,978			30,332			(48,732		)	80,578
Depreciation and amortization of deferred leasing costs	(22,649		)	(11,747		)	—			(34,396		)
Change in fair value of derivatives	—			—			(2		)	(2		)
Net income (loss)	$	76,329		$	18,585		$	(48,734	)	$	46,180
Capital investment	$	87,788		$	18,386		$	—		$	106,174
Total assets	$	983,369		$	431,182		$	9,177		$	1,423,728
Nine months ended September 30, 2016
Real estate rental operations:
Revenue	$	120,861		$	41,972		$	36		$	162,869
Expenses	(26,519		)	(13,694		)	—			(40,213		)
Income from real estate	94,342			28,278			36			122,656
Interest expense and amortization of deferred debt costs	—			—			(34,268		)	(34,268		)
General and administrative	—			—			(12,500		)	(12,500		)
Acquisition related costs	(57		)	—			—			(57		)
Subtotal	94,285			28,278			(46,732		)	75,831
Depreciation and amortization of deferred leasing costs	(22,774		)	(10,704		)	—			(33,478		)
Change in fair value of derivatives	—			—			(9		)	(9		)
Net income (loss)	$	71,511		$	17,574		$	(46,741	)	$	42,344
Capital investment	$	20,258		$	24,427		$	—		$	44,685
Total assets	$	938,124		$	363,439		$	9,441		$	1,311,004

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Organization, Formation and Structure (Details)	Sep. 30, 2017 partnership property
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Distribution of REIT taxable income (excluding net capital gains) to its stockholders (percent)	90.00%
Number of partnerships | partnership	2
Shopping Centers
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of real estate properties	49
Mixed-Use Properties
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of real estate properties	6
Non-operating Development Properties
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of real estate properties	3

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Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017 USD ($) tenant Property store	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) tenant Property store shares	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Significant Accounting Policies [Line Items]
Number of tenants | tenant	1		1
Number of shopping centers | store	32		32
Percentage of ownership in operating partnership			74.30%
Allowance for doubtful accounts receivables	$ 300		$ 300		$ 2,000
Accounts receivable, net representing rental income accrued	44,000		$ 44,000		43,100
Period expected for the sale of property to occur			1 year
Deferred debt costs	6,759		$ 6,759		7,500
Accumulated amortization, deferred debt costs	8,300		8,300		7,300
Deferred leasing costs, net	27,679		27,679		25,983
Accumulated amortization deferred leasing cost	34,000		34,000		30,400
Amortization expense deferred leasing cost			4,100	$ 4,400
Interest capitalized	$ 900	$ 506	$ 2,495	1,762
Commercial development projects, availability for occupancy, maximum period after major construction activity			1 year
Depreciation expense			$ 30,300	29,000
Repairs and maintenance expense			$ 8,500	$ 9,200
Shares credited to directors' deferred fee accounts (in shares) | shares			181,899
Held-for-sale
Significant Accounting Policies [Line Items]
Number of real estate properties | Property	0		0
Minimum
Significant Accounting Policies [Line Items]
Allowance for doubtful accounts receivables representing rental income accrued	$ 100		$ 100		$ 500
Minimum | Building
Significant Accounting Policies [Line Items]
Estimated useful life (in years)			35 years
Maximum | Building
Significant Accounting Policies [Line Items]
Estimated useful life (in years)			50 years
Maximum | Building Improvements
Significant Accounting Policies [Line Items]
Estimated useful life (in years)			20 years
Albertson's/Safeway
Significant Accounting Policies [Line Items]
Lease termination fee			$ 3,600
Giant Food
Significant Accounting Policies [Line Items]
Percentage of total revenue			4.60%
Number of shopping centers | store			10
Capital One
Significant Accounting Policies [Line Items]
Percentage of total revenue			2.80%
Number of shopping centers | store			18
Revenues
Significant Accounting Policies [Line Items]
Number of tenants | tenant	2		2
Percentage of total revenue			2.50%
Glebe Road Construction Loan
Significant Accounting Policies [Line Items]
Deferred debt costs	$ 1,700		$ 1,700

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Summary of Significant Accounting Policies - Construction in Progress (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Construction in progress	$ 80,163	$ 63,570
Glebe Road
Property, Plant and Equipment [Line Items]
Construction in progress	73,514	58,147
Other
Property, Plant and Equipment [Line Items]
Construction in progress	$ 6,649	$ 5,423

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Summary of Significant Accounting Policies - Basic and Diluted Shares Outstanding (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Accounting Policies [Abstract]
Weighted average common stock outstanding-Basic (in shares)	21,942	21,597	21,844	21,448
Effect of dilutive options (in shares)	86	182	105	96
Weighted average common stock outstanding-Diluted (in shares)	22,028	21,779	21,949	21,544
Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Non-dilutive options (in shares)	0	0	0	172

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Real Estate Acquired and Sold - Narrative (Details)	1 Months Ended						9 Months Ended		12 Months Ended
	Sep. 30, 2017 USD ($) ft²	Mar. 31, 2017 USD ($)	Jan. 31, 2017 USD ($)	Dec. 31, 2016 USD ($) ft²	Nov. 30, 2016 USD ($)	Aug. 31, 2016 USD ($) property	Sep. 30, 2017 USD ($) ft² property	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($) ft² property
Business Acquisition [Line Items]
Aggregate cost							$ 76,400,000		$ 10,300,000
Property acquisition costs				$ 60,400					$ 60,400
Rent expense							$ 578,200	$ 617,100
Number of properties purchased | property							1		2
Portion of purchase price allocated to land	$ 28,400,000			9,400,000			$ 28,400,000		$ 9,400,000
Portion of purchase price allocated to buildings	45,800,000			900,000			45,800,000		900,000
Portion of purchase price allocated to leases acquired in place	2,200,000			100,000			2,200,000		100,000
Portion of purchase price allocated to below market lease	(600,000)			(100,000)			(600,000)		$ (100,000)
Portion of purchase price allocated to above market lease	600,000						$ 600,000
Crosstown Business Center
Business Acquisition [Line Items]
Proceeds from sale of real estate				$ 5,400,000
Area of real estate property (in square feet) | ft²				197,100					197,100
Gains (losses) on sales of investment real estate				$ 1,000,000
Great Eastern Shopping Center
Business Acquisition [Line Items]
Proceeds from sale of real estate	$ 8,500,000
Area of real estate property (in square feet) | ft²	255,400						255,400
Gains (losses) on sales of investment real estate	$ 500,000
700 N. Glebe Road
Business Acquisition [Line Items]
Aggregate cost						$ 7,200,000
Number of contiguous properties | property						3
Thruway Pad
Business Acquisition [Line Items]
Aggregate cost						$ 3,100,000
Property acquisition costs						$ 60,400
Beacon Center
Business Acquisition [Line Items]
Aggregate cost					$ 22,500,000
Rent expense					60,000
Mortgage loans on real estate, period increase (decrease)					11,250,000
Southdale
Business Acquisition [Line Items]
Aggregate cost					15,000,000
Rent expense					$ 60,000
Burtonsville Town Square
Business Acquisition [Line Items]
Aggregate cost			$ 76,400,000
Olney
Business Acquisition [Line Items]
Aggregate cost		$ 3,000,000
Rent expense		$ 56,000
Great Eastern Shopping Center
Business Acquisition [Line Items]
Second trust financing	$ 1,275,000						$ 1,275,000
Second trust financing, stated interest rate	6.00%
Optional extension period	6 months

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Noncontrolling Interests - Holders of Convertible Limited Partnership Units in the Operating Partnership (Details) - Noncontrolling Interest shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017 shares	Sep. 30, 2016 shares	Sep. 30, 2017 shares	Sep. 30, 2016 shares
Noncontrolling Interest [Line Items]
Percentage of ownership interest of noncontrolling interest	25.70%		25.70%
Limited partnership units (in shares)	7,500		7,500
Limited partnership units, conversion ratio	1		1
Outstanding stock percent that should be acquired for rights to be exercised	39.90%		39.90%
Limited partnership units convertible into shares of common stock, eligible for conversion (in shares)	750		750
Fully converted partnership units and diluted weighted average shares outstanding (in shares)	29,500	29,200	29,400	28,900

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Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs - Narrative (Details) - USD ($)				3 Months Ended	9 Months Ended
	Sep. 01, 2017	Aug. 14, 2017	Jan. 18, 2017	Dec. 31, 2021	Sep. 30, 2017	Dec. 31, 2016
Debt Instrument [Line Items]
Outstanding debt					$ 968,905,000
Debt outstanding with fixed-rate					865,700,000	$ 844,300,000
Debt outstanding with variable-rate					103,200,000	63,500,000
Outstanding line of credit					88,608,000	48,217,000
Carrying value of properties collateralizing mortgage notes					1,000,000,000	957,200,000
Construction loan					873,538,000	783,400,000
Final payment amount					705,962,000
Total outstanding debt					968,900,000	907,800,000
Metro Pike Center Bank Loan
Debt Instrument [Line Items]
Construction loan					14,200,000
Guarantor obligations, maximum exposure					7,800,000
Unsecured Revolving Credit Facility
Debt Instrument [Line Items]
Outstanding line of credit					89,000,000	$ 49,000,000
Line of credit facility, maximum borrowing capacity					$ 275,000,000
Extension in line of credit facility period					1 year
Line of credit facility, maximum borrowing capacity					$ 185,800,000
Unsecured Revolving Credit Facility | LIBOR
Debt Instrument [Line Items]
Interest rate spread on LIBOR (percentage)					1.45%
Unsecured Revolving Credit Facility | LIBOR | Minimum
Debt Instrument [Line Items]
Interest rate spread on LIBOR (percentage)					1.45%
Unsecured Revolving Credit Facility | LIBOR | Maximum
Debt Instrument [Line Items]
Interest rate spread on LIBOR (percentage)					2.00%
Letter of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity					$ 185,000
Burtonsville Fixed Rate Mortgage
Debt Instrument [Line Items]
Construction-to-permanent loan			$ 40,000,000
Interest rate, stated percentage			3.39%
Periodic payment			$ 197,900
Amortization period			25 years
Final payment amount			$ 20,300,000
Debt instrument, term			15 years
Glebe Road Construction Loan
Debt Instrument [Line Items]
Construction-to-permanent loan		$ 157,000,000.0
Interest rate, stated percentage		4.67%
Amortization period		25 years
Park Van Ness Loan
Debt Instrument [Line Items]
Construction loan					$ 71,600,000
Interest rate, stated percentage					4.88%
Periodic payment	$ 413,460
Amortization period	25 years
Final payment amount					$ 39,600,000
Guarantor obligations, maximum exposure					$ 53,700,000
Forecast | Glebe Road Construction Loan
Debt Instrument [Line Items]
Periodic payment				$ 887,900

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Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs - Scheduled Maturities of Debt, Including Scheduled Principal Amortization (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Balloon Payments
October 1 through December 31, 2017	$ 0
2018	130,799
2019	60,793
2020	61,163
2021	11,012
2022	36,502
Thereafter	405,693
Principal amount	705,962
Scheduled Principal Amortization
October 1 through December 31, 2017	7,386
2018	29,015
2019	27,769
2020	25,182
2021	24,836
2022	25,277
Thereafter	123,478
Principal amount	262,943
Total
October 1 through December 31, 2017	7,386
2018	159,814
2019	88,562
2020	86,345
2021	35,848
2022	61,779
Thereafter	529,171
Principal amount	968,905
Unamortized deferred debt costs	6,759	$ 7,500
Net	$ 962,146

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Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs - Interest Expense and Amortization of Deferred Debt Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Debt Disclosure [Abstract]
Interest incurred	$ 12,370	$ 11,691	$ 37,037	$ 35,027
Amortization of deferred debt costs	351	339	1,043	1,003
Capitalized interest	(900)	(506)	(2,495)	(1,762)
Interest expense and amortization of deferred debt costs	$ 11,821	$ 11,524	$ 35,585	$ 34,268

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Equity (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Class of Stock [Line Items]
Income attributable to noncontrolling interests	$ 2,902	$ 2,484	$ 9,483	$ 8,530
Depositary shares outstanding (in shares)	7.2		7.2
6.875 Series C Cumulative Redeemable Preferred Stock
Class of Stock [Line Items]
Depository shares to cumulative redeemable preferred stock ratio			1.00%
Percentage of redeemable preferred stock			6.875%
Cumulative redeemable preferred stock liquidation preference (in usd per share)	$ 25.00		$ 25.00
Annual dividend on depositary shares (in usd per share)			$ 1.71875

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Related Party Transactions (Details)		1 Months Ended	9 Months Ended
	Dec. 08, 2016	Aug. 31, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
Related Party Transactions [Abstract]
Company contribution to a multi employer 401K plan at discretionary amount of employee's cash compensation, maximum percentage			6.00%
Company contribution to a multi employer 401K plan at discretionary amount of employee's cash compensation, amount			$ 270,600	$ 255,000
Deferred compensation, employee contribution, percentage			2.00%
Deferred compensation, company contribution, amount			$ 154,300	$ 129,000
Deferred compensation, company contribution, percentage			3	3
Deferred compensation, cumulative unfunded liability			$ 2,300,000		$ 2,100,000
Ancillary costs and expenses			6,300,000	$ 5,500,000
Liability due to The Saul Organization for the Company's share of these ancillary costs and expenses			$ 744,200		$ 860,700
Purchases from related party		$ 8,800,000
Percentage of annual increase in base rent			3.00%
Rent expense			$ 578,200	617,100
Insurance commissions and fees expense			$ 173,800	$ 279,100
BF Saul Real Estate Investment Trust | Affiliated Entity
Related Party Transaction [Line Items]
Automatic renewal period	12 months

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Stock Option Plans - Narrative (Details)	9 Months Ended
	Sep. 30, 2017 USD ($) compensation_plan shares	Sep. 29, 2017 $ / shares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Number of stock option plans | compensation_plan	2
Option expiration period	10 years
Option vesting period	4 years
Closing share price (in usd per share) | $ / shares		$ 61.91
Granted (in shares) | shares	232,500
Intrinsic value of granted shares | $	$ 581,250
Weighted average remaining contractual life of the Company's outstanding options	7 years 7 months 29 days
Weighted average remaining contractual life of the Company's exercisable options	6 years 8 months

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Stock Option Plans - Stock Options Issued (Details)	9 Months Ended
	Sep. 30, 2017 USD ($) $ / shares shares
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	1,689,000
Vested (in shares)	990,375
Exercised (in shares)	493,036
Forfeited (in shares)	228,750
Exercisable at end of period (in shares)	484,839
Remaining unexercised (in shares)	967,214
Exercise price (in usd per share) | $ / shares	$ 47.03
Total value at grant date | $	$ 11,831,465
Estimated forfeitures | $	1,913,761
Expensed in previous years | $	6,250,776
Expensed in 2017 | $	1,141,087
Future expense | $	$ 2,525,841
Weighted average term of remaining future expense (in years)	2 years 7 months 27 days
Directors
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	322,500
Vested (in shares)	322,500
Exercised (in shares)	177,500
Forfeited (in shares)	12,500
Exercisable at end of period (in shares)	132,500
Remaining unexercised (in shares)	132,500
Total value at grant date | $	$ 2,149,950
Expensed in previous years | $	1,984,400
Expensed in 2017 | $	165,550
Future expense | $	$ 0
Directors | 4/25/2008
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	30,000
Vested (in shares)	30,000
Exercised (in shares)	20,000
Forfeited (in shares)	7,500
Exercisable at end of period (in shares)	2,500
Remaining unexercised (in shares)	2,500
Exercise price (in usd per share) | $ / shares	$ 50.15
Volatility (percentage)	0.237
Expected life (years)	7 years
Assumed yield (percentage)	4.09%
Risk-free rate (percentage)	3.49%
Total value at grant date | $	$ 254,700
Expensed in previous years | $	254,700
Expensed in 2017 | $	0
Future expense | $	$ 0
Directors | 4/24/2009
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	32,500
Vested (in shares)	32,500
Exercised (in shares)	27,500
Forfeited (in shares)	0
Exercisable at end of period (in shares)	5,000
Remaining unexercised (in shares)	5,000
Exercise price (in usd per share) | $ / shares	$ 32.68
Volatility (percentage)	0.344
Expected life (years)	6 years
Assumed yield (percentage)	4.54%
Risk-free rate (percentage)	2.19%
Total value at grant date | $	$ 222,950
Expensed in previous years | $	222,950
Expensed in 2017 | $	0
Future expense | $	$ 0
Directors | 5/7/2010
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	32,500
Vested (in shares)	32,500
Exercised (in shares)	25,000
Forfeited (in shares)	2,500
Exercisable at end of period (in shares)	5,000
Remaining unexercised (in shares)	5,000
Exercise price (in usd per share) | $ / shares	$ 38.76
Volatility (percentage)	0.369
Expected life (years)	5 years
Assumed yield (percentage)	4.23%
Risk-free rate (percentage)	2.17%
Total value at grant date | $	$ 287,950
Expensed in previous years | $	287,950
Expensed in 2017 | $	0
Future expense | $	$ 0
Directors | 5/13/2011
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	32,500
Vested (in shares)	32,500
Exercised (in shares)	22,500
Forfeited (in shares)	2,500
Exercisable at end of period (in shares)	7,500
Remaining unexercised (in shares)	7,500
Exercise price (in usd per share) | $ / shares	$ 41.82
Volatility (percentage)	0.358
Expected life (years)	5 years
Assumed yield (percentage)	4.16%
Risk-free rate (percentage)	1.86%
Total value at grant date | $	$ 297,375
Expensed in previous years | $	297,375
Expensed in 2017 | $	0
Future expense | $	$ 0
Directors | 5/4/2012
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	35,000
Vested (in shares)	35,000
Exercised (in shares)	22,500
Forfeited (in shares)	0
Exercisable at end of period (in shares)	12,500
Remaining unexercised (in shares)	12,500
Exercise price (in usd per share) | $ / shares	$ 39.29
Volatility (percentage)	0.348
Expected life (years)	5 years
Assumed yield (percentage)	4.61%
Risk-free rate (percentage)	0.78%
Total value at grant date | $	$ 257,250
Expensed in previous years | $	257,250
Expensed in 2017 | $	0
Future expense | $	$ 0
Directors | 5/10/2013
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	35,000
Vested (in shares)	35,000
Exercised (in shares)	22,500
Forfeited (in shares)	0
Exercisable at end of period (in shares)	12,500
Remaining unexercised (in shares)	12,500
Exercise price (in usd per share) | $ / shares	$ 44.42
Volatility (percentage)	0.333
Expected life (years)	5 years
Assumed yield (percentage)	4.53%
Risk-free rate (percentage)	0.82%
Total value at grant date | $	$ 278,250
Expensed in previous years | $	278,250
Expensed in 2017 | $	0
Future expense | $	$ 0
Directors | 5/9/2014
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	30,000
Vested (in shares)	30,000
Exercised (in shares)	17,500
Forfeited (in shares)	0
Exercisable at end of period (in shares)	12,500
Remaining unexercised (in shares)	12,500
Exercise price (in usd per share) | $ / shares	$ 47.03
Volatility (percentage)	0.173
Expected life (years)	5 years
Assumed yield (percentage)	4.48%
Risk-free rate (percentage)	1.63%
Total value at grant date | $	$ 109,500
Expensed in previous years | $	109,500
Expensed in 2017 | $	0
Future expense | $	$ 0
Directors | 5/8/2015
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	35,000
Vested (in shares)	35,000
Exercised (in shares)	12,500
Forfeited (in shares)	0
Exercisable at end of period (in shares)	22,500
Remaining unexercised (in shares)	22,500
Exercise price (in usd per share) | $ / shares	$ 51.07
Volatility (percentage)	0.166
Expected life (years)	5 years
Assumed yield (percentage)	4.54%
Risk-free rate (percentage)	1.50%
Total value at grant date | $	$ 125,300
Expensed in previous years | $	125,300
Expensed in 2017 | $	0
Future expense | $	$ 0
Directors | 5/6/2016
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	32,500
Vested (in shares)	32,500
Exercised (in shares)	7,500
Forfeited (in shares)	0
Exercisable at end of period (in shares)	25,000
Remaining unexercised (in shares)	25,000
Exercise price (in usd per share) | $ / shares	$ 57.74
Volatility (percentage)	0.166
Expected life (years)	5 years
Assumed yield (percentage)	3.75%
Risk-free rate (percentage)	1.23%
Total value at grant date | $	$ 151,125
Expensed in previous years | $	151,125
Expensed in 2017 | $	0
Future expense | $	$ 0
Directors | 5/5/2017
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	27,500
Vested (in shares)	27,500
Exercised (in shares)	0
Forfeited (in shares)	0
Exercisable at end of period (in shares)	27,500
Remaining unexercised (in shares)	27,500
Exercise price (in usd per share) | $ / shares	$ 59.41
Volatility (percentage)	0.173
Expected life (years)	5 years
Assumed yield (percentage)	3.45%
Risk-free rate (percentage)	1.89%
Total value at grant date | $	$ 165,550
Expensed in previous years | $	0
Expensed in 2017 | $	165,550
Future expense | $	$ 0
Officers
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	1,366,500
Vested (in shares)	667,875
Exercised (in shares)	315,536
Forfeited (in shares)	216,250
Exercisable at end of period (in shares)	352,339
Remaining unexercised (in shares)	834,714
Total value at grant date | $	$ 9,681,515
Estimated forfeitures | $	1,913,761
Expensed in previous years | $	4,266,376
Expensed in 2017 | $	975,537
Future expense | $	$ 2,525,841
Officers | 5/13/2011
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	162,500
Vested (in shares)	118,750
Exercised (in shares)	96,100
Forfeited (in shares)	43,750
Exercisable at end of period (in shares)	22,650
Remaining unexercised (in shares)	22,650
Exercise price (in usd per share) | $ / shares	$ 41.82
Volatility (percentage)	0.330
Expected life (years)	8 years
Assumed yield (percentage)	4.81%
Risk-free rate (percentage)	2.75%
Total value at grant date | $	$ 1,366,625
Estimated forfeitures | $	367,937
Expensed in previous years | $	998,688
Expensed in 2017 | $	0
Future expense | $	$ 0
Officers | 5/4/2012
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	242,500
Vested (in shares)	107,500
Exercised (in shares)	91,830
Forfeited (in shares)	135,000
Exercisable at end of period (in shares)	15,670
Remaining unexercised (in shares)	15,670
Exercise price (in usd per share) | $ / shares	$ 39.29
Volatility (percentage)	0.315
Expected life (years)	8 years
Assumed yield (percentage)	5.28%
Risk-free rate (percentage)	1.49%
Total value at grant date | $	$ 1,518,050
Estimated forfeitures | $	845,100
Expensed in previous years | $	672,950
Expensed in 2017 | $	0
Future expense | $	$ 0
Officers | 5/10/2013
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	202,500
Vested (in shares)	171,875
Exercised (in shares)	83,000
Forfeited (in shares)	30,625
Exercisable at end of period (in shares)	88,875
Remaining unexercised (in shares)	88,875
Exercise price (in usd per share) | $ / shares	$ 44.42
Volatility (percentage)	0.304
Expected life (years)	8 years
Assumed yield (percentage)	5.12%
Risk-free rate (percentage)	1.49%
Total value at grant date | $	$ 1,401,300
Estimated forfeitures | $	211,925
Expensed in previous years | $	1,031,134
Expensed in 2017 | $	158,241
Future expense | $	$ 0
Officers | 5/9/2014
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	170,000
Vested (in shares)	126,875
Exercised (in shares)	35,000
Forfeited (in shares)	1,875
Exercisable at end of period (in shares)	91,875
Remaining unexercised (in shares)	133,125
Exercise price (in usd per share) | $ / shares	$ 47.03
Volatility (percentage)	0.306
Expected life (years)	7 years
Assumed yield (percentage)	4.89%
Risk-free rate (percentage)	2.17%
Total value at grant date | $	$ 1,349,800
Estimated forfeitures | $	168,749
Expensed in previous years | $	787,392
Expensed in 2017 | $	221,454
Future expense | $	$ 172,205
Officers | 5/8/2015
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	190,000
Vested (in shares)	94,375
Exercised (in shares)	8,981
Forfeited (in shares)	3,125
Exercisable at end of period (in shares)	85,394
Remaining unexercised (in shares)	177,894
Exercise price (in usd per share) | $ / shares	$ 51.07
Volatility (percentage)	0.298
Expected life (years)	7 years
Assumed yield (percentage)	4.94%
Risk-free rate (percentage)	1.89%
Total value at grant date | $	$ 1,584,600
Estimated forfeitures | $	141,780
Expensed in previous years | $	601,180
Expensed in 2017 | $	270,531
Future expense | $	$ 571,109
Officers | 5/6/2016
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	194,000
Vested (in shares)	48,500
Exercised (in shares)	625
Forfeited (in shares)	1,875
Exercisable at end of period (in shares)	47,875
Remaining unexercised (in shares)	191,500
Exercise price (in usd per share) | $ / shares	$ 57.74
Volatility (percentage)	0.185
Expected life (years)	7 years
Assumed yield (percentage)	3.80%
Risk-free rate (percentage)	1.55%
Total value at grant date | $	$ 1,136,840
Estimated forfeitures | $	86,628
Expensed in previous years | $	175,032
Expensed in 2017 | $	196,911
Future expense | $	$ 678,269
Officers | 5/5/2017
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Total grant (in shares)	205,000
Vested (in shares)	0
Exercised (in shares)	0
Forfeited (in shares)	0
Exercisable at end of period (in shares)	0
Remaining unexercised (in shares)	205,000
Exercise price (in usd per share) | $ / shares	$ 59.41
Volatility (percentage)	0.170
Expected life (years)	7 years
Assumed yield (percentage)	3.50%
Risk-free rate (percentage)	2.17%
Total value at grant date | $	$ 1,324,300
Estimated forfeitures | $	91,642
Expensed in previous years | $	0
Expensed in 2017 | $	128,400
Future expense | $	$ 1,104,258

XML

Stock Option Plans - Summary of Option Activity (Details)	9 Months Ended
	Sep. 30, 2017 USD ($) $ / shares shares
Number of Shares
Outstanding at beginning of period (in shares) | shares	833,630
Granted (in shares) | shares	232,500
Exercised (in shares) | shares	(95,166)
Expired/Forfeited (in shares) | shares	(3,750)
Outstanding at end of period (in shares) | shares	967,214
Exercisable at end of period (in shares) | shares	484,839
Weighted Average Exercise Price per share
Outstanding at beginning of period (in usd per share) | $ / shares	$ 49.92
Granted (in usd per share) | $ / shares	59.41
Exercised (in usd per share) | $ / shares	47.03
Expired/Forfeited (in usd per share) | $ / shares	53.73
Outstanding at end of period (in usd per share) | $ / shares	52.47
Exercisable at end of period (in usd per share) | $ / shares	$ 48.70
Aggregate Intrinsic Value
Outstanding at beginning of period | $	$ 13,913,891
Granted | $	581,250
Exercised | $	1,403,256
Expired/Forfeited | $
Outstanding at end of period | $	9,130,494
Exercisable at end of period | $	$ 6,402,577

XML

Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2017	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Notes payable, fixed interest rate	3.95%	4.25%
Notes payable, aggregate fair value	$ 928.0	$ 897.2
Notes payable, principal balance	865.7	$ 844.3
Interest Rate Swap
Fair Value of Financial Instruments [Line Items]
Fair value of derivative liability	$ 1.5

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Fair Value of Financial Instruments - Changes in Fair Value of Swaps (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Change in fair value:
Recognized in earnings	$ (1)	$ 1	$ (2)	$ (9)
Recognized in other comprehensive income	171	431	503	(383)
Total change in fair value	$ 170	$ 432	$ 501	$ (392)

XML

Business Segments - Narrative (Details)	9 Months Ended
	Sep. 30, 2017 segment
Segment Reporting [Abstract]
Number of reportable business segments	2

XML

Business Segments - Schedule of Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Real estate rental operations:
Revenue	$ 56,237	$ 53,233	$ 170,610	$ 162,869
Expenses	(14,304)	(13,271)	(41,269)	(40,213)
Income from real estate	41,933	39,962	129,341	122,656
Interest expense and amortization of deferred debt costs	(11,821)	(11,524)	(35,585)	(34,268)
General and administrative	(4,363)	(4,033)	(13,178)	(12,500)
Acquisition related costs	0	(57)	0	(57)
Subtotal	25,749	24,348	80,578	75,831
Depreciation and amortization of deferred leasing costs	(11,363)	(11,626)	(34,396)	(33,478)
Change in fair value of derivatives	(1)	1	(2)	(9)
Net income (loss)	14,385	12,723	46,180	42,344
Capital investment	11,664	18,253	106,174	44,685
Total assets	1,423,728	1,311,004	1,423,728	1,311,004	$ 1,343,025
Operating Segments | Shopping Centers
Real estate rental operations:
Revenue	40,834	38,738	124,854	120,861
Expenses	(8,799)	(8,330)	(25,876)	(26,519)
Income from real estate	32,035	30,408	98,978	94,342
Interest expense and amortization of deferred debt costs	0	0	0	0
General and administrative	0	0	0	0
Acquisition related costs		(57)		(57)
Subtotal	32,035	30,351	98,978	94,285
Depreciation and amortization of deferred leasing costs	(7,457)	(7,732)	(22,649)	(22,774)
Change in fair value of derivatives	0	0	0	0
Net income (loss)	24,578	22,619	76,329	71,511
Capital investment	3,503	13,854	87,788	20,258
Total assets	983,369	938,124	983,369	938,124
Operating Segments | Mixed-Use Properties
Real estate rental operations:
Revenue	15,395	14,484	45,725	41,972
Expenses	(5,505)	(4,941)	(15,393)	(13,694)
Income from real estate	9,890	9,543	30,332	28,278
Interest expense and amortization of deferred debt costs	0	0	0	0
General and administrative	0	0	0	0
Acquisition related costs		0		0
Subtotal	9,890	9,543	30,332	28,278
Depreciation and amortization of deferred leasing costs	(3,906)	(3,894)	(11,747)	(10,704)
Change in fair value of derivatives	0	0	0	0
Net income (loss)	5,984	5,649	18,585	17,574
Capital investment	8,161	4,399	18,386	24,427
Total assets	431,182	363,439	431,182	363,439
Corporate and Other
Real estate rental operations:
Revenue	8	11	31	36
Expenses	0	0	0	0
Income from real estate	8	11	31	36
Interest expense and amortization of deferred debt costs	(11,821)	(11,524)	(35,585)	(34,268)
General and administrative	(4,363)	(4,033)	(13,178)	(12,500)
Acquisition related costs		0		0
Subtotal	(16,176)	(15,546)	(48,732)	(46,732)
Depreciation and amortization of deferred leasing costs	0	0	0	0
Change in fair value of derivatives	(1)	1	(2)	(9)
Net income (loss)	(16,177)	(15,545)	(48,734)	(46,741)
Capital investment	0	0	0	0
Total assets	$ 9,177	$ 9,441	$ 9,177	$ 9,441