10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)

x ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

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, Suite 1500E, Bethesda, Maryland 20814-6522

(Address of principal executive offices) (Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, Par Value $0.01 Per Share	New York Stock Exchange
Depositary Shares each representing 1/100th of a share of 6.875% Series C Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share	New York Stock Exchange
Depositary Shares each representing 1/100th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: N/A

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act    Yes  o    No  x.

Indicate by check mark whether 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 requirements 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in the definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 

10-K.  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	x	Accelerated filer	o
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. o

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

The number of shares of Common Stock, $0.01 par value, issued and outstanding as of February 20, 2018 was 22.0 million.

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the closing price of the registrant’s Common Stock on the New York Stock Exchange on June 30, 2017 was $714.6 million.

DOCUMENTS INCORPORATED BY REFERENCE:

Registrant incorporates by reference into Part III (Items 10, 11, 12, 13 and 14) of this Annual Report on Form 10-K portions of registrant’s definitive Proxy Statement for the 2018 Annual Meeting of Stockholders to be filed with the Securities Exchange Commission pursuant to Regulation 14A. The definitive Proxy Statement will be filed with the Commission not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

TABLE OF CONTENTS

		Page Numbers
	PART I
Item 1.	Business	3
Item 1A.	Risk Factors	14
Item 1B.	Unresolved Staff Comments	27
Item 2.	Properties	27
Item 3.	Legal Proceedings	34
Item 4.	Mine Safety Disclosures	34
	PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	35
Item 6.	Selected Financial Data	38
Item 7.	Management’s Discussion and Analysis of Financial Condition And Results of Operations	39
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	62
Item 8.	Financial Statements and Supplementary Data	62
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	63
Item 9A.	Controls and Procedures	63
Item 9B.	Other Information	65
	PART III
Item 10.	Directors, Executive Officers and Corporate Governance	65
Item 11.	Executive Compensation	65
Item 12.	Security Ownership of Certain Beneficial Owners and Management And Related Stockholder Matters	65
Item 13.	Certain Relationships and Related Transactions, and Director Independence	65
Item 14.	Principal Accountant Fees and Services	65
	PART IV
Item 15.	Exhibits and Financial Statement Schedules	66
	FINANCIAL STATEMENT SCHEDULE
Schedule III.	Real Estate and Accumulated Depreciation	F-36

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PART I

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained herein constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are not guarantees of performance. Our future results, financial condition and business may differ materially from those expressed in these forward-looking statements. You can find many of these statements by looking for words such as “plans,” “intends,” “estimates,” “anticipates,” “expects,” “believes” or similar expressions in this Form 10-K. These forward-looking statements are subject to numerous assumptions, risks and uncertainties. Many of the factors that will determine these items are beyond our ability to control or predict. For further discussion of these factors, see “Item 1A. Risk Factors” in this Form 10-K.

For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-looking statements, which speak only as of the date of this Form 10-K or the date of any document incorporated by reference. All subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances after the date of this Form 10-K.

Item 1. Business

General

Saul Centers, Inc. (“Saul Centers”) was incorporated under the Maryland General Corporation Law on June 10, 1993. Saul Centers 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.

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.

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.

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The following table lists the significant properties acquired, developed and/or disposed of by the Company since January 1, 2015.

Name of Property	Location	Type	Square Footage	Year of Acquisition/ Development/ Disposal
Acquisitions
726 N. Glebe Road*	Arlington, Virginia	Shopping Center	4,800	September 2015
700 N. Glebe Road	Arlington, Virginia	Development	N/A	August 2016
Burtonsville Town Square	Burtonsville, Maryland	Shopping Center	121,000	January 2017
Developments
Park Van Ness	Washington, DC	Mixed-Use		2013-2016
750 N. Glebe Road	Arlington, Virginia	Mixed-Use		2017
Dispositions
Crosstown Business Center	Tulsa, Oklahoma	Mixed-Use	197,100	December 2016
Great Eastern	District Heights, Maryland	Shopping Center	255,400	September 2017

*As of August 2016, this property was removed from operations and reclassified to development.

As of December 31, 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. Shopping Centers and Mixed-Use Properties represent reportable business segments for financial reporting purposes. Revenue, net income, total assets and other financial information of each reportable segment are described in Note 15 to the Consolidated Financial Statements contained in Item 8 of this Form 10-K.

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Organizational Structure

The Company conducts its business through the Operating Partnership and/or directly or indirectly owned subsidiaries. The following diagram depicts the Company’s organizational structure and beneficial ownership of the common and preferred stock of Saul Centers calculated pursuant to Rule 13d-3 of the Exchange Act as of December 31, 2017.

(1) The Saul Organization’s ownership percentage in Saul Centers reported above does not include units of limited partnership interest of the Operating Partnership held by the Saul Organization. In general, most units are convertible into shares of the Company’s common stock on a one-for-one basis. However, not all of the units may be convertible into the Company’s common stock because (i) the articles of incorporation limit beneficial and constructive ownership (defined by reference to various Code provisions) to 39.9% in value of the Company’s issued and outstanding common and preferred equity securities, which comprise the ownership limit and (ii) the convertibility of some of the outstanding units is subject to approval of the Company’s stockholders.

Management of the Current Portfolio Properties

The Operating Partnership manages the Current Portfolio Properties and will manage any subsequently acquired or developed properties. The management of the properties includes performing property management, leasing, design, renovation, development and accounting duties for each property. The Operating Partnership provides each property with a fully integrated property management capability, with approximately 65 full-time equivalent employees at its headquarters office and 45 employees at its properties and with an extensive and mature network of relationships with tenants and potential tenants as well as with members of the brokerage and property

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owners’ communities. The Company currently does not, and does not intend to, retain third party managers or provide management services to third parties.

The Company augments its property management capabilities by sharing with the Saul Organization certain ancillary functions, at cost, such as information technology and payroll services, benefits administration and in-house legal services. The Company also shares insurance administration expenses on a pro rata basis with the Saul Organization. Management believes that these arrangements result in lower costs than could be obtained by contracting with third parties. These arrangements permit the Company to capture greater economies of scale in purchasing from third party vendors than would otherwise be available to the Company alone and to capture internal economies of scale by avoiding payments representing profits with respect to functions provided internally. The terms of all sharing arrangements with the Saul Organization, including payments related thereto, are specified in a written agreement and are reviewed annually by the Audit Committee of the Company’s Board of Directors.

The Company subleases its corporate headquarters space from the Saul Organization at the Company’s share of the cost. A discussion of the lease terms is provided in Note 7, Long Term Lease Obligations, of the Notes to Consolidated Financial Statements.

Principal Offices

The principal offices of the Company are located at 7501 Wisconsin Avenue, Suite 1500E, Bethesda, Maryland 20814-6522, and the Company’s telephone number is (301) 986-6200. The Company’s internet web address is www.saulcenters.com. Information contained on the Company’s website is not part of this report. The Company makes available free of charge on its website its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after the reports are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”). Alternatively, you may access these reports at the SEC’s website: www.sec.gov.

Policies with Respect to Certain Activities

The following is a discussion of the Company’s operating strategy and certain of its investment, financing and other policies. These strategies and policies have been determined by the Board of Directors and, in general, may be amended or revised from time to time by the Board of Directors without a vote of the Company’s stockholders.

Operating Strategy

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. Community and neighborhood shopping centers typically provide reliable cash flow and steady long-term growth potential. Management actively manages its property portfolio by engaging in strategic leasing activities, tenant selection, lease negotiation and shopping center expansion and reconfiguration. The Company seeks to optimize tenant mix by selecting tenants for its Shopping Centers that provide a broad spectrum of goods and services, consistent with the role of community and neighborhood shopping centers as the source for day-to-day necessities. Management believes that such a synergistic tenanting approach results in increased cash flow from existing tenants by providing the Shopping Centers with consistent traffic and a desirable mix of shoppers, resulting in increased sales and, therefore, increased cash flows.

Management believes there is potential for long term growth in cash flow as existing leases for space in the Shopping Centers 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

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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 which leases are not otherwise expiring, management selectively attempts to increase cash flow through a variety of means, or in connection with renovations or relocations, 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 Company will also seek growth opportunities in its Washington, D.C. metropolitan area Mixed-Use portfolio, primarily through development and redevelopment. The Company is developing approximately 490 residential units with approximately 62,000 square feet of street-level retail space at 750 N. Glebe Road in Arlington, Virginia, which 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. Management also intends to negotiate lease renewals or to re-lease available space in the Mixed-Use Properties, while considering the strategic balance of optimizing short-term cash flow and long-term asset value.

It is management’s intention to hold properties for long-term investment and to place strong emphasis on regular maintenance, periodic renovation and capital improvement. Management believes that characteristics such as cleanliness, lighting and security are particularly important in community and neighborhood shopping centers, which are frequently visited by shoppers during hours outside of the normal work-day. Management believes that the Shopping Centers and Mixed-Use Properties generally are attractive and well maintained. The Shopping Centers and Mixed-Use Properties will undergo expansion, renovation, reconfiguration and modernization from time to time when management believes that such action is warranted by opportunities or changes in the competitive environment of a property. The Company will continue its practice of expanding existing properties by undertaking new construction on outparcels suitable for development as free standing retail or office facilities.

Investment in Real Estate or Interests in Real Estate

The Company’s redevelopment and renovation objective is to selectively and opportunistically redevelop and renovate its properties, by replacing below-market-rent leases 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 acquisitions, 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 December 31, 2017, 260 apartments (95.9%) 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.

In January 2016, the Company terminated a 16,500 square foot lease at 11503 Rockville Pike and received a $3.0 million lease termination fee which was recognized as revenue in the first quarter. The space was previously occupied by an office supply store that had vacated in mid-2014 and the lease was scheduled to expire in 2019. The termination fee revenue was partially offset by the loss of approximately $1.1 million in rental revenue over the remainder of 2016. The Company executed leases with two replacement tenants whose occupancy and rent commencement occurred in 2017. While the Company continues to plan for a mixed-use development at this site and its neighboring Metro Pike Center, the initial phases of this development are expected to be on the west side of Rockville Pike at Metro Pike Center. The Company has not committed to any timetable for commencement of construction.

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From 2014 through 2016, in separate transactions, the Company purchased four adjacent properties on North Glebe Road in Arlington, Virginia, for an aggregate $54.0 million. The Company is developing approximately 490 residential units and 60,000 square feet of retail space on 2.8 acres of land. Excavation, sheeting and shoring are substantially complete and construction is proceeding on the first three levels of the below grade parking structure. 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. In 2017, the Company closed on a $157.0 million construction-to-permanent loan, the proceeds of which will be used to partially finance the project. Leases have been executed for a 41,500 square foot Target and 9,000 square feet of retail shop space, resulting in approximately 84% of the retail space being leased.

Albertson's/Safeway, a tenant at nine 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 Foods, for that space and Global Foods 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 was 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 opened in November 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. The purchase was funded with a new $40.0 million mortgage loan and through the Company's credit line facility. The Company expects to begin construction on a 16,000 square foot small shop expansion in the Spring of 2018, with delivery projected in late 2018. The total development cost is expected to be approximately $5.7 million. Lease negotiations are in progress for over 50% of the space.

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 gained possession on October 31, 2017. Lease negotiations are in progress for 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 Company sold Great Eastern in September 2017.

In light of the limited amount of quality properties for sale and the escalated pricing of properties that the Company has been presented with or has inquired about over the past year, management believes acquisition opportunities for investment in existing and new Shopping Center and Mixed-Use Properties in the near future is uncertain. Because of the Company’s conservative capital structure, including its cash and capacity under its revolving credit facility, management believes that the Company is positioned to take advantage of additional investment opportunities as attractive properties are identified and market conditions improve. (See “Item 1. Business - Capital Policies”). It is management’s view that several of the sub-markets in which the Company operates have, or are expected to have in the future, attractive supply/demand characteristics. The Company will continue to evaluate acquisition, development and redevelopment as integral parts of its overall business plan.

In evaluating a particular redevelopment, renovation, acquisition, or development, management will consider a variety of factors, including (i) the location and accessibility of the property; (ii) the geographic area (with an emphasis on the Washington, D.C./Baltimore metropolitan area and the southeastern region of the United States) and demographic characteristics of the community, as well as the local real estate market, including potential for growth and potential regulatory impediments to development; (iii) the size of the property; (iv) the purchase price; (v) the non-financial terms of the proposed acquisition; (vi) the availability of funds or other consideration for

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the proposed acquisition and the cost thereof; (vii) the “fit” of the property with the Company’s existing portfolio; (viii) the potential for, and current extent of, any environmental problems; (ix) the current and historical occupancy rates of the property or any comparable or competing properties in the same market; (x) the quality of construction and design and the current physical condition of the property; (xi) the financial and other characteristics of existing tenants and the terms of existing leases; and (xii) the potential for capital appreciation.

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, D.C./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, it does not set any limit on the amount or percentage of assets that may be invested in any one property or any one geographic area.

The Company intends to engage in such future investment or development activities in a manner that is consistent with the maintenance of its status as a REIT for federal income tax purposes and that will not make the Company become regulated as an investment company under the Investment Company Act of 1940, as amended. Equity investments in acquired properties may be subject to existing mortgage financings and other indebtedness or to new indebtedness which may be incurred in connection with acquiring or refinancing these investments.

Investments in Real Estate Mortgages

While the Company’s current portfolio and business objectives emphasize equity investments in commercial and neighborhood shopping centers and mixed-use properties, the Company may, at the discretion of the Board of Directors, invest in mortgages, participating or convertible mortgages, deeds of trust and other types of real estate interests consistent with its qualification as a REIT. The Company does not presently invest, nor does it intend to invest, in real estate mortgages.

Investments in Securities of or Interests in Persons Engaged in Real Estate Activities and Other Issues

Subject to the requirements to maintain REIT qualification, the Company may invest in securities of other REITs, other entities engaged in real estate activities or securities of other issuers, including for the purpose of exercising control over such entities. The Company does not presently invest, nor does it intend to invest, in any securities of other REITs.

Dispositions

In December 2016, the Company sold for $5.4 million the 197,100 square foot Crosstown Business Center located in Tulsa, Oklahoma and recognized a $1.0 million gain.

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 may elect to dispose of other properties if, based upon management’s periodic review of the Company’s portfolio, the Board of Directors determines that such action would be in the best interest of the Company’s stockholders.

Capital Policies

The Company has established a debt capitalization policy relative to asset value, which is computed by reference to the aggregate annualized cash flow from the properties in the Company’s portfolio rather than relative to book value. The Company has used a measure tied to cash flow because it believes that the book value of its portfolio properties, which is the depreciated historical cost of the properties, does not accurately reflect the Company’s ability to incur indebtedness. Asset value, however, is somewhat more variable than book value, and

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may not at all times reflect the fair market value of the underlying properties. 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. Given the Company’s current debt level, it is management’s belief that the ratio of the Company’s debt to total asset value is below 50% as of December 31, 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 policy in light of current economic conditions, relative costs of capital, market values of the Company property portfolio, opportunities for acquisition, development or expansion, and such other factors as the Board of Directors then deems relevant. The Board of Directors may modify the Company’s debt capitalization policy based on such a reevaluation without shareholder approval and 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, subject to maintaining compliance with financial covenants within existing debt agreements. 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 intends to finance future acquisitions and developments and to make debt repayments by utilizing the sources of capital then deemed to be most advantageous. Such sources may include undistributed operating cash flow, secured or unsecured bank and institutional borrowings, proceeds from the Company’s Dividend Reinvestment and Stock Purchase Plan, proceeds from the sale of properties and private and public offerings of debt or equity securities. Borrowings may be at the Operating Partnership or Subsidiary Partnerships’ level and securities offerings may include (subject to certain limitations) the issuance of Operating Partnership interests convertible into common stock or other equity securities.

Other Policies

The Company has the authority to offer equity or debt securities in exchange for property and to repurchase or otherwise acquire its common stock or other securities in the open market or otherwise, and may engage in such activities in the future. The Company expects, but is not obligated, to issue common stock to holders of units of the Operating Partnership upon exercise of their redemption rights. The Company has not engaged in trading, underwriting or agency distribution or sale of securities of other issuers other than the Operating Partnership and does not intend to do so. The Company has not made any loans to third parties, although the Company may in the future make loans to third parties. In addition, the Company has policies relating to related party transactions discussed in “Item 1A. Risk Factors.”

Competition

As an owner of, or investor in, community and neighborhood shopping centers and mixed-use properties, the Company is subject to competition from an indeterminate number of companies in connection with the acquisition, development, ownership and leasing of similar properties. These investors include investors with access to significant capital, such as domestic and foreign corporations and financial institutions, publicly traded and privately held REITs, private institutional investment funds, investment banking firms, life insurance companies and pension funds.

Competition may reduce properties available for acquisition or development or increase prices for raw land or developed properties of the type in which the Company invests. The Company faces competition in providing leases to prospective tenants and in re-letting space to current tenants upon expiration of their respective leases. If tenants decide not to renew or extend their leases upon expiration, the Company may not be able to re-let the space. Even if the tenants do renew or the Company can re-let the space, the terms of renewal or re-letting, including the cost of required renovations, may be less favorable than current lease terms or than expectations for the space. This risk may be magnified if the properties owned by our competitors have lower occupancy rates than the Company’s properties. As a result, these competitors may be willing to make space available at lower prices than the space in the Current Portfolio Properties.

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Management believes that success in the competition for ownership and leasing property is dependent in part upon the geographic location of the property, the tenant mix, the performance of property managers, the amount of new construction in the area and the maintenance and appearance of the property. Additional competitive factors impacting the Company’s properties include the ease of access to the properties, the adequacy of related facilities such as parking, and the demographic characteristics in the markets in which the properties compete. Overall economic circumstances and trends and new properties in the vicinity of each of the Current Portfolio Properties are also competitive factors.

Finally, retailers at our Shopping Centers face increasing competition from outlet stores, discount shopping clubs and other forms of marketing goods, such as direct mail, internet marketing and telemarketing. This competition may reduce percentage rents payable to us and may contribute to lease defaults or insolvency of tenants.

Environmental Matters

The Current Portfolio Properties are subject to various laws and regulations relating to environmental and pollution controls. The impact upon the Company from the application of such laws and regulations either prospectively or retrospectively is not expected to have a materially adverse effect on the Company’s property operations. As a matter of policy, the Company requires an environmental study be performed with respect to a property that may be subject to possible environmental hazards prior to its acquisition to ascertain that there are no material environmental hazards associated with such property.

Employees

As of February 27, 2018, the Company had approximately 65 full-time equivalent employees at its headquarters office, including seven leasing agents, and 45 employees at its properties. None of the Company’s employees are covered by collective bargaining agreements. Management believes that its relationship with employees is good.

Recent Developments

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.  Commercial leasing percentages, on a comparable property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, declined to 94.2% at December 31, 2017, from 95.5% at December 31, 2016.

On January 23, 2018, Saul Centers sold, in an underwritten public offering, 3.0 million depositary shares, each representing 1/100th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock, providing net cash proceeds of approximately $72.6 million. The depositary shares may be redeemed at the Company’s option, in whole or in part, on or after January 23, 2023, at the $25.00 liquidation preference, plus accumulated dividends to but not including the redemption date. The depositary shares pay an annual dividend of $1.53125 per share, equivalent to 6.125% of the $25.00 liquidation preference. The Series D 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 in 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. The proceeds from the offering were used to partially redeem the Company’s 6.875% Series C Cumulative Redeemable Preferred Stock and related depositary shares.

The Operating Partnership entered into a Credit Agreement dated January 26, 2018, by and among the Operating Partnership, as Borrower, Wells Fargo Bank, National Association, as Administrative Agent, Capital One,

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National Association, as Syndication Agent, Wells Fargo Securities, LLC and Capital One, National Association, as Joint Lead Arrangers, Wells Fargo Securities, LLC, as Sole Bookrunner and Wells Fargo Bank, National Association, Capital One, N.A., U.S. Bank National Association, TD Bank, N.A., Regions Bank and Associated Bank, National Association, as Lenders (the “New Credit Agreement”).

The New Credit Agreement replaces the Credit Agreement dated June 24, 2014, by and among the Operating Partnership, as Borrower, Wells Fargo Bank, National Association, as Administrative Agent, JP Morgan Chase Bank, N.A., as Syndication Agent, Wells Fargo Securities, LLC, as Sole Lead Arranger and Sole Bookrunner and Wells Fargo Bank, National Association, JP Morgan Chase Bank, N.A., Capital One, N.A. and Citizens Bank of Pennsylvania as Lenders (as amended, the “Original Agreement”). The Original Agreement consisted of a $275,000,000 unsecured revolving credit facility (the “Original Facility”) with a maturity date of June 23, 2018 and bore interest at a variable rate equal to one-month LIBOR plus a spread of 145 basis points to 200 basis points, as determined by certain leverage tests. As of the date the Original Facility was replaced, the applicable spread was 1.45%.

The New Credit Agreement consists of a $400,000,000 credit facility (the “New Facility”), of which $325,000,000 is a revolving credit facility (the “Revolving Line”) and $75,000,000 is a term loan (the “Term Loan”). The Revolving Line matures on January 26, 2022, which term may be extended by the Company for one additional year, subject to satisfaction of certain conditions. The Term Loan matures on January 26, 2023, and may not be extended.

In general, loan availability under the New Facility is primarily determined by operating income from the Company’s existing unencumbered properties. Interest accrues at a rate of LIBOR plus a spread of 135 basis points to 195 basis points under the Revolving Line, and 130 basis points to 190 basis points under the Term Loan, each as determined by certain leverage tests. As of January 26, 2018, the applicable spread for borrowings is 135 basis points under the Revolving Line and 130 basis points under the Term Loan.

The Company and certain subsidiaries of the Operating Partnership and the Company have guaranteed the payment obligations of the Partnership under the New Facility.

The Company had access to debt at attractive terms and pricing during 2015, 2016 and 2017. The Company maintains a ratio of total debt to total asset value of under 50%, which allows it to obtain additional secured borrowings if necessary. As of December 31, 2017, amortizing fixed-rate mortgage debt with staggered maturities from 2019 to 2035, represented approximately 92.2% of the Company’s notes payable, thus minimizing refinancing risk. The floating-rate debt of the Company is comprised of a $14.1 million loan secured by Metro Pike Center, which was repaid in full in January 2018, and $61.0 million outstanding under the Company's revolving credit facility.

Acquisition and Development Activity

A significant contributor to the Company’s recent growth in its Shopping Center portfolio has been its land acquisitions and subsequent development, redevelopment of existing Shopping Centers and operating property acquisition activities. Redevelopment activities reposition the Company’s Shopping Centers to be competitive in the current retailing environment. These redevelopments typically include an update of the facade, site improvements and reconfiguring tenant spaces to accommodate tenant size requirements and merchandising evolution. During the period January 1, 2015 through December 31, 2017, the Company acquired seven significant real estate assets. Below is a discussion of significant activities.

2017 / 2016 / 2015 Acquisitions, Developments and Redevelopments

700, 726, 730, 750 North Glebe Road

From 2014 through 2016, in separate transactions, the Company purchased four adjacent properties on North Glebe Road in Arlington, Virginia, for an aggregate $54.0 million. The Company is developing approximately 490 residential units and 60,000 square feet of retail space on 2.8 acres of land. Excavation, sheeting

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and shoring are substantially complete and construction is proceeding on the first three levels of the below grade parking structure. 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. In 2017, the Company closed on a $157.0 million construction-to-permanent loan, the proceeds of which will be used to partially finance the project. Leases have been executed for a 41,500 square foot Target and 9,000 square feet of retail shop space, resulting in approximately 84% of the retail space being leased.

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 December 31, 2017, 260 apartments (95.9%) 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.

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 the second quarter of 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.

Beacon Center

In the fourth quarter of 2016, the Company purchased for $22.7 million, including acquisition costs, 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 Company’s revolving credit facility.

Southdale

In the fourth quarter of 2016, the Company purchased for $15.3 million, including acquisition costs, 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 Company’s revolving credit facility.

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

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is 100% leased and anchored by Giant Food and CVS Pharmacy. The purchase was funded with a new $40.0 million mortgage loan and through the Company's credit line 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. The Company expects to begin construction on a 16,000 square foot small shop expansion in the Spring of 2018, with delivery projected in late 2018. The total development cost is expected to be approximately $5.7 million. Lease negotiations are in progress for over 50% of the space.

Olney Shopping Center

In March 2017, the Company purchased for $3.1 million, including acquisition costs, 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.

7316 Wisconsin Avenue

On January 12, 2018, the Company entered into an agreement to purchase for $35.5 million, plus approximately $0.7 million of acquisition costs, a 69,600 square foot office building and the underlying ground located at 7316 Wisconsin Avenue in Bethesda, Montgomery County, Maryland and has an earnest money deposit of $3.5 million at risk. The property has mixed-use development potential of up to 325 apartment units and approximately 10,000 square feet of street level retail pursuant to the recently approved Bethesda Downtown Plan. The purchase price will be funded through the Company's revolving credit facility. The Company anticipates closing the acquisition on or before January 12, 2019.

Item 1A. Risk Factors

RISK FACTORS

Carefully consider the following risks and all of the other information set forth in this Annual Report on Form 10-K, including the consolidated financial statements and the notes thereto. If any of the events or developments described below were actually to occur, the Company’s business, financial condition or results of operations could be adversely affected.

In this section, unless the context indicates otherwise, the terms “Company,” “we,” “us” and “our” refer to Saul Centers, Inc., and its subsidiaries, including the Operating Partnership.

Financial and economic conditions may have an adverse impact on us, our tenants’ businesses and our results of operations.

Our business may be affected by market and economic challenges experienced by the U.S. economy or real estate industry as a whole, by the local economic conditions in the markets in which our properties are located, including the impact of high unemployment, volatility in the public equity and debt markets, and international economic conditions. A prolonged deterioration of economic and other market conditions, could adversely affect our business, financial condition, results of operations or real estate values, as well as the financial condition of our tenants and lenders, which may expose us to increased risks of default by these parties.

Potential consequences of a prolonged deterioration of economic and other market conditions include:

• the financial condition of our tenants, many of which operate in the retail industry, may be adversely affected, which may result in tenant defaults under their leases due to bankruptcy, lack of liquidity, operational failures or for other reasons;

• the ability to borrow on terms and conditions that we find acceptable, or at all, may be limited, which could reduce our ability to pursue acquisition and development opportunities and

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refinance existing debt, reduce our returns from acquisition and development activities and increase our future interest expense;

• reduced values of our properties may limit our ability to dispose of assets at attractive prices and may reduce the ability to refinance loans; and

• one or more lenders under our credit facility could fail and we may not be able to replace the financing commitment of any such lenders on favorable terms, or at all.

Revenue from our properties may be reduced or limited if the retail operations of our tenants are not successful.

Adverse changes in consumer spending or consumer preferences for particular goods, services or store based retailing could severely impact our tenants’ ability to pay rent. Revenue from our properties depends primarily on the ability of our tenants to pay the full amount of rent due under their leases on a timely basis. The amount of rent we receive from our tenants generally will depend in part on the success of our tenants’ retail operations, making us vulnerable to general economic downturns and other conditions affecting the retail industry. Some tenants may terminate their occupancy due to an inability to operate profitably for an extended period of time, impacting the Company’s ability to maintain occupancy levels.

Any reduction in our tenants’ ability to pay base rent or percentage rent may adversely affect our financial condition and results of operations. Small business tenants and anchor retailers which lease space in the Company’s properties may experience a deterioration in their sales or other revenue, or experience a constraint on the availability of credit necessary to fund operations, which in turn may adversely impact those tenants’ ability to pay contractual base rents and operating expense recoveries. Some of our leases provide for the payment, in addition to base rent, of additional rent above the base amount according to a specified percentage of the gross sales generated by the tenants. Decreasing sales revenue by retail tenants could adversely impact the Company’s receipt of percentage rents required to be paid by tenants under certain leases.

Our ability to increase our net income depends on the success and continued presence of our shopping center “anchor” tenants and other significant tenants.

Our net income could be adversely affected in the event of a downturn in the business, or the bankruptcy or insolvency, of any anchor store or anchor tenant. Our largest shopping center anchor tenant is Giant Food, which accounted for 4.7% of our total revenue for the year ended December 31, 2017. The closing of one or more anchor stores prior to the expiration of the lease of that store or the termination of a lease by one or more of a property’s anchor tenants could adversely affect that property and result in lease terminations by, or reductions in rent from, other tenants whose leases may permit termination or rent reduction in those circumstances or whose own operations may suffer as a result. This could reduce our net income.

We may experience difficulty or delay in renewing leases or leasing vacant space.

We derive most of our revenue directly or indirectly from rent received from our tenants. We are subject to the risks that, upon expiration, leases for space in our properties may not be renewed, the space and other vacant space may not be re-leased, or the terms of renewal or re-lease, including the cost of required renovations or concessions to tenants, may be less favorable than previous lease terms. Constraints on the availability of credit to office and retail tenants, necessary to purchase and install improvements, fixtures and equipment, and fund start-up business expenses, could impact the Company’s ability to procure new tenants for spaces currently vacant in existing operating properties or properties under development. As a result, our results of operations and our net income could be reduced.

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We have substantial relationships with members of the Saul Organization whose interests could conflict with the interests of other stockholders.

Influence of Officers, Directors and Significant Stockholders.

Three of our executive officers, Mr. B. F. Saul II, our President and Chief Operating Officer, J. Page Lansdale, and our Executive Vice President-Chief Legal and Administrative Officer, Christine Nicolaides Kearns, are members of the Saul Organization, and persons associated with the Saul Organization constitute five of the

11 members of our Board of Directors. In addition, as of December 31, 2017, Mr. B. F. Saul II had the potential to exercise control over 9,481,682 shares of our common stock representing 43.2% of our issued and outstanding shares of common stock. Mr. B. F. Saul II also beneficially owned, as of December 31, 2017, 7,541,867 units of the Operating Partnership. In general, these units are convertible into shares of our common stock on a one-for-one basis. The ownership limitation set forth in our articles of incorporation is 39.9% in value of our issued and outstanding equity securities (which includes both common and preferred stock). As of December 31, 2017,

Mr. B. F. Saul II and members of the Saul Organization owned common stock representing approximately 38.1% in value of all our issued and outstanding equity securities. Members of the Saul Organization are permitted under our articles of incorporation to convert Operating Partnership units into shares of common stock or acquire additional shares of common stock until the Saul Organization’s actual ownership of common stock reaches 39.9% in value of our equity securities. As of December 31, 2017, approximately 740,000 of the 7,541,867 units of the Operating Partnership would have been permitted to convert into additional shares of common stock, and would have resulted in Mr. B. F. Saul II and members of the Saul Organization owning common stock representing approximately 39.9% in value of all our issued and outstanding equity securities.

As a result of these relationships, members of the Saul Organization will be in a position to exercise significant influence over our affairs, which influence might not be consistent with the interests of some, or a majority, of our stockholders. Except as discussed below, we do not have any written policies or procedures for the review, approval or ratification of transactions with related persons.

Management Time.

Our Chief Executive Officer, President and Chief Operating Officer, Executive Vice President-Chief Legal and Administrative Officer and Senior Vice President-Chief Accounting Officer are also officers of various entities of the Saul Organization. Although we believe that these officers spend sufficient management time to meet their responsibilities as our officers, the amount of management time devoted to us will depend on our specific circumstances at any given point in time. As a result, in a given period, these officers may spend less than a majority of their management time on our matters. Over extended periods of time, we believe that our Chief Executive Officer will spend less than a majority of his management time on Company matters, while our President and Chief Operating Officer, Executive Vice President-Chief Legal and Administrative Officer and Senior Vice President-Chief Accounting Officer may or may not spend less than a majority of their time on our matters.

Exclusivity and Right of First Refusal Agreements.

We will acquire, develop, own and manage shopping center properties and will own and manage other commercial properties, and, subject to certain exclusivity agreements and rights of first refusal to which we are a party, the Saul Organization will continue to develop, acquire, own and manage commercial properties and own land suitable for development as, among other things, shopping centers and other commercial properties. Therefore, conflicts could develop in the allocation of acquisition and development opportunities with respect to commercial properties other than shopping centers and with respect to development sites, as well as potential tenants and other matters, between us and the Saul Organization. The agreement relating to exclusivity and the right of first refusal between us and the Saul Organization generally requires the Saul Organization to conduct its shopping center business exclusively through us and to grant us a right of first refusal to purchase commercial properties and development sites in certain market areas that become available to the Saul Organization. The Saul Organization has granted the right of first refusal to us, acting through our independent directors, in order to minimize potential conflicts with respect to commercial properties and development sites. We and the Saul Organization have entered

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into this agreement in order to minimize conflicts with respect to shopping centers and certain of our commercial properties.

We own real estate assets in the Twinbrook area of Rockville, Maryland, which are adjacent to real estate assets owned by the B. F. Saul Real Estate Investment Trust (the “Trust”), a member of the Saul Organization. We have entered into an agreement with the Saul Trust, which originally expired on December 31, 2015, and which was extended to December 31, 2016, to share, on a pro rata basis, third-party predevelopment costs related to the planning of the future development of the adjacent sites. On December 8, 2016, we entered into a replacement agreement with the Saul Trust which extended the expiration date to December 31, 2017 and provides for automatic twelve month renewals unless either party provides notice of termination. Conflicts with respect to payments and allocations of costs may arise under the agreement.

Shared Services.

We share with the Saul Organization certain ancillary functions, such as computer and payroll services, benefits administration and in-house legal services. The terms of all sharing arrangements, including payments related thereto, are reviewed periodically by our Audit Committee, which is comprised solely of independent directors. Included in our general and administrative expenses or capitalized to specific development projects, for the year ended December 31, 2017, are charges totaling $8.1 million, related to such shared services, which included rental payments for the Company’s headquarters lease, which were billed by the Saul Organization. Although we believe that the amounts allocated to us for such shared services represent a fair allocation between us and the Saul Organization, we have not obtained a third party appraisal of the value of these services.

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 counter-signature fees in connection with our insurance program. Such commissions and fees amounted to approximately $288,400 for the year ended December 31, 2017.

Related Party Rents.

We sublease space for our corporate headquarters from a member of the Saul Organization, the building of which is owned by another member of the Saul Organization. The lease commenced in March 2002 and expires in February 2022. The Company and the Saul Organization entered into a Shared Services Agreement whereby each party pays a portion of the total rental payments based on a percentage proportionate to the number of employees employed by each party. The Company’s rent expense for the year ended December 31, 2017 was $774,700. Although the Company believes that this lease has terms comparable to what would have been obtained from a third party landlord, it did not seek bid proposals from any independent third parties when entering into its new corporate headquarters lease.

Conflicts Based on Individual Tax Considerations.

The tax basis of members of the Saul Organization in our portfolio properties which were contributed to certain partnerships at the time of our initial public offering in 1993 was substantially less than the fair market value thereof at the time of their contribution. In the event of our disposition of such properties, a disproportionately large share of the gain for federal income tax purposes would be allocated to members of the Saul Organization. In addition, future reductions of the level of our debt, or future releases of the guarantees or indemnities with respect thereto by members of the Saul Organization, would cause members of the Saul Organization to be considered, for federal income tax purposes, to have received constructive distributions. Depending on the overall level of debt and other factors, these distributions could be in excess of the Saul Organization’s bases in their Partnership units, in which case such excess constructive distributions would be taxable.

Consequently, it is in the interests of the Saul Organization that we continue to hold the contributed portfolio properties, that a portion of our debt remains outstanding or is refinanced and that the Saul Organization guarantees and indemnities remain in place, in order to defer the taxable gain to members of the Saul Organization. Therefore, the Saul Organization may seek to cause us to retain the contributed portfolio properties, and to refrain from reducing our debt or releasing the Saul Organization guarantees and indemnities, even when such action may

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not be in the interests of some, or a majority, of our stockholders. In order to minimize these conflicts, decisions as to sales of the portfolio properties, or any refinancing, repayment or release of guarantees and indemnities with respect to our debt, will be made by the independent directors.

Ability to Block Certain Actions.

Under applicable law and the limited partnership agreement of the Operating Partnership, consent of the limited partners is required to permit certain actions, including the sale of all or substantially all of the Operating Partnership’s assets. Therefore, members of the Saul Organization, through their status as limited partners in the Operating Partnership, could prevent the taking of any such actions, even if they were in the interests of some, or a majority, of our stockholders.

The amount of debt we have and the restrictions imposed by that debt could adversely affect our business and financial condition.

As of December 31, 2017, we had approximately $965.5 million of debt outstanding, $890.4 million of which was long-term fixed-rate debt secured by 37 of our properties and $75.1 million of which was variable-rate debt due under one secured bank loan and our revolving credit facility.

We currently have a general policy of limiting our borrowings to 50 percent of asset value, i.e., the value of our portfolio, as determined by our Board of Directors by reference to the aggregate annualized cash flow from our portfolio. Our organizational documents contain no limitation on the amount or percentage of indebtedness which we may incur. Therefore, the Board of Directors could alter or eliminate the current limitation on borrowing at any time. If our debt capitalization policy were changed, we could increase our leverage, resulting in an increase in debt service that could adversely affect our operating cash flow and our ability to make expected distributions to stockholders, and in an increased risk of default on our obligations.

We have established our debt capitalization policy relative to asset value, which is computed by reference to the aggregate annualized cash flow from the properties in our portfolio rather than relative to book value. We have used a measure tied to cash flow because we believe that the book value of our portfolio properties, which is the depreciated historical cost of the properties, does not accurately reflect our ability to borrow. Asset value, however, is somewhat more variable than book value, and may not at all times reflect the fair market value of the underlying properties.

The amount of our debt outstanding from time to time could have important consequences to our stockholders. For example, it could:

• require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, property acquisitions and other appropriate business opportunities that may arise in the future;

• limit our ability to obtain any additional financing we may need in the future for working capital, debt refinancing, capital expenditures, acquisitions, development or other general corporate purposes;

• make it difficult to satisfy our debt service requirements;

• limit our ability to make distributions on our outstanding common and preferred stock;

• require us to dedicate increased amounts of our cash flow from operations to payments on our variable rate, unhedged debt if interest rates rise;

• limit our flexibility in planning for, or reacting to, changes in our business and the factors that affect the profitability of our business, which may place us at a disadvantage compared to competitors with less debt or debt with less restrictive terms; and

• limit our ability to obtain any additional financing we may need in the future for working capital, debt refinancing, capital expenditures, acquisitions, development or other general corporate purposes.

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Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance, our indebtedness will depend primarily on our future performance, which to a certain extent is subject to economic, financial, competitive and other factors described in this section. If we are unable to generate sufficient cash flow from our business in the future to service our debt or meet our other cash needs, we may be required to refinance all or a portion of our existing debt, sell assets or obtain additional financing to meet our debt obligations and other cash needs. Our ability to refinance, sell assets or obtain additional financing may not be possible on terms that we would find acceptable.

We are obligated to comply with financial and other covenants in our debt that could restrict our operating activities, and the failure to comply could result in defaults that accelerate the payment under our debt.

Our secured debt generally contains customary covenants, including, among others, provisions:

• relating to the maintenance of the property securing the debt;

• restricting our ability to assign or further encumber the properties securing the debt; and

• restricting our ability to enter into certain new leases or to amend or modify certain existing leases without obtaining consent of the lenders.

Our unsecured debt generally contains various restrictive covenants. The covenants in our unsecured debt include, among others, provisions restricting our ability to:

• incur additional unsecured debt;

• guarantee additional debt;

• make certain distributions, investments and other restricted payments, including distribution payments on our outstanding stock;

• create certain liens;

• increase our overall secured and unsecured borrowing beyond certain levels; and

• consolidate, merge or sell all or substantially all of our assets.

Our ability to meet some of the covenants in our debt, including covenants related to the condition of the property or payment of real estate taxes, may be dependent on the performance by our tenants under their leases.

In addition, our line of credit requires us and our subsidiaries to satisfy financial covenants. The material financial covenants require us, 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 December 31, 2017, we were in compliance with all such covenants. If we were to breach any of our debt covenants and did not cure the breach within any applicable cure period, our lenders could require us to repay the debt immediately, and, if the debt is secured, could immediately begin proceedings to take possession of the property securing the loan. Some of our debt arrangements are cross-defaulted, which means that the lenders under those debt arrangements can put us in default and require immediate repayment of their debt if we breach and fail to cure a covenant under certain of our other debt obligations. As a result, any default under our debt covenants could have an adverse effect on our financial condition, our results of operations, our ability to meet our obligations and the market value of our shares.

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Our development activities are inherently risky.

The ground-up development of improvements on real property, which is different from the renovation and redevelopment of existing improvements, presents substantial risks. In addition to the risks associated with real estate investment in general as described elsewhere, the risks associated with our remaining development activities include:

• significant time lag between commencement and completion subjects us to greater risks due to fluctuation in the general economy;

• failure or inability to obtain construction or permanent financing on favorable terms;

• expenditure of money and time on projects that may never be completed;

• inability to achieve projected rental rates or anticipated pace of lease-up;

• higher-than-estimated construction costs, including labor and material costs; and

• possible delay in completion of the project because of a number of factors, including weather, labor disruptions, construction delays or delays in receipt of zoning or other regulatory approvals, or acts of God (such as fires, earthquakes or floods).

Redevelopments and acquisitions may fail to perform as expected.

Our investment strategy includes the redevelopment and acquisition of community and neighborhood shopping centers that are anchored by supermarkets, drugstores or high volume, value-oriented retailers that provide consumer necessities. The redevelopment and acquisition of properties entails risks that include the following, any of which could adversely affect our results of operations and our ability to meet our obligations:

• our estimate of the costs to improve, reposition or redevelop a property may prove to be too low, and, as a result, the property may fail to achieve the returns we have projected, either temporarily or for a longer time;

• we may not be able to identify suitable properties to acquire or may be unable to complete the acquisition of the properties we identify;

• we may not be able to integrate new developments or acquisitions into our existing operations successfully;

• properties we redevelop or acquire may fail to achieve the occupancy or rental rates we project at the time we make the decision to invest, which may result in the properties’ failure to achieve the returns we projected;

• our pre-acquisition evaluation of the physical condition of each new investment may not detect certain defects or identify necessary repairs until after the property is acquired, which could significantly increase our total acquisition costs; and

• our investigation of a property or building prior to our acquisition, and any representations we may receive from the seller, may fail to reveal various liabilities, which could reduce the cash flow from the property or increase our acquisition cost.

Our ability to grow will be limited if we cannot obtain additional capital.

Our growth strategy includes the redevelopment of properties we already own and the acquisition of additional properties. Because we are required to distribute to our stockholders at least 90% of our taxable income each year to continue to qualify as a real estate investment trust, or REIT, for federal income tax purposes, in addition to our undistributed operating cash flow, we rely upon the availability of debt or equity capital to fund our growth, which financing may or may not be available on favorable terms or at all. The debt could include mortgage loans from third parties or the sale of debt securities. Equity capital could include our common stock or preferred stock. Additional financing, refinancing or other capital may not be available in the amounts we desire or on favorable terms. Our access to debt or equity capital depends on a number of factors, including the general state of the capital markets, the market’s perception of our growth potential, our ability to pay dividends, and our current and potential future earnings. Depending on the outcome of these factors, we could experience delay or difficulty in implementing our growth strategy on satisfactory terms, or be unable to implement this strategy.

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Our performance and value are subject to general risks associated with the real estate industry.

Our economic performance and the value of our real estate assets, and, consequently, the value of our investments, are subject to the risk that if our properties do not generate revenue sufficient to meet our operating expenses, including debt service and capital expenditures, our cash flow and ability to pay distributions to our stockholders will be adversely affected. As a real estate company, we are susceptible to the following real estate industry risks:

• economic downturns in the areas where our properties are located;

• adverse changes in local real estate market conditions, such as oversupply or reduction in demand;

• changes in tenant preferences that reduce the attractiveness of our properties to tenants;

• zoning or regulatory restrictions;

• decreases in market rental rates;

• weather conditions that may increase energy costs and other operating expenses;

• costs associated with the need to periodically repair, renovate and re-lease space; and

• increases in the cost of adequate maintenance, insurance and other operating costs, including real estate taxes, associated with one or more properties, which may occur even when circumstances such as market factors and competition cause a reduction in revenue from one or more properties, although real estate taxes typically do not increase upon a reduction in such revenue.

Geographic concentration of our portfolio may make us particularly susceptible to adverse economic developments in the real estate markets of those areas.

Approximately 85% of our property operating income is generated by properties in the metropolitan Washington, DC/Baltimore area. As a result, our financial condition, operating results and ability to make distributions could be materially and adversely impacted by significant adverse economic changes affecting the real estate markets in that area. In turn, our common stock is subject to greater risk vis-a-vis other enterprises whose portfolio contains greater geographic diversity.

Adverse trends in the retail and office real estate sectors.

Tenants at our retail properties face continual competition in attracting customers from Internet shopping, retailers at other shopping centers, catalogue companies, online merchants, television shopping networks, warehouse stores, large discounters, outlet malls, wholesale clubs, direct mail and telemarketers. Such competition could have a material adverse effect on our ability to lease space in our retail properties and on the rents we can charge or the concessions we can grant. This in turn could materially and adversely affect our results of operations and cash flows, and could affect the realizable value of our assets upon sale. Further, as new technologies emerge, the relationships among customers, retailers, and shopping centers are evolving rapidly and it is critical we adapt to such new technologies and relationships on a timely basis. We may be unable to adapt quickly and effectively, which could adversely impact our financial performance.

Some businesses are rapidly evolving to make employee telecommuting, flexible work schedules, open workplaces and teleconferencing increasingly common. These practices enable businesses to reduce their space requirements. A continuation of the movement towards these practices could over time erode the overall demand for office space and, in turn, place downward pressure on occupancy, rental rates and property valuations, each of which could have an adverse effect on our financial position, results of operations, cash flows and ability to make distributions to our stockholders.

Many real estate costs are fixed, even if income from our properties decreases.

Our financial results depend primarily on leasing space in our properties to tenants on terms favorable to us. Costs associated with real estate investment, such as real estate taxes and maintenance costs, generally are not reduced even when a property is not fully occupied, rental rates decrease, or other circumstances cause a reduction

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in income from the investment. As a result, cash flow from the operations of our properties may be reduced if a tenant does not pay its rent or we are unable to rent our properties on favorable terms. Under those circumstances, we might not be able to enforce our rights as landlord without delays, and may incur substantial legal costs. Additionally, new properties that we may acquire or develop may not produce any significant revenue immediately, and the cash flow from existing operations may be insufficient to pay the operating expenses and debt service associated with that property until the property is fully leased.

Competition may limit our ability to purchase new properties and generate sufficient income from tenants.

Numerous commercial developers and real estate companies compete with us in seeking tenants for properties and properties for acquisition. This competition may:

• reduce properties available for acquisition;

• increase the cost of properties available for acquisition;

• reduce rents payable to us;

• interfere with our ability to attract and retain tenants;

• lead to increased vacancy rates at our properties; and

• adversely affect our ability to minimize expenses of operation.

Retailers at our shopping center properties also face increasing competition from outlet stores, discount shopping clubs, and other forms of marketing of goods, such as direct mail, internet marketing and telemarketing. This competition may reduce percentage rents payable to us and may contribute to lease defaults and insolvency of tenants. If we are unable to continue to attract appropriate retail tenants to our properties, or to purchase new properties in our geographic markets, it could materially affect our ability to generate net income, service our debt and make distributions to our stockholders.

We may be unable to sell properties when appropriate because real estate investments are illiquid.

Real estate investments generally cannot be sold quickly. In addition, there are some limitations under federal income tax laws applicable to real estate and to REITs in particular that may limit our ability to sell our assets. We may not be able to alter our portfolio promptly in response to changes in economic or other conditions. Our inability to respond quickly to adverse changes in the performance of our investments could have an adverse effect on our ability to meet our obligations and make distributions to our stockholders.

Our insurance coverage on our properties may be inadequate.

We carry comprehensive insurance on all of our properties, including insurance for liability, earthquake, fire, flood, terrorism and rental loss. These policies contain coverage limitations. We believe this coverage is of the type and amount customarily obtained for or by an owner of real property assets. We intend to obtain similar insurance coverage on subsequently acquired properties.

As a consequence of the September 11, 2001 terrorist attacks and other significant losses incurred by the insurance industry, the availability of insurance coverage has decreased and the prices for insurance have increased. As a result, we may be unable to renew or duplicate our current insurance coverage in adequate amounts or at reasonable prices. In addition, insurance companies may no longer offer coverage against certain types of losses, such as losses due to terrorist acts and toxic mold, or, if offered, the expense of obtaining these types of insurance may not be justified. We therefore may cease to have insurance coverage against certain types of losses and/or there may be decreases in the limits of insurance available. If an uninsured loss or a loss in excess of our insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenue from the property, but still remain obligated for any mortgage debt or other financial obligations related to the property. Material losses in excess of insurance proceeds may occur in the future. Also, due to inflation, changes in codes and ordinances, environmental considerations and other factors, it may not be feasible to use insurance proceeds to replace a building after it has been damaged or destroyed. Events such as these could adversely affect our results of operations and our ability to meet our obligations, including distributions to our stockholders.

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Environmental laws and regulations could reduce the value or profitability of our properties.

All real property and the operations conducted on real property are subject to federal, state and local laws, ordinances and regulations relating to hazardous materials, environmental protection and human health and safety. Under various federal, state and local laws, ordinances and regulations, we and our tenants may be required to investigate and clean up certain hazardous or toxic substances released on or in properties we own or operate, and also may be required to pay other costs relating to hazardous or toxic substances. This liability may be imposed without regard to whether we or our tenants knew about the release of these types of substances or were responsible for their release. The presence of contamination or the failure to properly remediate contamination at any of our properties may adversely affect our ability to sell or lease those properties or to borrow using those properties as collateral. The costs or liabilities could exceed the value of the affected real estate. We are not aware of any environmental condition with respect to any of our properties that management believes would have a material adverse effect on our business, assets or results of operations taken as a whole. The uses of any of our properties prior to our acquisition of the property and the building materials used at the property are among the property-specific factors that will affect how the environmental laws are applied to our properties. If we are subject to any material environmental liabilities, the liabilities could adversely affect our results of operations and our ability to meet our obligations.

We cannot predict what other environmental legislation or regulations will be enacted in the future, how existing or future laws or regulations will be administered or interpreted or what environmental conditions may be found to exist on the properties in the future. Compliance with existing and new laws and regulations may require us or our tenants to spend funds to remedy environmental problems. Our tenants, like many of their competitors, have incurred, and will continue to incur, capital and operating expenditures and other costs associated with complying with these laws and regulations, which will adversely affect their potential profitability. Generally, our tenants must comply with environmental laws and meet remediation requirements. Our leases typically impose obligations on our tenants to indemnify us from any compliance costs we may incur as a result of the environmental conditions on the property caused by the tenant. If a tenant fails to or cannot comply, we could be forced to pay these costs. If not addressed, environmental conditions could impair our ability to sell or re-lease the affected properties in the future or result in lower sales prices or rent payments.

The Americans with Disabilities Act of 1990 (the “ADA”) could require us to take remedial steps with respect to newly acquired properties.

The properties, as commercial facilities, are required to comply with Title III of the ADA. Investigation of a property may reveal non-compliance with the ADA. The requirements of the ADA, or of other federal, state or local laws, also may change in the future and restrict further renovations of our properties with respect to access for disabled persons. Future compliance with the ADA may require expensive changes to the properties.

The revenue generated by our tenants could be negatively affected by various federal, state and local laws to which they are subject.

We and our tenants are subject to a wide range of federal, state and local laws and regulations, such as local licensing requirements, consumer protection laws and state and local fire, life-safety and similar requirements that affect the use of the properties. The leases typically require that each tenant comply with all regulations. Failure to comply could result in fines by governmental authorities, awards of damages to private litigants, or restrictions on the ability to conduct business on such properties. Non-compliance of this sort could reduce our revenue from a tenant, could require us to pay penalties or fines relating to any non-compliance, and could adversely affect our ability to sell or lease a property.

Failure to qualify as a REIT for federal income tax purposes would cause us to be taxed as a corporation, which would substantially reduce funds available for payment of distributions.

We believe that we are organized and qualified as a REIT, and currently intend to operate in a manner that will allow us to continue to qualify as a REIT for federal income tax purposes under the Code. However, the IRS could successfully assert that we are not qualified as such. In addition, we may not remain qualified as a REIT in the future. Qualification as a REIT involves the application of highly technical and complex Code provisions. The

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complexity of these provisions and of the applicable income tax regulations that have been issued under the Code by the United States Department of Treasury is greater in the case of a REIT that holds its assets in partnership form. Certain facts and circumstances not entirely within our control may affect our ability to qualify as a REIT. For example, in order to qualify as a REIT, at least 95% of our gross income in any year must be derived from qualifying rents and other income. Satisfying this requirement could be difficult, for example, if defaults by tenants were to reduce the amount of income from qualifying rents. Also, we must make annual distributions to stockholders of at least 90% of our net taxable income (excluding capital gains). In addition, new legislation, new regulations, new administrative interpretations or new court decisions may significantly change the tax laws with respect to qualification as a REIT or the federal income tax consequences of such qualification. If we fail to qualify as a REIT:

• we would not be allowed a deduction for dividend distributions to stockholders in computing taxable income;

• we would be subject to federal income tax at regular corporate rates;

• we could be subject to the federal alternative minimum tax;

• unless we are entitled to relief under specific statutory provisions, we could not elect to be taxed as a REIT for four taxable years following the year during which we were disqualified;

• we could be required to pay significant income taxes, which would substantially reduce the funds available for investment and for distribution to our stockholders for each year in which we failed to qualify; and

• we would no longer be required by law to make any distributions to our stockholders.

We believe that the Operating Partnership is treated as a partnership, and not as a corporation, for federal income tax purposes. If the IRS were to challenge successfully the status of the Operating Partnership as a partnership for federal income tax purposes:

• the Operating Partnership would be taxed as a corporation;

• we would cease to qualify as a REIT for federal income tax purposes; and

• the amount of cash available for distribution to our stockholders would be substantially reduced.

We may be required to incur additional debt to qualify as a REIT.

As a REIT, we must make annual distributions to stockholders of at least 90% of our REIT taxable income. We are subject to income tax on amounts of undistributed REIT taxable income and net capital gain. In addition, we would be subject to a 4% excise tax if we fail to distribute sufficient income to meet a minimum distribution test based on our ordinary income, capital gain and aggregate undistributed income from prior years. We intend to make distributions to stockholders to comply with the Code’s distribution provisions and to avoid federal income and excise tax. We may need to borrow funds to meet our distribution requirements because:

• our income may not be matched by our related expenses at the time the income is considered received for purposes of determining taxable income; and

• non-deductible capital expenditures or debt service requirements may reduce available cash but not taxable income.

In these circumstances, we might have to borrow funds on unfavorable terms and even if our management believes the market conditions make borrowing financially unattractive.

U.S. federal tax reform legislation now and in the future could affect REITs, both positively and negatively, in ways that are difficult to anticipate.

The Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”), signed into law on December 22, 2017, represents sweeping tax reform legislation that makes significant changes to corporate and individual tax rates and the calculation of taxes.  While we currently do not expect the 2017 Tax Act will have a significant direct impact on us, it may impact us indirectly as our tenants and the jurisdictions in which we do business, as well as the overall investment thesis for REITs, may be impacted both positively and negatively in ways that are difficult to predict. Additionally, the overall impact of the 2017 Tax Act depends on future interpretations and regulations that may be

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issued by federal tax authorities, as well as changes in state and local taxation in response to the 2017 Tax Act, and it is possible that such future interpretations, regulations and other changes could adversely impact us.

The structure of our leases may jeopardize our ability to qualify as a REIT.

If the IRS were to challenge successfully the characterization of one or more of our leases of properties as leases for federal income tax purposes, the Operating Partnership would not be treated as the owner of the related property or properties for federal income tax purposes. As a result, the Operating Partnership would lose tax depreciation and cost recovery deductions with respect to one or more of our properties, which in turn could cause us to fail to qualify as a REIT. Although we will use our best efforts to structure any leasing transaction for properties acquired in the future so the lease will be characterized as a lease and the Operating Partnership will be treated as the owner of the property for federal income tax purposes, we will not seek an advance ruling from the IRS and do not intend to seek an opinion of counsel that the Operating Partnership will be treated as the owner of any leased properties for federal income tax purposes. Thus, the IRS could successfully assert that future leases will not be treated as leases for federal income tax purposes, which could adversely affect our financial condition and results of operations.

To maintain our status as a REIT, we limit the amount of shares any one stockholder can own.

The Code imposes certain limitations on the ownership of the stock of a REIT. For example, not more than 50% in value of our outstanding shares of capital stock may be owned, actually or constructively, by five or fewer individuals (as defined in the Code). To protect our REIT status, our articles of incorporation restrict beneficial and constructive ownership (defined by reference to various Code provisions) to no more than 2.5% in value of our issued and outstanding equity securities by any single stockholder with the exception of members of the Saul Organization, who are restricted to beneficial and constructive ownership of no more than 39.9% in value of our issued and outstanding equity securities.

The constructive ownership rules are complex. Shares of our capital stock owned, actually or constructively, by a group of related individuals and/or entities may be treated as constructively owned by one of those individuals or entities. As a result, the acquisition of less than 2.5% or 39.9% in value of our issued and outstanding equity securities, by an individual or entity could cause that individual or entity (or another) to own constructively more than 2.5% or 39.9% in value of the outstanding stock. If that happened, either the transfer or ownership would be void or the shares would be transferred to a charitable trust and then sold to someone who can own those shares without violating the respective ownership limit.

As of December 31, 2017, Mr. B. F. Saul II and members of the Saul Organization owned common stock representing approximately 38.1% in value of all our issued and outstanding equity securities. In addition, members of the Saul Organization beneficially owned Operating Partnership units that are, in general, convertible into our common stock on a one-for-one basis. Members of the Saul Organization are permitted under our articles of incorporation to convert Operating Partnership units into shares of common stock or acquire additional shares of common stock until the Saul Organization’s actual ownership of common stock reaches 39.9% in value of our equity securities.

The Board of Directors may waive these restrictions on a case-by-case basis. The Board has authorized the Company to grant waivers to look-through entities, such as mutual funds, in which shares of equity stock owned by the entity are treated as owned proportionally by individuals who are the beneficial owners of the entity. Even though these entities may own stock in excess of the 2.5% ownership limit, no individual beneficially or constructively would own more than 2.5%. The Board of Directors has agreed to waive the ownership limit with respect to certain mutual funds and similar investors. In addition, the Board of Directors has agreed to waive the ownership limit with respect to certain bank pledgees of shares of our common stock and units issued by the Operating Partnership and held by members of the Saul Organization.

The ownership restrictions may delay, defer or prevent a transaction or a change of our control that might involve a premium price for our equity stock or otherwise be in the stockholders’ best interest.

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We cannot assure you we will continue to pay dividends at historical rates.

Our ability to continue to pay dividends on our common stock at historical rates or to increase our common stock dividend rate will depend on a number of factors, including, among others, the following:

• our financial condition and results of future operations;

• the performance of lease terms by tenants;

• the terms of our loan covenants; and

• our ability to acquire, finance, develop or redevelop and lease additional properties at attractive rates.

If we do not maintain or increase the dividend rate on our common stock, it could have an adverse effect on the market price of our common stock and other securities. Payment of dividends on our common stock may be subject to payment in full of the dividends on any preferred stock or depositary shares and payment of interest on any debt securities we may offer.

Certain tax and anti-takeover provisions of our articles of incorporation and bylaws may inhibit a change of our control.

Certain provisions contained in our articles of incorporation and bylaws and the Maryland General Corporation Law may discourage a third party from making a tender offer or acquisition proposal to us. If this were to happen, it could delay, deter or prevent a change in control or the removal of existing management. These provisions also may delay or prevent the stockholders from receiving a premium for their stock over then-prevailing market prices. These provisions include:

• the REIT ownership limit described above;

• authorization of the issuance of our preferred stock with powers, preferences or rights to be determined by the Board of Directors;

• a staggered, fixed-size Board of Directors consisting of three classes of directors;

• special meetings of our stockholders may be called only by the Chairman of the Board, the president, by a majority of the directors or by stockholders possessing no less than 25% of all the votes entitled to be cast at the meeting;

• the Board of Directors, without a stockholder vote, can classify or reclassify unissued shares of preferred stock;

• a member of the Board of Directors may be removed only for cause upon the affirmative vote of 75% of the Board of Directors or 75% of the then-outstanding capital stock;

• advance notice requirements for proposals to be presented at stockholder meetings; and

• the terms of our articles of incorporation regarding business combinations and control share acquisitions.

We face risks relating to cybersecurity attacks that could cause loss of confidential information and other business disruptions.

We rely extensively on computer systems to process transactions and manage our business, and our business is at risk from and may be impacted by cybersecurity attacks. These could include attempts to gain unauthorized access to our data and computer systems. Attacks can be both individual and/or highly organized attempts organized by very sophisticated hacking organizations. We employ a number of measures to prevent, detect and mitigate these threats; however, there is no guarantee such efforts will be successful in preventing a cybersecurity attack. A cybersecurity attack could compromise the confidential information of our employees, tenants and vendors. A successful attack could disrupt and otherwise adversely affect our business operations.

We may amend or revise our business policies without your approval.

Our Board of Directors may amend or revise our operating policies without stockholder approval. Our investment, financing and borrowing policies and policies with respect to all other activities, such as growth, debt,

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capitalization and operations, are determined by the Board of Directors or those committees or officers to whom the Board of Directors has delegated that authority. The Board of Directors may amend or revise these policies at any time and from time to time at its discretion. A change in these policies could adversely affect our financial condition and results of operations, and the market price of our securities.

Item 1B. Unresolved Staff Comments

We have received no written comments from the Securities and Exchange Commission staff regarding our periodic or current reports in the 180 days preceding December 31, 2017 that remain unresolved.

Item 2. Properties

Overview

As of December 31, 2017, the Company is the owner, developer and operator of a real estate portfolio composed of 55 operating properties, totaling approximately 9.2 million square feet of gross leasable area (“GLA”), and three development parcels. The properties are located primarily in the Washington, D.C./Baltimore, Maryland metropolitan area. The operating property portfolio is composed of 49 neighborhood and community Shopping Centers, and six predominantly Mixed-Use Properties totaling approximately 7.7 million and 1.5 million square feet of commercial GLA, respectively. No single property accounted for more than 6.5% of the total gross leasable area. A majority of the Shopping Centers are anchored by several major tenants. Thirty-two of the Shopping Centers were anchored by a grocery store and offer primarily day-to-day necessities and services. Two retail tenants, Giant Food (4.7%), a tenant at ten Shopping Centers, and Capital One Bank (2.8%), a tenant at 18 properties, individually accounted for 2.5% or more of the Company’s total revenue for the year ended December 31, 2017.

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.

	Year ended December 31,
	2017		2016		2015		2014		2013
Base rent	$	19.51	$	18.73	$	18.52	$	18.07	$	17.77
Effective rent	$	17.69	$	16.95	$	16.81	$	16.45	$	15.98

The Company expects to hold its properties as long-term investments, and it has no maximum period for retention of any investment. It plans to selectively acquire additional income-producing properties and to expand, renovate, and improve its properties when circumstances warrant. See “Item 1. Business—Operating Strategies” and “Business—Capital Policies.”

The Shopping Centers

Community and neighborhood shopping centers typically are anchored by one or more grocery stores, discount department stores or drug stores. These anchors offer day-to-day necessities rather than apparel and luxury goods and, therefore, generate consistent local traffic. By contrast, regional malls generally are larger and typically are anchored by one or more full-service department stores.

In general, the Shopping Centers are seasoned community and neighborhood shopping centers located in well established, highly developed, densely populated, middle and upper income areas. The 2017 average estimated population within a one- and three-mile radius of the Shopping Centers is approximately 16,000 and 100,300, respectively. The 2017 average household income within the one- and three-mile radius of the Shopping Centers is approximately $111,500 and $114,400, respectively, compared to a national average of $80,700. Because the Shopping Centers generally are located in highly developed areas, management believes that there is little likelihood that significant numbers of competing centers will be developed in the future.

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The Shopping Center properties range in size from approximately 19,000 to 573,500 square feet of GLA, with six in excess of 300,000 square feet, and average approximately 158,200 square feet. A majority of the Shopping Centers are anchored by several major tenants and other tenants offering primarily day-to-day necessities and services. Thirty-two of the Shopping Centers are anchored by a grocery store.

Lease Expirations of Shopping Center Properties

The following table sets forth, by year of expiration, the aggregate amount of base rent and leasable area for leases in place at the Shopping Centers that the Company owned as of December 31, 2017, for each of the next ten years beginning with 2018, assuming that none of the tenants exercise renewal options and excluding an aggregate of 442,303 square feet of unleased space, which represented 5.7% of the GLA of the Shopping Centers as of December 31, 2017.

Lease Expirations of Shopping Center Properties

Year of Lease Expiration	Leasable Area Represented by Expiring Leases		Percentage of Leasable Area Represented by Expiring Leases		Annual Base Rent Under Expiring Leases (1)		Percentage of Annual Base Rent Under Expiring Leases		Annual Base Rent per Square Foot
2018	922,915	sf	11.9	%	$	15,331,391	11.9	%	$	16.61
2019	1,102,243		14.2	%	19,666,299		15.2	%	17.84
2020	905,736		11.7	%	16,814,589		13.0	%	18.56
2021	934,768		12.1	%	15,719,432		12.2	%	16.82
2022	976,150		12.6	%	18,175,083		14.1	%	18.62
2023	561,811		7.3	%	10,516,537		8.1	%	18.72
2024	375,296		4.8	%	7,559,612		5.9	%	20.14
2025	194,336		2.5	%	4,700,141		3.6	%	24.19
2026	262,059		3.4	%	5,018,603		3.9	%	19.15
2027	181,289		2.3	%	4,478,599		3.5	%	24.70
Thereafter	891,192		11.5	%	11,062,639		8.6	%	12.41
Total	7,307,795	sf	94.3	%	$	129,042,925	100.0	%	17.66

(1) Calculated using annualized contractual base rent payable as of December 31, 2017 for the expiring GLA, excluding expenses payable by or reimbursable from tenants.

The Mixed-Use Properties

All of the Mixed-Use Properties are located in the Washington, D.C. metropolitan area and contain an aggregate GLA of approximately 1.5 million square feet, comprised of 1.0 million and 0.1 million square feet of office and retail space, respectively, and 515 apartments. The Mixed-Use Properties represent three distinct styles of facilities, are located in differing commercial environments with distinctive demographic characteristics, and are geographically removed from one another. Accordingly, management believes that the Washington, D.C. area mixed-use properties compete for tenants in different commercial and geographic sub-markets of the metropolitan Washington, D.C. market and do not compete with one another.

601 Pennsylvania Avenue is a nine-story, 227,700 square foot Class A office building (with a small amount of street level retail space) built in 1986 and situated in a prime location in downtown Washington, D.C. Washington Square at Old Town is a 236,400 square foot Class A mixed-use office/retail complex completed in 2000 and located on a two-acre site along Alexandria’s main street, North Washington Street, in historic Old Town Alexandria, Virginia. Avenel Business Park is a 390,700 square foot research park located in the suburban Maryland,

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I-270 biotech corridor. The business park consists of twelve one-story buildings built in six phases, completed between 1981 and 2000. Clarendon Center, constructed in 2010, is a mixed-use Class A commercial and residential project located at the Clarendon Metro station in Arlington County, Virginia, which contains 171,600 square feet of office, 41,700 square feet of retail and 244 apartment units.

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 December 31, 2017, 260 apartments (95.9%) 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.

Lease Expirations of Mixed-Use Properties

The following table sets forth, by year of expiration, the aggregate amount of base rent and leasable area for commercial leases in place at the Mixed-Use Properties that the Company owned as of December 31, 2017, for each of the next ten years beginning with 2018, assuming that none of the tenants exercise renewal options and excluding an aggregate of 58,818 square feet of unleased office and retail space, which represented 5.5% of the GLA of the commercial space within the Mixed-Use Properties as of December 31, 2017.

Commercial Lease Expirations of Mixed-Use Properties

Year of Lease Expiration	Leasable Area Represented by Expiring Leases		Percentage of Leasable Area Represented by Expiring Leases		Annual Base Rent Under Expiring Leases (1)		Percentage of Annual Base Rent Under Expiring Leases		Annual Base Rent per Square Foot
2018	50,035	sf	4.6	%	$	1,825,758	4.7	%	$	36.49
2019	116,448		10.8	%	5,502,539		14.2	%	47.25
2020	170,321		15.8	%	4,124,585		10.6	%	24.22
2021	121,388		11.3	%	5,423,360		14.0	%	44.68
2022	96,594		9.0	%	3,943,093		10.1	%	40.82
2023	150,185		14.0	%	7,011,070		18.0	%	46.68
2024	64,613		6.0	%	3,070,660		7.9	%	47.52
2025	30,605		2.8	%	1,040,561		2.7	%	34.00
2026	113,521		10.5	%	4,914,922		12.6	%	43.30
2027	46,934		4.4	%	1,263,110		3.3	%	26.91
Thereafter	57,376		5.3	%	753,273		1.9	%	13.13
Total	1,018,020	sf	94.5	%	$	38,872,931	100.0	%	38.18

(1) Calculated using annualized contractual base rent payable as of December 31, 2017, for the expiring GLA, excluding expenses payable by or reimbursable from tenants.

As of December 31, 2017, the Company had 496 apartment leases, 423 of which will expire in 2018 and 73 of which will expire in 2019. Annual base rent due under these leases is $7.4 million and $3.1 million for the years ending December 31,2018 and 2019, respectively.

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Current Portfolio Properties

The following table sets forth, at the dates indicated, certain information regarding the Current Portfolio Properties:

Property	Location	Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of December 31, (1)
					2017		2016		2015		2014		2013		Anchor / Significant Tenants
Shopping Centers
Ashburn Village	Ashburn, VA	221,585	1994-2006	26.4	94	%	91	%	95	%	93	%	91	%	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	%	95	%	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	%	98	%	100	%	Panera Bread, Party City, Petco, Capital One Bank
Briggs Chaney MarketPlace	Silver Spring, MD	194,258	2004	18.2	100	%	98	%	99	%	99	%	99	%	Global Foods, Ross Dress For Less, Family Dollar, Advance Auto Parts, McDonald's, Wendy’s
Broadlands Village	Ashburn, VA	174,734	2003-2006	24.0	77	%	100	%	98	%	97	%	87	%	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	%	91	%	91	%	Safeway, CVS Pharmacy, Starbucks, McDonalds
Cranberry Square	Westminster, MD	141,450	2011	18.9	100	%	100	%	97	%	97	%	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	87	%	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	%	98	%	100	%	100	%	Burlington Coat Factory, Bed Bath & Beyond, Staples, Petco, The Tile Shop, Lakeshore Learning Center, Dollar Tree, Verizon
Germantown	Germantown, MD	18,982	1992	2.7	100	%	100	%	100	%	86	%	81	%	CVS Pharmacy. Jiffy Lube
The Glen	Woodbridge, VA	136,440	1994 (2005)	14.7	96	%	97	%	95	%	94	%	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	%	100	%	98	%	96	%	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, Kool Smiles
Hunt Club Corners	Apopka, FL	105,812	2006	13.9	93	%	97	%	94	%	94	%	97	%	Publix, Pet Supermarket, Sprint/Radio Shack, Hallmark
Jamestown Place	Altamonte Springs, FL	96,341	2005	10.9	93	%	95	%	90	%	92	%	89	%	Publix, Carrabas Italian Grill

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Property	Location	Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of December 31, (1)
					2017		2016		2015		2014		2013		Anchor / Significant Tenants
Shopping Centers (Continued)
Kentlands Square I	Gaithersburg, MD	114,381	2002	11.5	98	%	98	%	100	%	100	%	100	%	Lowe’s Home Improvement Center, Chipotle
Kentlands Square II	Gaithersburg, MD	246,965	2011, 2013	23.4	57	%	100	%	100	%	98	%	96	%	Giant Food, Party City, Panera Bread, Not Your Average Joe’s, Hallmark, Chick-Fil-A, Coal Fire Pizza, Tommy Joe's, Cava Mezze Grill, Zengo Cycle, Fleet Feet
Kentlands Place	Gaithersburg, MD	40,697	2005	3.4	93	%	100	%	96	%	100	%	100	%	Elizabeth Arden’s Red Door Salon, Bonefish Grill
Lansdowne Town Center	Leesburg, VA	189,422	2006	23.4	93	%	88	%	89	%	97	%	97	%	Harris Teeter, CVS Pharmacy, Panera Bread, 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	%	100	%	100	%	CVS Pharmacy, Party Depot, FedEx Office, Capital One Bank, Five Guys
Lumberton Plaza	Lumberton, NJ	192,718	1975 (1992/96)	23.3	84	%	91	%	90	%	94	%	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	67	%	69	%	89	%	80	%	92	%	McDonald's, Dunkin' Donuts, 7-Eleven
Shops at Monocacy	Frederick, MD	109,144	2004	13.0	99	%	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	%	99	%	92	%	95	%	87	%	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	%	98	%	97	%	Safeway, Advance Auto Parts, Dollar Tree, McDonalds, Wendy’s, Ledo’s Pizza, Capital One Bank
Olney	Olney, MD	53,765	1975 (1990)	3.7	92	%	90	%	97	%	92	%	93	%	Rite Aid, Olney Grill, Ledo’s Pizza, Popeye’s, Sardi's Fusion
Orchard Park	Dunwoody, GA	87,365	2007	10.5	98	%	97	%	98	%	98	%	94	%	Kroger, Subway, Jett Ferry Dental
Palm Springs Center	Altamonte Springs, FL	126,446	2005	12.0	94	%	100	%	98	%	91	%	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 Pike/5541 Nicholson Lane	Rockville, MD	40,249	2010/2012	3.0	61	%	63	%	63	%	63	%	70	%	Dr. Boyd's Pet Resort, Metropolitan Emergency Animal Clinic (MEAC)
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	%	95	%	97	%	97	%	Publix, Earth Origins Health Food, Petco, Planet Fitness, Vision Works
Marketplace at Sea Colony	Bethany Beach, DE	21,677	2008	5.1	100	%	94	%	95	%	91	%	91	%	Seacoast Realty, Armand’s Pizza, Candy Kitchen, Summer Salts, Fin's Alehouse
Seven Corners	Falls Church, VA	573,481	1973 (1994)	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

31

Property	Location		Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of December 31, (1)
						2017		2016		2015		2014		2013		Anchor / Significant Tenants
Shopping Centers (Continued)
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, Sprint, Five Guys, Unleashed (Petco), Mod Pizza, Jersey Mike's
Shops at Fairfax	Fairfax, VA		68,762	1975 (1993/99)	6.7	97	%	97	%	100	%	98	%	100	%	Super H Mart
Smallwood Village Center	Waldorf, MD		173,341	2006	25.1	83	%	80	%	69	%	72	%	74	%	Safeway, CVS Pharmacy, Family Dollar
Southdale	Glen Burnie, MD		486,335	1972 (1986)	39.8	99	%	98	%	95	%	89	%	87	%	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, Chipotle
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	%	91	%	94	%	94	%	Maxway, Big Lots, Emory Clinic, Dollar Tree, Shoe Land
Thruway	Winston-Salem, NC		366,693	1972 (1997)	31.5	95	%	98	%	96	%	97	%	96	%	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, McDonalds, 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	%	96	%	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	%	100	%	90	%	88	%	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	100	%	100	%	99	%	100	%	100	%	Giant Food, Sears, Walgreens, Boston Market, Sarku
Total Shopping Centers		(3)	7,750,098		753.2	94.3	%	96.1	%	97.0	%	96.5	%	95.9	%

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Property	Location		Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of December 31, (1)
						2017			2016			2015			2014			2013			Anchor / Significant Tenants
Mixed-Use Properties
Avenel Business Park	Gaithersburg, MD		390,683	1981-2000	37.1	88	%		83	%		84	%		88	%		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 and Herbert Bank, Bracket Room, South Block Blends, 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	%		99	%		98	%		98	%
Park Van Ness-Residential (271 units)	Washington, DC		214,600	2016	1.4	96	%		73	%		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	%		98	%		98	%		96	%		95	%		National Gallery of Art, American Assn. of Health 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	94	%		89	%		95	%		82	%		86	%		Freeman Expositions, Academy of Managed Care Pharmacy, Cooper Carry, National PACE Association, Marketing General, Alexandria Economic Development, Trader Joe’s, FedEx Office, Talbots, Starbucks, Virginia ABC
Total Mixed Use Properties		(3)	1,480,109		43.4	94.5	%	(2)	86.5	%	(2)	91.1	%	(2)	90.8	%	(2)	90.5	%	(2)
Total Portfolio		(3)	9,230,207		796.6	94.3	%	(2)	94.7	%	(2)	95.5	%	(2)	95.0	%	(2)	94.5	%	(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 60,000 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 square feet 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 December 31, 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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Item 3. Legal Proceedings

In the normal course of business, the Company is involved in litigation, including litigation arising out of the collection of rents, the enforcement or defense of the priority of its security interests, and the continued development and marketing of certain of its real estate properties. In the opinion of management, litigation that is currently pending should not have a material adverse impact on the financial condition or future operations of the Company.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Shares of Saul Centers common stock are listed on the New York Stock Exchange under the symbol “BFS”. The composite high and low closing sale prices for the Company’s shares of common stock were reported by the New York Stock Exchange for each quarter of 2017 and 2016 as follows:

Period	Share Price
	High		Low
October 1, 2017 – December 31, 2017	$	65.30	$	60.09
July 1, 2017 – September 30, 2017	$	62.76	$	57.58
April 1, 2017 – June 30, 2017	$	64.59	$	56.33
January 1, 2017 - March 31, 2017	$	66.80	$	60.57
October 1, 2016 – December 31, 2016	$	68.23	$	58.79
July 1, 2016 – September 30, 2016	$	68.58	$	61.28
April 1, 2016 – June 30, 2016	$	61.71	$	51.59
January 1, 2016 - March 31, 2016	$	53.50	$	47.77

On February 20, 2018, the closing price was $49.46 per share.

Holders

The approximate number of holders of record of the common stock was 171 as of February 20, 2018.

Dividends and Distributions

Under the Code, REITs are subject to numerous organizational and operating requirements, including the requirement to distribute at least 90% of REIT taxable income. The Company distributed more than the required amount in 2017 and 2016. Distributions by the Company to common stockholders and holders of limited partnership units in the Operating Partnership were $59.8 million and $53.0 million in 2017 and 2016, respectively. Distributions to preferred stockholders were $12.4 million in each of 2017 and 2016. See Notes to Consolidated Financial Statements, No. 13, “Distributions.” The Company may or may not elect to distribute in excess of 90% of REIT taxable income in future years.

The Company’s estimate of cash flow available for distributions is believed to be based on reasonable assumptions and represents a reasonable basis for setting distributions. However, the actual results of operations of the Company will be affected by a variety of factors, including but not limited to actual rental revenue, operating expenses of the Company, interest expense, general economic conditions, federal, state and local taxes (if any), unanticipated capital expenditures, the adequacy of reserves and preferred dividends. While the Company intends to continue paying regular quarterly distributions, any future payments will be determined solely by the Board of Directors and will depend on a number of factors, including cash flow of the Company, its financial condition and capital requirements, the annual distribution amounts required to maintain its status as a REIT under the Code, and such other factors as the Board of Directors deems relevant. We are obligated to pay regular quarterly distributions to holders of depositary shares, prior to distributions on the common stock.

The Company paid four quarterly distributions totaling $2.04, $1.84, and $1.69 per common share during 2017, 2016 and 2015, respectively. The annual distribution amounts paid by the Company exceeded the distribution amounts required for tax purposes. Distributions to the extent of our current and accumulated earnings and profits for federal income tax purposes generally will be taxable to a stockholder as ordinary dividend income. Distributions in excess of current and accumulated earnings and profits will be treated as a nontaxable reduction of

35

the stockholder’s basis in such stockholder’s shares, to the extent thereof, and thereafter as taxable gain. Distributions that are treated as a reduction of the stockholder’s basis in its shares will have the effect of deferring taxation until the sale of the stockholder’s shares. Of the $2.04 per common share dividend paid in 2017, 83.3% was treated as a taxable dividend and 16.7% represented a return of capital. Of the $1.84 per common share dividend paid in 2016, 95% was treated as a taxable dividend and 5% represented a return of capital. The 2015 common dividends were treated as taxable dividends. No assurance can be given regarding what portion, if any, of distributions in 2018 or subsequent years will constitute a return of capital for federal income tax purposes. All of the preferred stock dividends paid are treated as ordinary dividend income.

Acquisition of Equity Securities by the Saul Organization

Through participation in the Company’s Dividend Reinvestment Plan, during the quarter ended December 31, 2017, (a) B. Francis Saul II, the Company’s Chairman of the Board and Chief Executive Officer, (b) his spouse, (c) B. F. Saul Real Estate Investment Trust and B. F. Saul Company, for each of which Mr. B. F. Saul II serves as either President or Chairman, and (d) B. F. Saul Property Company, Avenel Executive Park Phase II, LLC, SHLP Unit Acquisition Corp. and Dearborn, LLC, which are wholly-owned subsidiaries of either B. F. Saul Company or B. F. Saul Real Estate Investment Trust, acquired an aggregate of 53,981 shares of common stock and 15,596 limited partnership units at an average price of $59.50 per share/unit, in respect of the October 31, 2017 dividend distribution.

No shares were acquired pursuant to a publicly announced plan or program.

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Performance Graph

Rules promulgated under the Exchange Act require the Company to present a graph comparing the cumulative total stockholder return on its Common Stock with the cumulative total stockholder return of (i) a broad equity market index, and (ii) a published industry index or peer group. The following graph compares the cumulative total stockholder return of the Company’s common stock, based on the market price of the common stock and assuming reinvestment of dividends, with the National Association of Real Estate Investment Trust Equity Index (“NAREIT Equity”), the S&P 500 Index (“S&P 500”) and the Russell 2000 Index (“Russell 2000”). The graph assumes the investment of $100 on December 31, 2012.

	Period Ended
Index	12/31/2012		12/31/2013		12/31/2014		12/31/2015		12/31/2016		12/31/2017
Saul Centers, Inc. 1		$100.00		$115.11		$142.46		$131.79		$176.88		$163.80
S&P 500 2		$100.00		$132.39		$150.51		$152.59		$170.84		$208.14
Russell 2000 3		$100.00		$138.82		$145.62		$139.19		$168.85		$225.23
NAREIT Equity 4		$100.00		$102.47		$133.35		$137.61		$149.33		$157.14
1 Source: S&P Capital I.Q.
2 Source: Bloomberg
3 Source: FTSE Russell
4 Source: National Association of Real Estate Investment Trusts

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Item 6. Selected Financial Data

The selected financial data of the Company contained herein has been derived from the consolidated financial statements of the Company. The data should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements included elsewhere in this report.

SELECTED FINANCIAL DATA
	Years Ended December 31,
(In thousands, except per share data)	2017			2016			2015			2014			2013
Operating Data:
Total revenue	$	227,285		$	217,070		$	209,077		$	207,092		$	197,897
Total operating expenses	166,687			161,357			156,147			155,163			162,628
Operating income	60,598			55,713			52,930			51,929			35,269
Non-operating income:
Change in fair value of derivatives	70			(6		)	(10		)	(10		)	(7		)
Loss on early extinguishment of debt	—			—			—			—			(497		)
Gains on sales of properties	—			1,013			11			6,069			—
Gain on casualty settlements	—			—			—			—			77
Net income	60,668			56,720			52,931			57,988			34,842
Income attributable to noncontrolling interests	(12,411		)	(11,441		)	(10,463		)	(11,045		)	(3,970		)
Net income attributable to Saul Centers, Inc.	48,257			45,279			42,468			46,943			30,872
Preferred stock redemption	—			—			—			(1,480		)	(5,228		)
Preferred dividends	(12,375		)	(12,375		)	(12,375		)	(13,361		)	(13,983		)
Net income available to common stockholders	$	35,882		$	32,904		$	30,093		$	32,102		$	11,661
Per Share Data (diluted):
Net income available to common stockholders	$	1.63		$	1.52		$	1.42		$	1.54		$	0.57
Basic and Diluted Shares Outstanding:
Weighted average common shares - basic	21,901			21,505			21,127			20,772			20,364
Effect of dilutive options	107			110			69			49			37
Weighted average common shares - diluted	22,008			21,615			21,196			20,821			20,401
Weighted average convertible limited partnership units	7,503			7,375			7,253			7,156			6,929
Weighted average common shares and fully converted limited partnership units - diluted	29,511			28,990			28,449			27,977			27,330
Dividends Paid:
Cash dividends to common stockholders (1)	$	44,576		$	39,472		$	35,645		$	32,346		$	29,205
Cash dividends per share	$	2.04		$	1.84		$	1.69		$	1.56		$	1.44
Balance Sheet Data:
Real estate investments (net of accumulated depreciation)	$	1,315,034		$	1,242,534		$	1,197,340		$	1,163,542		$	1,094,776
Total assets	1,422,452			1,343,025			1,295,408			1,257,113			1,189,000
Total debt, including accrued interest	958,622			903,709			869,652			850,727			813,653
Preferred stock	180,000			180,000			180,000			180,000			180,000
Total equity	393,103			373,249			353,727			339,257			315,126

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SELECTED FINANCIAL DATA
	Years Ended December 31,
(In thousands, except per share data)	2017			2016			2015			2014			2013
Other Data
Cash flow provided by (used in):
Operating activities	$	103,450		$	89,090		$	88,896		$	86,568		$	73,527
Investing activities	$	(113,306	)	$	(86,274	)	$	(69,587	)	$	(83,589	)	$	(26,034	)
Financing activities	$	12,442		$	(4,497	)	$	(21,434	)	$	(8,148	)	$	(42,329	)
Funds from operations (2):
Net income	$	60,668		$	56,720		$	52,931		$	57,988		$	34,842
Real property depreciation and amortization	45,694			44,417			43,270			41,203			49,130
Gain on property dispositions and casualty settlements	—			(1,013		)	(11		)	(6,069		)	(77		)
Funds from operations	106,362			100,124			96,190			93,122			83,895
Preferred stock redemption	—			—			—			(1,480		)	(5,228		)
Preferred dividends	(12,375		)	(12,375		)	(12,375		)	(13,361		)	(13,983		)
Funds from operations available to common stockholders and noncontrolling interests	$	93,987		$	87,749		$	83,815		$	78,281		$	64,684

1) During 2017, 2016, 2015, 2014, and 2013, shareholders reinvested $15.8 million, $10.3 million,

$10.6 million, $9.3 million and $20.7 million, respectively, in newly issued common stock through the Company’s dividend reinvestment plan.

2) Funds from operations (FFO) is a non-GAAP financial measure and is defined in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Funds From Operations.”

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

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) begins with the Company’s primary business strategy to give the reader an overview of the goals of the Company’s business. This is followed by a discussion of the critical accounting policies that the Company believes are important to understanding the assumptions and judgments incorporated in the Company’s reported financial results. The next section, beginning on page 44, discusses the Company’s results of operations for the past two years. Beginning on page 49, the Company provides an analysis of its liquidity and capital resources, including discussions of its cash flows, debt arrangements, sources of capital and financial commitments. Finally, on page 57, the Company discusses funds from operations, or FFO, which is a non-GAAP financial measure of performance of an equity REIT used by the REIT industry.

The MD&A should be read in conjunction with the other sections of this Annual Report on Form 10-K, including the consolidated financial statements and notes thereto appearing in Item 8 of this report. Historical results set forth in Selected Financial Information, the Consolidated Financial Statements and Supplemental Data included in Item 6 and Item 8 and this section should not be taken as indicative of the Company’s future operations.

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 Center 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

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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 which leases are not otherwise expiring, management selectively attempts to increase cash flow through a variety of means, or in connection with renovations or relocations, 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 Company’s redevelopment and renovation objective is to selectively and opportunistically redevelop and renovate its properties, by replacing below-market-rent leases 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 acquisitions, 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 December 31, 2017, 260 apartments (95.9%) 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.

In 2014, in separate transactions, the Company purchased three properties, with approximately 57,400 square feet of retail space, for an aggregate $25.2 million. The three properties are adjacent to an existing property on the east side of Rockville Pike near the Twinbrook Metro station. Combined, the four properties total 10.3 acres and are zoned for up to 1.2 million square feet of rentable mixed-use space. The Company is actively engaged in a plan for redevelopment but has not committed to any timetable for commencement of construction.

The Company owns properties on the east and west sides of Rockville Pike near the White Flint Metro station which combined total 7.6 acres which are zoned for a development potential of up to 1.6 million square feet of mixed-use space. The Company is actively engaged in a plan for redevelopment but has not committed to any timetable for commencement of construction.

In January 2016, the Company terminated a 16,500 square foot lease at 11503 Rockville Pike and received a $3.0 million lease termination fee which was recognized as revenue in the first quarter. The space was previously occupied by an office supply store that had vacated in mid 2014 and the lease was scheduled to expire in 2019. The termination fee revenue was partially offset by the loss of approximately $1.1 million in rental revenue over the remainder of 2016. The Company executed leases with two replacement tenants, whose occupancy and rent commencement occurred in 2017. While the Company continues to plan for a mixed-use development at this site and its neighboring Metro Pike Center, the initial phases of this development are expected to be on the west side of Rockville Pike at Metro Pike Center. The Company has not committed to any timetable for commencement of construction.

From 2014 through 2016, in separate transactions, the Company purchased four adjacent properties on North Glebe Road in Arlington, Virginia, for an aggregate $54.0 million. The Company is developing approximately 490 residential units and 60,000 square feet of retail space, on 2.8 acres of land. Excavation, sheeting and shoring are substantially complete and construction is proceeding on the first three levels of the below grade parking structure. 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. In 2017, the Company closed on a $157.0 million construction-to-permanent loan, the proceeds of which will be used to partially finance the project. Leases have been executed for a 41,500 square foot Target and 9,000 square feet of retail shop space, resulting in approximately 84% of the retail space being leased.

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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 Foods, for that space, which commenced operations in March 2017. The Company terminated the lease with Albertson's/Safeway at Broadlands and has executed a lease with Aldi Food Market for 20,000 square feet of this space which opened in November 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. The purchase was funded with a new $40.0 million mortgage loan and through the Company's credit line facility. The Company expects to begin construction on a 16,000 square foot small shop expansion in the Spring of 2018, with delivery projected in late 2018. The total development cost is expected to be approximately $5.7 million. Lease negotiations are in progress for over 50% of the space.

In light of the limited amount of quality properties for sale and the escalated pricing of properties that the Company has been presented with or has inquired about over the past year, management believes acquisition opportunities for investment in existing and new Shopping Center and Mixed-Use Properties in the near future is uncertain. Because of its conservative capital structure, including its cash and capacity under its revolving credit facility, management believes that the Company is positioned to take advantage of additional investment opportunities as attractive properties are identified and market conditions improve. (See “Item 1. Business - Capital Policies”). It is management’s view that several of the sub-markets in which the Company operates have, or are expected to have in the future, attractive supply/demand characteristics. The Company will continue to evaluate acquisition, development and redevelopment as integral parts of its overall business plan.

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 commercial leasing percentage, on a comparable property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, declined to 94.2% at December 31, 2017, from 95.5% at December 31, 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 December 31, 2017, amortizing fixed-rate mortgage debt with staggered maturities from 2019 to 2035 represented approximately 92.2% of the Company’s notes payable, thus minimizing refinancing risk. The Company’s variable-rate debt consists of a $14.1 million bank term loan secured by the Metro Pike Center, which was repaid in full in January 2018, and $61.0 million outstanding under the unsecured revolving line of credit. As of December 31, 2017, the Company has loan availability of approximately $213.8 million under its $275.0 million unsecured revolving line of credit.

The Operating Partnership entered into a Credit Agreement dated January 26, 2018, by and among the Operating Partnership, as Borrower, Wells Fargo Bank, National Association, as Administrative Agent, Capital One, National Association, as Syndication Agent, Wells Fargo Securities, LLC and Capital One, National Association, as Joint Lead Arrangers, Wells Fargo Securities, LLC, as Sole Bookrunner and Wells Fargo Bank, National Association, Capital One, N.A., U.S. Bank National Association, TD Bank, N.A., Regions Bank and Associated Bank, National Association, as Lenders (the “New Credit Agreement”).

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The New Credit Agreement replaces the Credit Agreement dated June 24, 2014, by and among the Operating Partnership, as Borrower, Wells Fargo Bank, National Association, as Administrative Agent, JP Morgan Chase Bank, N.A., as Syndication Agent, Wells Fargo Securities, LLC, as Sole Lead Arranger and Sole Bookrunner and Wells Fargo Bank, National Association, JP Morgan Chase Bank, N.A., Capital One, N.A. and Citizens Bank of Pennsylvania as Lenders (as amended, the “Original Agreement”). The Original Agreement consisted of a $275,000,000 unsecured revolving credit facility (the “Original Facility”) with a maturity date of June 23, 2018 and bore interest at a variable rate equal to one-month LIBOR plus a spread of 145 basis points to 200 basis points, as determined by certain leverage tests. As of the date the Original Facility was replaced, the applicable spread was 1.45%.

The New Credit Agreement consists of a $400,000,000 credit facility (the “New Facility”), of which $325,000,000 is a revolving credit facility (the “Revolving Line”) and $75,000,000 is a term loan (the “Term Loan”). The Revolving Line matures on January 26, 2022, which term may be extended by the Company for one additional year, subject to satisfaction of certain conditions. The Term Loan matures on January 26, 2023, and may not be extended.

In general, loan availability under the New Facility is primarily determined by operating income from the Company’s existing unencumbered properties. Interest accrues at a rate of LIBOR plus a spread of 135 basis points to 195 basis points under the Revolving Line, and 130 basis points to 190 basis points under the Term Loan, each as determined by certain leverage tests. As of January 26, 2018, the applicable spread for borrowings is 135 basis points under the Revolving Line and 130 basis points under the Term Loan.

The Company and certain subsidiaries of the Operating Partnership and the Company have guaranteed the payment obligations of the Partnership under the New Facility.

Although it is management’s present intention to concentrate future acquisition and development activities on community and neighborhood shopping centers and office properties in the Washington, D.C. metropolitan area, the Company may, in the future, also acquire other types of real estate in other areas of the country as opportunities present themselves. 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.

Critical Accounting Policies

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

Real Estate Investments

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

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

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value of all cash flows expected to be generated by the property including an initial lease up period. 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 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 a below market lease component is recorded as deferred income and accreted as additional lease revenue over the remaining contractual lease period. If the fair value of the below market lease intangible includes fair value associated with a renewal option, such amounts are not accreted until the renewal option is exercised. If the renewal option is not exercised the value is recognized at that time. The fair value of above market lease intangibles is recorded as a deferred asset and is amortized as a reduction of lease 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 value of the intangibles are amortized over the life of the customer relationship. From time to time the Company may purchase a property for future development purposes. The property may be improved with an existing structure that would be demolished as part of the development. In such cases, the fair value of the building may be determined based only on existing leases and not include estimated cash flows related to future leases. Acquisition-related transaction costs are either (a) expensed as incurred when related to business combinations or (b) capitalized to land and/or building when related to asset acquisitions.

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 in identifying impairment indicators 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 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 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, the assets are placed in service, rental income, direct operating expenses, and depreciation associated with such properties are included in current operations. 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 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.

Deferred Leasing Costs

Certain initial direct costs incurred by the Company in negotiating and consummating successful commercial leases are capitalized and amortized over the term of the leases. Deferred leasing costs consist of

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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 acquisition properties.

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 throughout the term of the lease. 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 when the expenses are incurred. Rental income based on a tenant’s revenue, known as percentage rent, is accrued when a tenant reports sales that exceed a specified 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.

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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 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 operating income under GAAP to same property revenue and operating income for the indicated periods. The same property results include 48 Shopping Centers and five Mixed-Use properties for each period.

Same property revenue

(in thousands)	Year ended December 31,
	2017			2016
Total revenue	$	227,285		$	217,070
Less: Interest income	(80		)	(52		)
Less: Acquisitions, dispositions and development properties	(13,746		)	(5,364		)
Total same property revenue	$	213,459		$	211,654
Shopping centers	$	160,393		$	158,044
Mixed-Use properties	53,066			53,610
Total same property revenue	$	213,459		$	211,654

The $1.8 million increase in same property revenue for 2017 compared to 2016 was primarily due to (a) a $0.21 per square foot increase in base rent ($1.8 million), exclusive of the net impact of a 2017 lease termination at Broadlands and a 2016 lease termination at 11503 Rockville Pike, (b) increased expense recovery income ($0.7 million), (c) the net impact of a 2017 lease termination at Broadlands and a 2016 lease termination at 11503 Rockville Pike ($0.1 million), partially offset by (d) lower other income ($0.7 million), exclusive of the termination fees at 11503 Rockville Pike and Broadlands, and (e) a 3,833 square foot decrease in leased space ($0.1 million), exclusive of the net impact of a 2017 lease termination at Broadlands and a 2016 lease termination at 11503 Rockville Pike.

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Same property operating income

	Year Ended December 31,
(In thousands)	2017			2016
Net income	$	60,668		$	56,720
Add: Interest expense and amortization of deferred debt costs	47,225			45,683
Add: General and administrative	18,176			17,496
Add: Depreciation and amortization of deferred leasing costs	45,694			44,417
Add: Acquisition related costs	—			60
Add: Change in fair value of derivatives	(70		)	6
Less: Gains on property dispositions	—			(1,013		)
Less: Interest income	(80		)	(52		)
Property operating income	171,613			163,317
Less: Acquisitions, dispositions & development property	(8,978		)	(1,760		)
Total same property operating income	$	162,635		$	161,557
Shopping centers	$	127,096		$	124,470
Mixed-Use properties	35,539			37,087
Total same property operating income	$	162,635		$	161,557

Same property operating income increased $1.1 million for 2017 compared to 2016 due primarily to

(a) a $0.21 per square foot increase in base rent ($1.8 million), exclusive of the net impact of a 2017 lease termination at Broadlands and a 2016 lease termination at 11503 Rockville Pike, (b) increased expense recovery income ($0.7 million), (c) lower property operating expenses ($0.4 million) and (d) the net impact of a 2017 lease termination at Broadlands and a 2016 lease termination at 11503 Rockville Pike ($0.1 million), partially offset by (e) higher real estate taxes ($1.5 million) and (f) lower other income ($0.7 million), exclusive of the termination fees at 11503 Rockville Pike and Broadlands.

The following is a discussion of the components of revenue and expense for the entire Company.

Revenue
(Dollars in thousands)	Year ended December 31,						Percentage Change
	2017		2016		2015		2017 from 2016		2016 from 2015
Base rent	$	181,141	$	172,381	$	168,303	5.1	%	2.4	%
Expense recoveries	35,347		34,269		32,911		3.1	%	4.1	%
Percentage rent	1,458		1,379		1,608		5.7	%	(14.2	)%
Other	9,339		9,041		6,255		3.3	%	44.5	%
Total revenue	$	227,285	$	217,070	$	209,077	4.7	%	3.8	%

Base rent includes $0.5 million, $1.8 million and $2.4 million, for the years 2017, 2016, and 2015, respectively, to recognize base rent on a straight-line basis. In addition, base rent includes $1.7 million, $1.8 million and $1.8 million, for the years 2017, 2016, and 2015, respectively, to recognize income from the amortization of in-place leases.

Total revenue increased 4.7% in 2017 compared to 2016 primarily due to (a) an $0.84 per square foot increase in base rent ($7.3 million), exclusive of the net impact of a 2017 lease termination at Broadlands and a 2016 lease termination at 11503 Rockville Pike, (b) higher residential base rent ($4.8 million), (c) higher expense

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recoveries ($1.1 million), and (d) the net impact of a 2017 lease termination at Broadlands and a 2016 lease termination at 11503 Rockville Pike ($0.1 million) partially offset by (e) a 144,327 square foot decrease in leased space ($2.7 million), exclusive of the net impact of a 2017 lease termination at Broadlands and a 2016 lease termination at 11503 Rockville Pike and (f) lower other income ($0.3 million), exclusive of the termination fees at 11503 Rockville Pike and Broadlands. Total revenue increased 3.8% in 2016 compared to 2015 primarily due to (a) a $0.32 per square foot increase in base rent ($2.8 million) exclusive of the impact of a lease termination at 11503 Rockville Pike, (b) higher residential base rent ($2.3 million), (c) the impact of a lease termination at 11503 Rockville Pike ($1.9 million), and (d) higher expense recoveries ($1.4 million) partially offset by (e) a 4,185 square foot decrease in leased space ($0.1 million) exclusive of the impact of a lease termination at 11503 Rockville Pike. A discussion of the components of revenue follows.

Base rent

The $8.8 million increase in base rent in 2017 compared to 2016 was attributable to (a) a $0.78 per square foot increase in base rent ($6.8 million) and (b) higher residential base rent ($4.8 million) partially offset by (c) a 144,327 square foot decrease in leased space ($2.7 million). The $4.1 million increase in base rent in 2016 compared to 2015 was attributable to (a) a $0.21 per square foot increase in base rent ($1.8 million) and (b) higher residential base rent ($2.3 million) partially offset by (c) a 4,185 square foot decrease in leased space ($0.1 million).

Expense recoveries

Expense recovery income increased $1.1 million in 2017 compared to 2016 primarily due to higher real estate tax expense. Expense recovery income increased $1.4 million in 2016 compared to 2015 primarily due to higher real estate tax expense.

Other revenue

Other revenue increased $0.3 million in 2017 compared to 2016. Other revenue increased $2.8 million in 2016 compared to 2015 due primarily to a $3.0 million lease termination fee at 11503 Rockville Pike.

Operating expenses
(Dollars in thousands)	Year ended December 31,						Percentage Change
	2017		2016		2015		2017 from 2016		2016 from 2015
Property operating expenses	$	27,689	$	27,527	$	26,565	0.6	%	3.6	%
Provision for credit losses	906		1,494		915		(39.4	)%	63.3	%
Real estate taxes	26,997		24,680		23,663		9.4	%	4.3	%
Interest expense and amortization of deferred debt costs	47,225		45,683		45,165		3.4	%	1.1	%
Depreciation and amortization of deferred leasing costs	45,694		44,417		43,270		2.9	%	2.7	%
General and administrative	18,176		17,496		16,353		3.9	%	7.0	%
Acquisition related costs	—		60		84		(100.0	)%	(28.6	)%
Predevelopment expenses	—		—		132		NA		(100.0	)%
Total operating expenses	$	166,687	$	161,357	$	156,147	3.3	%	3.3	%

Total operating expenses increased 3.3% in 2017 compared to 2016. Total operating expenses increased 3.3% in 2016 compared to 2015.

Property operating expenses

Property operating expenses increased $0.2 million in 2017 compared to 2016. Property operating expenses increased $1.0 million in 2016 compared to 2015.

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Provision for credit losses

The provision for credit losses represents the Company’s estimate of amounts owed by tenants that may not be collectible and was 0.40%, 0.69%, and 0.44% for 2017, 2016, and 2015, respectively. The increase in 2016 relates primarily to a single shopping center tenant.

Real estate taxes

Real estate taxes increased $2.3 million in 2017 compared to 2016 primarily due to (a) Park Van Ness ($0.7 million), (b) Burtonsville Town Square ($0.4 million) and (c) small increases at various properties throughout the portfolio. Real estate taxes increased $1.0 million in 2016 compared to 2015 primarily due to (a) Park Van Ness ($0.3 million) and (b) small increases throughout the remainder of the portfolio.

Interest expense and amortization of deferred debt costs

Interest expense and amortization of deferred debt costs increased by $1.5 million in 2017 compared to 2016 primarily due to (a) Burtonsville Town Square ($2.2 million) and (b) Park Van Ness ($0.7 million) partially offset by (c) higher capitalized interest ($1.0 million) and (d) lower average balances of mortgage debt throughout the portfolio ($0.4 million).

Depreciation and amortization

Depreciation and amortization of deferred leasing costs increased by $1.3 million in 2017 compared to 2016 primarily due to (a) Burtonsville Town Square ($1.4 million) and (b) Park Van Ness ($1.2 million) partially offset by (c) lower expense at North Glebe Road ($0.9 million) and (d) lower expense at 1500 Rockville Pike ($0.3 million). Depreciation and amortization of deferred leasing costs increased $1.1 million in 2016 compared to 2015 primarily due to (a) Park Van Ness ($1.8 million) partially offset by (b) lower expense at Germantown ($0.7 million).

General and administrative

General and administrative costs increased $0.7 million in 2017 compared to 2016 primarily due to (a) increased salary and benefit expense ($0.6 million). General and administrative costs increased $1.1 million in 2016 compared to 2015 primarily due to (a) increased salary and benefit expense ($1.0 million) and (b) increased stock option expense ($0.2 million).

Acquisition related costs

Acquisition related costs in 2016 totaling approximately $0.1 million relate to the purchase of a retail pad site adjacent to the Company's existing Thruway Shopping Center. Acquisition related costs in 2015 totaling approximately $0.1 million relate to the purchase of 726 N. Glebe Road.

Predevelopment expenses

Predevelopment expenses include lease termination costs and demolition costs which are related to development projects and do not meet the criteria to be capitalized.

Gain on Sales of Properties

Gain on sale of property in 2016 resulted from the December 2016 sale of Crosstown Business Center.

Impact of Inflation

Inflation has remained relatively low during 2017 and 2016. The impact of rising operating expenses due to inflation on the operating performance of the Company’s portfolio would have been mitigated by terms in substantially all of the Company’s leases which contain provisions designed to increase revenues to offset the adverse impact of inflation on the Company’s results of operations. These provisions include upward periodic

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adjustments in base rent due from tenants, usually based on a stipulated increase and to a lesser extent on a factor of the change in the consumer price index, commonly referred to as the CPI.

In addition, substantially all of the Company’s properties are leased to tenants under long-term leases, which provide for reimbursement of operating expenses by tenants. These leases tend to reduce the Company’s exposure to rising property expenses due to inflation. Inflation and increased costs may have an adverse impact on the Company’s tenants if increases in their operating expenses exceed increases in their revenue.

Liquidity and Capital Resources

Cash and cash equivalents were $10.9 million and $8.3 million at December 31, 2017 and 2016, respectively. The changes in cash and cash equivalents during the years ended December 31, 2017 and 2016 were attributable to operating, investing and financing activities, as described below.

(in thousands)	Year Ended December 31,
	2017			2016
Net cash provided by operating activities	$	103,450		$	89,090
Net cash used in investing activities	(113,306		)	(86,274		)
Net cash used in financing activities	12,442			(4,497		)
Increase (decrease) in cash and cash equivalents	$	2,586		$	(1,681	)

Operating Activities

Net cash provided by operating activities increased $14.4 million to $103.5 million for the year ended December 31, 2017 compared to $89.1 million for the year ended December 31, 2016. Net cash provided by operating activities represents, in each year, cash received primarily from rental income, plus other income, less property operating expenses, normal recurring general and administrative expenses and interest payments on debt outstanding.

Investing Activities

Net cash used in investing activities increased $27.0 million to $113.3 million for the year ended December 31, 2017 from $86.3 million for the year ended December 31, 2016. Investing activities in 2017 primarily reflect tenant improvements and capital expenditures ($17.7 million), the Company's development activities ($22.8 million) and the acquisition of various retail real estate assets ($79.5 million). Net cash used in investing activities increased $16.7 million to $86.3 million for the year ended December 31, 2016 from $69.6 million for the year ended December 31, 2015. Investing activities in 2016 primarily reflect (a) tenant improvements and capital expenditures ($15.6 million), (b) the Company's development activities ($27.2 million) and (c) the acquisition of various retail real estate assets ($48.3 million).

Financing Activities

Net cash used in financing activities was $12.4 million and $4.5 million for the years ended December 31, 2017 and 2016, respectively. Net cash used in financing activities in 2017 primarily reflects:

• the repayment of mortgage notes payable totaling $55.7 million;

• the repayment of amounts borrowed under the revolving credit facility totaling $51.0 million;

• distributions to common stockholders totaling $44.6 million;

• distributions to holders of convertible limited partnership units in the Operating Partnership totaling $15.3 million;

• distributions made to preferred stockholders totaling $12.4 million; and

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• payments of $2.6 million for financing costs of mortgage notes payable;

which was partially offset by:

• proceeds of $63.0 million received from revolving credit facility draws;

• proceeds of $6.7 million from the issuance of limited partnership units in the Operating Partnership under the dividend reinvestment program;

• proceeds of $22.8 million from the issuance of common stock under the dividend reinvestment program, directors deferred plan and from the exercise of stock options; and

• proceeds of $1.4 million received from construction loan draws.

Net cash used in financing activities for the year ended December 31, 2016 primarily reflects:

• repayments of $57.5 million on the revolving credit facility;

• the repayment of mortgage notes payable totaling $24.7 million;

• distributions to common stockholders totaling $39.5 million;

• distributions to holders of convertible limited partnership units in the Operating Partnership totaling $13.5 million;

• distributions made to preferred stockholders totaling $12.4 million; and

• payments of $0.1 million for financing costs of new mortgage loans;

which was partially offset by:

• proceeds of $78.5 million received from revolving credit facility;

• proceeds of $6.9 million from the issuance of limited partnership units in the Operating Partnership under the dividend reinvestment program;

• proceeds of $21.6 million received from the issuance of common stock under the dividend reinvestment program and from the exercise of stock options; and

• proceeds of $24.9 million from construction loan draws.

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. We anticipate that long-term liquidity requirements will also include amounts required for property acquisitions and developments. The Company is developing a primarily residential project with street-level retail at 750 N. Glebe Road in Arlington, Virginia. The total cost of the project, including acquisition of land, is expected to be approximately $275.0 million. The Company had invested $83.5 million as of December 31, 2017, and expects to invest approximately $34.5 million during 2018, which will be funded by the revolving credit facility. The remaining cost will be funded by a $157.0 million construction-to-permanent loan, which closed in 2017. 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 are expected to be funded with available cash,

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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.

Contractual Payment Obligations

As of December 31, 2017, the Company had unfunded contractual payment obligations of approximately $228.8 million, excluding operating obligations, due within the next 12 months. The table below shows the total contractual payment obligations as of December 31, 2017.

	Payments Due By Period
(Dollars in thousands)	One Year or Less		2 - 3 Years		4 - 5 Years		After 5 Years		Total
Notes Payable:
Interest	$	46,110	$	79,900	$	66,050	$	129,953	$	322,013
Scheduled Principal	30,160		56,015		53,415		145,038		284,628
Balloon Payments	75,105		121,957		47,514		436,325		680,901
Subtotal	151,375		257,872		166,979		711,316		1,287,542
Corporate Headquarters Lease (1)	799		1,670		1,772		—		4,241
Development Obligations	70,000		81,869		—		—		151,869
Tenant Improvements	6,621		778		1,485		—		8,884
Total Contractual Obligations	$	228,795	$	342,189	$	170,236	$	711,316	$	1,452,536

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

Management believes that the Company’s cash flow from operations and its capital resources, which at December 31, 2017, included cash balances of $10.9 million and borrowing availability of approximately $213.8 million on its revolving line of credit, will be sufficient to meet its contractual obligations for the foreseeable future.

Preferred Stock Issues

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 "Series C Stock"). The depositary shares may be redeemed at the Company’s option, in whole or in part, on or after February 12, 2018, 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 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.

On January 23, 2018, Saul Centers sold, in an underwritten public offering, 3.0 million depositary shares, each representing 1/100th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock, providing net cash proceeds of approximately $72.6 million. The depositary shares may be redeemed at the Company’s option, in whole or in part, on or after January 23, 2023, at the $25.00 liquidation preference, plus accumulated divid

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ends to but not including the redemption date. The depositary shares pay an annual dividend of $1.53125 per share, equivalent to 6.125% of the $25.00 liquidation preference. The Series D 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 in 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. On February 22, 2018, the proceeds from the offering, together with cash on hand, were used to redeem 3.0 million depositary shares, each representing 1/100th of a share of the Company’s 6.875% Series C Cumulative Redeemable Preferred Stock.

Dividend Reinvestments

In December 1995, the Company established a Dividend Reinvestment Plan (the “Plan”) to allow its common stockholders and holders of limited partnership interests an opportunity to buy additional shares of common stock by reinvesting all or a portion of their dividends or distributions. The Plan provides for investing in newly issued shares of common stock at a 3% discount from market price without payment of any brokerage commissions, service charges or other expenses. All expenses of the Plan are paid by the Company. The Company issued 258,759 and 178,787 shares under the Plan at a weighted average discounted price of $59.20 and $55.19 per share during the years ended December 31, 2017 and 2016, respectively. The Company issued 111,351 and 124,758 limited partnership units under the Plan at a weighted average price of $60.48 and $55.39 per unit during the years ended December 31, 2017 and 2015, respectively. The Company also credited 7,252 and 8,010 shares to directors pursuant to the reinvestment of dividends specified by the Directors’ Deferred Compensation Plan at a weighted average discounted price of $59.70 and $55.42 per share, during the years ended December 31, 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 December 31, 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 policy in light of current economic conditions, relative costs of capital, market values of the Company property portfolio, opportunities for acquisition, development or expansion, and such other factors as the Board of Directors then deems relevant. The Board of Directors may modify the Company’s debt capitalization policy based on such a reevaluation without shareholder approval and 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 following is a summary of notes payable as of December 31, 2017 and 2016.

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Notes Payable	Year Ended December 31,					Interest		Scheduled
(Dollars in thousands)	2017			2016		Rate*		Maturity*
Fixed rate mortgages:	—		(a)	$	29,428	6.01	%	Feb-2018
	30,201		(b)	32,036		5.88	%	Jan-2019
	9,783		(c)	10,372		5.76	%	May-2019
	13,529		(d)	14,335		5.62	%	Jul-2019
	13,543		(e)	14,325		5.79	%	Sep-2019
	12,029		(f)	12,725		5.22	%	Jan-2020
	9,948		(g)	10,277		5.60	%	May-2020
	8,244		(h)	8,697		5.30	%	Jun-2020
	37,998		(i)	39,213		5.83	%	Jul-2020
	7,325		(j)	7,685		5.81	%	Feb-2021
	5,649		(k)	5,808		6.01	%	Aug-2021
	32,673		(l)	33,571		5.62	%	Jun-2022
	9,999		(m)	10,253		6.08	%	Sep-2022
	10,877		(n)	11,129		6.43	%	Apr-2023
	12,577		(o)	13,401		6.28	%	Feb-2024
	15,452		(p)	15,917		7.35	%	Jun-2024
	13,438		(q)	13,832		7.60	%	Jun-2024
	23,873		(r)	24,504		7.02	%	Jul-2024
	28,115		(s)	28,945		7.45	%	Jul-2024
	28,025		(t)	28,822		7.30	%	Jan-2025
	14,537		(u)	14,961		6.18	%	Jan-2026
	105,817		(v)	109,144		5.31	%	Apr-2026
	32,016		(w)	33,097		4.30	%	Oct-2026
	36,507		(x)	37,701		4.53	%	Nov-2026
	17,086		(y)	17,630		4.70	%	Dec-2026
	64,472		(z)	66,210		5.84	%	May-2027
	15,859		(aa)	16,352		4.04	%	Apr-2028
	39,968		(bb)	41,753		3.51	%	Jun-2028
	16,055		(cc)	16,543		3.99	%	Sep-2028
	27,884		(dd)	28,679		3.69	%	Mar-2030
	14,950		(ee)	15,357		3.99	%	Apr-2030
	39,140		(ff)	—		3.39	%	Feb-2032
	71,211		(gg)	70,144		4.88	%	Sep-2032
	60,000		(hh)	—		3.75	%	Dec-2032
	11,613		(ii)	11,446		8.00	%	Apr-2034
Total fixed rate	890,393			844,292		5.25	%	8.6 Years
Variable rate loans:
	61,000		(jj)	49,000		LIBOR + 1.45	%	Jun-2018
	14,135		(kk)	14,482		LIBOR + 1.65	%	Feb-2018
Total variable rate	75,135			63,482		2.86	%	0.4 Years
Total notes payable	$	965,528		$	907,774	5.07	%	7.9 Years

* Interest rate and scheduled maturity data presented as of December 31, 2017. Totals computed using weighted averages.

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(a) The loan was collateralized by Washington Square and required equal monthly principal and interest payments of $264,000 based upon a 27.5-year amortization schedule and a final payment of $28.0 million at loan maturity. In 2017, the loan was repaid in full and replaced with a new $60.0 million loan. See (hh) below.

(b) The loan is collateralized by three shopping centers, Broadlands Village, The Glen and Kentlands Square I, and requires equal monthly principal and interest payments of $306,000 based upon a 25-year amortization schedule and a final payment of $28.4 million at loan maturity. Principal of $1.8 million was amortized during 2017.

(c) The loan is collateralized by Olde Forte Village and requires equal monthly principal and interest payments of $98,000 based upon a 25-year amortization schedule and a final payment of $9.0 million at loan maturity. Principal of $589,000 was amortized during 2017.

(d) The loan is collateralized by Countryside and requires equal monthly principal and interest payments of $133,000 based upon a 25-year amortization schedule and a final payment of $12.3 million at loan maturity. Principal of $806,000 was amortized during 2017.

(e) The loan is collateralized by Briggs Chaney MarketPlace and requires equal monthly principal and interest payments of $133,000 based upon a 25-year amortization schedule and a final payment of $12.2 million at loan maturity. Principal of $782,000 was amortized during 2017.

(f) The loan is collateralized by Shops at Monocacy and requires equal monthly principal and interest payments of $112,000 based upon a 25-year amortization schedule and a final payment of $10.6 million at loan maturity. Principal of $696,000 was amortized during 2017.

(g) The loan is collateralized by Boca Valley Plaza and requires equal monthly principal and interest payments of $75,000 based upon a 30-year amortization schedule and a final payment of $9.1 million at loan maturity. Principal of $329,000 was amortized during 2017.

(h) The loan is collateralized by Palm Springs Center and requires equal monthly principal and interest payments of $75,000 based upon a 25-year amortization schedule and a final payment of $7.1 million at loan maturity. Principal of $453,000 was amortized during 2017.

(i) The loan and a corresponding interest-rate swap closed on June 29, 2010 and are collateralized by Thruway. On a combined basis, the loan and the interest-rate swap require equal monthly principal and interest payments of $289,000 based upon a 25-year amortization schedule and a final payment of $34.8 million at loan maturity. Principal of $1.2 million was amortized during 2017.

(j) The loan is collateralized by Jamestown Place and requires equal monthly principal and interest payments of $66,000 based upon a 25-year amortization schedule and a final payment of $6.1 million at loan maturity. Principal of $360,000 was amortized during 2017.

(k) The loan is collateralized by Hunt Club Corners and requires equal monthly principal and interest payments of $42,000 based upon a 30-year amortization schedule and a final payment of $5.0 million, at loan maturity. Principal of $159,000 was amortized during 2017.

(l) The loan is collateralized by Lansdowne Town Center and requires monthly principal and interest payments of $230,000 based on a 30-year amortization schedule and a final payment of $28.2 million at loan maturity. Principal of $898,000 was amortized during 2017.

(m) The loan is collateralized by Orchard Park and requires equal monthly principal and interest payments of $73,000 based upon a 30-year amortization schedule and a final payment of $8.6 million at loan maturity. Principal of $254,000 was amortized during 2017.

(n) The loan is collateralized by BJ’s Wholesale and requires equal monthly principal and interest payments of $80,000 based upon a 30-year amortization schedule and a final payment of $9.3 million at loan maturity. Principal of $252,000 was amortized during 2017.

(o) The loan is collateralized by Great Falls shopping center. The loan consists of three notes which require equal monthly principal and interest payments of $138,000 based upon a weighted average 26-year amortization schedule and a final payment of $6.3 million at maturity. Principal of $824,000 was amortized during 2017.

(p) The loan is collateralized by Leesburg Pike and requires equal monthly principal and interest payments of $135,000 based upon a 25-year amortization schedule and a final payment of $11.5 million at loan maturity. Principal of $465,000 was amortized during 2017.

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(q) The loan is collateralized by Village Center and requires equal monthly principal and interest payments of $119,000 based upon a 25-year amortization schedule and a final payment of $10.1 million at loan maturity. Principal of $394,000 was amortized during 2017.

(r) The loan is collateralized by White Oak and requires equal monthly principal and interest payments of $193,000 based upon a 24.4 year weighted amortization schedule and a final payment of $18.5 million at loan maturity. The loan was previously collateralized by Van Ness Square. During 2012, the Company substituted White Oak as the collateral and borrowed an additional $10.5 million. Principal of $631,000 was amortized during 2017.

(s) The loan is collateralized by Avenel Business Park and requires equal monthly principal and interest payments of $246,000 based upon a 25-year amortization schedule and a final payment of $20.9 million at loan maturity. Principal of $830,000 was amortized during 2017.

(t) The loan is collateralized by Ashburn Village and requires equal monthly principal and interest payments of $240,000 based upon a 25-year amortization schedule and a final payment of $20.5 million at loan maturity. Principal of $797,000 was amortized during 2017.

(u) The loan is collateralized by Ravenwood and requires equal monthly principal and interest payments of $111,000 based upon a 25-year amortization schedule and a final payment of $10.1 million at loan maturity. Principal of $424,000 was amortized during 2017.

(v) The loan is collateralized by Clarendon Center and requires equal monthly principal and interest payments of $753,000 based upon a 25-year amortization schedule and a final payment of $70.5 million at loan maturity. Principal of $3.3 million was amortized during 2017.

(w) The loan is collateralized by Severna Park MarketPlace and requires equal monthly principal and interest payments of $207,000 based upon a 25-year amortization schedule and a final payment of $20.3 million at loan maturity. Principal of $1.1 million was amortized during 2017.

(x) The loan is collateralized by Kentlands Square II and requires equal monthly principal and interest payments of $240,000 based upon a 25-year amortization schedule and a final payment of $23.1 million at loan maturity. Principal of $1.2 million was amortized during 2017.

(y) The loan is collateralized by Cranberry Square and requires equal monthly principal and interest payments of $113,000 based upon a 25-year amortization schedule and a final payment of $10.9 million at loan maturity. Principal of $544,000 was amortized during 2017.

(z) The loan in the original amount of $73.0 million closed in May 2012, is collateralized by Seven Corners and requires equal monthly principal and interest payments of $463,200 based upon a 25-year amortization schedule and a final payment of $42.3 million at loan maturity. Principal of $1.7 million was amortized during 2017.

(aa) The loan is collateralized by Hampshire Langley and requires equal monthly principal and interest payments of $95,400 based upon a 25-year amortization schedule and a final payment of $9.5 million at loan maturity. Principal of $493,000 was amortized in 2017.

(bb) The loan is collateralized by Beacon Center and requires equal monthly principal and interest payments of $268,500 based upon a 20-year amortization schedule and a final payment of $17.1 million at loan maturity. Principal of $1.8 million was amortized in 2017.

(cc) The loan is collateralized by Seabreeze Plaza and requires equal monthly principal and interest payments of $94,900 based upon a 25-year amortization schedule and a final payment of $9.5 million at loan maturity. Principal of $488,000 was amortized in 2017.

(dd) The loan is collateralized by Shops at Fairfax and Boulevard shopping centers and requires equal monthly principal and interest payments totaling $153,300 based upon a 25-year amortization schedule and a final payment of $15.5 million at maturity. Principal of $795,000 was amortized in 2017.

(ee) The loan is collateralized by Northrock and requires equal monthly principal and interest payments totaling $84,400 based upon a 25-year amortization schedule and a final payment of $8.4 million at maturity. Principal of $407,000 was amortized in 2017.

(ff) The loan is collateralized by Burtonsville Town Square and requires equal monthly principal and interest payments of $198,000 based on a 25-year amortization schedule and a final payment of $20.3 million at loan maturity. Principal of $860,000 was amortized in 2017.

(gg) The loan is a $71.6 million construction-to-permanent facility that is collateralized by and financed a portion of the construction costs of Park Van Ness. During the construction period, interest was funded by the loan. Effective September 1, 2017, the loan converted to permanent financing and requires monthly principal and

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interest payments totaling $413,500 based upon a 25-year amortization schedule. A final payment of $39.6 million will be due at maturity. Principal of $369,000 was amortized in 2017.

(hh) The loan is collateralized by Washington Square and requires equal monthly principal and interest payments of $308,000 based upon a 25-year amortization schedule and a final payment of $31.1 million at loan maturity.

(ii) The Company entered into a sale-leaseback transaction with its Olney property and is accounting for that transaction as a secured financing. The arrangement requires monthly payments of $60,400 which increase by 1.5% on May 1, 2015, and every May 1 thereafter. The arrangement provides for a final payment of $14.7 million and has an implicit interest rate of 8.0%. Negative amortization in 2017 totaled $167,000.

(jj) The loan is a $275.0 million unsecured revolving credit facility. Interest accrues at a rate equal to the sum of one-month LIBOR plus a spread of 145 basis points. The line may be extended at the Company’s option for one year with payment of a fee of 0.15%. Monthly payments, if required, are interest only and vary depending upon the amount outstanding and the applicable interest rate for any given month.

(kk) The loan is collateralized by Metro Pike Center and requires monthly principal and interest payments of approximately $48,000 and a final payment of $14.2 million at loan maturity. Principal of $347,000 was amortized during 2017.

The carrying value of properties collateralizing the mortgage notes payable totaled $1.0 billion and $957.2 million as of December 31, 2017 and 2016, respectively. The Company’s credit facility requires the Company and its subsidiaries to maintain certain financial covenants, which are summarized below. As of December 31, 2017, the Company was in compliance with all such covenants:

• 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).

2018 Financing Activity

On January 26, 2018, the Company replaced its credit facility. The new credit facility, which can be used for working capital, property acquisitions, development projects or letters of credit, totals $400,000,000 (the “New Facility”), of which $325,000,000 is a revolving credit facility (the “Revolving Line”) and $75,000,000 is a term loan (the “Term Loan”). The Revolving Line matures on January 26, 2022, which term may be extended by the Company for one additional year, subject to satisfaction of certain conditions. The Term Loan matures on January 26, 2023, and may not be extended. In general, loan availability under the New Facility is primarily determined by operating income from the Company’s existing unencumbered properties. Interest accrues at a rate of LIBOR plus a spread of 135 basis points to 195 basis points under the Revolving Line, and 130 basis points to 190 basis points under the Term Loan, each as determined by certain leverage tests. As of January 26, 2018, the applicable spread for borrowings is 135 basis points under the Revolving Line and 130 basis points under the Term Loan. Saul Centers and certain consolidated subsidiaries of the Operating Partnership have guaranteed the payment obligations of the Operating Partnership under the revolving credit facility.

2017 Financing Activity

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 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.

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 $413,500 based on a 25-year amortization schedule and requires a final payment of $39.6 million at maturity.

On November 20, 2017, the Company closed on a 15-year, non-recourse $60.0 million mortgage loan secured by Washington Square. The loan matures in 2032, bears interest at a fixed rate of 3.75%, requires monthly principal and interest payments of $308,500 based on a 25-year amortization schedule and requires a final payment of $31.1 million. Proceeds were used to repay the remaining balance of approximately $28.1 million on the existing mortgage and reduce the outstanding balance of the revolving credit facility.

2016 Financing Activity

In November 2016, the existing loan secured by Beacon Center was increased by $11.25 million. The interest rate, amortization period and maturity date did not change; the required monthly payment was increased to $268,500. Proceeds were used to partially fund the purchase of the ground which underlies Beacon Center.

2015 Financing Activity

On March 3, 2015, the Company closed on a 15-year, $30.0 million non-recourse mortgage loan secured by Boulevard and Shops at Fairfax shopping centers in Fairfax, Virginia. The loan matures in 2030, bears interest at a fixed rate of 3.69%, requires monthly principal and interest payments totaling $153,300 based on a

25-year amortization schedule and a final payment of $15.5 million at maturity.  Proceeds of the loan were used to repay in full the existing 7.45% mortgage in the amount of $15.2 million, which was scheduled to mature in June 2015 and to pay down outstanding balances under the revolving credit facility.

On April 1, 2015, the Company closed on a 15-year, non-recourse $16.0 million mortgage loan secured by Northrock. The loan matures in 2030, bears interest at a fixed rate of 3.99%, requires monthly principal and interest payments totaling $84,400 based on a 25-year amortization schedule and requires a final payment of $8.4 million at maturity. Proceeds of the loan were used to repay in full the $14.5 million remaining balance of existing debt secured by Northrock.

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.

Funds From Operations

In 2017, the Company reported Funds From Operations ("FFO")¹ available to common stockholders and noncontrolling interests of $94.0 million, a 7.1% increase from 2016 FFO available to common stockholders and noncontrolling interests of $87.7 million. The following table presents a reconciliation from net income to FFO available to common stockholders and noncontrolling interests for the periods indicated:

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	Year ended December 31,
(Dollars in thousands)	2017			2016			2015			2014			2013
Net income	$	60,668		$	56,720		$	52,931		$	57,988		$	34,842
Subtract:
Gains on sales of properties	—			(1,013		)	(11		)	(6,069		)	—
Gain on casualty settlement	—			—			—			—			(77		)
Add:
Real estate depreciation and amortization	45,694			44,417			43,270			41,203			49,130
FFO	106,362			100,124			96,190			93,122			83,895
Subtract:
Preferred dividends	(12,375		)	(12,375		)	(12,375		)	(13,361		)	(13,983		)
Preferred stock redemption	—			—			—			(1,480		)	(5,228		)
FFO available to common stockholders and noncontrolling interests	$	93,987		$	87,749		$	83,815		$	78,281		$	64,684
Average shares and units used to compute FFO per share	29,511			28,990			28,449			27,977			27,330
FFO per share	$	3.18		$	3.03		$	2.95		$	2.80		$	2.37

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 we believe occurs with our assets, and because industry analysts have accepted it as a performance measure. FFO may not be comparable to similarly titled measures employed by other REITs.

Acquisitions, Redevelopments and Renovations

Management anticipates that during the coming year the Company will continue activities related to the redevelopment of 750 N. Glebe Road and may develop additional freestanding outparcels or expansions within certain of the Shopping Centers. Although not currently planned, it is possible that the Company may redevelop additional Current Portfolio Properties and may develop expansions within certain of the Shopping Centers. Acquisition and development of properties are undertaken only after careful analysis and review, and management’s determination that such properties are expected to provide long-term earnings and cash flow growth. During the coming year, any developments, expansions or acquisitions are expected to be funded with 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 office development and acquisitions of operating properties for opportunities to enhance operating income and cash flow growth. The following describes significant acquisitions, developments, redevelopments and renovations which affected the Company’s financial position and results of operations in 2017, 2016, and 2015.

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Westview Pad

In February 2015, the Company purchased for $0.9 million, including acquisition costs, a 1.1 acre retail pad site in Frederick, Maryland, which is contiguous with and an expansion of the Company's other Westview asset.

700, 726, 730, 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 Company is developing approximately 490 residential units and 60,000 square feet of retail space on 2.8 acres of land. Excavation, sheeting and shoring are substantially complete and construction is proceeding on the first three levels of the below grade parking structure. 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. In 2017, 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 Company has executed a 41,500 square foot anchor-lease with Target and leases for an aggregate of 9,000 square feet of retail shop space, resulting in approximately 84% of the retail space being leased.

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 December 31, 2017, 260 apartments (95.9%) 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.

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 the second quarter of 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.

Beacon Center

In the fourth quarter of 2016, the Company purchased for $22.7 million, including acquisition costs, 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 Company’s revolving credit facility.

Southdale

In the fourth quarter of 2016, the Company purchased for $15.3 million, including acquisition costs, 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 Company’s revolving credit facility.

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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. The purchase was funded with a new $40.0 million mortgage loan and through the Company's credit line 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. The Company expects to begin construction on a 16,000 square foot small shop expansion in the Spring of 2018, with delivery projected in late 2018. The total development cost is expected to be approximately $5.7 million. Lease negotiations are in progress for over 50% of the space.

Olney Shopping Center

In March 2017, the Company purchased for $3.1 million, including acquisition costs, 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.

7316 Wisconsin Avenue

On January 12, 2018, the Company entered into an agreement to purchase for $35.5 million, plus approximately $0.7 million of acquisition costs, a 69,600 square foot office building and the underlying ground located at 7316 Wisconsin Avenue in Bethesda, Montgomery County, Maryland and has an earnest money deposit of $3.5 million at risk. The property has mixed-use development potential of up to 325 apartment units and approximately 10,000 square feet of street level retail pursuant to the recently approved Bethesda Downtown Plan. The purchase price will be funded through the Company's revolving credit facility. The Company anticipates closing the acquisition on or before January 12, 2019.

Property Sales

Crosstown Business Center

In December 2016, the Company sold for $5.4 million the 197,100 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.

Portfolio Leasing Status

The following chart sets forth certain information regarding commercial leases at our properties for the periods indicated.

	Total Properties		Total Square Footage		Percentage Leased
As of December 31,	Shopping Centers	Mixed-Use	Shopping Centers	Mixed-Use	Shopping Centers		Mixed-Use
2017	49	6	7,750,098	1,076,838	94.3	%	94.5	%
2016	49	6	7,882,054	1,076,208	96.0	%	91.0	%
2015	50	6	7,896,499	1,264,488	95.4	%	91.0	%

The residential components of Clarendon Center and Park Van Ness were 96.7% and 95.9% leased, respectively, at December 31, 2017. On a same property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, the Shopping Center leasing percentage decreased to 94.2%

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from 96.1% and the Mixed-Use leasing percentage increased to 94.5% from 91.0%. The overall portfolio leasing percentage, on a comparative same property basis, decreased to 94.2% at December 31, 2017 from 95.5% at December 31, 2016.

The 2016 Mixed-Use leasing percentage includes the recently-developed Park Van Ness commercial space and excludes Crosstown Business Center. The residential components of Clarendon Center and Park Van Ness were 97.1% and 72.7% leased at December 31, 2016. On a same property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, the Shopping Center leasing percentage increased to 96.0% from 95.4% and the Mixed-Use leasing percentage decreased to 90.9% from 92.2%. The overall portfolio leasing percentage, on a comparative same property basis, increased to 95.4% at December 31, 2016 from 95.0% at December 31, 2015.

The Clarendon Center residential component was 99.2% leased at December 31, 2015. On a same property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, the Shopping Center leasing percentage increased to 95.3% from 95.0%. and the Mixed-Use leasing percentage increased to 91.0% from 90.8%. The overall portfolio leasing percentage, on a comparative same property basis, increased to 94.7% at December 31, 2015 from 94.4% at December 31, 2014.

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.

			Base Rent per Square Foot
Year ended December 31,	Square Feet	Number of Leases	New/Renewed Leases		Expiring Leases
2017	1,315,192	280	$	19.60	$	19.45
2016	1,292,483	244	17.24		17.05
2015	1,583,310	259	15.15		14.82

Additional information about commercial leasing activity during the three months ended December 31, 2017, 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	20			42
Square feet	61,562			158,007
Per square foot average annualized:
Base rent	$	21.94		$	21.99
Tenant improvements	(3.95		)	(0.27		)
Leasing costs	(0.63		)	(0.06		)
Rent concessions	(0.50		)	(0.02		)
Effective rents	$	16.86		$	21.64

During 2017, the Company entered into 475 new or renewed apartment leases, excluding new leases at Park Van Ness. The monthly rent per square foot for the 395 leases for units that were previously occupied decreased to $3.51 from $3.54. During 2016, the Company entered into 216 new or renewed apartment leases. The

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monthly rent per square foot for these leases increased to $3.57 from $3.45. During 2015, the Company entered into 222 new or renewed apartment leases. The monthly rent per square foot for these leases was unchanged at $3.45.

As of December 31, 2017, 972,950 square feet of Commercial space was subject to leases scheduled to expire in 2018. Below is information about existing and estimated market base rents per square foot for that space.

Expiring Leases:	Total
Square feet	972,950
Average base rent per square foot	$	17.63
Estimated market base rent per square foot	$	17.66

Item 7A. 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 mortgage debt. The swap agreement was effective July 1, 2010, terminates on July 1, 2020 and effectively fixes the interest rate on the mortgage debt at 5.83%. The aggregate fair value of the swap at December 31, 2017 was approximately $1.1 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 December 31, 2017, the Company had variable rate indebtedness totaling $75.1 million. If the interest rates on the Company’s variable rate debt instruments outstanding at December 31, 2017 had been one percent higher, our annual interest expense relating to these debt instruments would have increased by $751,400, based on those balances. As of December 31, 2017, the Company had fixed-rate indebtedness totaling $890.4 million with a weighted average interest rate of 5.25%. If interest rates on the Company’s fixed-rate debt instruments at December 31, 2017 had been one percent higher, the fair value of those debt instruments on that date would have decreased by approximately $47.5 million.

Item 8. Financial Statements and Supplementary Data

The financial statements of the Company and its consolidated subsidiaries are included in this report on the pages indicated, and are incorporated herein by reference:

Page
F-1	(a)     Reports of Independent Registered Public Accounting Firm – Ernst & Young LLP.
F-3	(b)    Consolidated Balance Sheets - December 31, 2017 and 2016.
F-4	(c)     Consolidated Statements of Operations - Years ended December 31, 2017, 2016, and 2015.
F-5	(d)     Consolidated Statements of Comprehensive Income – Years ended December 31, 2017, 2016, and 2015.
F-6	(e)     Consolidated Statements of Equity - Years ended December 31, 2017, 2016, and 2015.
F-7	(f)      Consolidated Statements of Cash Flows - Years ended December 31, 2017, 2016, and 2015.
F-8	(g)    Notes to Consolidated Financial Statements.

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Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Quarterly Assessment.

The Company carried out an assessment as of December 31, 2017 of the effectiveness of the design and operation of its disclosure controls and procedures and its internal control over financial reporting. This assessment was done under the supervision and with the participation of management, including 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 as appropriate. Rules adopted by the SEC require that the Company present the conclusions of the Company’s Chairman and Chief Executive Officer and its Senior Vice President-Chief Financial Officer, Secretary and Treasurer about the effectiveness of the Company’s disclosure controls and procedures and the conclusions of the Company’s management about the effectiveness of its internal control over financial reporting as of the end of the period covered by this Annual Report on Form 10-K.

CEO and CFO Certifications.

Included as Exhibits 31 to this Annual Report on Form 10-K are forms of “Certification” of the Company’s Chairman and Chief Executive Officer and its Senior Vice President-Chief Financial Officer, Secretary and Treasurer. The forms of Certification are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002. This section of the Annual Report on Form 10-K that you are currently reading is the information concerning the assessment referred to in the Section 302 certifications and this information should be read in conjunction with the Section 302 certifications for a more complete understanding of the topics presented.

Disclosure Controls and Procedures and Internal Control over Financial Reporting.

Management is responsible for establishing and maintaining adequate disclosure controls and procedures and internal control over financial reporting. Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act, such as this Annual Report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed to provide reasonable assurance that such information is accumulated and communicated to the Company’s management, including 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, as appropriate to allow timely decisions regarding required disclosure.

Internal control over financial reporting is a process designed by, or under the supervision of 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, and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U. S. GAAP and includes those policies and procedures that:

• pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets;

• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U. S. GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of management or the Company’s Board of Directors; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material adverse effect on the Company’s financial statements.

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Limitations on the Effectiveness of Controls.

Management, including 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, does not expect that the Company’s disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no assessment of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management’s override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Scope of the Assessments.

The assessment by 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 of the Company’s disclosure controls and procedures and the assessment by the Company’s management of the Company’s internal control over financial reporting included a review of procedures and discussions with the Company’s Disclosure Committee and others in the Company. In the course of the assessments, management sought to identify data errors, control problems or acts of fraud and to confirm that appropriate corrective action, including process improvements, were being undertaken. Management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013 Framework) to assess the effectiveness of the Company’s internal control over financial reporting. The evaluation of the Company’s disclosure controls and procedures and internal control over financial reporting is done on a quarterly basis so that the conclusions concerning the effectiveness of disclosure controls can be reported in the Company’s Quarterly Reports on Form 10-Q and Annual Report on Form 10-K.

The Company’s internal control over financial reporting is also evaluated on an ongoing basis by management, other personnel in the Company’s accounting department and the Company’s internal audit function. The effectiveness of the Company’s internal control over financial reporting is audited by the Company’s independent registered public accounting firm. We consider the results of these various assessment activities as we monitor the Company’s disclosure controls and procedures and internal control over financial reporting and when deciding to make modifications as necessary. Management’s intent in this regard is that the disclosure controls and procedures and the internal control over financial reporting will be maintained and updated (including improvements and corrections) as conditions warrant.

Assessment of Effectiveness of Disclosure Controls and Procedures

Based upon the assessments, 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 have concluded that, as of December 31, 2017, the Company’s disclosure controls and procedures were effective.

Assessment of Effectiveness of Internal Control Over Financial Reporting.

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013 Framework) to assess the effectiveness of the Company’s internal control over financial reporting. Based upon the assessments, the Company’s management has concluded that, as of December 31, 2017, the Company’s internal control over financial reporting was effective.

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The Company’s independent registered public accounting firm has issued a report on the effectiveness of the Company’s internal control over financial reporting, which appears on page F-2 of this Annual Report on Form 10‑K.

Changes in Internal Control Over Financial Reporting.

During the three months ended December 31, 2017, there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information this Item requires is incorporated by reference to the information under the captions “The Board of Directors,” “Corporate Governance – Ethical Conduct Policy and Senior Financial Officer Code of Ethics,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Corporate Governance – Nominating and Corporate Governance Committee – Selection of Director Nominees,” and “Corporate Governance – Audit Committee” of the Company’s Proxy Statement to be filed with the SEC for its annual stockholders’ meeting to be held on May 11, 2018 (the “Proxy Statement”).

Item 11. Executive Compensation

The information this Item requires is incorporated by reference to the information under the captions “Corporate Governance – Compensation of Directors,” “Report of the Compensation Committee,” and “Executive Compensation” of the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

The information this Item requires is incorporated by reference to the information under the captions “Equity Compensation Plan Information” and “Security Ownership of Certain Beneficial Owners and Management” of the Proxy Statement.

Item 13. Certain Relationships and Related Transactions and Director Independence

The information this Item requires is incorporated by reference to the information under the captions “Certain Relationships and Transactions” and “Corporate Governance – Board of Directors” of the Proxy Statement.

Item 14. Principal Accountant Fees and Services

The information this Item requires is incorporated by reference to the information contained in the Proxy Statement under the caption “Audit Committee Report – 2017 and 2016 Independent Registered Public Accounting Firm Fee Summary” of the Proxy Statement.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)	The following documents are filed as part of this report:
1.		Financial Statements
		The following financial statements of the Company and their consolidated subsidiaries are incorporated by reference in Part II, Item 8.
	(a)	Reports of Independent Registered Public Accounting Firm – Ernst & Young LLP
	(b)	Consolidated Balance Sheets - December 31, 2017 and 2016
	(c)	Consolidated Statements of Operations - Years ended December 31, 2017, 2016, and 2015.
	(d)	Consolidated Statements of Comprehensive Income – Years ended December 31, 2017, 2016, and 2015.
	(e)	Consolidated Statements of Equity - Years ended December 31, 2017, 2016, and 2015.
	(f)	Consolidated Statements of Cash Flows - Years ended December 31, 2017, 2016, and 2015.
	(g)	Notes to Consolidated Financial Statements
2.		Financial Statement Schedule and Supplementary Data
	(a)	Selected Quarterly Financial Data for the Company are incorporated by reference in Part II, Item 8
	(b)	Schedule of the Company:
		Schedule III - Real Estate and Accumulated Depreciation
All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.

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		Exhibits
3.	(a)	First Amended and Restated Articles of Incorporation of Saul Centers, Inc. filed with the Maryland Department of Assessments and Taxation on August 23, 1994 and filed as Exhibit 3.(a) of the 1993 Annual Report of the Company on Form 10-K are hereby incorporated by reference. Articles of Amendment to the First Amended and Restated Articles of Incorporation of Saul Centers, Inc., filed with the Maryland Department of Assessments and Taxation on May 28, 2004 and filed as Exhibit 3.(a) of the June 30, 2004 Quarterly Report of the Company is hereby incorporated by reference.Articles of Amendment to the First Amended and Restated Articles of Incorporation of Saul Centers, Inc., filed with the Maryland Department of Assessments and Taxation on May 26, 2006 and filed as Exhibit 3.(a) of the Company’s Current Report on Form 8-K filed May 30, 2006 is hereby incorporated by reference.Articles of Amendment to the First Amended and Restated Articles of Incorporation of Saul Centers, Inc., filed with the Maryland State Department of Assessments and Taxation on May 14, 2013 and filed as Exhibit 3.(a) of the Company's Current Report on Form 8-K filed May 14, 2013, is hereby incorporated by reference.
	(b)	Amended and Restated Bylaws of Saul Centers, Inc. as in effect at and after August 24, 1993 and as of August 26, 1993 and filed as Exhibit 3.(b) of the 1993 Annual Report of the Company on Form 10-K are hereby incorporated by reference. Amendment No. 1 to Amended and Restated Bylaws of Saul Centers, Inc. adopted November 29, 2007 and filed as Exhibit 3(b) of the Company’s Current Report on Form 8-K filed December 3, 2007 is hereby incorporated by reference.
	(c)	Articles Supplementary to First Amended and Restated Articles of Incorporation of the Company, dated October 30, 2003, filed as Exhibit 2 to the Company’s Current Report on Form 8-A dated October 31, 2003, is hereby incorporated by reference.
	(d)	Articles Supplementary to First Amended and Restated Articles of Incorporation of the Company, as amended, dated March 26, 2008, filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed March 27, 2008, is hereby incorporated by reference.
	(e)	Articles Supplementary to First Amended and Restated Articles of Incorporation of the Company, dated February 6, 2013, filed as Exhibit 3.2 to Saul Centers’ Registration Statement on Form 8-A, filed February 7, 2013, is hereby incorporated by reference.
	(f)	Articles Supplementary to First Amended and Restated Articles of Incorporation of the Company, dated November 10, 2014, filed as Exhibit 3.2 of the Company's Current Report on Form 8-K, dated November 12, 2014, is hereby incorporated by reference.
	(g)	Articles Supplementary to First Amended and Restated Articles of Incorporation of the Company, dated January 19, 2018, filed as Exhibit 3.3 of the Company’s Registration Statement on Form 8-A filed January 23, 2018 is hereby incorporated by reference.
4.	(a)	Deposit Agreement, dated February 6, 2013, among the Company, Continental Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts, each representing 1/100th of a share of 6.875% Series C Cumulative Redeemable Preferred Stock of Saul Centers, Inc. filed as Exhibit 4.1 to Saul Centers’ Registration Statement on Form 8-A on February 7, 2013 is hereby incorporated by reference.
	(b)	Form specimen of receipt representing the depositary shares, each representing 1/100th of a share of 6.875% Series C Cumulative Redeemable Preferred Stock of Saul Centers, Inc. and included as part of Exhibit 4.2 to Saul Centers’ Registration Statement on Form 8-A on February 7, 2013 is hereby incorporated by reference.
	(c)	First Amendment to Deposit Agreement, dated November 12, 2014, among the Company, Continental Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts, each representing 1/100th of a share of 6.875% Series C Cumulative Redeemable Preferred Stock of Saul Centers, Inc. filed as Exhibit 4.2 to of the Company's Current Report on Form 8-K, dated November 12, 2014, is hereby incorporated by reference.
	(d)	Deposit Agreement, dated January 23, 2018, among the Company, Continental Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts, filed as Exhibit 4.2 of the Registrant’s Registration Statement on Form 8-A filed January 23, 2018 is hereby incorporated by reference.
	(e)	Specimen certificate representing the 6.125% Series D Cumulative Redeemable Preferred Stock, par value $0.01 per share, of the Company, filed as Exhibit 4.4 of the Company’s Registration Statement on Form 8-A filed January 23, 2018 is hereby incorporated by reference.

67

10.	(a)	First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit No. 10.1 to Registration Statement No. 33-64562 is hereby incorporated by reference. The First Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership, the Second Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership, and the Third Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the 1995 Annual Report of the Company on Form 10-K is hereby incorporated by reference. The Fourth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the March 31, 1997 Quarterly Report of the Company is hereby incorporated by reference.The Fifth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 4.(c) to Registration Statement No. 333-41436, is hereby incorporated by reference.The Sixth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the September 30, 2003 Quarterly Report of the Company on Form 10-Q is hereby incorporated by reference. The Seventh Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the December 31, 2003 Annual Report of the Company on Form 10-K is hereby incorporated by reference.The Eighth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the December 31, 2007 Annual Report of the Company on Form 10-K is hereby incorporated by reference.The Ninth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the March 31, 2008 Quarterly Report of the Company on Form 10-Q is hereby incorporated by reference. The Tenth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the March 31, 2008 Quarterly Report of the Company on Form 10-Q is hereby incorporated by reference.The Eleventh Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the September 30, 2011 Quarterly Report of the Company on Form 10-Q is hereby incorporated by reference.The Twelfth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.1 of the Current Report of the Company on Form 8-K dated February 12, 2013 is hereby incorporated by reference.The Thirteenth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.1 of the Current Report of the Company on Form 8-K dated November 12, 2014, is hereby incorporated by reference.The Fourteenth Amendment to the First Amended and Restated Agreement of Limited Partnership of the Saul Holdings Limited Partnership, filed as Exhibit 10.1 of the Current Report of the Company on Form 8-K dated January 23, 2018, is hereby incorporated by reference.
	(b)	First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary I Limited Partnership and Amendment No. 1 thereto filed as Exhibit 10.2 to Registration Statement No. 33-64562 are hereby incorporated by reference. The Second Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary I Limited Partnership, the Third Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary I Limited Partnership and the Fourth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary I Limited Partnership as filed as Exhibit 10.(b) of the 1997 Annual Report of the Company on Form 10-K are hereby incorporated by reference.
	(c)	First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary II Limited Partnership and Amendment No. 1 thereto filed as Exhibit 10.3 to Registration Statement No. 33-64562 are hereby incorporated by reference. The Second Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary II Limited Partnership filed as Exhibit 10.(c) of the June 30, 2001 Quarterly Report of the Company is hereby incorporated by reference.The Third Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary II Limited Partnership filed as exhibit 10.(c) of the 2006 Annual Report of the Company on Form 10-K are hereby incorporated by reference.The Fourth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary II Limited Partnership as filed as Exhibit 10.(c) of the 2009 Annual Report of the Company on Form 10-K is hereby incorporated by reference.The Fifth Amendment to our First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary II Limited Partnership filed as Exhibit 10.(c) of the September 30, 2016 Quarterly Report of the Company is hereby incorporated by reference.
	(d)	Property Conveyance Agreement filed as Exhibit 10.4 to Registration Statement No. 33- 64562 is hereby incorporated by reference.
	(e)	Management Functions Conveyance Agreement filed as Exhibit 10.5 to Registration Statement No. 33-64562 is hereby incorporated by reference.
	(f)	Registration Rights and Lock-Up Agreement filed as Exhibit 10.6 to Registration Statement No. 33-64562 is hereby incorporated by reference.

68

(g)	Exclusivity and Right of First Refusal Agreement filed as Exhibit 10.7 to Registration Statement No. 33-64562 is hereby incorporated by reference.
(h)	Agreement of Assumption dated as of August 26, 1993 executed by Saul Holdings Limited Partnership and filed as Exhibit 10.(i) of the 1993 Annual Report of the Company on Form 10-K is hereby incorporated by reference.
(i)	Deferred Compensation Plan for Directors, dated as of April 23, 2004 and filed as Exhibit 10.(k) of the June 30, 2004 Quarterly Report of the Company is hereby incorporated by reference.
(j)	Amended and Restated Credit Agreement, dated as of June 24, 2014, by and among Saul Holdings Limited Partnership as Borrower; Wells Fargo Bank, National Association, as Administrative Agent and Sole Lead Arranger; JP Morgan Chase Bank, N.A., as Syndication Agent; and Wells Fargo Bank, National Association, JP Morgan Chase Bank, N.A., Capital One, N.A. and Citizens Bank of Pennsylvania as Lenders, as filed as Exhibit 10.1 of the Company's Current Report on Form 8-K, dated June 25, 2014, is hereby incorporated by reference.
(k)	Amended and Restated Guaranty, dated as of June 24, 2014, by and between Saul Centers, Inc., as Guarantor, and Wells Fargo Bank, National Association, as Administrative Agent and Sole Lead Arranger for itself and other financial institutions as Lenders, as filed as Exhibit 10.2 of the Company's Current Report on Form 8-K, dated June 25, 2014, is hereby incorporated by reference.
(l)	Credit Agreement dated January 26, 2018, by and among: the Saul Holdings Limited Partnership, as Borrower; Wells Fargo Bank, National Association (“Wells Fargo”), as Administrative Agent; Capital One, National Association (“Capital One”), as Syndication Agent; TD Bank, N.A. (“TD Bank”) and U.S. Bank National Association (“U.S. Bank”), as Documentation Agents; and Wells Fargo, Capital One, TD Bank, U.S. Bank, Regions Bank and Associated Bank, National Association (“Associated Bank”), as Lenders (the “Agreement”) and filed as Exhibit 10.1 of the Current Report of the Company on Form 8‑K dated January 26, 2018, is hereby incorporated by reference.
(m)	Guaranty dated January 26, 2018, by and between: Saul Centers, Inc.; Saul Subsidiary I Limited Partnership; Saul Subsidiary II Limited Partnership; Briggs Chaney Plaza, LLC; Kentlands Lot 1, LLC; 11503 Rockville Pike LLC; Rockville Pike Holdings LLC; 1500 Rockville Pike LLC; Smallwood Village Center LLC; Westview Village Center LLC; Avenel VI, Inc.; Metro Pike Center LLC; and Washington Square Center, LLC, as Guarantors; in favor of Wells Fargo Bank, National Association, as Administrative Agent for the lenders from time to time party to that certain Credit Agreement dated January 26, 2018 and filed as Exhibit 10.2 of the Current Report of the Company on Form 8 K dated January 26, 2018, is hereby incorporated by reference.
(n)	The Saul Centers, Inc. 2004 Stock Plan, as amended on April 25, 2008 and May 10, 2013 and filed as Exhibit 10.(a) of the Company's Current Report on Form 8-K filed on May 14, 2013, is hereby incorporated by reference.
(o)	Form of Director Stock Option Agreements, as filed as Exhibit 10.(j) of the September 30, 2004 Quarterly Report of the Company, is hereby incorporated by reference.
(p)	Form of Officer Stock Option Grant Agreements, as filed as Exhibit 10.(k) of the September 30, 2004 Quarterly Report of the Company, is hereby incorporated by reference.
(q)	Promissory Note, dated as of March 23, 2011, by Clarendon Center LLC to The Prudential Life Insurance Company of America as filed as Exhibit 10.(a) of the Company’s Current Report on Form 8-K dated April 28, 2011, is hereby incorporated by reference.
(r)	Deed of Trust, Security Agreement and Fixture Filing, dated as of March 23, 2011, by Clarendon Center LLC to Lawyers Title Realty Services, Inc. as trustee for the benefit of The Prudential Insurance Company of America, as beneficiary, as filed as Exhibit 10.(b) of the Company’s Current Report on Form 8-K dated April 28, 2011, is hereby incorporated by reference.
(s)	Shared Services Agreement dated as of January 1, 2018, between B. F. Saul Company and Saul Centers, Inc., is filed herewith.
(t)	Purchase Agreement, dated as of August 9, 2011, by and among the Company, Saul Holdings Limited Partnership and B. F. Saul Real Estate Investment Trust and filed as Exhibit 10.(r) of the September 30, 2011 Quarterly Report of the Company is hereby incorporated by reference.
(u)	Promissory Note, dated as of August 14, 2017, by 750 North Glebe LLC to The Northwestern Mutual Life Insurance Company as filed as Exhibit 10.(a) of the September 30, 2017 Quarterly Report of the Company is hereby incorporated by reference.

69

	(v)	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, as filed as Exhibit 10.(b) of the September 30, 2017 Quarterly Report of the Company is hereby incorporated by reference.
21.		Subsidiaries of Saul Centers, Inc. is filed herewith.
23.		Consent of Independent Registered Public Accounting Firm is filed herewith.
24.		Power of Attorney (included on signature page).
31.		Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer and Chief Financial Officer are filed herewith.
32.		Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer are filed herewith.
101.		The following financial statements from the Company’s Annual Report on Form 10-K for the year ended December 31, 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.

70

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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:	February 27, 2018	/s/ B. Francis Saul II
		B. Francis Saul II
		Chairman of the Board of Directors & Chief Executive Officer (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons in the capacities indicated. Each person whose signature appears below hereby constitutes and appoints each of B. Francis Saul II, J. Page Lansdale and Scott V. Schneider as his attorney-in-fact and agent, with full power of substitution and resubstitution for him in any and all capacities, to sign any or all amendments to this Report and to file same, with exhibits thereto and other documents in connection therewith, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that such attorney-in-fact and agent or his substitutes may do or cause to be done by virtue hereof.

Date:	February 27, 2018	/s/ J. Page Lansdale
		J. Page Lansdale, President and Director
Date:	February 27, 2018	/s/ Philip D. Caraci
		Philip D. Caraci, Vice Chairman
Date:	February 27, 2018	/s/ Scott V. Schneider
		Scott V. Schneider, Senior Vice President, Treasurer and Secretary (Principal Financial Officer)
Date:	February 27, 2018	/s/ Joel A. Friedman
		Joel A. Friedman, Senior Vice President-Chief Accounting Officer (Principal Accounting Officer)
Date:	February 27, 2018	/s/ John E. Chapoton
		John E. Chapoton, Director
Date:	February 27, 2018	/s/ G. Patrick Clancy, Jr.
		G. Patrick Clancy, Jr., Director

71

Date:	February 27, 2018	/s/ Philip C. Jackson Jr.
		Philip C. Jackson Jr., Director
Date:	February 27, 2018	/s/ Patrick F. Noonan
		Patrick F. Noonan, Director
Date:	February 27, 2018	/s/ H. Gregory Platts
		H. Gregory Platts, Director
Date:	February 27, 2018	/s/ Andrew M. Saul II
		Andrew M. Saul II Director
Date:	February 27, 2018	/s/ Mark Sullivan III
		Mark Sullivan III, Director
Date:	February 27, 2018
		John R. Whitmore, Director

72

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Saul Centers, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Saul Centers, Inc. (the Company) as of December 31, 2017 and 2016, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the three years in the period ended December 31, 2017, and the related notes and financial statement schedule listed in the Index at Item 15(a)2(b) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017 and 2016, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 27, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2002.

Tysons, Virginia

February 27, 2018

F-1

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Saul Centers, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Saul Centers, Inc.’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), (the COSO criteria). In our opinion, Saul Centers, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of

December 31, 2017, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the 2017 consolidated financial statements of the Company and our report dated

February 27, 2018 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Assessment of Effectiveness of Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Tysons, Virginia

February 27, 2018

F-2

Saul Centers, Inc.

CONSOLIDATED BALANCE SHEETS

	December 31,
(Dollars in thousands, except per share amounts)	2017			2016
Assets
Real estate investments
Land	$	450,256		$	422,546
Buildings and equipment	1,261,830			1,214,697
Construction in progress	91,114			63,570
	1,803,200			1,700,813
Accumulated depreciation	(488,166		)	(458,279		)
	1,315,034			1,242,534
Cash and cash equivalents	10,908			8,322
Accounts receivable and accrued income, net	54,057			52,774
Deferred leasing costs, net	27,255			25,983
Prepaid expenses, net	5,248			5,057
Other assets	9,950			8,355
Total assets	$	1,422,452		$	1,343,025
Liabilities
Mortgage notes payable	$	897,888		$	783,400
Revolving credit facility payable	60,734			48,217
Construction loan payable	—			68,672
Dividends and distributions payable	18,520			17,953
Accounts payable, accrued expenses and other liabilities	23,123			20,838
Deferred income	29,084			30,696
Total liabilities	1,029,349			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, 22,123,128 and 21,704,359 shares issued and outstanding, respectively	221			217
Additional paid-in capital	352,590			328,171
Accumulated deficit	(197,710		)	(188,584		)
Accumulated other comprehensive loss	(696		)	(1,299		)
Total Saul Centers, Inc. equity	334,405			318,505
Noncontrolling interests	58,698			54,744
Total equity	393,103			373,249
Total liabilities and equity	$	1,422,452		$	1,343,025

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

F-3

Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

	For The Year Ended December 31,
(Dollars in thousands, except per share amounts)	2017			2016			2015
Revenue
Base rent	$	181,141		$	172,381		$	168,303
Expense recoveries	35,347			34,269			32,911
Percentage rent	1,458			1,379			1,608
Other	9,339			9,041			6,255
Total revenue	227,285			217,070			209,077
Operating expenses
Property operating expenses	27,689			27,527			26,565
Provision for credit losses	906			1,494			915
Real estate taxes	26,997			24,680			23,663
Interest expense and amortization of deferred debt costs	47,225			45,683			45,165
Depreciation and amortization of deferred leasing costs	45,694			44,417			43,270
General and administrative	18,176			17,496			16,353
Acquisition related costs	—			60			84
Predevelopment expenses	—			—			132
Total operating expenses	166,687			161,357			156,147
Operating income	60,598			55,713			52,930
Change in fair value of derivatives	70			(6		)	(10		)
Gains on sales of properties	—			1,013			11
Net Income	60,668			56,720			52,931
Income attributable to noncontrolling interests	(12,411		)	(11,441		)	(10,463		)
Net income attributable to Saul Centers, Inc.	48,257			45,279			42,468
Preferred dividends	(12,375		)	(12,375		)	(12,375		)
Net income available to common stockholders	$	35,882		$	32,904		$	30,093
Per share net income available to common stockholders
Basic	$	1.64		$	1.53		$	1.42
Diluted	$	1.63		$	1.52		$	1.42

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

F-4

Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	For The Year Ended December 31,
(Dollars in thousands)	2017			2016			2015
Net income	$	60,668		$	56,720		$	52,931
Other comprehensive income
Unrealized gain on cash flow hedge	812			678			124
Total comprehensive income	61,480			57,398			53,055
Comprehensive income attributable to noncontrolling interests	(12,620		)	(11,616		)	(10,495		)
Total comprehensive income attributable to Saul Centers, Inc.	48,860			45,782			42,560
Preferred dividends	(12,375		)	(12,375		)	(12,375		)
Total comprehensive income available to common stockholders	$	36,485		$	33,407		$	30,185

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

F-5

CONSOLIDATED STATEMENTS OF EQUITY
(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 Interests			Total
Balance, December 31, 2014	$	180,000	$	209	$	287,995	$	(173,774	)	$	(1,894	)	$	292,536		$	46,721		$	339,257
Issuance of common stock:
201,212 shares pursuant to dividend reinvestment plan	—		3		10,647		—			—			10,650			—			10,650
117,886 shares due to exercise of employee stock options and issuance of directors' deferred stock	—		1		6,366		—			—			6,367			—			6,367
Issuance of 107,037 partnership units pursuant to dividend reinvestment plan	—		—		—		—			—			—			5,673			5,673
Net income	—		—		—		42,468			—			42,468			10,463			52,931
Change in unrealized loss on cash flow hedge	—		—		—		—			92			92			32			124
Series C preferred stock distributions	—		—		—		(9,282		)	—			(9,282		)	—			(9,282		)
Common stock distributions	—		—		—		(27,265		)	—			(27,265		)	(9,349		)	(36,614		)
Distributions payable on Series C preferred stock, $42.97 per share	—		—		—		(3,093		)	—			(3,093		)	—			(3,093		)
Distributions payable common stock ($0.43/share) and partnership units ($0.43/unit)	—		—		—		(9,145		)	—			(9,145		)	(3,141		)	(12,286		)
Balance, December 31, 2015	180,000		213		305,008		(180,091		)	(1,802		)	303,328			50,399			353,727
Issuance of common stock:
186,797 shares pursuant to dividend reinvestment plan	—		2		10,309		—			—			10,311			—			10,311
251,323 shares due to exercise of employee stock options and issuance of directors' deferred stock	—		2		12,854		—			—			12,856			—			12,856
Issuance of 124,758 partnership units pursuant to dividend reinvestment plan	—		—		—		—			—			—			6,910			6,910
Net income	—		—		—		45,279			—			45,279			11,441			56,720
Change in unrealized loss on cash flow hedge	—		—		—		—			503			503			175			678
Series C preferred stock distributions	—		—		—		(9,282		)	—			(9,282		)	—			(9,282		)
Common stock distributions	—		—		—		(30,328		)	—			(30,328		)	(10,392		)	(40,720		)
Distributions payable on Series C preferred stock, $42.97 per share	—		—		—		(3,093		)	—			(3,093		)	—			(3,093		)
Distributions payable common stock ($0.51/share) and partnership units ($0.51/unit)	—		—		—		(11,069		)	—			(11,069		)	(3,789		)	(14,858		)
CONSOLIDATED STATEMENTS OF EQUITY (continued)
(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 Interests			Total
Balance, December 31, 2016	180,000		217		328,171		(188,584		)	(1,299		)	318,505			54,744			373,249
Issuance of common stock:
266,011 shares pursuant to dividend reinvestment plan	—		2		15,748		—			—			15,750			—			15,750
152,758 shares due to exercise of employee stock options and issuance of directors' deferred stock	—		2		8,671		—			—			8,673			—			8,673
Issuance of 111,351 partnership units pursuant to dividend reinvestment plan	—		—		—		—			—			—			6,735			6,735
Net income	—		—		—		48,257			—			48,257			12,411			60,668
Change in unrealized loss on cash flow hedge	—		—		—		—			603			603			209			812
Series C preferred stock distributions	—		—		—		(9,282		)	—			(9,282		)	—			(9,282		)
Common stock distributions	—		—		—		(33,490		)	—			(33,490		)	(11,479		)	(44,969		)
Distributions payable on Series C preferred stock, $42.97 per share	—		—		—		(3,093		)	—			(3,093		)	—			(3,093		)
Distributions payable common stock ($0.52/share) and partnership units ($0.52/unit)	—		—		—		(11,518		)	—			(11,518		)	(3,922		)	(15,440		)
Balance, December 31, 2017	$	180,000	$	221	$	352,590	$	(197,710	)	$	(696	)	$	334,405		$	58,698		$	393,103

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

F-6

Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
	For The Year Ended December 31,
(Dollars in thousands)	2017			2016			2015
Cash flows from operating activities:
Net income	$	60,668		$	56,720		$	52,931
Adjustments to reconcile net income to net cash provided by operating activities:
Change in fair value of derivatives	(70		)	6			10
Gains on sales of properties	—			(1,013		)	(11		)
Depreciation and amortization of deferred leasing costs	45,694			44,417			43,270
Amortization of deferred debt costs	1,392			1,343			1,433
Non cash compensation costs of stock grants and options	1,672			1,603			1,434
Provision for credit losses	906			1,494			915
Increase in accounts receivable and accrued income	(1,643		)	(3,525		)	(5,216		)
Additions to deferred leasing costs	(4,615		)	(4,633		)	(5,563		)
Increase in prepaid expenses	(294		)	(399		)	(570		)
(Increase) decrease in other assets	1,374			(6,368		)	1,544
Increase (decrease) in accounts payable, accrued expenses and other liabilities	1,125			921			(937		)
Decrease in deferred income	(2,759		)	(1,476		)	(344		)
Net cash provided by operating activities	103,450			89,090			88,896
Cash flows from investing activities:
Acquisitions of real estate investments	(79,499		)	(48,250		)	(4,894		)
Additions to real estate investments	(17,653		)	(15,564		)	(18,855		)
Additions to development and redevelopment projects	(22,842		)	(27,231		)	(45,870		)
Proceeds from sale of properties (1)	6,688			4,771			32
Net cash used in investing activities	(113,306		)	(86,274		)	(69,587		)
Cash flows from financing activities:
Proceeds from mortgage notes payable	100,000			11,250			46,000
Repayments on mortgage notes payable	(55,679		)	(24,653		)	(52,963		)
Proceeds from construction loans payable	1,437			24,937			39,817
Proceeds from revolving credit facility	63,000			78,500			20,000
Repayments on revolving credit facility	(51,000		)	(57,500		)	(35,000		)
Additions to deferred debt costs	(2,583		)	(125		)	(296		)
Proceeds from the issuance of:
Common stock	22,751			21,564			15,583
Partnership units	6,735			6,910			5,673
Distributions to:
Series C preferred stockholders	(12,375		)	(12,375		)	(12,375		)
Common stockholders	(44,576		)	(39,472		)	(35,645		)
Noncontrolling interests	(15,268		)	(13,533		)	(12,228		)
Net cash provided by (used in) financing activities	12,442			(4,497		)	(21,434		)
Net increase (decrease) in cash and cash equivalents	2,586			(1,681		)	(2,125		)
Cash and cash equivalents, beginning of year	8,322			10,003			12,128
Cash and cash equivalents, end of year	$	10,908		$	8,322		$	10,003
Supplemental disclosure of cash flow information:
Cash paid for interest	$	45,713		$	44,066		$	43,799
Increase (decrease) in accrued real estate investments and development costs	$	2,097		$	(7,098	)	$	5,201

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

Great Eastern property.

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

F-7

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

1. ORGANIZATION, FORMATION, AND BASIS OF PRESENTATION

Organization

Saul Centers, Inc. (“Saul Centers”) was incorporated under the Maryland General Corporation Law on June 10, 1993. Saul Centers 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.

Formation and Structure of Company

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 "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-used 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, developed and/or disposed of by the Company since January 1, 2015.

Name of Property	Location	Type	Year of Acquisition/ Development/ Disposal
Acquisitions
726 N. Glebe Road*	Arlington, Virginia	Shopping Center	September 2015
700 N. Glebe Road	Arlington, Virginia	Development	August 2016
Burtonsville Town Square	Burtonsville, Maryland	Shopping Center	January 2017
Developments
Park Van Ness	Washington, DC	Mixed-Use	2013-2016
750 N. Glebe Road	Arlington, Virginia	Mixed-Use	2017
Dispositions
Crosstown Business Center	Tulsa, Oklahoma	Mixed-Use	December 2016
Great Eastern	District Heights, Maryland	Shopping Center	September 2017

*As of August 2016, this property was removed from operations and reclassified to development.

As of December 31, 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.

Basis of Presentation

The accompanying financial statements are presented on the historical cost basis of the Saul Organization because of affiliated ownership and common management and because the assets and liabilities were

F-8

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

the subject of a business combination with the Operating Partnership, the Subsidiary Partnerships and Saul Centers, all newly formed entities with no prior operations.

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-used properties, primarily in the Washington, DC/Baltimore metropolitan area. Because the properties are located primarily in the Washington, DC/Baltimore metropolitan area, a disproportionate economic downturn in the local economy would have a greater negative impact on our overall financial performance than on the overall financial performance of a company with a portfolio that is more geographically diverse. A majority of the Shopping Centers are anchored by several major tenants. As of December 31, 2017, 32 of the Shopping Centers were anchored by a grocery store and offer primarily day-to-day necessities and services. Two retail tenants, Giant Food (4.7%), a tenant at ten Shopping Centers and Capital One Bank (2.8%), a tenant at 18 properties, individually accounted for 2.5% or more of the Company’s total revenue for the year ended December 31, 2017.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Saul Centers, its subsidiaries, and 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 74.4% of the net income of the Operating Partnership. Because the Operating Partnership was already consolidated into the financial statements of the Company, the identification of it as a VIE has no impact on the consolidated financial statements of the Company.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

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 then 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 property may be improved with an existing structure that would be demolished as part of the development. In such cases, the fair value of the building may be determined based only on existing leases and not include estimated cash flows related to future leases. In certain circumstances, such as if the building is vacant and the Company intends to demolish the building in the near term, the entire purchase price will be allocated to land.

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 a below market lease component is recorded as deferred income and accreted as additional lease revenue over the remaining contractual lease period. If the fair value of the

F-9

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

below market lease intangible includes fair value associated with a renewal option, such amounts are not accreted until the renewal option is exercised. If the renewal option is not exercised the value is recognized at that time. The fair value of above market lease intangibles is recorded as a deferred asset and is amortized as a reduction of lease 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. Acquisition-related transaction costs are either (a) expensed as incurred when related to business combinations or (b) capitalized to land and/or building when related to asset acquisitions.

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 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. The Company did not recognize an impairment loss on any of its real estate in 2017, 2016, or 2015.

Interest, real estate taxes, development related salary costs and other carrying costs are capitalized on projects under development and construction. Once construction is substantially completed and the assets are placed in service, their 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. Property operating expenses are charged to operations as incurred. Interest expense capitalized totaled $3.5 million, $2.5 million, and $2.2 million during 2017, 2016, and 2015, 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 improvements 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 improvement, using the straight-line method. Depreciation expense, which is included in Depreciation and amortization of deferred leasing costs in the Consolidated Statements of Operations, for the years ended December 31, 2017, 2016, and 2015, was $40.2 million, $38.8 million, and $37.7 million, respectively. Repairs and maintenance expense totaled $11.6 million, $11.8 million, and $11.6 million for 2017, 2016, and 2015, respectively, and is included in property operating expenses in the accompanying consolidated financial statements.

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 and amounts attributed to in place leases associated with acquired properties and are amortized, using the straight-line method, over the term of the lease or the remaining term of an

F-10

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

acquired lease. 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 costs are charged to expense if the applicable lease is terminated prior to expiration of the initial lease term. Collectively, deferred leasing costs totaled $27.3 million and $26.0 million, net of accumulated amortization of approximately $35.3 million and $30.4 million, as of December 31, 2017 and 2016, respectively. Amortization expense, which is included in Depreciation and amortization of deferred leasing costs in the Consolidated Statements of Operations, totaled approximately $5.5 million, $5.6 million, and $5.6 million, for the years ended December 31, 2017, 2016, and 2015, respectively.

Construction in Progress

Construction in progress includes 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. The following table shows the components of construction in progress.

	December 31,
(in thousands)	2017		2016
N. Glebe Road	$	83,462	$	58,147
Other	7,652		5,423
Total	$	91,114	$	63,570

Accounts Receivable and Accrued Income

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 consolidated financial statements are shown net of an allowance for doubtful accounts of $0.4 million and $2.0 million, at December 31, 2017 and 2016, respectively.

(In thousands)	Year ended December 31,
	2017			2016			2015
Beginning Balance	$	1,958		$	1,263		$	677
Provision for Credit Losses	906			1,494			915
Charge-offs	(2,459		)	(799		)	(329		)
Ending Balance	$	405		$	1,958		$	1,263

In addition to rents due currently, accounts receivable also includes $44.1 million and $43.1 million, at December 31, 2017 and 2016, respectively, net of allowance for doubtful accounts totaling $0.2 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;

F-11

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

• 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 December 31, 2015, the Company has classified as held-for-sale one operating property, comprising 197,100 square feet of gross leasable area. The book value of this property, which is included in Other Assets, was $3.4 million, net of accumulated depreciation of $7.0 million, which does not exceed its estimated fair value, less costs to sell, and liabilities were $0.2 million. The asset was sold in 2016.

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. Substantially all of the Company’s cash balances at December 31, 2017 are held in non-interest bearing accounts at various banks. From time to time the Company may maintain deposits with financial institutions in amounts in excess of federally insured limits. The Company has not experienced any losses on such deposits and believes it is not exposed to any significant credit risk on those deposits.

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 $6.9 million and $7.5 million, net of accumulated amortization of $8.2 million and $7.3 million at December 31, 2017 and 2016, respectively, and are reflected as a reduction of the related debt in the Consolidated Balance Sheets. At December 31, 2017, deferred debt costs totaling $1.8 million, related to the Glebe Road construction loan, which has no outstanding balance, are included in Other Assets in the Consolidated Balance Sheets.

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.

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 on the consolidated balance sheets. For those derivative instruments that qualify, the Company may designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge or a cash flow hedge. Derivative instruments that are designated as a hedge are evaluated to ensure they continue to qualify for hedge accounting. The effective portion of any 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.

F-12

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

For derivative instruments that do not meet the criteria for hedge accounting, or that qualify and are not designated, changes in fair value are immediately recognized in earnings.

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 stepped increases, income is recognized on a straight-line basis. Expense recoveries represent a portion of property operating expenses billed to the 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 (“percentage rent”) is accrued when a tenant reports sales that exceed a specified breakpoint, pursuant to the terms of their respective leases.

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 complies with certain other requirements. Therefore, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

As of December 31, 2017, the Company had no material unrecognized tax benefits and there exist no potentially significant unrecognized tax benefits which are reasonably expected to occur within the next twelve months. The Company recognizes penalties and interest accrued related to unrecognized tax benefits, if any, as general and administrative expense. No penalties and interest have been accrued in years 2017, 2016, and 2015. The tax basis of the Company’s real estate investments was approximately $1.32 billion and $1.26 billion as of December 31, 2017 and 2016, respectively. With few exceptions, the Company is no longer subject to U.S. federal, state, and local tax examinations by tax authorities for years before 2013.

Stock Based Employee Compensation, Deferred Compensation and Stock 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 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 common stock’s closing market price on the first trading day of the following quarter to determine the number of shares to be allocated to the director. As of December 31, 2017, the directors’ deferred fee accounts comprise 183,818 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

F-13

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

Annual Meeting of Stockholders. The shares are awarded as of each Annual Meeting of Shareholders, and their issuance may not be deferred. Each director was issued 200 shares for each of the years ended December 31, 2017, 2016, and 2015. The shares were valued at the closing stock price on the dates the shares were awarded and included in general and administrative expenses in the total amounts of $130,700, $150,100, and $143,000, for the years ended December 31, 2017, 2016, and 2015, respectively.

Noncontrolling Interest

Saul Centers is the sole general partner of the Operating Partnership, owning a 74.4% common interest as of December 31, 2017. Noncontrolling interest in the Operating Partnership is comprised of limited partnership units owned by the Saul Organization. Noncontrolling interest 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 interest reflected on the consolidated statements of operations represents earnings allocated to limited partnership interests held by the Saul Organization.

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 anti-dilutive. The treasury stock method was used to measure the effect of the dilution.

	December 31,
(Shares in thousands)	2017		2016		2015
Weighted average common shares outstanding - Basic	21,901		21,505		21,127
Effect of dilutive options	107		110		69
Weighted average common shares outstanding - Diluted	22,008		21,615		21,196
Average share price	$	61.63	$	58.96	$	53.38
Non-dilutive options	—		129		111
Years non-dilutive options were issued			2007, 2015, and 2016		2007 and 2015

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. 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.

Recently Issued Accounting Standards

In May 2014, the FASB issued ASU No. 2014-09 titled “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 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. Management believes the majority of the Company's revenue falls outside of the scope of this guidance and does not anticipate any significant changes to the timing of the Company's revenue recognition. The Company intends to implement the standard retrospectively with the cumulative effect recognized in retained earnings at the date of adoption.

In February 2015, the FASB issued ASU No. 2015-02, “Consolidation” ("ASU 2015-02"). ASU 2015-02 modifies existing consolidation guidance for reporting organizations that are required to evaluate

F-14

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. ASU 2015-02 is effective for annual periods beginning after December 15, 2015, and interim periods within those years. The adoption of ASU 2015-02 effective January 1, 2016, resulted in the Operating Partnership being classified as a variable interest entity. Because the Operating Partnership was already consolidated into the financial statements, adoption had no impact on the Company’s consolidated financial statements or disclosures.

In April 2015, the FASB issued ASU No. 2015-03, “Interest - Imputation of Interest” (“ASU 2015-03”). ASU 2015-03 simplifies the presentation of debt issuance costs and will require an entity to deduct transaction costs from the carrying value of the related financial liability and not record those transaction costs as a separate asset. Recognition and measurement guidance for debt issuance costs are not affected by ASU 2015-03. ASU 2015-03 is effective for annual periods beginning after December 15, 2015, and interim periods within those years, and must be applied retrospectively by adjusting the balance sheet of each individual period presented. The Company retrospectively adopted ASU 2015-03 effective January 1, 2016. As a result of the adoption of ASU 2015-03, the Company no longer reports its net deferred debt costs as an asset and instead reports those amounts as reduction of the carrying value of the associated debt.

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 our consolidated financial statements or 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 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 during the first quarter of 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 assessment liabilities at relative fair value, instead of fair value. 

Reclassifications

Certain reclassifications have been made to prior years to conform to the presentation used for year ended December 31, 2017.

F-15

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

3. REAL ESTATE ACQUIRED

700, 726, 730 and 750 N. Glebe Road

In August 2014, the Company purchased for $40.0 million, 750 N. Glebe Road and incurred acquisition costs of $0.4 million. In December 2014, the Company purchased for $2.8 million730 N. Glebe Road and incurred acquisition costs of $40,400. In September 2015, the Company purchased for $4.0 million726 N. Glebe Road and incurred acquisition costs of $0.1 million. In August 2016, the Company purchased for $7.2 million, including acquisition costs, 700 N. Glebe Road. These properties are contiguous and are located in Arlington, Virginia.

Westview pad

In February 2015, the Company purchased for $0.9 million including acquisition costs, a 1.1 acre retail pad site in Frederick, Maryland, which is contiguous with and an expansion of the Company's other Westview asset.

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 the fourth quarter of 2016, the Company purchased for $22.7 million, including acquisition costs, 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 Company’s revolving credit facility.

Southdale

In the fourth quarter of 2016, the Company purchased for $15.3 million, including acquisition costs, 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 Company’s 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 $3.1 million, including acquisition costs, 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.

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. See Note 2. Summary of Significant Accounting Policies-Real Estate Investment Properties.

During 2017, the Company purchased one property, Burtonsville Town Square, at a cost of $76.4 million, including acquisition costs. Of the total acquisition cost, $28.4 million was allocated to land, $45.8 million was allocated to buildings, $2.2 million was allocated to in-place leases, $0.6 million was allocated to above-market rent, and $(0.6) million was allocated to below-market rent, based on their relative fair values.

F-16

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

During 2016, the Company purchased two properties at an aggregate cost of $10.3 million, and incurred acquisition costs totaling $60,400. The purchase price was allocated to the assets acquired and liabilities assumed based on their fair value as shown in the following table.

(in thousands)	700 N. Glebe Road		Thruway Pad			Total
Land	$	7,236	$	2,196		$	9,432
Buildings	—		874			874
In-place Leases	—		93			93
Above Market Rent	—		—			—
Below Market Rent	—		(63		)	(63		)
Total Purchase Price	$	7,236	$	3,100		$	10,336

During 2015, the Company purchased one property, 726 N. Glebe Road, at a cost of $4.0 million and incurred acquisition costs of $0.1 million. Of the total purchase price, $3.9 million was allocated to land and $0.1 million was allocated to building. No amounts were allocated to in-place, above-market or below-market leases.

The gross carrying amount of lease intangible assets included in deferred leasing costs as of December 31, 2017 and 2016 was $12.3 million and $10.1 million, respectively, and accumulated amortization was $7.5 million and $6.4 million, respectively. Amortization expense totaled $1.1 million, $1.0 million and $1.3 million, for the years ended December 31, 2017, 2016, and 2015, respectively. The gross carrying amount of below market lease intangible liabilities included in deferred income as of December 31, 2017 and 2016 was $25.1 million and $25.1 million, respectively, and accumulated amortization was $11.8 million and $10.6 million, respectively. Accretion income totaled $1.7 million, $1.8 million, and $1.8 million, for the years ended December 31, 2017, 2016, and 2015, respectively. The gross carrying amount of above market lease intangible assets included in accounts receivable as of December 31, 2017 and 2016 was $0.6 million and $10,200, respectively, and accumulated amortization was $39,500 and $7,800, respectively. Amortization expense totaled $31,600, $1,500 and $1,500, for the years ended December 31, 2017, 2016 and 2015, respectively. The remaining weighted-average amortization period as of December 31, 2017 is 4.6 years, 5.8 years, and 8.8 years for lease acquisition costs, above market leases and below market leases, respectively.

As of December 31, 2017, scheduled amortization of intangible assets and deferred income related to in place leases is as follows:

(In thousands)	Lease acquisition costs		Above market leases		Below market leases
2018	$	982	$	33	$	1,652
2019	780		33		1,515
2020	653		33		1,433
2021	530		33		1,409
2022	390		33		1,306
Thereafter	1,547		409		6,029
Total	$	4,882	$	574	$	13,344

4. NONCONTROLLING INTERESTS - HOLDERS OF CONVERTIBLE LIMITED PARTNERSHIP UNITS IN THE OPERATING PARTNERSHIP

The Saul Organization holds a 25.6% limited partnership interest in the Operating Partnership represented by 7,541,867 limited partnership units, as of December 31, 2017. The 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

F-17

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

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 December 31, 2017, approximately 740,000 units were eligible for conversion.

The impact of the Saul Organization’s 25.6% 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 shares outstanding for the years ended December 31, 2017, 2016, and 2015, were 29,510,900, 28,989,900, and 28,449,400, respectively.

5. MORTGAGE NOTES PAYABLE, REVOLVING CREDIT FACILITY, INTEREST EXPENSE AND AMORTIZATION OF DEFERRED DEBT COSTS

At December 31, 2017, the principal amount of outstanding debt totaled $965.5 million, of which $890.4 million was fixed rate debt and $75.1 million was variable rate debt. The principal amount of the Company’s outstanding debt totaled $907.8 million at December 31, 2016, of which $844.3 million was fixed rate debt and $63.5 million was variable rate debt. At December 31, 2017, the Company had a $275.0 million unsecured revolving credit facility, which can be used for working capital, property acquisitions or development projects. 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 December 31, 2017, based on the value of the Company's unencumbered properties, approximately $213.8 million was available under the line, $61.0 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 December 31, 2017, the margin was 145 basis points.

Saul Centers is a guarantor of the revolving credit facility, of which the Operating Partnership is the borrower, a portion of the Metro Pike Center bank loan (approximately $7.8 million of the $14.1 million outstanding at December 31, 2017), a portion of the Park Van Ness construction-to-permanent loan (approximately $53.7 million of the $71.2 million outstanding balance at December 31, 2017), and a portion of the Kentlands Square II mortgage loan (approximately $9.2 million of the $36.5 million outstanding at December 31, 2017). All other notes payable are non-recourse.

On March 3, 2015, the Company closed on a 15-year, non-recourse $30.0 million mortgage loan secured by Shops at Fairfax and Boulevard. The loan matures in 2030, bears interest at a fixed rate of 3.69%, requires monthly principal and interest payments totaling $153,300 based on a 25-year amortization schedule and requires a final payment of $15.5 million at maturity. Proceeds were used to repay in full the $15.2 million remaining balance of existing debt secured by Shops at Fairfax and Boulevard and to reduce outstanding borrowings under the revolving credit facility.

On April 1, 2015, the Company closed on a 15-year, non-recourse $16.0 million mortgage loan secured by Northrock. The loan matures in 2030, bears interest at a fixed rate of 3.99%, requires monthly principal and interest payments totaling $84,400 based on a 25-year amortization schedule and requires a final payment of $8.4 million at maturity. Proceeds were used to repay in full the $14.5 million remaining balance of existing debt secured by Northrock.

In November 2016, the existing loan secured by Beacon Center was increased by $11.25 million. The interest rate, amortization period and maturity date did not change; the required monthly payment was increased to $268,500. Proceeds were used to partially fund the purchase of the ground which underlies Beacon Center.

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 million at maturity.

F-18

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

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.

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 November 20, 2017, the Company closed on a 15-year, non-recourse $60.0 million mortgage loan secured by Washington Square. The loan matures in 2032, bears interest at a fixed rate of 3.75%, requires monthly principal and interest payments of $308,500 based on a 25-year amortization schedule and requires a final payment of $31.1 million. Proceeds were used to repay the remaining balance of approximately $28.1 million on the existing mortgage and reduce the outstanding balance of the revolving credit facility.

F-19

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

The following is a summary of notes payable as of December 31, 2017 and 2016.

Notes Payable	December 31,					Interest		Scheduled
(Dollars in thousands)	2017			2016		Rate *		Maturity *
Fixed rate mortgages:	$	—	(a)	$	29,428	6.01	%	Feb-2018
	30,201		(b)	32,036		5.88	%	Jan-2019
	9,783		(c)	10,372		5.76	%	May-2019
	13,529		(d)	14,335		5.62	%	Jul-2019
	13,543		(e)	14,325		5.79	%	Sep-2019
	12,029		(f)	12,725		5.22	%	Jan-2020
	9,948		(g)	10,277		5.60	%	May-2020
	8,244		(h)	8,697		5.30	%	Jun-2020
	37,998		(i)	39,213		5.83	%	Jul-2020
	7,325		(j)	7,685		5.81	%	Feb-2021
	5,649		(k)	5,808		6.01	%	Aug-2021
	32,673		(l)	33,571		5.62	%	Jun-2022
	9,999		(m)	10,253		6.08	%	Sep-2022
	10,877		(n)	11,129		6.43	%	Apr-2023
	12,577		(o)	13,401		6.28	%	Feb-2024
	15,452		(p)	15,917		7.35	%	Jun-2024
	13,438		(q)	13,832		7.60	%	Jun-2024
	23,873		(r)	24,504		7.02	%	Jul-2024
	28,115		(s)	28,945		7.45	%	Jul-2024
	28,025		(t)	28,822		7.30	%	Jan-2025
	14,537		(u)	14,961		6.18	%	Jan-2026
	105,817		(v)	109,144		5.31	%	Apr-2026
	32,016		(w)	33,097		4.30	%	Oct-2026
	36,507		(x)	37,701		4.53	%	Nov-2026
	17,086		(y)	17,630		4.70	%	Dec-2026
	64,472		(z)	66,210		5.84	%	May-2027
	15,859		(aa)	16,352		4.04	%	Apr-2028
	39,968		(bb)	41,753		3.51	%	Jun-2028
	16,055		(cc)	16,543		3.99	%	Sep-2028
	27,884		(dd)	28,679		3.69	%	Mar-2030
	14,950		(ee)	15,357		3.99	%	Apr-2030
	39,140		(ff)	—		3.39	%	Feb-2032
	71,211		(gg)	70,144		4.88	%	Sep-2032
	60,000		(hh)	—		3.75	%	Dec-2032
	11,613		(ii)	11,446		8.00	%	Apr-2034
Total fixed rate	890,393			844,292		5.25	%	8.6 Years
Variable rate loans:
	61,000		(jj)	49,000		LIBOR + 1.45	%	Jun-2018
	14,135		(kk)	14,482		LIBOR + 1.65	%	Feb-2018
Total variable rate	$	75,135		$	63,482	2.86	%	0.4 Years
Total notes payable	$	965,528		$	907,774	5.07	%	7.9 Years

* Interest rate and scheduled maturity data presented as of December 31, 2017. Totals computed using weighted averages. Amounts shown are principal amounts and have not been reduced by any deferred debt issuance costs.

F-20

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

(a) The loan was collateralized by Washington Square and required equal monthly principal and interest payments of $264,000 based upon a 27.5-year amortization schedule and a final payment of $28.0 million at loan maturity. In 2017, the loan was repaid in full and replaced with a new $60.0 million loan. See (hh) below.

(b) The loan is collateralized by three shopping centers, Broadlands Village, The Glen and Kentlands Square I, and requires equal monthly principal and interest payments of $306,000 based upon a 25-year amortization schedule and a final payment of $28.4 million at loan maturity. Principal of $1.8 million was amortized during 2017.

(c) The loan is collateralized by Olde Forte Village and requires equal monthly principal and interest payments of $98,000 based upon a 25-year amortization schedule and a final payment of $9.0 million at loan maturity. Principal of $589,000 was amortized during 2017.

(d) The loan is collateralized by Countryside and requires equal monthly principal and interest payments of $133,000 based upon a 25-year amortization schedule and a final payment of $12.3 million at loan maturity. Principal of $806,000 was amortized during 2017.

(e) The loan is collateralized by Briggs Chaney MarketPlace and requires equal monthly principal and interest payments of $133,000 based upon a 25-year amortization schedule and a final payment of $12.2 million at loan maturity. Principal of $782,000 was amortized during 2017.

(f) The loan is collateralized by Shops at Monocacy and requires equal monthly principal and interest payments of $112,000 based upon a 25-year amortization schedule and a final payment of $10.6 million at loan

maturity. Principal of $696,000 was amortized during 2017.

(g) The loan is collateralized by Boca Valley Plaza and requires equal monthly principal and interest payments of $75,000 based upon a 30-year amortization schedule and a final payment of $9.1 million at loan maturity. Principal of $329,000 was amortized during 2017.

(h) The loan is collateralized by Palm Springs Center and requires equal monthly principal and interest payments of $75,000 based upon a 25-year amortization schedule and a final payment of $7.1 million at loan maturity. Principal of $453,000 was amortized during 2017.

(i) The loan and a corresponding interest-rate swap closed on June 29, 2010 and are collateralized by Thruway. On a combined basis, the loan and the interest-rate swap require equal monthly principal and interest payments of $289,000 based upon a 25-year amortization schedule and a final payment of $34.8 million at loan maturity. Principal of $1.2 million was amortized during 2017.

(j) The loan is collateralized by Jamestown Place and requires equal monthly principal and interest payments of $66,000 based upon a 25-year amortization schedule and a final payment of $6.1 million at loan maturity. Principal of $360,000 was amortized during 2017.

(k) The loan is collateralized by Hunt Club Corners and requires equal monthly principal and interest payments of $42,000 based upon a 30-year amortization schedule and a final payment of $5.0 million, at loan maturity. Principal of $159,000 was amortized during 2017.

(l) The loan is collateralized by Lansdowne Town Center and requires monthly principal and interest payments of $230,000 based on a 30-year amortization schedule and a final payment of $28.2 million at loan maturity. Principal of $898,000 was amortized during 2017.

(m) The loan is collateralized by Orchard Park and requires equal monthly principal and interest payments of $73,000 based upon a 30-year amortization schedule and a final payment of $8.6 million at loan maturity. Principal of $254,000 was amortized during 2017.

(n) The loan is collateralized by BJ’s Wholesale and requires equal monthly principal and interest payments of $80,000 based upon a 30-year amortization schedule and a final payment of $9.3 million at loan maturity. Principal of $252,000 was amortized during 2017.

(o) The loan is collateralized by Great Falls shopping center. The loan consists of three notes which require equal monthly principal and interest payments of $138,000 based upon a weighted average 26-year amortization schedule and a final payment of $6.3 million at maturity. Principal of $824,000 was amortized during 2017.

(p) The loan is collateralized by Leesburg Pike and requires equal monthly principal and interest payments of $135,000 based upon a 25-year amortization schedule and a final payment of $11.5 million at loan maturity. Principal of $465,000 was amortized during 2017.

F-21

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

(q) The loan is collateralized by Village Center and requires equal monthly principal and interest payments of $119,000 based upon a 25-year amortization schedule and a final payment of $10.1 million at loan maturity. Principal of $394,000 was amortized during 2017.

(r) The loan is collateralized by White Oak and requires equal monthly principal and interest payments of $193,000 based upon a 24.4 year weighted amortization schedule and a final payment of $18.5 million at loan maturity. The loan was previously collateralized by Van Ness Square. During 2012, the Company substituted White Oak as the collateral and borrowed an additional $10.5 million. Principal of $631,000 was amortized during 2017.

(s) The loan is collateralized by Avenel Business Park and requires equal monthly principal and interest payments of $246,000 based upon a 25-year amortization schedule and a final payment of $20.9 million at loan maturity. Principal of $830,000 was amortized during 2017.

(t) The loan is collateralized by Ashburn Village and requires equal monthly principal and interest payments of $240,000 based upon a 25-year amortization schedule and a final payment of $20.5 million at loan maturity. Principal of $797,000 was amortized during 2017.

(u) The loan is collateralized by Ravenwood and requires equal monthly principal and interest payments of $111,000 based upon a 25-year amortization schedule and a final payment of $10.1 million at loan maturity. Principal of $424,000 was amortized during 2017.

(v) The loan is collateralized by Clarendon Center and requires equal monthly principal and interest payments of $753,000 based upon a 25-year amortization schedule and a final payment of $70.5 million at loan maturity. Principal of $3.3 million was amortized during 2017.

(w) The loan is collateralized by Severna Park MarketPlace and requires equal monthly principal and interest payments of $207,000 based upon a 25-year amortization schedule and a final payment of $20.3 million at loan maturity. Principal of $1.1 million was amortized during 2017.

(x) The loan is collateralized by Kentlands Square II and requires equal monthly principal and interest payments of $240,000 based upon a 25-year amortization schedule and a final payment of $23.1 million at loan maturity. Principal of $1.2 million was amortized during 2017.

(y) The loan is collateralized by Cranberry Square and requires equal monthly principal and interest payments of $113,000 based upon a 25-year amortization schedule and a final payment of $10.9 million at loan maturity. Principal of $544,000 was amortized during 2017.

(z) The loan in the original amount of $73.0 million closed in May 2012, is collateralized by Seven Corners and requires equal monthly principal and interest payments of $463,200 based upon a 25-year amortization schedule and a final payment of $42.3 million at loan maturity. Principal of $1.7 million was amortized during 2017.

(aa) The loan is collateralized by Hampshire Langley and requires equal monthly principal and interest payments of $95,400 based upon a 25 -year amortization schedule and a final payment of $9.5 million at loan maturity. Principal of $493,000 was amortized in 2017.

(bb) The loan is collateralized by Beacon Center and requires equal monthly principal and interest payments of $268,500 based upon a 20-year amortization schedule and a final payment of $17.1 million at loan maturity. Principal of $1.8 million was amortized in 2017.

(cc) The loan is collateralized by Seabreeze Plaza and requires equal monthly principal and interest payments of $94,900 based upon a 25-year amortization schedule and a final payment of $9.5 million at loan maturity. Principal of $488,000 was amortized in 2017.

(dd) The loan is collateralized by Shops at Fairfax and Boulevard shopping centers and requires equal monthly principal and interest payments totaling $153,300 based upon a 25-year amortization schedule and a final payment of $15.5 million at maturity. Principal of $795,000 was amortized in 2017.

(ee) The loan is collateralized by Northrock and requires equal monthly principal and interest payments totaling $84,400 based upon a 25-year amortization schedule and a final payment of $8.4 million at maturity. Principal of $407,000 was amortized in 2017.

(ff) The loan is collateralized by Burtonsville Town Square and requires equal monthly principal and interest payments of $198,000 based on a 25-year amortization schedule and a final payment of $20.3 million at loan maturity. Principal of $860,000 was amortized in 2017.

(gg) The loan is a $71.6 million construction-to-permanent facility that is collateralized by and financed a portion of the construction costs of Park Van Ness. During the construction period, interest was funded by the loan. Effective September 1, 2017, the loan converted to permanent financing and requires monthly principal and

F-22

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

interest payments totaling $413,500 based upon a 25-year amortization schedule. A final payment of $39.6 million will be due at maturity. Principal of $369,000 was amortized in 2017.

(hh) The loan is collateralized by Washington Square and requires equal monthly principal and interest payments of $308,000 based upon a 25-year amortization schedule and a final payment of $31.1 million at loan maturity.

(ii) The Company entered into a sale-leaseback transaction with its Olney property and is accounting for that transaction as a secured financing. The arrangement requires monthly payments of $60,400 which increase by 1.5% on May 1, 2015, and every May 1 thereafter. The arrangement provides for a final payment of $14.7 million and has an implicit interest rate of 8.0%. Negative amortization in 2017 totaled $167,000.

(jj) The loan is a $275.0 million unsecured revolving credit facility. Interest accrues at a rate equal to the sum of one-month LIBOR plus a spread of 145 basis points. The line may be extended at the Company’s option for one year with payment of a fee of 0.15%. Monthly payments, if required, are interest only and vary depending upon the amount outstanding and the applicable interest rate for any given month.

(kk) The loan is collateralized by Metro Pike Center and requires monthly principal and interest payments of approximately $48,000 and a final payment of $14.2 million at loan maturity. Principal of $347,000 was amortized during 2017.

The carrying value of the properties collateralizing the mortgage notes payable totaled $1.0 billion and $957.2 million, as of December 31, 2017 and 2016, respectively. The Company’s credit facility requires the Company and its subsidiaries to maintain certain financial covenants, which are summarized below. The Company was in compliance as of December 31, 2017.

• 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 2.0 x 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).

Mortgage notes payable at each of December 31, 2017 and 2016, totaling $51.0 million, are guaranteed by members of the Saul Organization. As of December 31, 2017, the scheduled maturities of all debt including scheduled principal amortization for years ended December 31 are as follows:

(in thousands)	Balloon Payments			Scheduled Principal Amortization		Total
2018	$	75,105	(a)	$	30,160	$	105,265
2019	60,793			29,272		90,065
2020	61,163			26,743		87,906
2021	11,012			26,456		37,468
2022	36,503			26,958		63,461
Thereafter	436,325			145,038		581,363
Principal amount	$	680,901		$	284,627	965,528
Unamortized deferred debt costs						6,906
Net						$	958,622

(a) Includes $61.0 million outstanding under the line of credit.

F-23

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

The components of interest expense are set forth below.

(in thousands)	Year ended December 31,
	2017			2016			2015
Interest incurred	$	49,322		$	46,867		$	45,898
Amortization of deferred debt costs	1,392			1,343			1,433
Capitalized interest	(3,489		)	(2,527		)	(2,166		)
Total	$	47,225		$	45,683		$	45,165

Deferred debt costs capitalized during the years ending December 31, 2017, 2016 and 2015 totaled $2.6 million, $0.1 million and $0.3 million, respectively.

6. LEASE AGREEMENTS

Lease income includes primarily base rent arising from noncancelable leases. Base rent (including straight-line rent) for the years ended December 31, 2017, 2016, and 2015, amounted to $181.1 million, $172.4 million, and $168.3 million, respectively. Future contractual payments under noncancelable leases for years ended December 31 (which exclude the effect of straight-line rents), are as follows: 

(in thousands)
2018	$	160,025
2019	141,097
2020	120,369
2021	100,766
2022	77,312
Thereafter	245,103
	$	844,672

The majority of the leases provide for rental increases and expense recoveries based on fixed annual increases or increases in the Consumer Price Index and increases in operating expenses. The expense recoveries generally are payable in equal installments throughout the year based on estimates, with adjustments made in the succeeding year. Expense recoveries for the years ended December 31, 2017, 2016, and 2015, amounted to $35.3 million, $34.3 million, and $32.9 million, respectively. In addition, certain retail leases provide for percentage rent based on sales in excess of the minimum specified in the tenant’s lease. Percentage rent amounted to $1.5 million, $1.4 million, and $1.6 million, for the years ended December 31, 2017, 2016, and 2015, respectively.

7. LONG-TERM LEASE OBLIGATIONS

During 2016 and 2017, the Company purchased the land underlying Olney, Beacon Center and Southdale - See Note 3. As a result, at December 31, 2017, no properties are subject to noncancelable long-term leases which apply to underlying land. Reflected in the accompanying consolidated financial statements is minimum ground rent expense of $10,500, $159,000, $176,000, for the years ended December 31, 2017, 2016, and 2015, respectively.

Flagship Center consists of two developed out parcels that are part of a larger adjacent community shopping center formerly owned by the Saul Organization and sold to an affiliate of a tenant in 1991. The Company has a 90-year ground leasehold interest which commenced in September 1991 with a minimum rent of one dollar per year. Countryside shopping center was acquired in February 2004. Because of certain land use considerations, approximately 3.4% of the underlying land is held under a 99-year ground lease. The lease requires the Company to pay minimum rent of one dollar per year as well as its pro-rata share of the real estate taxes.

The Company’s corporate headquarters space is leased by a member of the Saul Organization. The lease commenced in March 2002, and expires in February 2022. The Company and the Saul Organization entered into a Shared Services Agreement whereby each party pays an allocation of total rental payments based on a

F-24

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

percentage proportionate to the number of employees employed by each party. The Company’s rent expense for the years ended December 31, 2017, 2016, and 2015 was $774,700, $843,300, and $904,900, respectively. Expenses arising from the lease are included in general and administrative expense (see Note 9 – Related Party Transactions).

8. EQUITY AND NONCONTROLLING INTEREST

The Consolidated Statements of Operations for the years ended December 31, 2017, 2016, and 2015 reflect noncontrolling interest of $12.4 million, $11.4 million, and $10.5 million, respectively, representing the Saul Organization’s share of the net income for the year.

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 ("Series C 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 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.

9. RELATED PARTY TRANSACTIONS

The Chairman and Chief Executive Officer, the President and Chief Operating Officer, 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 $349,500, $329,000, and $400,000, for 2017, 2016, and 2015, respectively. All amounts deferred by employees and contributed by 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 years ended December 31, 2017, 2016, and 2015, the Company contributed three times the amount deferred by employees. The Company’s expense, included in general and administrative expense, totaled $228,500, $250,800, and $224,900, for the years ended December 31, 2017, 2016, and 2015, respectively. All amounts deferred by employees and the Company are fully vested. The cumulative unfunded liability under this plan was $2.4 million and $2.1 million, at December 31, 2017 and 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. Senior management has determined that the final allocations of shared costs are reasonable. The terms of the Agreement and the payments made thereunder are reviewed annually by the Audit Committee of the Board of Directors, which consists entirely of independent directors. Net billings by the Saul Organization for the Company’s share of these ancillary costs and expenses for the years ended December 31,

F-25

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

2017, 2016, and 2015, which included rental expense for the Company’s headquarters lease (see Note 7. Long Term Lease Obligations), totaled $8.1 million, $7.2 million, and $8.2 million, respectively. The amounts are expensed when incurred and are primarily reported as general and administrative expenses or capitalized to specific development projects in these consolidated financial statements. As of December 31, 2017 and 2016, accounts payable, accrued expenses and other liabilities included $993,200 and $829,000, respectively, representing billings due to the Saul Organization for the Company’s share of these ancillary costs and expenses.

The Company has entered into a shared third-party predevelopment cost agreement with the Trust (the “Predevelopment Agreement”). The Predevelopment Agreement, which expired on December 31, 2015 and was extended to December 31, 2016, relates 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 Saul 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.

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 counter-signature fees in connection with the Company’s insurance program. Such commissions and fees amounted to approximately $288,400, $360,500, and $443,500, for the years ended December 31, 2017, 2016, and 2015, respectively.

In August 2016, the Company entered into an agreement to acquire from 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. 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 the second quarter of 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.

10. STOCK OPTION PLAN

The Company established a stock option plan in 1993 (the “1993 Plan”) for the purpose of attracting and retaining executive officers and other key personnel. The 1993 Plan provides for grants of options to purchase up to 400,000 shares of common stock. The 1993 Plan authorizes the Compensation Committee of the Board of Directors to grant options at an exercise price which may not be less than the market value of the common stock on the date the option is granted.

At the annual meeting of the Company’s stockholders in 2004, the stockholders approved the adoption of the 2004 stock plan for the purpose of attracting and retaining executive officers, directors and other key personnel. The 2004 stock plan was subsequently amended by the Company’s stockholders at the 2008 Annual Meeting and further amended at the 2013 Annual Meeting (the “Amended 2004 Plan”). The Amended 2004 Plan, which terminates in 2023, provides for grants of options to purchase up to 2,000,000 shares of common stock as well as grants of up to 200,000 shares of common stock to directors. The Amended 2004 Plan authorizes the Compensation Committee of the Board of Directors to grant options at an exercise price which may not be less than the market value of the common stock on the date the option is granted.

Effective April 25, 2008, the Compensation Committee granted options to purchase 30,000 shares (all nonqualified stock options) to 12 Company directors (the “2008 Options”), which were immediately exercisable and expire on April 24, 2018. The exercise price of $50.15 per share was the closing market price of the Company’s common stock on the date of the award. Using the Black-Scholes model, the Company determined the total fair value of the 2008 Options to be $254,700. Because the directors’ options vested immediately, the entire $254,700 was expensed as of the date of grant. No options were granted to the Company’s officers in 2008.

Effective April 24, 2009, the Compensation Committee granted options to purchase 32,500 shares (all nonqualified stock options) to 13 Company directors (the “2009 Options”), which were immediately exercisable and

F-26

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

expire on April 23, 2019. The exercise price of $32.68 per share was the closing market price of the Company’s common stock on the date of the award. Using the Black-Scholes model, the Company determined the total fair value of the 2009 Options to be $222,950. Because the directors’ options vested immediately, the entire $222,950 was expensed as of the date of grant. No options were granted to the Company’s officers in 2009.

Effective May 7, 2010, the Compensation Committee granted options to purchase 32,500 shares (all nonqualified stock options) to 13 Company directors (the “2010 Options”), which were immediately exercisable and expire on May 6, 2020. The exercise price of $38.76 per share was the closing market price of the Company’s common stock on the date of the award. Using the Black-Scholes model, the Company determined the total fair value of the 2010 Options to be $287,950. Because the directors’ options vested immediately, the entire $287,950 was expensed as of the date of grant. No options were granted to the Company’s officers in 2010.

Effective May 13, 2011, the Compensation Committee granted options to purchase 195,000 shares (65,300 incentive stock options and 129,700 nonqualified stock options) to 15 Company officers and 13 Company Directors (the “2011 options”), which expire on May 12, 2021. The officers’ 2011 Options vest 25% per year over four years and are subject to early expiration upon termination of employment. The directors’ 2011 options were immediately exercisable. The exercise price of $41.82 per share was the closing market price of the Company’s common stock on the date of award. Using the Black-Scholes model, the Company determined the total fair value of the 2011 Options to be $1.6 million, of which $1.3 million and $297,375 were assigned to the officer options and director options, respectively. Because the directors’ options vested immediately, the entire $297,375 was expensed as of the date of grant. The expense for the officers’ options is being recognized as compensation expense monthly during the four years the options vest.

Effective May 4, 2012, the Compensation Committee granted options to purchase 277,500 shares (26,157 incentive stock options and 251,343 nonqualified stock options) to 15 Company officers and 14 Company Directors (the “2012 options”), which expire on May 3, 2022. The officers’ 2012 Options vest 25% per year over four years and are subject to early expiration upon termination of employment. The directors’ 2012 Options were immediately exercisable. The exercise price of $39.29 per share was the closing market price of the Company’s common stock on the date of award. Using the Black-Scholes model, the Company determined the total fair value of the 2012 Options to be $1.7 million, of which $1.4 million and $257,250 were assigned to the officer options and director options, respectively. Because the directors’ options vested immediately, the entire $257,250 was expensed as of the date of grant. The expense for the officers’ options is being recognized as compensation expense monthly during the four years the options vest.

Effective May 10, 2013, the Compensation Committee granted options to purchase 237,500 shares (35,592 incentive stock options and 201,908 nonqualified stock options) to 15 Company officers and 14 Company Directors (the "2013 options"), which expire on May 9, 2023. The officers' 2013 Options vest 25% per year over four years and are subject to early expiration upon termination of employment. The directors' 2013 options were immediately exercisable. The exercise price of $44.42 per share was the closing market price of the Company's common stock on the date of award. Using the Black-Scholes model, the Company determined the total fair value of the 2013 Options to be $1.5 million, of which $1.2 million and $278,250 were assigned to the officer options and director options, respectively. Because the directors' options vested immediately, the entire $278,250 was expensed as of the date of grant. The expense for the officers' options is being recognized as compensation expense monthly during the four years the option was vested.

Effective May 9, 2014, the Compensation Committee granted options to purchase 200,000 shares (29,300 incentive stock options and 170,700 nonqualified stock options) to 18 Company officers and 12 Company Directors (the “2014 options”), which expire on May 8, 2024. The officers’ 2014 Options vest 25% per year over four years and are subject to early expiration upon termination of employment. The directors’ 2014 Options were immediately exercisable. The exercise price of $47.03 per share was the closing market price of the Company’s common stock on the date of award. Using the Black-Scholes model, the Company determined the total fair value of the 2014 Options to be $1.3 million, of which $1.2 million and $109,500 were assigned to the officer options and director options, respectively. Because the directors’ options vested immediately, the entire $109,500 was expensed as of the date of grant. The expense for the officers’ options is being recognized as compensation expense monthly during the four years the options vest.

F-27

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

Effective May 8, 2015, the Compensation Committee granted options to purchase 225,000 shares (33,690 incentive stock options and 191,310 nonqualified stock options) to 19 Company officers and 14 Company Directors (the “2015 options”), which expire on May 7, 2025. The officers’ 2015 Options vest 25% per year over four years and are subject to early expiration upon termination of employment. The directors’ 2015 Options were immediately exercisable. The exercise price of $51.07 per share was the closing market price of the Company’s common stock on the date of award. Using the Black-Scholes model, the Company determined the total fair value of the 2015 Options to be $1.57 million, of which $1.44 million and $125,300 were assigned to the officer options and director options, respectively. Because the directors’ options vested immediately, the entire $125,300 was expensed as of the date of grant. The expense for the officers’ options is being recognized as compensation expense monthly during the four years the options vest.

Effective May 6, 2016, the Compensation Committee granted options to purchase 226,500 shares (24,248 incentive stock options and 202,252 nonqualified stock options) to 19 Company officers and 13 Company Directors (the “2016 options”), which expire on May 5, 2026. The officers’ 2016 Options vest 25% per year over four years and are subject to early expiration upon termination of employment. The directors’ 2016 Options were immediately exercisable. The exercise price of $57.74 per share was the closing market price of the Company’s common stock on the date of award. Using the Black-Scholes model, the Company determined the total fair value of the 2016 Options to be $1.2 million, of which $1.0 million and $151,125 were assigned to the officer options and director options, respectively. Because the directors’ options vested immediately, the entire $151,125 was expensed as of the date of grant. The expense for the officers’ options is being recognized as compensation expense monthly during the four years the options vest.

Effective May 5, 2017, the Compensation Committee granted options to purchase 232,500 shares (21,492 incentive stock options and 211,008 nonqualified stock options) to 20 Company officers and 11 Company Directors (the “2017 options”), which expire on May 4, 2027. The officers’ 2017 Options vest 25% per year over four years and are subject to early expiration upon termination of employment. The directors’ 2017 Options were immediately exercisable. The exercise price of $59.41 per share was the closing market price of the Company’s common stock on the date of award. Using the Black-Scholes model, the Company determined the total fair value of the 2017 Options to be $1.4 million, of which $1.2 million and $165,550 were assigned to the officer options and director options, respectively. Because the directors’ options vested immediately, the entire $165,550 was expensed as of the date of grant. The expense for the officers’ options is being recognized as compensation expense monthly during the four years the options vest.

The following table summarizes the amount and activity of each grant, 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 years ended December 31, 2017, 2016 and 2015.

F-28

SAUL CENTERS, INC. Notes to Consolidated Financial Statements (Dollars in thousands, except per share data)
Stock options issued
	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 December 31, 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		$	255		$	223		$	288		$	297		$	257		$	278		$	110		$	125		$	151		$	166		$	2,150
Expensed in previous years		255			223			288			297			257			278			110			—			—			—			1,708
Expensed in 2015		—			—			—			—			—			—			—			125			—			—			125
Expensed in 2016		—			—			—			—			—			—			—			—			151			—			151
Expensed in 2017		—			—			—			—			—			—			—			—			—			166			166
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			Subtotals									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			116,500			41,250			20,000			3,750			—			369,430									546,930
Forfeited		43,750			135,000			30,625			1,875			3,125			1,875			—			216,250									228,750
Exercisable at December 31, 2017		22,650			15,670			55,375			85,625			74,375			44,750			—			298,445									430,945
Remaining unexercised		22,650			15,670			55,375			126,875			166,875			188,375			205,000			780,820									913,320
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		$	1,518		$	1,401		$	1,350		$	1,585		$	1,137		$	1,324		$	9,681								$	11,831
Estimated forfeitures		368			845			212			169			142			86			92			1,914									1,914
Expensed in previous years		909			419			493			197			—			—			—			2,018									3,726
Expensed in 2015		89			157			269			296			240			—			—			1,051									1,176
Expensed in 2016		—			97			269			295			361			175			—			1,197									1,348
Expensed in 2017		—			—			158			295			361			263			205			1,282									1,448
Future expense		—			—			—			98			481			613			1,027			2,219									2,219
Weighted average term of remaining future expense		2.5			years

F-29

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

The table below summarizes the option activity for the years 2017, 2016, and 2015:

	2017				2016				2015
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Outstanding at January 1	833,630		$	49.92	860,274		$	46.58	748,208		$	44.79
Granted	232,500		59.41		226,500		57.74		225,000		51.07
Exercised	(149,060	)	46.97		(246,894	)	45.59		(112,934	)	43.67
Expired/Forfeited	(3,750	)	53.73		(6,250	)	45.31		—		—
Outstanding December 31	913,320		52.80		833,630		49.92		860,274		46.58
Exercisable at December 31	430,945		48.94		375,255		46.68		435,899		45.33

The intrinsic value of options exercised in 2017, 2016, and 2015, was $2.2 million, $3.4 million and $1.5 million, respectively. The intrinsic value of options outstanding and exercisable at year end 2017 was $8.2 million and $5.5 million, respectively. The intrinsic value measures the 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 date of exercise was the measurement date for shares exercised during the period. At December 29, 2017, the final trading day of calendar 2017, the closing price of $61.75 per share was used for the calculation of aggregate intrinsic value of options outstanding and exercisable at that date. The weighted average remaining contractual life of the Company’s exercisable and outstanding options at December 31, 2017 are 6.5 and 7.5 years, respectively.

11.     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 3.90% and 4.25%, would be approximately $951.7 million and $851.3 million as of December 31, 2017 and 2016, respectively, compared to the principal balance of $890.4 million and $844.3 million at December 31, 2017 and 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.

Effective June 30, 2011, the Company determined that one of its interest-rate swap arrangements was a highly effective hedge of the cash flows under one of its variable-rate mortgage loans and designated the swap as a cash flow hedge of that mortgage. The swap is carried at fair value with changes in fair value recognized either in income or comprehensive income depending on the effectiveness of the swap. The following chart summarizes the changes in fair value of the Company’s swap for the indicated periods.

(Dollars in thousands)	Year ended December 31,
	2017		2016			2015
Increase (decrease) in fair value:
Recognized in earnings	$	70	$	(6	)	$	(10	)
Recognized in other comprehensive income	812		678			124
Total	$	882	$	672		$	114

The Company carries its interest rate swaps at fair value. The Company has determined the majority of the inputs used to value its derivative 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 are not significant. Derivative instruments are classified within Level 2 of the fair value hierarchy because their values are determined using third-party pricing

F-30

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

models which contain inputs that are derived from observable market data. Where possible, the values produced by the pricing models are verified by the 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 December 31, 2017, the fair value of the interest-rate swap was approximately $1.1 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 designated as a cash flow hedge is reflected in “Other Comprehensive Income” in the Consolidated Statements of Comprehensive Income.

12.     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.

13. DISTRIBUTIONS

In December 1995, the Company established a Dividend Reinvestment and Stock Purchase Plan (the “Plan”), to allow its stockholders and holders of limited partnership interests an opportunity to buy additional shares of common stock by reinvesting all or a portion of their dividends or distributions. The Plan provides for investing in newly issued shares of common stock at a 3% discount from market price without payment of any brokerage commissions, service charges or other expenses. All expenses of the Plan are paid by the Company. The Operating Partnership also maintains a similar dividend reinvestment plan that mirrors the Plan, which allows holders of limited partnership interests the opportunity to buy either additional limited partnership units or common stock shares of the Company.

The Company paid common stock distributions of $2.04 per share in 2017, $1.84 per share in 2016, and $1.69 per share during 2015 and Series C preferred stock dividends of $1.72 per depositary share during each of 2017, 2016, and 2015. Of the common stock dividends paid, $1.70 per share, $1.75 per share, and $1.69 per share, represented ordinary dividend income in 2017, 2016, and 2015, respectively, and $0.34 per share and $0.09 per share represented return of capital to the shareholders in 2017 and 2016, respectively. All of the preferred stock dividends paid were considered ordinary dividend income.

F-31

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

The following summarizes distributions paid during the years ended December 31, 2017, 2016, and 2015, and includes activity in the Plan as well as limited partnership units issued from the reinvestment of unit distributions:

	Total Distributions to						Dividend Reinvestments
(Dollars in thousands, except per share amounts)	Preferred Stockholders		Common Stockholders		Limited Partnership Unitholders		Common Stock Shares Issued	Discounted Share Price		Limited Partnership Units Issued	Average Unit Price
Distributions during 2017
October 31	$	3,094	$	11,221	$	3,838	82,991	$	59.33	15,596	$	60.08
July 31	3,094		11,160		3,830		85,731	57.40		16,021	58.13
April 30	3,094		11,119		3,810		51,003	59.64		40,623	59.96
January 31	3,093		11,076		3,790		46,286	61.85		39,111	62.15
Total 2017	$	12,375	$	44,576	$	15,268	266,011			111,351
Distributions during 2016
October 31	$	3,094	$	10,168	$	3,478	44,176	$	57.18	30,891	$	57.18
July 31	3,094		10,133		3,465		39,487	65.64		26,897	65.64
April 30	3,094		10,029		3,449		48,854	51.59		34,201	51.59
January 31	3,093		9,142		3,141		54,280	49.24		32,769	49.24
Total 2016	$	12,375	$	39,472	$	13,533	186,797			124,758
Distributions during 2015
October 31	$	3,094	$	9,106	$	3,129	47,313	$	55.73	28,936	$	55.73
July 31	3,094		9,081		3,115		56,003	50.30		32,041	50.30
April 30	3,094		9,055		3,104		54,921	50.21		25,264	50.21
January 31	3,093		8,403		2,880		42,975	56.74		20,796	56.74
Total 2015	$	12,375	$	35,645	$	12,228	201,212			107,037

In December 2017, the Board of Directors of the Company authorized a distribution of $0.52 per common share payable in January 2018, to holders of record on January 17, 2018. As a result, $11.5 million was paid to common shareholders on January 31, 2018. Also, $3.9 million was paid to limited partnership unitholders on January 31, 2018 ($0.52 per Operating Partnership unit). The Board of Directors authorized preferred stock dividends of $0.4297 per Series C depositary share to holders of record on January 2, 2018. As a result, $3.1 million was paid to preferred shareholders on January 15, 2018. These amounts are reflected as a reduction of stockholders’ equity in the case of common stock and preferred stock dividends and noncontrolling interests deductions in the case of limited partner distributions and are included in dividends and distributions payable in the accompanying consolidated financial statements.

F-32

SAUL CENTERS, INC.

Notes to Consolidated Financial Statements

14. INTERIM RESULTS (Unaudited)

The following summary presents the results of operations of the Company for the quarterly periods of calendar years 2017 and 2016.

(In thousands, except per share amounts)	2017
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Revenue	$	58,466	$	55,907	$	56,237	$	56,675
Operating income before loss on early extinguishment of debt, gain on casualty settlement, and noncontrolling interests	17,374		14,422		14,386		14,416
Gain on sales of properties	—		—		—		—
Net income attributable to Saul Centers, Inc.	13,704		11,510		11,483		11,560
Net income available to common stockholders	10,610		8,416		8,390		8,466
Net income available to common stockholders per diluted share	0.49		0.38		0.38		0.38

(In thousands, except per share amounts)	2016
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Revenue	$	56,926	$	52,710	$	53,233	$	54,201
Operating income before loss on early extinguishment of debt, gain on casualty settlement, and noncontrolling interests	16,381		13,250		12,722		13,360
Gain on sales of properties	—		—		—		1,013
Net income attributable to Saul Centers, Inc.	12,948		10,627		10,239		11,465
Net income available to common stockholders	9,854		7,533		7,146		8,371
Net income available to common stockholders per diluted share	0.46		0.35		0.33		0.38

15. 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 for 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.

F-33

SAUL CENTERS, INC. Notes to Consolidated Financial Statements
(In thousands)	Shopping			Mixed-Use			Corporate			Consolidated
As of or for the year ended December 31, 2017	Centers			Properties			and Other			Totals
Real estate rental operations:
Revenue	$	165,853		$	61,352		$	80		$	227,285
Expenses	(34,675		)	(20,917		)	—			(55,592		)
Income from real estate	131,178			40,435			80			171,693
Interest expense and amortization of deferred debt costs	—			—			(47,225		)	(47,225		)
General and administrative	—			—			(18,176		)	(18,176		)
Subtotal	131,178			40,435			(65,321		)	106,292
Depreciation and amortization of deferred leasing costs	(29,977		)	(15,717		)	—			(45,694		)
Change in fair value of derivatives	—			—			70			70
Net income (loss)	$	101,201		$	24,718		$	(65,251	)	$	60,668
Capital investment	$	90,896		$	29,098		$	—		$	119,994
Total assets	$	974,061		$	438,283		$	10,108		$	1,422,452
As of or for the year ended December 31, 2016
Real estate rental operations:
Revenue	$	160,179		$	56,840		$	51		$	217,070
Expenses	(34,931		)	(18,770		)	—			(53,701		)
Income from real estate	125,248			38,070			51			163,369
Interest expense and amortization of deferred debt costs	—			—			(45,683		)	(45,683		)
General and administrative	—			—			(17,496		)	(17,496		)
Subtotal	125,248			38,070			(63,128		)	100,190
Depreciation and amortization of deferred leasing costs	(29,964		)	(14,453		)	—			(44,417		)
Acquisition related costs	(60		)	—			—			(60		)
Change in fair value of derivatives	—			—			(6		)	(6		)
Gain on sale of property	—			1,013			—			1,013
Net income (loss)	$	95,224		$	24,630		$	(63,134	)	$	56,720
Capital investment	$	64,044		$	27,001		$	—		$	91,045
Total assets	$	976,545		$	358,419		$	8,061		$	1,343,025

F-34

SAUL CENTERS, INC. Notes to Consolidated Financial Statements (continued)
(In thousands)	Shopping			Mixed-Use			Corporate			Consolidated
As of or for the year ended December 31, 2015	Centers			Properties			and Other			Totals
Real estate rental operations:
Revenue	$	156,110		$	52,916		$	51		$	209,077
Expenses	(33,877		)	(17,266		)	—			(51,143		)
Income from real estate	122,233			35,650			51			157,934
Interest expense and amortization of deferred debt costs	—			—			(45,165		)	(45,165		)
General and administrative	—			—			(16,353		)	(16,353		)
Subtotal	122,233			35,650			(61,467		)	96,416
Depreciation and amortization of deferred leasing costs	(30,171		)	(13,099		)	—			(43,270		)
Acquisition related costs	(84		)	—			—			(84		)
Predevelopment expenses	(57		)	(75		)	—			(132		)
Change in fair value of derivatives	—			—			(10		)	(10		)
Gain on sale of property	11			—			—			11
Net income (loss)	$	91,932		$	22,476		$	(61,477	)	$	52,931
Capital investment	$	17,159		$	52,460		$	—		$	69,619
Total assets	$	931,256		$	354,254		$	9,898		$	1,295,408

16. Subsequent Events

On January 12, 2018, the Company entered into an agreement to purchase for $35.5 million, plus approximately $0.7 million of acquisition costs, an office building and the underlying ground located at 7316 Wisconsin Avenue in Bethesda, Montgomery County, Maryland and has an earnest money deposit of $3.5 million at risk. The purchase price will be funded through the Company's revolving credit facility. The Company anticipates closing the acquisition on or before January 12, 2019.

On January 23, 2018, the Company sold, in an underwritten public offering, 3.0 million depositary shares, each representing 1/100^th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock (the “Series D Stock”) and received net cash proceeds totaling approximately $72.6 million. The depositary shares may be redeemed at the Company’s option, in whole or in part, on or after January 23, 2023, at the $25.00 liquidation preference, plus accrued but unpaid dividends. The depositary shares pay an annual dividend of $1.53125 per share, equivalent to 6.125% of the $25.00 liquidation preference. The first dividend is scheduled to be paid on April 15, 2018, and cover the period from January 23, 2018, through March 31, 2018. The Series D 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.

On January 26, 2018, the Company replaced its revolving credit facility, which was scheduled to expire on June 23, 2018, with a new credit facility. The new credit facility is comprised of a $75.0 million term facility that matures on January 26, 2023, and a $325.0 million revolving facility that matures on January 26, 2022, and can be extended for one year at the Company’s option, subject to satisfaction of certain conditions. The terms, conditions and covenants of the new credit facility are substantially the same as the existing credit facility.

On February 22, 2018, the Company used the net proceeds from the sale of the Series D Stock, together with cash on hand, to redeem 3.0 million depositary shares, each representing 1/100^th of a share of Series C Stock at a price of $25.00 per depositary share, plus accrued dividends.

F-35

Schedule III

SAUL CENTERS, INC. Real Estate and Accumulated Depreciation December 31, 2017 (Dollars in Thousands)
			Costs																Buildings
			Capitalized		Basis at Close of Period														and
	Initial Basis		Subsequent to Acquisition		Land		Buildings and Improvements		Total		Accumulated Depreciation		Book Value		Related Debt		Date of Construction	Date Acquired	Improvements Depreciable Lives in Years
Shopping Centers
Ashburn Village, Ashburn, VA	$	11,431	$	20,278	$	6,764	$	24,945	$	31,709	$	12,993	$	18,716	$	28,025	1994 & 2000-6	3/94	40
Ashland Square Phase I, Dumfries, VA	1,178		7,503		1,178		7,503		8,681		1,764		6,917		—		2007, 2013	12/04	20 & 50
Beacon Center, Alexandria, VA	24,161		18,426		22,674		19,913		42,587		14,288		28,299		39,968		1960 & 1974	1/72, 11/16	40 & 50
BJ’s Wholesale Club, Alexandria, VA	22,623		—		22,623		—		22,623		—		22,623		10,877			3/08	—
Boca Valley Plaza, Boca Raton, FL	16,720		1,768		5,735		12,753		18,488		4,424		14,064		9,948			2/04	40
Boulevard, Fairfax, VA	4,883		4,461		3,687		5,657		9,344		2,808		6,536		16,730		1969, 1999 & 2009	4/94	40
Briggs Chaney MarketPlace, Silver Spring, MD	27,037		4,143		9,789		21,391		31,180		7,908		23,272		13,543			4/04	40
Broadlands Village, Ashburn, VA	5,316		27,954		5,300		27,970		33,270		10,933		22,337		16,082		2003, 2004 & 2006	3/02	40 & 50
Burtonsville Town Square, Burtonsville, MD	74,212		342		28,401		46,153		74,554		1,095		73,459		39,140		2010	1/17	20 & 45
Countryside Marketplace, Sterling, VA	28,912		3,752		7,666		24,998		32,664		8,838		23,826		13,529			2/04	40
Cranberry Square, Westminster, MD	31,578		640		6,700		25,518		32,218		4,105		28,113		17,086			9/11	40
Cruse MarketPlace, Cumming, GA	12,226		448		3,901		8,773		12,674		3,057		9,617		—			3/04	40
Flagship Center, Rockville, MD	160		9		169		—		169		—		169		—		1972	1/72	—
French Market, Oklahoma City, OK	5,781		13,829		1,118		18,492		19,610		11,191		8,419		—		1972 & 1998	3/74	50
Germantown, Germantown, MD	2,034		567		2,034		567		2,601		297		2,304		—		1990	8/93	40
The Glen, Woodbridge, VA	12,918		8,098		5,300		15,716		21,016		9,026		11,990		7,696		1993 & 2005	6/94	40
Great Falls Center, Great Falls, VA	41,750		3,178		14,766		30,162		44,928		7,719		37,209		12,577			3/08	40
Hampshire Langley, Takoma, MD	3,159		3,499		1,856		4,802		6,658		3,702		2,956		15,859		1960	1/72	40
Hunt Club Corners, Apopka, FL	12,584		4,034		4,822		11,796		16,618		3,801		12,817		5,649			6/06, 12/12	40
Jamestown Place, Altamonte Springs, FL	14,055		1,603		4,455		11,203		15,658		3,477		12,181		7,325			11/05	40
Kentlands Square I, Gaithersburg, MD	14,379		507		5,006		9,880		14,886		3,713		11,173		6,423		2002	9/02	40
Kentlands Square II, Gaithersburg, MD	76,723		1,602		22,800		55,525		78,325		9,092		69,233		36,507			9/11, 9/13	40
Kentlands Place, Gaithersburg, MD	1,425		7,255		1,425		7,255		8,680		3,744		4,936		—		2005	1/04	50
Lansdowne Town Center, Leesburg, VA	6,545		37,312		6,546		37,311		43,857		13,727		30,130		32,673		2006	11/02	50
Leesburg Pike Plaza, Baileys Crossroads, VA	2,418		6,243		1,132		7,529		8,661		5,934		2,727		15,452		1965	2/66	40
Lumberton Plaza, Lumberton, NJ	4,400		11,220		950		14,670		15,620		12,751		2,869		—		1975	12/75	40
Metro Pike Center, Rockville, MD	33,123		4,095		26,064		11,154		37,218		1,375		35,843		14,135			12/10	40
Shops at Monocacy, Frederick, MD	9,541		13,926		9,260		14,207		23,467		5,565		17,902		12,029		2004	11/03	50
Northrock, Warrenton, VA	12,686		15,414		12,686		15,414		28,100		3,871		24,229		14,950		2009	01/08	50
Olde Forte Village, Ft. Washington, MD	15,933		6,643		5,409		17,167		22,576		7,158		15,418		9,783		2004	07/03	40
Olney, Olney, MD	4,963		1,961		3,079		3,845		6,924		3,318		3,606		11,613		1972	11/75	40
Orchard Park, Dunwoody, GA	19,377		1,014		7,751		12,640		20,391		3,432		16,959		9,999			7/07	40
Palm Springs Center, Altamonte Springs, FL	18,365		1,435		5,739		14,061		19,800		4,606		15,194		8,244			3/05	40
Ravenwood, Baltimore, MD	1,245		4,227		703		4,769		5,472		3,067		2,405		14,537		1959 & 2006	1/72	40
11503 Rockville Pike/5541 Nicholson Lane, Rockville, MD	26,561		24		22,113		4,472		26,585		806		25,779		—			10/10 12/12	40
1500/1580/1582/1584 Rockville Pike, Rockville, MD	51,149		1,553		43,863		8,839		52,702		5,656		47,046		—			12/12, 1/14, 4/14, 12/14	5, 10, 5, 4
Seabreeze Plaza, Palm Harbor, FL	24,526		1,960		8,665		17,821		26,486		5,611		20,875		16,055			11/05	40
Market Place at Sea Colony, Bethany Beach, DE	2,920		203		1,147		1,976		3,123		491		2,632		—			3/08	40
Seven Corners, Falls Church, VA	4,848		44,108		4,913		44,043		48,956		28,790		20,166		64,472		1956 & 1997	7/73	40
Severna Park Marketplace, Severna Park, MD	63,254		232		12,700		50,786		63,486		7,927		55,559		32,016			9/11	40
Shops at Fairfax, Fairfax, VA	2,708		9,924		992		11,640		12,632		7,989		4,643		11,154		1975 & 1999	6/75	50
Smallwood Village Center, Waldorf, MD	17,819		7,975		6,402		19,392		25,794		7,278		18,516		—			1/06	40
Southdale, Glen Burnie, MD	18,895		24,345		15,254		27,986		43,240		21,333		21,907		—		1962 & 1986	1/72	40
Southside Plaza, Richmond, VA	6,728		10,695		1,878		15,545		17,423		12,280		5,143		—		1958	1/72	40
South Dekalb Plaza, Atlanta, GA	2,474		4,359		703		6,130		6,833		4,792		2,041		—		1970	2/76	40
Thruway, Winston-Salem, NC	7,848		24,821		7,693		24,976		32,669		16,735		15,934		37,998		1955 & 1965	5/72	40
Village Center, Centreville, VA	16,502		2,495		7,851		11,146		18,997		6,688		12,309		13,438		1990	8/93	40
Westview Village, Frederick, MD	6,047		25,227		6,047		25,227		31,274		7,511		23,763		—		2009	11/07, 02/15	50
White Oak, Silver Spring, MD	6,277		5,366		4,649		6,994		11,643		6,043		5,600		23,873		1958 & 1967	1/72	40
Other Buildings / Improvements			423				423		423		109		314		—
Total Shopping Centers	832,397		401,096		412,358		821,135		1,233,493		332,818		900,675		639,385
Mixed-Use Properties
Avenel Business Park, Gaithersburg, MD	21,459		30,409		3,756		48,112		51,868		36,469		15,399		28,115		1981-2000	12/84	35 & 40
Clarendon Center, Arlington, VA (1)	12,753		185,904		16,287		182,370		198,657		37,242		161,415		105,817		2010	7/73, 1/96 & 4/02	50
Park Van Ness, Washington, DC	2,242		91,617		2,242		91,617		93,859		4,801		89,058		71,211		2016	7/73 & 2/11	50
601 Pennsylvania Ave., Washington, DC	5,479		67,995		5,667		67,807		73,474		52,194		21,280		—		1986	7/73	35
Washington Square, Alexandria, VA	2,034		56,735		544		58,225		58,769		24,642		34,127		60,000		2000	7/73	50
Total Mixed-Use Properties	43,967		432,660		28,496		448,131		476,627		155,348		321,279		265,143
Development Land
Ashland Square Phase II, Manassas, VA	5,292		1,917		7,028		181		7,209		—		7,209		—			12/04
New Market, New Market, MD	2,088		286		2,374		—		2,374		—		2,374		—			9/05
North Glebe Road, Arlington, VA	52,067		31,430		—		83,497		83,497		—		83,497		—		—	8/14-8/16
Total Development Land	59,447		33,633		9,402		83,678		93,080		—		93,080		—
Total	$	935,811	$	867,389	$	450,256	$	1,352,944	$	1,803,200	$	488,166	$	1,315,034	$	904,528

(1) Includes the North and South Blocks and Residential

F-36

Schedule III

SAUL CENTERS, INC.

Real Estate and Accumulated Depreciation

December 31, 2017

Depreciation and amortization related to the real estate investments reflected in the statements of operations is calculated over the estimated useful lives of the assets as follows:

Base building	Generally 35 - 50 years or a shorter period if management determines that
	the building has a shorter useful life.
Building components	Up to 20 years
Tenant improvements	The shorter of the term of the lease or the useful life
	of the improvements

The aggregate remaining net basis of the real estate investments for federal income tax purposes was approximately $1.3 billion at December 31, 2017. Depreciation and amortization are provided on the declining balance and straight-line methods over the estimated useful lives of the assets.

The changes in total real estate investments and related accumulated depreciation for each of the years in the three year period ended December 31, 2017 are summarized as follows:

(In thousands)	2017			2016			2015
Total real estate investments:
Balance, beginning of year	$	1,700,813		$	1,622,710		$	1,560,159
Acquisitions	77,258			48,123			4,894
Improvements	42,640			35,826			70,067
Retirements	(17,511		)	(5,846		)	(1,981		)
Transfers to assets held for sale	—			—			(10,429		)
Balance, end of year	$	1,803,200		$	1,700,813		$	1,622,710
Total accumulated depreciation:
Balance, beginning of year	$	458,279		$	425,370		$	396,617
Depreciation expense	40,197			38,755			37,698
Retirements	(10,310		)	(5,846		)	(1,911		)
Transfers to assets held for sale	—			$	—		(7,034		)
Balance, end of year	$	488,166		$	458,279		$	425,370

F-37

EX-10.Q

Exhibit 10.(q)

AMENDED AND RESTATED

SHARED SERVICES AGREEMENT

This AMENDED AND RESTATED SHARED SERVICES AGREEMENT (this “Agreement”), executed as of December 8, 2017, but effective as of January 1, 2018, is between B. F. Saul Company, a corporation organized under the laws of the District of Columbia (“Saul Company,” which definition shall be deemed to include, for purposes of this Agreement, all consolidated subsidiaries of Saul Company), and Saul Centers, Inc., a corporation organized under the laws of the State of Maryland (“Saul Centers,” which definition shall be deemed to include, for purposes of this Agreement, Saul Holdings Limited Partnership and all of its subsidiaries). Saul Company and Saul Centers shall collectively be referred to herein as the “parties.”

RECITALS:

A. On July 1, 2004, Saul Company and Saul Centers executed a Shared Services Agreement (as amended, the “Original Shared Services Agreement”), whereby the parties established certain standards and procedures for sharing costs and services as more particularly set forth in the Original Shared Services Agreement.

B.Saul Company and Saul Centers continue to be engaged in various businesses involving real estate. The headquarters location and most executive officers of each of the parties are located at the same address,designated below as “Headquarters.”

C.Each of Saul Company and Saul Centers has certain experienced employees, programs and procedures the use of which by the other party is beneficial. In connection with the foregoing, Saul Company and Saul Centers have now agreed to execute and deliver this Agreement to update the policies and procedures established by the parties pursuant to the Original Shared Services Agreement and reflect the apportionment of shared business costs, shared employee costs, and shared services between Saul Centers and Saul Company.

D. Both parties agree that the following terms represent a fair and equitable treatment of the costs and benefits to each of the parties with respect to such time, goods and services.

E. The parties confirm that this Agreement is intended to amend and restate the Original Shared Services Agreement.

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows.

1

Exhibit 10.(q)

AGREEMENT:

1.Agreement to Share Costs. Upon the terms and subject to the conditions contained herein, Saul Company and Saul Centers hereby agree to provide to the other party, as applicable, services as more particularly described herein. Each of the services shall be provided and accepted, in accordance with, and subject to, the terms, limitations and conditions set forth below. Each party will use commercially reasonable efforts to provide services to the other party in the same manner as if it were providing such services on its own account.

2.Headquarters Costs.

(a)Headquarters Shared Costs. The headquarters offices of both Saul Company and Saul Centers are currently located at 7501 Wisconsin Avenue, Bethesda, Maryland 20814 (such location, until changed by written agreement of an authorized officer of each of the parties, to be referred to herein as the “Headquarters”). The parties agree that certain costs of the operation of, and company operations run from, the Headquarters, as set forth on Schedule 1 attached to this Agreement (collectively, the “Headquarters Shared Costs”)shall be allocated between Saul Company and Saul Centers on a percentage basis proportionate to the number of employees employed by each such party (individually, an “Employee” and collectively, the “Employees”)whose primary place of employment is the Headquarters. The costs included on Schedule 1 shall be reviewed by authorized officers of each of the parties on an annual basis (or more frequently to the extent deemed appropriate by such authorized officers). The parties acknowledge and agree that certain occupancy costs related to the Headquarters, such as rent, are the subject of one or more separate agreements, such as a sublease. Costs covered by such separate agreements are not intended to be treated under this Agreement.

(b)Budgeting and Reconciliation. The respective number of Saul Company and Saul Centers Employees for the purpose of the calculation set forth in this Section 2 shall be determined prospectively annually on or before the last month of the calendar year and shall be reviewed as of the end of the second quarter of the then effective calendar year (or more frequently to the extent deemed appropriate by authorized officers of each party), and adjusted prospectively for the second half of the calendar year. For each calendar year, such number shall be determined, by using the sum of (i) (1) the number of Employees employed by each party and (2) the number of vacant positions expected to be filled as of the first business day of the last month in the preceding calendar year plus (ii) the projected new positions expected to be created and filled during the current calendar year. For example, for the period from January 1, 2018 through December 31, 2018, such number shall be based on the number of Employees, vacant positions and new positions projected to be filled of each party as of the first business day of December, 2017. The parties acknowledge that the number of Employees may fluctuate from time to time within any quarter, but, subject to the provisions set forth above for more frequent determinations by mutual agreement) have agreed that the system of computation described above in this Section 2 substantially captures the agreement of the parties and is fair and equitable on an overall basis.

2

Exhibit 10.(q)

(c)Auditor Space. Saul Company leases certain premises which include one (1) conference room that is currently fully utilized by outside auditors of Saul Centers (the “Saul Centers Auditor Space”). Saul Centers shall reimburse Saul Company for one hundred percent (100%) of the costs of the Saul Centers Auditor Space (the “Auditor Space Cost”).

3.Allocated Support Groups Costs.

(a)Support Groups. The following support groups are divisions within the Saul Company which perform services for Saul Centers:

(i) Administration;

(ii) Information Technology;

(iii) Corporate Accounting;

(iv) Internal Audit;

(v) Financial Reporting;

(vi) Human Resources;

(vii) Payroll;

(viii) Facilities;

(ix) Finance;

(x) Construction and Development Accounting; and

(xi) Office Leasing.

The Residential Division of Saul Centers performs services for Saul Company.

(b)Support Groups Costs. Commencing on the date hereof and continuing each year thereafter, Saul Company and Saul Centers shall respectively determine the annual costs (the “Allocated Support Employee Cost”) of each employee in the Support Groups (individually, an “Allocated Support Employee” and collectively, the “Allocated Support Employees”). The Allocated Support Employee Cost will be calculated by adding the following:

(i) annual base salary paid by the employer of such Allocated Support Employee;

(ii) annual bonus or other financial incentive paid by the employer to the Allocated Support Employee;

(iii) annual employer contributions based on the amount of cash compensation such as social security tax and retirement account matching; and

(iv) other expenses of the home department of the Allocated Support Employee based on the average cost per person in his or her applicable Support Group, which shall include all rent, office expenses, professional fees, information technology costs, and other related costs and depreciation attributable to the applicable Support Group.

(c)Calculating Payment. The parties will determine the percentage of time spent annually in each of Saul Company and Saul Centers matters by each Allocated Support Employee (the “Allocated Percentage”). Each of the parties hereto agrees to pay to the other, on a monthly basis, the Allocated Percentage of the Allocated Support Employee Costs for each of their respective Allocated Support Employees (collectively, the “Support Groups Costs”).

3

Exhibit 10.(q)

(d)Budgeting and Reconciliation. The Allocated Support Employees, Allocated Support Employee Cost and the Allocated Percentages for the purpose of the calculations set forth in this Section 3 shall be determined prospectively annually on or before the last month of the calendar year and shall be reviewed as of the end of the second quarter of the then effective calendar year (or more frequently to the extent deemed appropriate by authorized officers of each party), and adjusted prospectively for the second half of the calendar year. For each calendar year, the number of Allocated Support Employees shall be determined, by using the sum of (i) (1) the number of Allocated Support Employees employed by each party and (2) the number of vacant positions expected to be filled as of the first business day of the last month in the preceding calendar year plus (ii) the projected new positions expected to be created and filled during the current calendar year. For example, for the period from January 1, 2018 through December 31, 2018, such number shall be based on the number of Allocated Support Employees, vacant positions and new positions projected to be filled of each party as of the first business day of December, 2017. The parties acknowledge that the number of Allocated Support Employees may fluctuate from time to time within any quarter, but, subject to the provisions set forth above for more frequent determinations by mutual agreement) have agreed that the system of computation described above in this Section 3 substantially captures the agreement of the parties and is fair and equitable on an overall basis.

4.Industry Services Costs.

(a)Acquisition and Development Group; Construction Group. The Acquisition and Development Group (“A&D Group”) is composed of Employees of each of Saul Company and Saul Centers. Saul Company employees perform acquisition and development services for Saul Centers. Similarly, Saul Centers employees perform acquisition and development services for Saul Company. The Construction Group is composed of Saul Company employees, which employees perform construction management services for both Saul Company and Saul Centers. The A&D Group and the Construction Group shall be referred collectively herein as the “Industry Groups.”

(b)Industry Groups Costs. Commencing on the date hereof and continuing each year thereafter, Saul Company and Saul Centers shall respectively determine the monthly costs (“Industry Employee Cost”) of each employee in the Industry Groups (individually, an “Industry Employee” and collectively, the “Industry Employees”). The Industry Employee Cost will be calculated by adding the following and dividing it by twelve (12) months:

(v) annual base salary paid by the employer of such Industry Employee;

(vi) annual bonus or other financial incentive paid by the employer to the Industry Employee;

(vii) annual employer contributions based on the amount of cash compensation such as social security tax and retirement account matching; and

(viii) other expenses of the home department of the Industry Employee based on the average cost per person in his or her applicable group, which shall include all rent, office expenses, professional fees, information

4

Exhibit 10.(q)

technology costs, and other related costs and depreciation attributable to the applicable group.

(c)Calculating Payment. Employees of each of the Industry Groups track the actual work hours spent in Saul Company and Saul Centers matters. The parties will determine the percentage of time spent monthly by each Industry Group Employee in Saul Company and Saul Centers matters (the “Monthly Percentage”). Each of the parties hereto agrees to pay to the other party, the respective Monthly Percentage of the Industry Employee Costs for each of their respective Industry Employees (collectively, the “Industry Groups Costs”).

5.Benefits Costs.

(a)Company-Wide Shared Costs. Both Saul Company and Saul Centers have offices in locations other than the Headquarters, and Employees who work at locations other than the Headquarters. The parties agree that certain “company-wide” costs of the operation of the respective businesses of Saul Company and Saul Centers, whether relating to officers and Employees at Headquarters or other offices, as set forth on Schedule 2 attached to this Agreement (the “Company-Wide Shared Costs”) shall be allocated between Saul Company and Saul Centers on a percentage basis proportionate to the number of the Employees employed by each such party, including both of the Employees whose principal place of business is the Headquarters and the Employees whose principal place of business is a location other than the Headquarters; provided, however, that group health insurance costs shall be allocated between the parties based on the actual Employees of each party who participate in the group health plan.

(b) Excluded Employees. Anything herein to the contrary notwithstanding, the parties acknowledge that the Company-Wide Shared Costs are not intended to cover the hotel division field-based employees of Saul Company or its subsidiaries.

6. Shared Program Costs.

(a)Designated Programs. The parties acknowledge that (i) certain costs of the operation of each of the parties are incurred under programs (the “Designated Programs”) that apply only to certain segments of the employee population, based on the needs of the employers and the terms of their employment; and (ii) the cost and administrative activities related to such programs (“Shared Program Costs”)can reasonably be expected to be reduced if such Designated Programs are operated on a shared basis. The Designated Programs covered by this Agreement are as set forth on Schedule 3 attached to this Agreement. The costs for the items included on Schedule 3 shall be reviewed by authorized officers of each of the parties on an annual basis (or more frequently to the extent deemed appropriate by such authorized officers).

(b)Calculating Payment. The portion of the Shared Program Costs allocated to each of the parties hereto shall be determined based on the ratio of the number of Employees of each party who attended the Designated Program to the total number of Employees who attended the Designated Program.

5

Exhibit 10.(q)

7.Information Technology Costs.

(a) Information Technology (“IT”) Equipment. The parties acknowledge that each of Saul Company and Saul Centers will from time to time purchase computer, telephone, and other information technology-related equipment for individual employees (including, by way of example and not limitation, desktop computers and office telephones) (collectively, the “IT Equipment”). All IT Equipment costs shall be borne directly by the entity for whom that person works, and shall not be included in the IT Shared Costs (as hereinafter defined).

(b)IT Shared Costs. The parties acknowledge that IT software, third-party services for maintenance of IT hardware and software, and licenses (collectively, the “IT Software”) can be provided more efficiently and cost effectively to Saul Company and Saul Centers on a shared basis. Costs for IT Software utilized by either party (the “IT Shared Costs”) shall be calculated as follows: Saul Company shall determine the cost of each individual component of the IT Software that it has purchased or otherwise licensed and divide the cost by the number of Employees who have such component installed on their computer. The IT Shared Costs shall be allocated to each party based on the actual use of IT Software by the Employees of each party.

(c)Budgeting and Reconciliation. The cost of IT Software and the number of individual Employee users of each of Saul Company and Saul Centers shall be determined prospectively annually on or before the last month of the calendar year and shall be reviewed before the end of the second quarter of the then effective calendar year (or more frequently to the extent deemed appropriate by authorized officers of each party), and adjusted prospectively for the second half of the year. For each calendar year, such number shall be determined, by using the actual number of users of IT Software employed by each party on the first business day of the last month in the preceding calendar year plus the projected new hires for the current calendar year.

8. Legal Services. The parties acknowledge that certain “in-house” legal services (the “Legal Services”)are provided to Saul Centers by employees of Saul Company on an on-going basis for purposes of efficiency and cost effectiveness. Saul Centers shall pay to Saul Company, on a monthly basis, a fixed fee for each hour of legal services performed by Saul Company employees for Saul Centers. Such hourly fee shall be determined by mutual agreement of the parties on an annual basis (or more frequently to the extent deemed appropriate), and based upon the “all-in” employment costs to Saul Company for such employee and may be different for each member of the in-house legal team.

9. Payment; Direct Billing; Reconciliation.

(a) Monthly Payment. Each of the parties hereto agrees to pay to the other, on a monthly basis, its allocation of the following costs as calculated pursuant to this Agreement:

(i) the Headquarters Shared Costs;

(ii) the Auditor Space Costs;

(iii) the Support Group Costs;

(iv) the Industry Groups Costs;

(v) the Company-Wide Shared Costs;

6

Exhibit 10.(q)

(vi) the Shared Program Costs;

(vii) the IT Shared Costs; and

(viii) the Legal Services.

The parties agree that as an administrative convenience, Saul Centers may offset its monthly payment to Saul Company by the monthly amounts owed to Saul Centers by Saul Company under this Agreement.

(b)Supporting Documentation; Inspection Right. Either party may request supporting documentation evidencing any of the sums payable by the other party under this Agreement. Such supporting documentation shall be made available to the requesting party within five (5) business days of such written request. Each party will keep and maintain books and records on behalf of the other party in accordance with past practices and internal control procedures. Each party will have the right, at any time and from time to time upon reasonable prior notice to the other party to inspect and copy (at its expense) during normal business hours at the Headquarters the books and records relating to the services and costs, and with respect to the other party’s performance of its obligations under this Agreement. This inspection right will include the ability of the other party’s financial auditors to review such books and records in the ordinary course of performing standard financial auditing services for such party (but subject to such financial auditors executing appropriate confidentiality agreements reasonably acceptable to the other party, if requested). Upon the expiration or termination of this Agreement, each party will be obligated to return to the other party, as soon as reasonably practicable, any property or materials of the other party that is in its control or possession.

(c)Direct Billing. The parties acknowledge that a number of operational and other costs are billed by outside vendors directly to Saul Company or Saul Centers. The parties will make all reasonable efforts to confirm that such costs are billed to and paid by the correct party in each case. On a quarterly basis (or more frequently to the extent deemed appropriate by authorized officers of each of the parties), any misapplied invoices and payments shall be reconciled and appropriate payments shall be made by each party to the other. In addition, certain shared services may be billed or invoiced to both Saul Company and Saul Centers. The parties agree that either party may pay such invoices and submit a request for reimbursement to the other party.

(d)Reconciliation. The parties also agree that they will make all reasonable efforts to ensure that all allocations, charges and payments made pursuant to this Agreement are accurate. On an annual basis (or more frequently to the extent deemed appropriate by authorized officers of each of the parties), such allocations, charges and payments shall be reviewed and reconciled, and any appropriate payments shall be made by each party to the other.

10.Ordinary Course of Business Changes; Amendments.

(a)Changes to the services or programs shared by the parties and listed as the Headquarters Shared Costs, the Company-Wide Shared Costs, the Shared Program Costs and the IT Shared Costs, may be made by the parties, on an annual basis, by mutual agreement of authorized officers. Changes in the hourly billing rates of the Legal Services may also be made by the parties, on an annual basis by mutual agreement of authorized officers.

7

Exhibit 10.(q)

(b) Except as expressly provided in Section 10(a) above, this Agreement may be amended only by agreement in writing of all parties.

11.Resolution of Disputes

(a)Saul Centers and Saul Company acknowledge that the success of their relationship requires an efficient decision-making process for issues that arise under this Agreement. The Parties shall use reasonable best efforts to resolve specific disputes posed by either Party. If the dispute is not resolved in a satisfactory manner within five (5) business days from submission to the other Party in writing with all necessary supporting materials, the dispute shall be submitted in writing to the President of Saul Centers and the Chairman of Saul Company (the “Senior Leaders”) for resolution. If the Senior Leaders are unable to resolve the dispute within (10) business days, the dispute shall be submitted to the Audit Committee of Saul Centers and the Chairman of Saul Company (the “Dispute Resolution Board”).

(b)Any dispute which has not been resolved by the Dispute Resolution Board within ten (10) business days shall be adjudicated by binding arbitration in accordance with the then-applicable CPR Rules for Non-Administered Arbitration (the “CPR Rules”). The arbitration shall be conducted by three arbitrators. Each Party shall appoint one arbitrator, and the two Party-appointed arbitrators shall then appoint a third arbitrator, who shall chair the tribunal, in accordance with the CPR Rules. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. Judgment upon the award rendered by the arbitrators may be entered by any court having jurisdiction. Unless otherwise agreed by the Parties, the arbitration shall be conducted in Washington, D.C. The arbitrators shall have no authority to award punitive, exemplary, indirect or special damages except in connection with a statutory claim that explicitly provides that relief, nor any authority to hear or certify any class action.

(c)Notwithstanding anything to the contrary in this Agreement, all negotiations pursuant to this Section 11 shall be deemed to be confidential information and treated as compromise and settlement negotiations under any applicable state or federal evidentiary law. The Parties shall maintain the confidentiality of all negotiations, settlements and arbitration awards in accordance with the CPR Rules, unless otherwise required by applicable laws; provided, however, that arbitration proceedings may be disclosed when and to the extent necessary if a Party requests a judgment confirming, challenging or enforcing an arbitration award.

(d)Each Party shall bear its own expenses arising from preparing for and participating in any negotiations or arbitration under this Section 11; provided that the Parties shall each be responsible for fifty percent (50%) of the costs and fees owed to the arbitrators, and/or CPR, as applicable, in accordance with any arbitration held in accordance with this Section 11.

(e)For purposes of this Section 11, references to each Party shall mean the Saul Company, on the one hand, and Saul Centers, on the other hand.

8

Exhibit 10.(q)

12.General Provisions.

(a)Nothing herein contained shall prevent employees of Saul Company from engaging in other activities, including, without limitation, the rendering of advice to, and performance of services for, other entities affiliated with Saul Company.

(b)This Agreement shall have a term of one year from the date set forth above, and thereafter shall automatically continue for additional one-year terms unless terminated by either party upon not less than thirty (30) days’ written notice to the other party. The parties may terminate this Agreement at any time by mutual written agreement. Within thirty (30) days after the effective date of such termination (i) all unpaid payments or reimbursements for services performed or costs incurred under this Agreement by either party prior to such termination shall be paid by the other party and (ii) a reconciliation pursuant to Section 9(d) above shall be agreed upon and paid.

(c) Any notice, report or other communication required or permitted to be given hereunder shall be in writing and shall be provided by personal delivery, interoffice mail or recognized overnight courier. Any such notices to either party shall be given to the Headquarters address unless a party has provided the other party with notice, pursuant to this subsection (c), of a different notice address.

(d)This Agreement shall not be changed, modified, terminated, or discharged, in whole or in part, except by an instrument in writing signed by all parties hereto, or their respective successors or assignees.

(e)The provisions of this Agreement are independent of and severable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

(f)This Agreement shall be construed and interpreted in accordance with the laws of the State of Maryland, without regard to conflict of law principles.

(g)This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. The parties acknowledge and agree that upon the execution of this Agreement, the Original Shared Services Agreement is hereby superseded in full and replaced by this Agreement.

(h)Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy,

9

Exhibit 10.(q)

power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

(i) The titles of paragraphs and subparagraphs contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

(j) This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

[signature page follows]

10

Exhibit 10.(q)

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written.

B. F. SAUL COMPANY

By: /s/ Patrick T. Connors        

Name: Patrick T. Connors

Title: Senior Vice President

SAUL CENTERS, INC.

By: /s/ Scott V. Schneider        

Name: Scott V. Schneider

Title: Senior Vice President

Schedule 1: Headquarters Shared Costs

Schedule 2: Company-Wide Shared Costs; Excluded Employees

Schedule 3: Designated Programs/Shared Program Costs

11

Exhibit 10.(q)

Schedule 1

Headquarters Shared Costs

Paper and supplies

Plant and facilities maintenance contracts

Lunchroom charges

Copiers and other equipment rental and maintenance

Company sponsored special events

7501 parking costs

Metro SmartTrip benefits

Costs of offsite storage, pantry supplies and other services

12

Exhibit 10.(q)

SCHEDULE 2

Company-Wide Shared Costs

Group health

Group life insurance

Fidelity bonds

EAP and other employee support services

Wellness Programs

13

Exhibit 10.(q)

SCHEDULE 3

Designated Programs/Shared Costs

Designated Programs:

CPD

14

EX-21

Exhibit 21

SUBSIDIARIES OF SAUL CENTERS, INC.

1500 Rockville Pike LLC

11503 Rockville Pike LLC

750 North Glebe LLC

Ashburn Village Center LLC

Avenel Business Park LLC

Avenel VI, Inc.

Beacon Center LLC

Briggs Chaney Plaza, LLC

Burtonsville Center LLC

Clarendon Center LLC

Countryside Commercial Center Association, Inc.

Cranberry Square LLC

Cranberry Square Subsidiary LLC

Kentlands 311 LLC

Kentlands Lot 1, LLC

Kentlands Square LLC

Kentlands Square Subsidiary LLC

Lansdowne Village Greens Commercial Association

Leesburg Pike Center LLC

Metro Pike Center LLC

Northrock Center LLC

Ravenwood Shopping Center LLC

Rockville Pike Holdings LLC

Saul Holdings Limited Partnership

Saul Monocacy, LLC

Saul Subsidiary I Limited Partnership

Saul Subsidiary II Limited Partnership

Seabreeze Plaza LLC

Seven Corners Center LLC

Severna Park MarketPlace LLC

Severna Park MarketPlace Subsidiary LLC

Shops at Fairfax LLC

Smallwood Village Center LLC

Thruway Shopping Center LLC

Washington Square Center

Westview Village Center LLC

White Oak Subsidiary LLC

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements of Saul Centers, Inc.:

Registration

Statement Number         Form             Description                    

333-123982             Form S-3         Common Stock to be Resold by Selling Stockholders

333-115262             Form S-8         2004 Stock Plan

333-60064             Form S-3         Common Stock to be Resold by Selling Stockholders

333-59962             Form S-8         Deferred Compensation Plan for Directors

333-41436             Form S-3         Common Stock to be Resold by Selling Stockholders

333-88127            Form S-3         Common Stock to be Resold by Selling Stockholders

333-82041             Form S-8         Deferred Compensation and Stock Plan for Directors

333-139376             Form S-3D         Dividend Reinvestment and Stock Purchase Plan

333-150785             Form S-8         Amended 2004 Stock Plan

333-151515             Form S-3         Common Stock to be Resold by Selling Stockholders

333-166751             Form S-3         Common Stock to be Resold by Selling Stockholders

333-185595             Form S-3         Shelf Registration Statement

333-187367            Form S-3D        Dividend Reinvestment and Stock Purchase Plan

333-188686            Form S-3        Common Stock to be Resold by Selling Stockholders

333-200921            Form S-3        Common Stock to be Resold by Selling Stockholders

333-222262            Form S-3ASR        Shelf Registration Statement

of our reports dated February 27, 2018, with respect to the consolidated financial statements and schedule of Saul Centers, Inc. and the effectiveness of internal control over financial reporting of Saul Centers, Inc., included in this Annual Report (Form 10-K) of Saul Centers, Inc. for the year ended December 31, 2017.

/s/ Ernst & Young LLP

McLean, Virginia

February 27, 2018

EX-31

Exhibit 31

CERTIFICATIONS

I, B. Francis Saul II, certify that:

1. I have reviewed this report on Form 10-K 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; and

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 fourth fiscal quarter 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: February 27, 2018

/s/ B. Francis Saul II

B. Francis Saul II

Chairman and Chief Executive Officer

Exhibit 31

CERTIFICATIONS

I, Scott V. Schneider, certify that:

1.    I have reviewed this report on Form 10-K 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; and

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 fourth fiscal quarter 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: February 27, 2018

/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 Annual Report on Form 10-K for the period ending December 31, 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: February 27, 2018/s/ B. Francis Saul II

Name: B. Francis Saul II

Title: Chairman & Chief Executive Officer

Exhibit 32

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 Annual Report on Form 10-K for the period ending December 31, 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: February 27, 2018/s/ Scott V. Schneider

Name: Scott V. Schneider

Title: Senior Vice President,

Chief Financial Officer, Secretary &

    Treasurer

XML

Document and Entity Information - USD ($) shares in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2017	Feb. 20, 2018	Jun. 30, 2017
Document And Entity Information [Abstract]
Document type	10-K
Amendment flag	false
Document period end date	Dec. 31, 2017
Document fiscal year focus	2017
Document fiscal period focus	FY
Trading symbol	BFS
Entity registrant name	SAUL CENTERS INC
Entity central index key	0000907254
Current fiscal year end date	--12-31
Entity well-known seasoned issuer	Yes
Entity current reporting status	Yes
Entity voluntary filers	No
Entity filer category	Large Accelerated Filer
Entity common stock, shares outstanding		22.0
Entity public float			$ 714.6

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Real estate investments
Land	$ 450,256	$ 422,546
Buildings and equipment	1,261,830	1,214,697
Construction in progress	91,114	63,570
Total Purchase Price	1,803,200	1,700,813
Accumulated depreciation	(488,166)	(458,279)
Real estate investments, net	1,315,034	1,242,534
Cash and cash equivalents	10,908	8,322
Accounts receivable and accrued income, net	54,057	52,774
Deferred leasing costs, net	27,255	25,983
Prepaid expenses, net	5,248	5,057
Other assets	9,950	8,355
Total assets	1,422,452	1,343,025
Liabilities
Mortgage notes payable	897,888	783,400
Revolving credit facility payable	60,734	48,217
Construction loan payable	0	68,672
Dividends and distributions payable	18,520	17,953
Accounts payable, accrued expenses and other liabilities	23,123	20,838
Deferred income	29,084	30,696
Total liabilities	1,029,349	969,776
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, 22,123,128 and 21,704,359 shares issued and outstanding, respectively	221	217
Additional paid-in capital	352,590	328,171
Accumulated deficit	(197,710)	(188,584)
Accumulated other comprehensive loss	(696)	(1,299)
Total Saul Centers, Inc. equity	334,405	318,505
Noncontrolling interests	58,698	54,744
Total equity	393,103	373,249
Total liabilities and equity	$ 1,422,452	$ 1,343,025

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 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)	22,123,128	21,704,359
Common stock, shares outstanding (in shares)	22,123,128	21,704,359

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenue
Base rent	$ 181,141	$ 172,381	$ 168,303
Expense recoveries	35,347	34,269	32,911
Percentage rent	1,458	1,379	1,608
Other	9,339	9,041	6,255
Total revenue	227,285	217,070	209,077
Operating expenses
Property operating expenses	27,689	27,527	26,565
Provision for credit losses	906	1,494	915
Real estate taxes	26,997	24,680	23,663
Interest expense and amortization of deferred debt costs	47,225	45,683	45,165
Depreciation and amortization of deferred leasing costs	45,694	44,417	43,270
General and administrative	18,176	17,496	16,353
Acquisition related costs	0	60	84
Predevelopment expenses	0	0	132
Total operating expenses	166,687	161,357	156,147
Operating income	60,598	55,713	52,930
Change in fair value of derivatives	70	(6)	(10)
Gains on sales of properties	0	1,013	11
Net income (loss)	60,668	56,720	52,931
Income attributable to noncontrolling interests	(12,411)	(11,441)	(10,463)
Net income attributable to Saul Centers, Inc.	48,257	45,279	42,468
Preferred dividends	(12,375)	(12,375)	(12,375)
Net income available to common stockholders	$ 35,882	$ 32,904	$ 30,093
Per share net income available to common stockholders
Basic (in usd per share)	$ 1.64	$ 1.53	$ 1.42
Diluted (in usd per share)	$ 1.63	$ 1.52	$ 1.42

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 60,668	$ 56,720	$ 52,931
Other comprehensive income
Unrealized gain on cash flow hedge	812	678	124
Total comprehensive income	61,480	57,398	53,055
Comprehensive income attributable to noncontrolling interests	(12,620)	(11,616)	(10,495)
Total comprehensive income attributable to Saul Centers, Inc.	48,860	45,782	42,560
Preferred dividends	(12,375)	(12,375)	(12,375)
Total comprehensive income available to common stockholders	$ 36,485	$ 33,407	$ 30,185

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Consolidated Statements of Equity - USD ($) $ in Thousands	Total	Dividend paid	Dividend declared	Series C Preferred Stock Dividend paid	Series C Preferred Stock Dividend declared	Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Deficit Dividend paid	Accumulated Deficit Dividend declared	Accumulated Deficit Series C Preferred Stock Dividend paid	Accumulated Deficit Series C Preferred Stock Dividend declared	Accumulated Other Comprehensive (Loss)	Total Saul Centers, Inc.	Total Saul Centers, Inc. Dividend paid	Total Saul Centers, Inc. Dividend declared	Total Saul Centers, Inc. Series C Preferred Stock Dividend paid	Total Saul Centers, Inc. Series C Preferred Stock Dividend declared	Noncontrolling Interests	Noncontrolling Interests Dividend paid	Noncontrolling Interests Dividend declared
Beginning balance at Dec. 31, 2014	$ 339,257					$ 180,000	$ 209	$ 287,995	$ (173,774)					$ (1,894)	$ 292,536					$ 46,721
Issuance of common stock:
Shares issued pursuant to dividend reinvestment plan	10,650						3	10,647							10,650
Shares issued due to exercise of employee stock options and issuance of directors' deferred stock	6,367						1	6,366							6,367
Issuance of partnership units pursuant to dividend reinvestment plan	5,673																			5,673
Net income	52,931								42,468						42,468					10,463
Change in unrealized loss on cash flow hedge	124													92	92					32
Preferred stock distributions:
Preferred stock distributions				$ (9,282)	$ (3,093)							$ (9,282)	$ (3,093)					$ (9,282)	$ (3,093)
Common stock distributions		$ (36,614)								$ (27,265)						$ (27,265)					$ (9,349)
Distributions payable common stock and distributions payable partnership units			$ (12,286)								$ (9,145)						$ (9,145)					$ (3,141)
Ending balance at Dec. 31, 2015	353,727					180,000	213	305,008	(180,091)					(1,802)	303,328					50,399
Issuance of common stock:
Shares issued pursuant to dividend reinvestment plan	10,311						2	10,309							10,311
Shares issued due to exercise of employee stock options and issuance of directors' deferred stock	12,856						2	12,854							12,856
Issuance of partnership units pursuant to dividend reinvestment plan	6,910																			6,910
Net income	56,720								45,279						45,279					11,441
Change in unrealized loss on cash flow hedge	678													503	503					175
Preferred stock distributions:
Preferred stock distributions				(9,282)	(3,093)							(9,282)	(3,093)					(9,282)	(3,093)
Common stock distributions		(40,720)								(30,328)						(30,328)					(10,392)
Distributions payable common stock and distributions payable partnership units			(14,858)								(11,069)						(11,069)					(3,789)
Ending balance at Dec. 31, 2016	373,249					180,000	217	328,171	(188,584)					(1,299)	318,505					54,744
Issuance of common stock:
Shares issued pursuant to dividend reinvestment plan	15,750						2	15,748							15,750
Shares issued due to exercise of employee stock options and issuance of directors' deferred stock	8,673						2	8,671							8,673
Issuance of partnership units pursuant to dividend reinvestment plan	6,735																			6,735
Net income	60,668								48,257						48,257					12,411
Change in unrealized loss on cash flow hedge	812													603	603					209
Preferred stock distributions:
Preferred stock distributions				$ (9,282)	$ (3,093)							$ (9,282)	$ (3,093)					$ (9,282)	$ (3,093)
Common stock distributions		$ (44,969)								$ (33,490)						$ (33,490)					$ (11,479)
Distributions payable common stock and distributions payable partnership units			$ (15,440)								$ (11,518)						$ (11,518)					$ (3,922)
Ending balance at Dec. 31, 2017	$ 393,103					$ 180,000	$ 221	$ 352,590	$ (197,710)					$ (696)	$ 334,405					$ 58,698

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Consolidated Statements of Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Common Stock Shares Issued (in shares)	266,011	186,797	201,212
Shares issued to directors (in shares)	152,758	251,323	117,886
Issuance of partnership units pursuant to dividend reinvestment plan (in shares)	111,351	124,758	107,037
Dividend declared
Distributions payable common stock and partnership units (in usd per share)	$ 0.52	$ 0.51	$ 0.43
Dividend declared | Series C Preferred Stock
Distributions payable on preferred stock (in usd per share)	$ 42.97	$ 42.97	$ 42.97

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands		12 Months Ended
		Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income		$ 60,668	$ 56,720	$ 52,931
Adjustments to reconcile net income to net cash provided by operating activities:
Change in fair value of derivatives		(70)	6	10
Gains on sales of properties		0	(1,013)	(11)
Depreciation and amortization of deferred leasing costs		45,694	44,417	43,270
Amortization of deferred debt costs		1,392	1,343	1,433
Non cash compensation costs of stock grants and options		1,672	1,603	1,434
Provision for credit losses		906	1,494	915
Increase in accounts receivable and accrued income		(1,643)	(3,525)	(5,216)
Additions to deferred leasing costs		(4,615)	(4,633)	(5,563)
Increase in prepaid expenses		(294)	(399)	(570)
(Increase) decrease in other assets		1,374	(6,368)	1,544
Increase (decrease) in accounts payable, accrued expenses and other liabilities		1,125	921	(937)
Decrease in deferred income		(2,759)	(1,476)	(344)
Net cash provided by operating activities		103,450	89,090	88,896
Cash flows from investing activities:
Acquisitions of real estate investments		(79,499)	(48,250)	(4,894)
Additions to real estate investments		(17,653)	(15,564)	(18,855)
Additions to development and redevelopment projects		(22,842)	(27,231)	(45,870)
Proceeds from sale of properties	[1]	6,688	4,771	32
Net cash used in investing activities		(113,306)	(86,274)	(69,587)
Cash flows from financing activities:
Proceeds from mortgage notes payable		100,000	11,250	46,000
Repayments on mortgage notes payable		(55,679)	(24,653)	(52,963)
Proceeds from construction loans payable		1,437	24,937	39,817
Proceeds from revolving credit facility		63,000	78,500	20,000
Repayments on revolving credit facility		(51,000)	(57,500)	(35,000)
Additions to deferred debt costs		(2,583)	(125)	(296)
Proceeds from the issuance of:
Common stock		22,751	21,564	15,583
Partnership units		6,735	6,910	5,673
Distributions to:
Series C preferred stockholders		(12,375)	(12,375)	(12,375)
Common stockholders		(44,576)	(39,472)	(35,645)
Noncontrolling interests		(15,268)	(13,533)	(12,228)
Net cash provided by (used in) financing activities		12,442	(4,497)	(21,434)
Net increase (decrease) in cash and cash equivalents		2,586	(1,681)	(2,125)
Cash and cash equivalents, beginning of year		8,322	10,003	12,128
Cash and cash equivalents, end of year		10,908	8,322	10,003
Supplemental disclosure of cash flow information:
Cash paid for interest		45,713	44,066	43,799
Increase (decrease) in accrued real estate investments and development costs		2,097	$ (7,098)	$ 5,201
Great Eastern Shopping Center
Property, Plant and Equipment [Line Items]
Seller financing		$ 1,275

[1] Proceeds from sales 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 Basis of Presentation

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Formation, and Basis of Presentation

ORGANIZATION, FORMATION, AND BASIS OF PRESENTATION

Organization

Saul Centers, Inc. (“Saul Centers”) was incorporated under the Maryland General Corporation Law on June 10, 1993. Saul Centers 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.

Formation and Structure of Company

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 "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-used 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, developed and/or disposed of by the Company since January 1, 2015.

Name of Property	Location	Type	Year of Acquisition/ Development/ Disposal
Acquisitions
726 N. Glebe Road*	Arlington, Virginia	Shopping Center	September 2015
700 N. Glebe Road	Arlington, Virginia	Development	August 2016
Burtonsville Town Square	Burtonsville, Maryland	Shopping Center	January 2017
Developments
Park Van Ness	Washington, DC	Mixed-Use	2013-2016
750 N. Glebe Road	Arlington, Virginia	Mixed-Use	2017
Dispositions
Crosstown Business Center	Tulsa, Oklahoma	Mixed-Use	December 2016
Great Eastern	District Heights, Maryland	Shopping Center	September 2017

*As of August 2016, this property was removed from operations and reclassified to development.

As of December 31, 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.

Basis of Presentation

The accompanying financial statements are presented on the historical cost basis of the Saul Organization because of affiliated ownership and common management and because the assets and liabilities were the subject of a business combination with the Operating Partnership, the Subsidiary Partnerships and Saul Centers, all newly formed entities with no prior operations.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 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-used properties, primarily in the Washington, DC/Baltimore metropolitan area. Because the properties are located primarily in the Washington, DC/Baltimore metropolitan area, a disproportionate economic downturn in the local economy would have a greater negative impact on our overall financial performance than on the overall financial performance of a company with a portfolio that is more geographically diverse. A majority of the Shopping Centers are anchored by several major tenants. As of December 31, 2017, 32 of the Shopping Centers were anchored by a grocery store and offer primarily day-to-day necessities and services. Two retail tenants, Giant Food (4.7%), a tenant at ten Shopping Centers and Capital One Bank (2.8%), a tenant at 18 properties, individually accounted for 2.5% or more of the Company’s total revenue for the year ended December 31, 2017.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Saul Centers, its subsidiaries, and 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 74.4% of the net income of the Operating Partnership. Because the Operating Partnership was already consolidated into the financial statements of the Company, the identification of it as a VIE has no impact on the consolidated financial statements of the Company.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

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 then 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 property may be improved with an existing structure that would be demolished as part of the development. In such cases, the fair value of the building may be determined based only on existing leases and not include estimated cash flows related to future leases. In certain circumstances, such as if the building is vacant and the Company intends to demolish the building in the near term, the entire purchase price will be allocated to land.

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 a below market lease component is recorded as deferred income and accreted as additional lease revenue over the remaining contractual lease period. If the fair value of the below market lease intangible includes fair value associated with a renewal option, such amounts are not accreted until the renewal option is exercised. If the renewal option is not exercised the value is recognized at that time. The fair value of above market lease intangibles is recorded as a deferred asset and is amortized as a reduction of lease 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. Acquisition-related transaction costs are either (a) expensed as incurred when related to business combinations or (b) capitalized to land and/or building when related to asset acquisitions.

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 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. The Company did not recognize an impairment loss on any of its real estate in 2017, 2016, or 2015.

Interest, real estate taxes, development related salary costs and other carrying costs are capitalized on projects under development and construction. Once construction is substantially completed and the assets are placed in service, their 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. Property operating expenses are charged to operations as incurred. Interest expense capitalized totaled $3.5 million, $2.5 million, and $2.2 million during 2017, 2016, and 2015, 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 improvements 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 improvement, using the straight-line method. Depreciation expense, which is included in Depreciation and amortization of deferred leasing costs in the Consolidated Statements of Operations, for the years ended December 31, 2017, 2016, and 2015, was $40.2 million, $38.8 million, and $37.7 million, respectively. Repairs and maintenance expense totaled $11.6 million, $11.8 million, and $11.6 million for 2017, 2016, and 2015, respectively, and is included in property operating expenses in the accompanying consolidated financial statements.

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 and amounts attributed to in place leases associated with acquired properties and are amortized, using the straight-line method, over the term of the lease or the remaining term of an acquired lease. 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 costs are charged to expense if the applicable lease is terminated prior to expiration of the initial lease term. Collectively, deferred leasing costs totaled $27.3 million and $26.0 million, net of accumulated amortization of approximately $35.3 million and $30.4 million, as of December 31, 2017 and 2016, respectively. Amortization expense, which is included in Depreciation and amortization of deferred leasing costs in the Consolidated Statements of Operations, totaled approximately $5.5 million, $5.6 million, and $5.6 million, for the years ended December 31, 2017, 2016, and 2015, respectively.

Construction in Progress

Construction in progress includes 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. The following table shows the components of construction in progress.

	December 31,
(in thousands)	2017		2016
N. Glebe Road	$	83,462	$	58,147
Other	7,652		5,423
Total	$	91,114	$	63,570

Accounts Receivable and Accrued Income

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 consolidated financial statements are shown net of an allowance for doubtful accounts of $0.4 million and $2.0 million, at December 31, 2017 and 2016, respectively.

(In thousands)	Year ended December 31,
	2017			2016			2015
Beginning Balance	$	1,958		$	1,263		$	677
Provision for Credit Losses	906			1,494			915
Charge-offs	(2,459		)	(799		)	(329		)
Ending Balance	$	405		$	1,958		$	1,263

In addition to rents due currently, accounts receivable also includes $44.1 million and $43.1 million, at December 31, 2017 and 2016, respectively, net of allowance for doubtful accounts totaling $0.2 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 December 31, 2015, the Company has classified as held-for-sale one operating property, comprising 197,100 square feet of gross leasable area. The book value of this property, which is included in Other Assets, was $3.4 million, net of accumulated depreciation of $7.0 million, which does not exceed its estimated fair value, less costs to sell, and liabilities were $0.2 million. The asset was sold in 2016.

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. Substantially all of the Company’s cash balances at December 31, 2017 are held in non-interest bearing accounts at various banks. From time to time the Company may maintain deposits with financial institutions in amounts in excess of federally insured limits. The Company has not experienced any losses on such deposits and believes it is not exposed to any significant credit risk on those deposits.

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 $6.9 million and $7.5 million, net of accumulated amortization of $8.2 million and $7.3 million at December 31, 2017 and 2016, respectively, and are reflected as a reduction of the related debt in the Consolidated Balance Sheets. At December 31, 2017, deferred debt costs totaling $1.8 million, related to the Glebe Road construction loan, which has no outstanding balance, are included in Other Assets in the Consolidated Balance Sheets.

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.

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 on the consolidated balance sheets. For those derivative instruments that qualify, the Company may designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge or a cash flow hedge. Derivative instruments that are designated as a hedge are evaluated to ensure they continue to qualify for hedge accounting. The effective portion of any 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 meet the criteria for hedge accounting, or that qualify and are not designated, changes in fair value are immediately recognized in earnings.

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 stepped increases, income is recognized on a straight-line basis. Expense recoveries represent a portion of property operating expenses billed to the 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 (“percentage rent”) is accrued when a tenant reports sales that exceed a specified breakpoint, pursuant to the terms of their respective leases.

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 complies with certain other requirements. Therefore, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

As of December 31, 2017, the Company had no material unrecognized tax benefits and there exist no potentially significant unrecognized tax benefits which are reasonably expected to occur within the next twelve months. The Company recognizes penalties and interest accrued related to unrecognized tax benefits, if any, as general and administrative expense. No penalties and interest have been accrued in years 2017, 2016, and 2015. The tax basis of the Company’s real estate investments was approximately $1.32 billion and $1.26 billion as of December 31, 2017 and 2016, respectively. With few exceptions, the Company is no longer subject to U.S. federal, state, and local tax examinations by tax authorities for years before 2013.

Stock Based Employee Compensation, Deferred Compensation and Stock 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 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 common stock’s closing market price on the first trading day of the following quarter to determine the number of shares to be allocated to the director. As of December 31, 2017, the directors’ deferred fee accounts comprise 183,818 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 Shareholders, and their issuance may not be deferred. Each director was issued 200 shares for each of the years ended December 31, 2017, 2016, and 2015. The shares were valued at the closing stock price on the dates the shares were awarded and included in general and administrative expenses in the total amounts of $130,700, $150,100, and $143,000, for the years ended December 31, 2017, 2016, and 2015, respectively.

Noncontrolling Interest

Saul Centers is the sole general partner of the Operating Partnership, owning a 74.4% common interest as of December 31, 2017. Noncontrolling interest in the Operating Partnership is comprised of limited partnership units owned by the Saul Organization. Noncontrolling interest 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 interest reflected on the consolidated statements of operations represents earnings allocated to limited partnership interests held by the Saul Organization.

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 anti-dilutive. The treasury stock method was used to measure the effect of the dilution.

	December 31,
(Shares in thousands)	2017		2016		2015
Weighted average common shares outstanding - Basic	21,901		21,505		21,127
Effect of dilutive options	107		110		69
Weighted average common shares outstanding - Diluted	22,008		21,615		21,196
Average share price	$	61.63	$	58.96	$	53.38
Non-dilutive options	—		129		111
Years non-dilutive options were issued			2007, 2015, and 2016		2007 and 2015

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. 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.

Recently Issued Accounting Standards

In May 2014, the FASB issued ASU No. 2014-09 titled “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 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. Management believes the majority of the Company's revenue falls outside of the scope of this guidance and does not anticipate any significant changes to the timing of the Company's revenue recognition. The Company intends to implement the standard retrospectively with the cumulative effect recognized in retained earnings at the date of adoption.

In February 2015, the FASB issued ASU No. 2015-02, “Consolidation” ("ASU 2015-02"). ASU 2015-02 modifies existing consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. ASU 2015-02 is effective for annual periods beginning after December 15, 2015, and interim periods within those years. The adoption of ASU 2015-02 effective January 1, 2016, resulted in the Operating Partnership being classified as a variable interest entity. Because the Operating Partnership was already consolidated into the financial statements, adoption had no impact on the Company’s consolidated financial statements or disclosures.

In April 2015, the FASB issued ASU No. 2015-03, “Interest - Imputation of Interest” (“ASU 2015-03”). ASU 2015-03 simplifies the presentation of debt issuance costs and will require an entity to deduct transaction costs from the carrying value of the related financial liability and not record those transaction costs as a separate asset. Recognition and measurement guidance for debt issuance costs are not affected by ASU 2015-03. ASU 2015-03 is effective for annual periods beginning after December 15, 2015, and interim periods within those years, and must be applied retrospectively by adjusting the balance sheet of each individual period presented. The Company retrospectively adopted ASU 2015-03 effective January 1, 2016. As a result of the adoption of ASU 2015-03, the Company no longer reports its net deferred debt costs as an asset and instead reports those amounts as reduction of the carrying value of the associated debt.

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 our consolidated financial statements or 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 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 during the first quarter of 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 assessment liabilities at relative fair value, instead of fair value. 

Reclassifications

Certain reclassifications have been made to prior years to conform to the presentation used for year ended December 31, 2017.

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Real Estate Acquired

12 Months Ended

Dec. 31, 2017

Real Estate [Abstract]

Real Estate Acquired

REAL ESTATE ACQUIRED

700, 726, 730 and 750 N. Glebe Road

In August 2014, the Company purchased for $40.0 million, 750 N. Glebe Road and incurred acquisition costs of $0.4 million. In December 2014, the Company purchased for $2.8 million730 N. Glebe Road and incurred acquisition costs of $40,400. In September 2015, the Company purchased for $4.0 million726 N. Glebe Road and incurred acquisition costs of $0.1 million. In August 2016, the Company purchased for $7.2 million, including acquisition costs, 700 N. Glebe Road. These properties are contiguous and are located in Arlington, Virginia.

Westview pad

In February 2015, the Company purchased for $0.9 million including acquisition costs, a 1.1 acre retail pad site in Frederick, Maryland, which is contiguous with and an expansion of the Company's other Westview asset.

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 the fourth quarter of 2016, the Company purchased for $22.7 million, including acquisition costs, 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 Company’s revolving credit facility.

Southdale

In the fourth quarter of 2016, the Company purchased for $15.3 million, including acquisition costs, 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 Company’s 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 $3.1 million, including acquisition costs, 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.

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. See Note 2. Summary of Significant Accounting Policies-Real Estate Investment Properties.

During 2017, the Company purchased one property, Burtonsville Town Square, at a cost of $76.4 million, including acquisition costs. Of the total acquisition cost, $28.4 million was allocated to land, $45.8 million was allocated to buildings, $2.2 million was allocated to in-place leases, $0.6 million was allocated to above-market rent, and $(0.6) million was allocated to below-market rent, based on their relative fair values.

During 2016, the Company purchased two properties at an aggregate cost of $10.3 million, and incurred acquisition costs totaling $60,400. The purchase price was allocated to the assets acquired and liabilities assumed based on their fair value as shown in the following table.

(in thousands)	700 N. Glebe Road		Thruway Pad			Total
Land	$	7,236	$	2,196		$	9,432
Buildings	—		874			874
In-place Leases	—		93			93
Above Market Rent	—		—			—
Below Market Rent	—		(63		)	(63		)
Total Purchase Price	$	7,236	$	3,100		$	10,336

During 2015, the Company purchased one property, 726 N. Glebe Road, at a cost of $4.0 million and incurred acquisition costs of $0.1 million. Of the total purchase price, $3.9 million was allocated to land and $0.1 million was allocated to building. No amounts were allocated to in-place, above-market or below-market leases.

The gross carrying amount of lease intangible assets included in deferred leasing costs as of December 31, 2017 and 2016 was $12.3 million and $10.1 million, respectively, and accumulated amortization was $7.5 million and $6.4 million, respectively. Amortization expense totaled $1.1 million, $1.0 million and $1.3 million, for the years ended December 31, 2017, 2016, and 2015, respectively. The gross carrying amount of below market lease intangible liabilities included in deferred income as of December 31, 2017 and 2016 was $25.1 million and $25.1 million, respectively, and accumulated amortization was $11.8 million and $10.6 million, respectively. Accretion income totaled $1.7 million, $1.8 million, and $1.8 million, for the years ended December 31, 2017, 2016, and 2015, respectively. The gross carrying amount of above market lease intangible assets included in accounts receivable as of December 31, 2017 and 2016 was $0.6 million and $10,200, respectively, and accumulated amortization was $39,500 and $7,800, respectively. Amortization expense totaled $31,600, $1,500 and $1,500, for the years ended December 31, 2017, 2016 and 2015, respectively. The remaining weighted-average amortization period as of December 31, 2017 is 4.6 years, 5.8 years, and 8.8 years for lease acquisition costs, above market leases and below market leases, respectively.

As of December 31, 2017, scheduled amortization of intangible assets and deferred income related to in place leases is as follows:

(In thousands)	Lease acquisition costs		Above market leases		Below market leases
2018	$	982	$	33	$	1,652
2019	780		33		1,515
2020	653		33		1,433
2021	530		33		1,409
2022	390		33		1,306
Thereafter	1,547		409		6,029
Total	$	4,882	$	574	$	13,344

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

12 Months Ended

Dec. 31, 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

The Saul Organization holds a 25.6% limited partnership interest in the Operating Partnership represented by 7,541,867 limited partnership units, as of December 31, 2017. The 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 December 31, 2017, approximately 740,000 units were eligible for conversion.

The impact of the Saul Organization’s 25.6% 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 shares outstanding for the years ended December 31, 2017, 2016, and 2015, were 29,510,900, 28,989,900, and 28,449,400, respectively.

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

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

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

MORTGAGE NOTES PAYABLE, REVOLVING CREDIT FACILITY, INTEREST EXPENSE AND AMORTIZATION OF DEFERRED DEBT COSTS

At December 31, 2017, the principal amount of outstanding debt totaled $965.5 million, of which $890.4 million was fixed rate debt and $75.1 million was variable rate debt. The principal amount of the Company’s outstanding debt totaled $907.8 million at December 31, 2016, of which $844.3 million was fixed rate debt and $63.5 million was variable rate debt. At December 31, 2017, the Company had a $275.0 million unsecured revolving credit facility, which can be used for working capital, property acquisitions or development projects. 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 December 31, 2017, based on the value of the Company's unencumbered properties, approximately $213.8 million was available under the line, $61.0 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 December 31, 2017, the margin was 145 basis points.

Saul Centers is a guarantor of the revolving credit facility, of which the Operating Partnership is the borrower, a portion of the Metro Pike Center bank loan (approximately $7.8 million of the $14.1 million outstanding at December 31, 2017), a portion of the Park Van Ness construction-to-permanent loan (approximately $53.7 million of the $71.2 million outstanding balance at December 31, 2017), and a portion of the Kentlands Square II mortgage loan (approximately $9.2 million of the $36.5 million outstanding at December 31, 2017). All other notes payable are non-recourse.

On March 3, 2015, the Company closed on a 15-year, non-recourse $30.0 million mortgage loan secured by Shops at Fairfax and Boulevard. The loan matures in 2030, bears interest at a fixed rate of 3.69%, requires monthly principal and interest payments totaling $153,300 based on a 25-year amortization schedule and requires a final payment of $15.5 million at maturity. Proceeds were used to repay in full the $15.2 million remaining balance of existing debt secured by Shops at Fairfax and Boulevard and to reduce outstanding borrowings under the revolving credit facility.

On April 1, 2015, the Company closed on a 15-year, non-recourse $16.0 million mortgage loan secured by Northrock. The loan matures in 2030, bears interest at a fixed rate of 3.99%, requires monthly principal and interest payments totaling $84,400 based on a 25-year amortization schedule and requires a final payment of $8.4 million at maturity. Proceeds were used to repay in full the $14.5 million remaining balance of existing debt secured by Northrock.

In November 2016, the existing loan secured by Beacon Center was increased by $11.25 million. The interest rate, amortization period and maturity date did not change; the required monthly payment was increased to $268,500. Proceeds were used to partially fund the purchase of the ground which underlies Beacon Center.

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 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.

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 November 20, 2017, the Company closed on a 15-year, non-recourse $60.0 million mortgage loan secured by Washington Square. The loan matures in 2032, bears interest at a fixed rate of 3.75%, requires monthly principal and interest payments of $308,500 based on a 25-year amortization schedule and requires a final payment of $31.1 million. Proceeds were used to repay the remaining balance of approximately $28.1 million on the existing mortgage and reduce the outstanding balance of the revolving credit facility.

The following is a summary of notes payable as of December 31, 2017 and 2016.

Notes Payable	December 31,					Interest		Scheduled
(Dollars in thousands)	2017			2016		Rate *		Maturity *
Fixed rate mortgages:	$	—	(a)	$	29,428	6.01	%	Feb-2018
	30,201		(b)	32,036		5.88	%	Jan-2019
	9,783		(c)	10,372		5.76	%	May-2019
	13,529		(d)	14,335		5.62	%	Jul-2019
	13,543		(e)	14,325		5.79	%	Sep-2019
	12,029		(f)	12,725		5.22	%	Jan-2020
	9,948		(g)	10,277		5.60	%	May-2020
	8,244		(h)	8,697		5.30	%	Jun-2020
	37,998		(i)	39,213		5.83	%	Jul-2020
	7,325		(j)	7,685		5.81	%	Feb-2021
	5,649		(k)	5,808		6.01	%	Aug-2021
	32,673		(l)	33,571		5.62	%	Jun-2022
	9,999		(m)	10,253		6.08	%	Sep-2022
	10,877		(n)	11,129		6.43	%	Apr-2023
	12,577		(o)	13,401		6.28	%	Feb-2024
	15,452		(p)	15,917		7.35	%	Jun-2024
	13,438		(q)	13,832		7.60	%	Jun-2024
	23,873		(r)	24,504		7.02	%	Jul-2024
	28,115		(s)	28,945		7.45	%	Jul-2024
	28,025		(t)	28,822		7.30	%	Jan-2025
	14,537		(u)	14,961		6.18	%	Jan-2026
	105,817		(v)	109,144		5.31	%	Apr-2026
	32,016		(w)	33,097		4.30	%	Oct-2026
	36,507		(x)	37,701		4.53	%	Nov-2026
	17,086		(y)	17,630		4.70	%	Dec-2026
	64,472		(z)	66,210		5.84	%	May-2027
	15,859		(aa)	16,352		4.04	%	Apr-2028
	39,968		(bb)	41,753		3.51	%	Jun-2028
	16,055		(cc)	16,543		3.99	%	Sep-2028
	27,884		(dd)	28,679		3.69	%	Mar-2030
	14,950		(ee)	15,357		3.99	%	Apr-2030
	39,140		(ff)	—		3.39	%	Feb-2032
	71,211		(gg)	70,144		4.88	%	Sep-2032
	60,000		(hh)	—		3.75	%	Dec-2032
	11,613		(ii)	11,446		8.00	%	Apr-2034
Total fixed rate	890,393			844,292		5.25	%	8.6 Years
Variable rate loans:
	61,000		(jj)	49,000		LIBOR + 1.45	%	Jun-2018
	14,135		(kk)	14,482		LIBOR + 1.65	%	Feb-2018
Total variable rate	$	75,135		$	63,482	2.86	%	0.4 Years
Total notes payable	$	965,528		$	907,774	5.07	%	7.9 Years

* Interest rate and scheduled maturity data presented as of December 31, 2017. Totals computed using weighted averages. Amounts shown are principal amounts and have not been reduced by any deferred debt issuance costs.

(a) The loan was collateralized by Washington Square and required equal monthly principal and interest payments of $264,000 based upon a 27.5-year amortization schedule and a final payment of $28.0 million at loan maturity. In 2017, the loan was repaid in full and replaced with a new $60.0 million loan. See (hh) below.

(b) The loan is collateralized by three shopping centers, Broadlands Village, The Glen and Kentlands Square I, and requires equal monthly principal and interest payments of $306,000 based upon a 25-year amortization schedule and a final payment of $28.4 million at loan maturity. Principal of $1.8 million was amortized during 2017.

(c) The loan is collateralized by Olde Forte Village and requires equal monthly principal and interest payments of $98,000 based upon a 25-year amortization schedule and a final payment of $9.0 million at loan maturity. Principal of $589,000 was amortized during 2017.

(d) The loan is collateralized by Countryside and requires equal monthly principal and interest payments of $133,000 based upon a 25-year amortization schedule and a final payment of $12.3 million at loan maturity. Principal of $806,000 was amortized during 2017.

(e) The loan is collateralized by Briggs Chaney MarketPlace and requires equal monthly principal and interest payments of $133,000 based upon a 25-year amortization schedule and a final payment of $12.2 million at loan maturity. Principal of $782,000 was amortized during 2017.

(f) The loan is collateralized by Shops at Monocacy and requires equal monthly principal and interest payments of $112,000 based upon a 25-year amortization schedule and a final payment of $10.6 million at loan

maturity. Principal of $696,000 was amortized during 2017.

(g) The loan is collateralized by Boca Valley Plaza and requires equal monthly principal and interest payments of $75,000 based upon a 30-year amortization schedule and a final payment of $9.1 million at loan maturity. Principal of $329,000 was amortized during 2017.

(h) The loan is collateralized by Palm Springs Center and requires equal monthly principal and interest payments of $75,000 based upon a 25-year amortization schedule and a final payment of $7.1 million at loan maturity. Principal of $453,000 was amortized during 2017.

(i) The loan and a corresponding interest-rate swap closed on June 29, 2010 and are collateralized by Thruway. On a combined basis, the loan and the interest-rate swap require equal monthly principal and interest payments of $289,000 based upon a 25-year amortization schedule and a final payment of $34.8 million at loan maturity. Principal of $1.2 million was amortized during 2017.

(j) The loan is collateralized by Jamestown Place and requires equal monthly principal and interest payments of $66,000 based upon a 25-year amortization schedule and a final payment of $6.1 million at loan maturity. Principal of $360,000 was amortized during 2017.

(k) The loan is collateralized by Hunt Club Corners and requires equal monthly principal and interest payments of $42,000 based upon a 30-year amortization schedule and a final payment of $5.0 million, at loan maturity. Principal of $159,000 was amortized during 2017.

(l) The loan is collateralized by Lansdowne Town Center and requires monthly principal and interest payments of $230,000 based on a 30-year amortization schedule and a final payment of $28.2 million at loan maturity. Principal of $898,000 was amortized during 2017.

(m) The loan is collateralized by Orchard Park and requires equal monthly principal and interest payments of $73,000 based upon a 30-year amortization schedule and a final payment of $8.6 million at loan maturity. Principal of $254,000 was amortized during 2017.

(n) The loan is collateralized by BJ’s Wholesale and requires equal monthly principal and interest payments of $80,000 based upon a 30-year amortization schedule and a final payment of $9.3 million at loan maturity. Principal of $252,000 was amortized during 2017.

(o) The loan is collateralized by Great Falls shopping center. The loan consists of three notes which require equal monthly principal and interest payments of $138,000 based upon a weighted average 26-year amortization schedule and a final payment of $6.3 million at maturity. Principal of $824,000 was amortized during 2017.

(p) The loan is collateralized by Leesburg Pike and requires equal monthly principal and interest payments of $135,000 based upon a 25-year amortization schedule and a final payment of $11.5 million at loan maturity. Principal of $465,000 was amortized during 2017.

(q) The loan is collateralized by Village Center and requires equal monthly principal and interest payments of $119,000 based upon a 25-year amortization schedule and a final payment of $10.1 million at loan maturity. Principal of $394,000 was amortized during 2017.

(r) The loan is collateralized by White Oak and requires equal monthly principal and interest payments of $193,000 based upon a 24.4 year weighted amortization schedule and a final payment of $18.5 million at loan maturity. The loan was previously collateralized by Van Ness Square. During 2012, the Company substituted White Oak as the collateral and borrowed an additional $10.5 million. Principal of $631,000 was amortized during 2017.

(s) The loan is collateralized by Avenel Business Park and requires equal monthly principal and interest payments of $246,000 based upon a 25-year amortization schedule and a final payment of $20.9 million at loan maturity. Principal of $830,000 was amortized during 2017.

(t) The loan is collateralized by Ashburn Village and requires equal monthly principal and interest payments of $240,000 based upon a 25-year amortization schedule and a final payment of $20.5 million at loan maturity. Principal of $797,000 was amortized during 2017.

(u) The loan is collateralized by Ravenwood and requires equal monthly principal and interest payments of $111,000 based upon a 25-year amortization schedule and a final payment of $10.1 million at loan maturity. Principal of $424,000 was amortized during 2017.

(v) The loan is collateralized by Clarendon Center and requires equal monthly principal and interest payments of $753,000 based upon a 25-year amortization schedule and a final payment of $70.5 million at loan maturity. Principal of $3.3 million was amortized during 2017.

(w) The loan is collateralized by Severna Park MarketPlace and requires equal monthly principal and interest payments of $207,000 based upon a 25-year amortization schedule and a final payment of $20.3 million at loan maturity. Principal of $1.1 million was amortized during 2017.

(x) The loan is collateralized by Kentlands Square II and requires equal monthly principal and interest payments of $240,000 based upon a 25-year amortization schedule and a final payment of $23.1 million at loan maturity. Principal of $1.2 million was amortized during 2017.

(y) The loan is collateralized by Cranberry Square and requires equal monthly principal and interest payments of $113,000 based upon a 25-year amortization schedule and a final payment of $10.9 million at loan maturity. Principal of $544,000 was amortized during 2017.

(z) The loan in the original amount of $73.0 million closed in May 2012, is collateralized by Seven Corners and requires equal monthly principal and interest payments of $463,200 based upon a 25-year amortization schedule and a final payment of $42.3 million at loan maturity. Principal of $1.7 million was amortized during 2017.

(aa) The loan is collateralized by Hampshire Langley and requires equal monthly principal and interest payments of $95,400 based upon a 25 -year amortization schedule and a final payment of $9.5 million at loan maturity. Principal of $493,000 was amortized in 2017.

(bb) The loan is collateralized by Beacon Center and requires equal monthly principal and interest payments of $268,500 based upon a 20-year amortization schedule and a final payment of $17.1 million at loan maturity. Principal of $1.8 million was amortized in 2017.

(cc) The loan is collateralized by Seabreeze Plaza and requires equal monthly principal and interest payments of $94,900 based upon a 25-year amortization schedule and a final payment of $9.5 million at loan maturity. Principal of $488,000 was amortized in 2017.

(dd) The loan is collateralized by Shops at Fairfax and Boulevard shopping centers and requires equal monthly principal and interest payments totaling $153,300 based upon a 25-year amortization schedule and a final payment of $15.5 million at maturity. Principal of $795,000 was amortized in 2017.

(ee) The loan is collateralized by Northrock and requires equal monthly principal and interest payments totaling $84,400 based upon a 25-year amortization schedule and a final payment of $8.4 million at maturity. Principal of $407,000 was amortized in 2017.

(ff) The loan is collateralized by Burtonsville Town Square and requires equal monthly principal and interest payments of $198,000 based on a 25-year amortization schedule and a final payment of $20.3 million at loan maturity. Principal of $860,000 was amortized in 2017.

(gg) The loan is a $71.6 million construction-to-permanent facility that is collateralized by and financed a portion of the construction costs of Park Van Ness. During the construction period, interest was funded by the loan. Effective September 1, 2017, the loan converted to permanent financing and requires monthly principal and interest payments totaling $413,500 based upon a 25-year amortization schedule. A final payment of $39.6 million will be due at maturity. Principal of $369,000 was amortized in 2017.

(hh) The loan is collateralized by Washington Square and requires equal monthly principal and interest payments of $308,000 based upon a 25-year amortization schedule and a final payment of $31.1 million at loan maturity.

(ii) The Company entered into a sale-leaseback transaction with its Olney property and is accounting for that transaction as a secured financing. The arrangement requires monthly payments of $60,400 which increase by 1.5% on May 1, 2015, and every May 1 thereafter. The arrangement provides for a final payment of $14.7 million and has an implicit interest rate of 8.0%. Negative amortization in 2017 totaled $167,000.

(jj) The loan is a $275.0 million unsecured revolving credit facility. Interest accrues at a rate equal to the sum of one-month LIBOR plus a spread of 145 basis points. The line may be extended at the Company’s option for one year with payment of a fee of 0.15%. Monthly payments, if required, are interest only and vary depending upon the amount outstanding and the applicable interest rate for any given month.

(kk) The loan is collateralized by Metro Pike Center and requires monthly principal and interest payments of approximately $48,000 and a final payment of $14.2 million at loan maturity. Principal of $347,000 was amortized during 2017.

The carrying value of the properties collateralizing the mortgage notes payable totaled $1.0 billion and $957.2 million, as of December 31, 2017 and 2016, respectively. The Company’s credit facility requires the Company and its subsidiaries to maintain certain financial covenants, which are summarized below. The Company was in compliance as of December 31, 2017.

• 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 2.0 x 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).

Mortgage notes payable at each of December 31, 2017 and 2016, totaling $51.0 million, are guaranteed by members of the Saul Organization. As of December 31, 2017, the scheduled maturities of all debt including scheduled principal amortization for years ended December 31 are as follows:

(in thousands)	Balloon Payments			Scheduled Principal Amortization		Total
2018	$	75,105	(a)	$	30,160	$	105,265
2019	60,793			29,272		90,065
2020	61,163			26,743		87,906
2021	11,012			26,456		37,468
2022	36,503			26,958		63,461
Thereafter	436,325			145,038		581,363
Principal amount	$	680,901		$	284,627	965,528
Unamortized deferred debt costs						6,906
Net						$	958,622

(a) Includes $61.0 million outstanding under the line of credit.

The components of interest expense are set forth below.

(in thousands)	Year ended December 31,
	2017			2016			2015
Interest incurred	$	49,322		$	46,867		$	45,898
Amortization of deferred debt costs	1,392			1,343			1,433
Capitalized interest	(3,489		)	(2,527		)	(2,166		)
Total	$	47,225		$	45,683		$	45,165

Deferred debt costs capitalized during the years ending December 31, 2017, 2016 and 2015 totaled $2.6 million, $0.1 million and $0.3 million, respectively.

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Lease Agreements

12 Months Ended

Dec. 31, 2017

Leases [Abstract]

Lease Agreements

LEASE AGREEMENTS

Lease income includes primarily base rent arising from noncancelable leases. Base rent (including straight-line rent) for the years ended December 31, 2017, 2016, and 2015, amounted to $181.1 million, $172.4 million, and $168.3 million, respectively. Future contractual payments under noncancelable leases for years ended December 31 (which exclude the effect of straight-line rents), are as follows: 

(in thousands)
2018	$	160,025
2019	141,097
2020	120,369
2021	100,766
2022	77,312
Thereafter	245,103
	$	844,672

The majority of the leases provide for rental increases and expense recoveries based on fixed annual increases or increases in the Consumer Price Index and increases in operating expenses. The expense recoveries generally are payable in equal installments throughout the year based on estimates, with adjustments made in the succeeding year. Expense recoveries for the years ended December 31, 2017, 2016, and 2015, amounted to $35.3 million, $34.3 million, and $32.9 million, respectively. In addition, certain retail leases provide for percentage rent based on sales in excess of the minimum specified in the tenant’s lease. Percentage rent amounted to $1.5 million, $1.4 million, and $1.6 million, for the years ended December 31, 2017, 2016, and 2015, respectively.

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Long-Term Lease Obligations

12 Months Ended

Dec. 31, 2017

Leases [Abstract]

Long-Term Lease Obligations

LONG-TERM LEASE OBLIGATIONS

During 2016 and 2017, the Company purchased the land underlying Olney, Beacon Center and Southdale - See Note 3. As a result, at December 31, 2017, no properties are subject to noncancelable long-term leases which apply to underlying land. Reflected in the accompanying consolidated financial statements is minimum ground rent expense of $10,500, $159,000, $176,000, for the years ended December 31, 2017, 2016, and 2015, respectively.

Flagship Center consists of two developed out parcels that are part of a larger adjacent community shopping center formerly owned by the Saul Organization and sold to an affiliate of a tenant in 1991. The Company has a 90-year ground leasehold interest which commenced in September 1991 with a minimum rent of one dollar per year. Countryside shopping center was acquired in February 2004. Because of certain land use considerations, approximately 3.4% of the underlying land is held under a 99-year ground lease. The lease requires the Company to pay minimum rent of one dollar per year as well as its pro-rata share of the real estate taxes.

The Company’s corporate headquarters space is leased by a member of the Saul Organization. The lease commenced in March 2002, and expires in February 2022. The Company and the Saul Organization entered into a Shared Services Agreement whereby each party pays 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 the years ended December 31, 2017, 2016, and 2015 was $774,700, $843,300, and $904,900, respectively. Expenses arising from the lease are included in general and administrative expense (see Note 9 – Related Party Transactions).

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Equity and Noncontrolling Interest

12 Months Ended

Dec. 31, 2017

Noncontrolling Interest [Abstract]

Equity and Noncontrolling Interest

EQUITY AND NONCONTROLLING INTEREST

The Consolidated Statements of Operations for the years ended December 31, 2017, 2016, and 2015 reflect noncontrolling interest of $12.4 million, $11.4 million, and $10.5 million, respectively, representing the Saul Organization’s share of the net income for the year.

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 ("Series C 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 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

12 Months Ended

Dec. 31, 2017

Related Party Transactions [Abstract]

Related Party Transactions

RELATED PARTY TRANSACTIONS

The Chairman and Chief Executive Officer, the President and Chief Operating Officer, 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 $349,500, $329,000, and $400,000, for 2017, 2016, and 2015, respectively. All amounts deferred by employees and contributed by 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 years ended December 31, 2017, 2016, and 2015, the Company contributed three times the amount deferred by employees. The Company’s expense, included in general and administrative expense, totaled $228,500, $250,800, and $224,900, for the years ended December 31, 2017, 2016, and 2015, respectively. All amounts deferred by employees and the Company are fully vested. The cumulative unfunded liability under this plan was $2.4 million and $2.1 million, at December 31, 2017 and 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. Senior management has determined that the final allocations of shared costs are reasonable. The terms of the Agreement and the payments made thereunder are reviewed annually by the Audit Committee of the Board of Directors, which consists entirely of independent directors. Net billings by the Saul Organization for the Company’s share of these ancillary costs and expenses for the years ended December 31, 2017, 2016, and 2015, which included rental expense for the Company’s headquarters lease (see Note 7. Long Term Lease Obligations), totaled $8.1 million, $7.2 million, and $8.2 million, respectively. The amounts are expensed when incurred and are primarily reported as general and administrative expenses or capitalized to specific development projects in these consolidated financial statements. As of December 31, 2017 and 2016, accounts payable, accrued expenses and other liabilities included $993,200 and $829,000, respectively, representing billings due to the Saul Organization for the Company’s share of these ancillary costs and expenses.

The Company has entered into a shared third-party predevelopment cost agreement with the Trust (the “Predevelopment Agreement”). The Predevelopment Agreement, which expired on December 31, 2015 and was extended to December 31, 2016, relates 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 Saul 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.

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 counter-signature fees in connection with the Company’s insurance program. Such commissions and fees amounted to approximately $288,400, $360,500, and $443,500, for the years ended December 31, 2017, 2016, and 2015, respectively.

In August 2016, the Company entered into an agreement to acquire from 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. 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 the second quarter of 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.

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Stock Option Plan

12 Months Ended

Dec. 31, 2017

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

Stock Option Plan

STOCK OPTION PLAN

The Company established a stock option plan in 1993 (the “1993 Plan”) for the purpose of attracting and retaining executive officers and other key personnel. The 1993 Plan provides for grants of options to purchase up to 400,000 shares of common stock. The 1993 Plan authorizes the Compensation Committee of the Board of Directors to grant options at an exercise price which may not be less than the market value of the common stock on the date the option is granted.

At the annual meeting of the Company’s stockholders in 2004, the stockholders approved the adoption of the 2004 stock plan for the purpose of attracting and retaining executive officers, directors and other key personnel. The 2004 stock plan was subsequently amended by the Company’s stockholders at the 2008 Annual Meeting and further amended at the 2013 Annual Meeting (the “Amended 2004 Plan”). The Amended 2004 Plan, which terminates in 2023, provides for grants of options to purchase up to 2,000,000 shares of common stock as well as grants of up to 200,000 shares of common stock to directors. The Amended 2004 Plan authorizes the Compensation Committee of the Board of Directors to grant options at an exercise price which may not be less than the market value of the common stock on the date the option is granted.

Effective April 25, 2008, the Compensation Committee granted options to purchase 30,000 shares (all nonqualified stock options) to 12 Company directors (the “2008 Options”), which were immediately exercisable and expire on April 24, 2018. The exercise price of $50.15 per share was the closing market price of the Company’s common stock on the date of the award. Using the Black-Scholes model, the Company determined the total fair value of the 2008 Options to be $254,700. Because the directors’ options vested immediately, the entire $254,700 was expensed as of the date of grant. No options were granted to the Company’s officers in 2008.

Effective April 24, 2009, the Compensation Committee granted options to purchase 32,500 shares (all nonqualified stock options) to 13 Company directors (the “2009 Options”), which were immediately exercisable and expire on April 23, 2019. The exercise price of $32.68 per share was the closing market price of the Company’s common stock on the date of the award. Using the Black-Scholes model, the Company determined the total fair value of the 2009 Options to be $222,950. Because the directors’ options vested immediately, the entire $222,950 was expensed as of the date of grant. No options were granted to the Company’s officers in 2009.

Effective May 7, 2010, the Compensation Committee granted options to purchase 32,500 shares (all nonqualified stock options) to 13 Company directors (the “2010 Options”), which were immediately exercisable and expire on May 6, 2020. The exercise price of $38.76 per share was the closing market price of the Company’s common stock on the date of the award. Using the Black-Scholes model, the Company determined the total fair value of the 2010 Options to be $287,950. Because the directors’ options vested immediately, the entire $287,950 was expensed as of the date of grant. No options were granted to the Company’s officers in 2010.

Effective May 13, 2011, the Compensation Committee granted options to purchase 195,000 shares (65,300 incentive stock options and 129,700 nonqualified stock options) to 15 Company officers and 13 Company Directors (the “2011 options”), which expire on May 12, 2021. The officers’ 2011 Options vest 25% per year over four years and are subject to early expiration upon termination of employment. The directors’ 2011 options were immediately exercisable. The exercise price of $41.82 per share was the closing market price of the Company’s common stock on the date of award. Using the Black-Scholes model, the Company determined the total fair value of the 2011 Options to be $1.6 million, of which $1.3 million and $297,375 were assigned to the officer options and director options, respectively. Because the directors’ options vested immediately, the entire $297,375 was expensed as of the date of grant. The expense for the officers’ options is being recognized as compensation expense monthly during the four years the options vest.

Effective May 4, 2012, the Compensation Committee granted options to purchase 277,500 shares (26,157 incentive stock options and 251,343 nonqualified stock options) to 15 Company officers and 14 Company Directors (the “2012 options”), which expire on May 3, 2022. The officers’ 2012 Options vest 25% per year over four years and are subject to early expiration upon termination of employment. The directors’ 2012 Options were immediately exercisable. The exercise price of $39.29 per share was the closing market price of the Company’s common stock on the date of award. Using the Black-Scholes model, the Company determined the total fair value of the 2012 Options to be $1.7 million, of which $1.4 million and $257,250 were assigned to the officer options and director options, respectively. Because the directors’ options vested immediately, the entire $257,250 was expensed as of the date of grant. The expense for the officers’ options is being recognized as compensation expense monthly during the four years the options vest.

Effective May 10, 2013, the Compensation Committee granted options to purchase 237,500 shares (35,592 incentive stock options and 201,908 nonqualified stock options) to 15 Company officers and 14 Company Directors (the "2013 options"), which expire on May 9, 2023. The officers' 2013 Options vest 25% per year over four years and are subject to early expiration upon termination of employment. The directors' 2013 options were immediately exercisable. The exercise price of $44.42 per share was the closing market price of the Company's common stock on the date of award. Using the Black-Scholes model, the Company determined the total fair value of the 2013 Options to be $1.5 million, of which $1.2 million and $278,250 were assigned to the officer options and director options, respectively. Because the directors' options vested immediately, the entire $278,250 was expensed as of the date of grant. The expense for the officers' options is being recognized as compensation expense monthly during the four years the option was vested.

Effective May 9, 2014, the Compensation Committee granted options to purchase 200,000 shares (29,300 incentive stock options and 170,700 nonqualified stock options) to 18 Company officers and 12 Company Directors (the “2014 options”), which expire on May 8, 2024. The officers’ 2014 Options vest 25% per year over four years and are subject to early expiration upon termination of employment. The directors’ 2014 Options were immediately exercisable. The exercise price of $47.03 per share was the closing market price of the Company’s common stock on the date of award. Using the Black-Scholes model, the Company determined the total fair value of the 2014 Options to be $1.3 million, of which $1.2 million and $109,500 were assigned to the officer options and director options, respectively. Because the directors’ options vested immediately, the entire $109,500 was expensed as of the date of grant. The expense for the officers’ options is being recognized as compensation expense monthly during the four years the options vest.

Effective May 8, 2015, the Compensation Committee granted options to purchase 225,000 shares (33,690 incentive stock options and 191,310 nonqualified stock options) to 19 Company officers and 14 Company Directors (the “2015 options”), which expire on May 7, 2025. The officers’ 2015 Options vest 25% per year over four years and are subject to early expiration upon termination of employment. The directors’ 2015 Options were immediately exercisable. The exercise price of $51.07 per share was the closing market price of the Company’s common stock on the date of award. Using the Black-Scholes model, the Company determined the total fair value of the 2015 Options to be $1.57 million, of which $1.44 million and $125,300 were assigned to the officer options and director options, respectively. Because the directors’ options vested immediately, the entire $125,300 was expensed as of the date of grant. The expense for the officers’ options is being recognized as compensation expense monthly during the four years the options vest.

Effective May 6, 2016, the Compensation Committee granted options to purchase 226,500 shares (24,248 incentive stock options and 202,252 nonqualified stock options) to 19 Company officers and 13 Company Directors (the “2016 options”), which expire on May 5, 2026. The officers’ 2016 Options vest 25% per year over four years and are subject to early expiration upon termination of employment. The directors’ 2016 Options were immediately exercisable. The exercise price of $57.74 per share was the closing market price of the Company’s common stock on the date of award. Using the Black-Scholes model, the Company determined the total fair value of the 2016 Options to be $1.2 million, of which $1.0 million and $151,125 were assigned to the officer options and director options, respectively. Because the directors’ options vested immediately, the entire $151,125 was expensed as of the date of grant. The expense for the officers’ options is being recognized as compensation expense monthly during the four years the options vest.

Effective May 5, 2017, the Compensation Committee granted options to purchase 232,500 shares (21,492 incentive stock options and 211,008 nonqualified stock options) to 20 Company officers and 11 Company Directors (the “2017 options”), which expire on May 4, 2027. The officers’ 2017 Options vest 25% per year over four years and are subject to early expiration upon termination of employment. The directors’ 2017 Options were immediately exercisable. The exercise price of $59.41 per share was the closing market price of the Company’s common stock on the date of award. Using the Black-Scholes model, the Company determined the total fair value of the 2017 Options to be $1.4 million, of which $1.2 million and $165,550 were assigned to the officer options and director options, respectively. Because the directors’ options vested immediately, the entire $165,550 was expensed as of the date of grant. The expense for the officers’ options is being recognized as compensation expense monthly during the four years the options vest.

The following table summarizes the amount and activity of each grant, 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 years ended December 31, 2017, 2016 and 2015.

SAUL CENTERS, INC. Notes to Consolidated Financial Statements (Dollars in thousands, except per share data)
Stock options issued
	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 December 31, 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		$	255		$	223		$	288		$	297		$	257		$	278		$	110		$	125		$	151		$	166		$	2,150
Expensed in previous years		255			223			288			297			257			278			110			—			—			—			1,708
Expensed in 2015		—			—			—			—			—			—			—			125			—			—			125
Expensed in 2016		—			—			—			—			—			—			—			—			151			—			151
Expensed in 2017		—			—			—			—			—			—			—			—			—			166			166
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			Subtotals									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			116,500			41,250			20,000			3,750			—			369,430									546,930
Forfeited		43,750			135,000			30,625			1,875			3,125			1,875			—			216,250									228,750
Exercisable at December 31, 2017		22,650			15,670			55,375			85,625			74,375			44,750			—			298,445									430,945
Remaining unexercised		22,650			15,670			55,375			126,875			166,875			188,375			205,000			780,820									913,320
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		$	1,518		$	1,401		$	1,350		$	1,585		$	1,137		$	1,324		$	9,681								$	11,831
Estimated forfeitures		368			845			212			169			142			86			92			1,914									1,914
Expensed in previous years		909			419			493			197			—			—			—			2,018									3,726
Expensed in 2015		89			157			269			296			240			—			—			1,051									1,176
Expensed in 2016		—			97			269			295			361			175			—			1,197									1,348
Expensed in 2017		—			—			158			295			361			263			205			1,282									1,448
Future expense		—			—			—			98			481			613			1,027			2,219									2,219
Weighted average term of remaining future expense		2.5			years

The table below summarizes the option activity for the years 2017, 2016, and 2015:

	2017				2016				2015
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Outstanding at January 1	833,630		$	49.92	860,274		$	46.58	748,208		$	44.79
Granted	232,500		59.41		226,500		57.74		225,000		51.07
Exercised	(149,060	)	46.97		(246,894	)	45.59		(112,934	)	43.67
Expired/Forfeited	(3,750	)	53.73		(6,250	)	45.31		—		—
Outstanding December 31	913,320		52.80		833,630		49.92		860,274		46.58
Exercisable at December 31	430,945		48.94		375,255		46.68		435,899		45.33

The intrinsic value of options exercised in 2017, 2016, and 2015, was $2.2 million, $3.4 million and $1.5 million, respectively. The intrinsic value of options outstanding and exercisable at year end 2017 was $8.2 million and $5.5 million, respectively. The intrinsic value measures the 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 date of exercise was the measurement date for shares exercised during the period. At December 29, 2017, the final trading day of calendar 2017, the closing price of $61.75 per share was used for the calculation of aggregate intrinsic value of options outstanding and exercisable at that date. The weighted average remaining contractual life of the Company’s exercisable and outstanding options at December 31, 2017 are 6.5 and 7.5 years, respectively.

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Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 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 3.90% and 4.25%, would be approximately $951.7 million and $851.3 million as of December 31, 2017 and 2016, respectively, compared to the principal balance of $890.4 million and $844.3 million at December 31, 2017 and 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.

Effective June 30, 2011, the Company determined that one of its interest-rate swap arrangements was a highly effective hedge of the cash flows under one of its variable-rate mortgage loans and designated the swap as a cash flow hedge of that mortgage. The swap is carried at fair value with changes in fair value recognized either in income or comprehensive income depending on the effectiveness of the swap. The following chart summarizes the changes in fair value of the Company’s swap for the indicated periods.

(Dollars in thousands)	Year ended December 31,
	2017		2016			2015
Increase (decrease) in fair value:
Recognized in earnings	$	70	$	(6	)	$	(10	)
Recognized in other comprehensive income	812		678			124
Total	$	882	$	672		$	114

The Company carries its interest rate swaps at fair value. The Company has determined the majority of the inputs used to value its derivative 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 are 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 the 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 December 31, 2017, the fair value of the interest-rate swap was approximately $1.1 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 designated as a cash flow hedge is reflected in “Other Comprehensive Income” in the Consolidated Statements of Comprehensive Income.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 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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Distributions

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Distributions

DISTRIBUTIONS

In December 1995, the Company established a Dividend Reinvestment and Stock Purchase Plan (the “Plan”), to allow its stockholders and holders of limited partnership interests an opportunity to buy additional shares of common stock by reinvesting all or a portion of their dividends or distributions. The Plan provides for investing in newly issued shares of common stock at a 3% discount from market price without payment of any brokerage commissions, service charges or other expenses. All expenses of the Plan are paid by the Company. The Operating Partnership also maintains a similar dividend reinvestment plan that mirrors the Plan, which allows holders of limited partnership interests the opportunity to buy either additional limited partnership units or common stock shares of the Company.

The Company paid common stock distributions of $2.04 per share in 2017, $1.84 per share in 2016, and $1.69 per share during 2015 and Series C preferred stock dividends of $1.72 per depositary share during each of 2017, 2016, and 2015. Of the common stock dividends paid, $1.70 per share, $1.75 per share, and $1.69 per share, represented ordinary dividend income in 2017, 2016, and 2015, respectively, and $0.34 per share and $0.09 per share represented return of capital to the shareholders in 2017 and 2016, respectively. All of the preferred stock dividends paid were considered ordinary dividend income.

The following summarizes distributions paid during the years ended December 31, 2017, 2016, and 2015, and includes activity in the Plan as well as limited partnership units issued from the reinvestment of unit distributions:

	Total Distributions to						Dividend Reinvestments
(Dollars in thousands, except per share amounts)	Preferred Stockholders		Common Stockholders		Limited Partnership Unitholders		Common Stock Shares Issued	Discounted Share Price		Limited Partnership Units Issued	Average Unit Price
Distributions during 2017
October 31	$	3,094	$	11,221	$	3,838	82,991	$	59.33	15,596	$	60.08
July 31	3,094		11,160		3,830		85,731	57.40		16,021	58.13
April 30	3,094		11,119		3,810		51,003	59.64		40,623	59.96
January 31	3,093		11,076		3,790		46,286	61.85		39,111	62.15
Total 2017	$	12,375	$	44,576	$	15,268	266,011			111,351
Distributions during 2016
October 31	$	3,094	$	10,168	$	3,478	44,176	$	57.18	30,891	$	57.18
July 31	3,094		10,133		3,465		39,487	65.64		26,897	65.64
April 30	3,094		10,029		3,449		48,854	51.59		34,201	51.59
January 31	3,093		9,142		3,141		54,280	49.24		32,769	49.24
Total 2016	$	12,375	$	39,472	$	13,533	186,797			124,758
Distributions during 2015
October 31	$	3,094	$	9,106	$	3,129	47,313	$	55.73	28,936	$	55.73
July 31	3,094		9,081		3,115		56,003	50.30		32,041	50.30
April 30	3,094		9,055		3,104		54,921	50.21		25,264	50.21
January 31	3,093		8,403		2,880		42,975	56.74		20,796	56.74
Total 2015	$	12,375	$	35,645	$	12,228	201,212			107,037

In December 2017, the Board of Directors of the Company authorized a distribution of $0.52 per common share payable in January 2018, to holders of record on January 17, 2018. As a result, $11.5 million was paid to common shareholders on January 31, 2018. Also, $3.9 million was paid to limited partnership unitholders on January 31, 2018 ($0.52 per Operating Partnership unit). The Board of Directors authorized preferred stock dividends of $0.4297 per Series C depositary share to holders of record on January 2, 2018. As a result, $3.1 million was paid to preferred shareholders on January 15, 2018. These amounts are reflected as a reduction of stockholders’ equity in the case of common stock and preferred stock dividends and noncontrolling interests deductions in the case of limited partner distributions and are included in dividends and distributions payable in the accompanying consolidated financial statements.

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Interim Results (Unaudited)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Interim Results (Unaudited)

INTERIM RESULTS (Unaudited)

The following summary presents the results of operations of the Company for the quarterly periods of calendar years 2017 and 2016.

(In thousands, except per share amounts)	2017
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Revenue	$	58,466	$	55,907	$	56,237	$	56,675
Operating income before loss on early extinguishment of debt, gain on casualty settlement, and noncontrolling interests	17,374		14,422		14,386		14,416
Gain on sales of properties	—		—		—		—
Net income attributable to Saul Centers, Inc.	13,704		11,510		11,483		11,560
Net income available to common stockholders	10,610		8,416		8,390		8,466
Net income available to common stockholders per diluted share	0.49		0.38		0.38		0.38

(In thousands, except per share amounts)	2016
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Revenue	$	56,926	$	52,710	$	53,233	$	54,201
Operating income before loss on early extinguishment of debt, gain on casualty settlement, and noncontrolling interests	16,381		13,250		12,722		13,360
Gain on sales of properties	—		—		—		1,013
Net income attributable to Saul Centers, Inc.	12,948		10,627		10,239		11,465
Net income available to common stockholders	9,854		7,533		7,146		8,371
Net income available to common stockholders per diluted share	0.46		0.35		0.33		0.38

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Business Segments

12 Months Ended

Dec. 31, 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 for 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.

SAUL CENTERS, INC. Notes to Consolidated Financial Statements
(In thousands)	Shopping			Mixed-Use			Corporate			Consolidated
As of or for the year ended December 31, 2017	Centers			Properties			and Other			Totals
Real estate rental operations:
Revenue	$	165,853		$	61,352		$	80		$	227,285
Expenses	(34,675		)	(20,917		)	—			(55,592		)
Income from real estate	131,178			40,435			80			171,693
Interest expense and amortization of deferred debt costs	—			—			(47,225		)	(47,225		)
General and administrative	—			—			(18,176		)	(18,176		)
Subtotal	131,178			40,435			(65,321		)	106,292
Depreciation and amortization of deferred leasing costs	(29,977		)	(15,717		)	—			(45,694		)
Change in fair value of derivatives	—			—			70			70
Net income (loss)	$	101,201		$	24,718		$	(65,251	)	$	60,668
Capital investment	$	90,896		$	29,098		$	—		$	119,994
Total assets	$	974,061		$	438,283		$	10,108		$	1,422,452
As of or for the year ended December 31, 2016
Real estate rental operations:
Revenue	$	160,179		$	56,840		$	51		$	217,070
Expenses	(34,931		)	(18,770		)	—			(53,701		)
Income from real estate	125,248			38,070			51			163,369
Interest expense and amortization of deferred debt costs	—			—			(45,683		)	(45,683		)
General and administrative	—			—			(17,496		)	(17,496		)
Subtotal	125,248			38,070			(63,128		)	100,190
Depreciation and amortization of deferred leasing costs	(29,964		)	(14,453		)	—			(44,417		)
Acquisition related costs	(60		)	—			—			(60		)
Change in fair value of derivatives	—			—			(6		)	(6		)
Gain on sale of property	—			1,013			—			1,013
Net income (loss)	$	95,224		$	24,630		$	(63,134	)	$	56,720
Capital investment	$	64,044		$	27,001		$	—		$	91,045
Total assets	$	976,545		$	358,419		$	8,061		$	1,343,025

SAUL CENTERS, INC. Notes to Consolidated Financial Statements (continued)
(In thousands)	Shopping			Mixed-Use			Corporate			Consolidated
As of or for the year ended December 31, 2015	Centers			Properties			and Other			Totals
Real estate rental operations:
Revenue	$	156,110		$	52,916		$	51		$	209,077
Expenses	(33,877		)	(17,266		)	—			(51,143		)
Income from real estate	122,233			35,650			51			157,934
Interest expense and amortization of deferred debt costs	—			—			(45,165		)	(45,165		)
General and administrative	—			—			(16,353		)	(16,353		)
Subtotal	122,233			35,650			(61,467		)	96,416
Depreciation and amortization of deferred leasing costs	(30,171		)	(13,099		)	—			(43,270		)
Acquisition related costs	(84		)	—			—			(84		)
Predevelopment expenses	(57		)	(75		)	—			(132		)
Change in fair value of derivatives	—			—			(10		)	(10		)
Gain on sale of property	11			—			—			11
Net income (loss)	$	91,932		$	22,476		$	(61,477	)	$	52,931
Capital investment	$	17,159		$	52,460		$	—		$	69,619
Total assets	$	931,256		$	354,254		$	9,898		$	1,295,408

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Subsequent Events

12 Months Ended

Dec. 31, 2017

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On January 12, 2018, the Company entered into an agreement to purchase for $35.5 million, plus approximately $0.7 million of acquisition costs, an office building and the underlying ground located at 7316 Wisconsin Avenue in Bethesda, Montgomery County, Maryland and has an earnest money deposit of $3.5 million at risk. The purchase price will be funded through the Company's revolving credit facility. The Company anticipates closing the acquisition on or before January 12, 2019.

On January 23, 2018, the Company sold, in an underwritten public offering, 3.0 million depositary shares, each representing 1/100^th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock (the “Series D Stock”) and received net cash proceeds totaling approximately $72.6 million. The depositary shares may be redeemed at the Company’s option, in whole or in part, on or after January 23, 2023, at the $25.00 liquidation preference, plus accrued but unpaid dividends. The depositary shares pay an annual dividend of $1.53125 per share, equivalent to 6.125% of the $25.00 liquidation preference. The first dividend is scheduled to be paid on April 15, 2018, and cover the period from January 23, 2018, through March 31, 2018. The Series D 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.

On January 26, 2018, the Company replaced its revolving credit facility, which was scheduled to expire on June 23, 2018, with a new credit facility. The new credit facility is comprised of a $75.0 million term facility that matures on January 26, 2023, and a $325.0 million revolving facility that matures on January 26, 2022, and can be extended for one year at the Company’s option, subject to satisfaction of certain conditions. The terms, conditions and covenants of the new credit facility are substantially the same as the existing credit facility.

On February 22, 2018, the Company used the net proceeds from the sale of the Series D Stock, together with cash on hand, to redeem 3.0 million depositary shares, each representing 1/100^th of a share of Series C Stock at a price of $25.00 per depositary share, plus accrued dividends.

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Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2017

SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract]

Real estate and accumulated depreciation

SAUL CENTERS, INC. Real Estate and Accumulated Depreciation December 31, 2017 (Dollars in Thousands)
			Costs																Buildings
			Capitalized		Basis at Close of Period														and
	Initial Basis		Subsequent to Acquisition		Land		Buildings and Improvements		Total		Accumulated Depreciation		Book Value		Related Debt		Date of Construction	Date Acquired	Improvements Depreciable Lives in Years
Shopping Centers
Ashburn Village, Ashburn, VA	$	11,431	$	20,278	$	6,764	$	24,945	$	31,709	$	12,993	$	18,716	$	28,025	1994 & 2000-6	3/94	40
Ashland Square Phase I, Dumfries, VA	1,178		7,503		1,178		7,503		8,681		1,764		6,917		—		2007, 2013	12/04	20 & 50
Beacon Center, Alexandria, VA	24,161		18,426		22,674		19,913		42,587		14,288		28,299		39,968		1960 & 1974	1/72, 11/16	40 & 50
BJ’s Wholesale Club, Alexandria, VA	22,623		—		22,623		—		22,623		—		22,623		10,877			3/08	—
Boca Valley Plaza, Boca Raton, FL	16,720		1,768		5,735		12,753		18,488		4,424		14,064		9,948			2/04	40
Boulevard, Fairfax, VA	4,883		4,461		3,687		5,657		9,344		2,808		6,536		16,730		1969, 1999 & 2009	4/94	40
Briggs Chaney MarketPlace, Silver Spring, MD	27,037		4,143		9,789		21,391		31,180		7,908		23,272		13,543			4/04	40
Broadlands Village, Ashburn, VA	5,316		27,954		5,300		27,970		33,270		10,933		22,337		16,082		2003, 2004 & 2006	3/02	40 & 50
Burtonsville Town Square, Burtonsville, MD	74,212		342		28,401		46,153		74,554		1,095		73,459		39,140		2010	1/17	20 & 45
Countryside Marketplace, Sterling, VA	28,912		3,752		7,666		24,998		32,664		8,838		23,826		13,529			2/04	40
Cranberry Square, Westminster, MD	31,578		640		6,700		25,518		32,218		4,105		28,113		17,086			9/11	40
Cruse MarketPlace, Cumming, GA	12,226		448		3,901		8,773		12,674		3,057		9,617		—			3/04	40
Flagship Center, Rockville, MD	160		9		169		—		169		—		169		—		1972	1/72	—
French Market, Oklahoma City, OK	5,781		13,829		1,118		18,492		19,610		11,191		8,419		—		1972 & 1998	3/74	50
Germantown, Germantown, MD	2,034		567		2,034		567		2,601		297		2,304		—		1990	8/93	40
The Glen, Woodbridge, VA	12,918		8,098		5,300		15,716		21,016		9,026		11,990		7,696		1993 & 2005	6/94	40
Great Falls Center, Great Falls, VA	41,750		3,178		14,766		30,162		44,928		7,719		37,209		12,577			3/08	40
Hampshire Langley, Takoma, MD	3,159		3,499		1,856		4,802		6,658		3,702		2,956		15,859		1960	1/72	40
Hunt Club Corners, Apopka, FL	12,584		4,034		4,822		11,796		16,618		3,801		12,817		5,649			6/06, 12/12	40
Jamestown Place, Altamonte Springs, FL	14,055		1,603		4,455		11,203		15,658		3,477		12,181		7,325			11/05	40
Kentlands Square I, Gaithersburg, MD	14,379		507		5,006		9,880		14,886		3,713		11,173		6,423		2002	9/02	40
Kentlands Square II, Gaithersburg, MD	76,723		1,602		22,800		55,525		78,325		9,092		69,233		36,507			9/11, 9/13	40
Kentlands Place, Gaithersburg, MD	1,425		7,255		1,425		7,255		8,680		3,744		4,936		—		2005	1/04	50
Lansdowne Town Center, Leesburg, VA	6,545		37,312		6,546		37,311		43,857		13,727		30,130		32,673		2006	11/02	50
Leesburg Pike Plaza, Baileys Crossroads, VA	2,418		6,243		1,132		7,529		8,661		5,934		2,727		15,452		1965	2/66	40
Lumberton Plaza, Lumberton, NJ	4,400		11,220		950		14,670		15,620		12,751		2,869		—		1975	12/75	40
Metro Pike Center, Rockville, MD	33,123		4,095		26,064		11,154		37,218		1,375		35,843		14,135			12/10	40
Shops at Monocacy, Frederick, MD	9,541		13,926		9,260		14,207		23,467		5,565		17,902		12,029		2004	11/03	50
Northrock, Warrenton, VA	12,686		15,414		12,686		15,414		28,100		3,871		24,229		14,950		2009	01/08	50
Olde Forte Village, Ft. Washington, MD	15,933		6,643		5,409		17,167		22,576		7,158		15,418		9,783		2004	07/03	40
Olney, Olney, MD	4,963		1,961		3,079		3,845		6,924		3,318		3,606		11,613		1972	11/75	40
Orchard Park, Dunwoody, GA	19,377		1,014		7,751		12,640		20,391		3,432		16,959		9,999			7/07	40
Palm Springs Center, Altamonte Springs, FL	18,365		1,435		5,739		14,061		19,800		4,606		15,194		8,244			3/05	40
Ravenwood, Baltimore, MD	1,245		4,227		703		4,769		5,472		3,067		2,405		14,537		1959 & 2006	1/72	40
11503 Rockville Pike/5541 Nicholson Lane, Rockville, MD	26,561		24		22,113		4,472		26,585		806		25,779		—			10/10 12/12	40
1500/1580/1582/1584 Rockville Pike, Rockville, MD	51,149		1,553		43,863		8,839		52,702		5,656		47,046		—			12/12, 1/14, 4/14, 12/14	5, 10, 5, 4
Seabreeze Plaza, Palm Harbor, FL	24,526		1,960		8,665		17,821		26,486		5,611		20,875		16,055			11/05	40
Market Place at Sea Colony, Bethany Beach, DE	2,920		203		1,147		1,976		3,123		491		2,632		—			3/08	40
Seven Corners, Falls Church, VA	4,848		44,108		4,913		44,043		48,956		28,790		20,166		64,472		1956 & 1997	7/73	40
Severna Park Marketplace, Severna Park, MD	63,254		232		12,700		50,786		63,486		7,927		55,559		32,016			9/11	40
Shops at Fairfax, Fairfax, VA	2,708		9,924		992		11,640		12,632		7,989		4,643		11,154		1975 & 1999	6/75	50
Smallwood Village Center, Waldorf, MD	17,819		7,975		6,402		19,392		25,794		7,278		18,516		—			1/06	40
Southdale, Glen Burnie, MD	18,895		24,345		15,254		27,986		43,240		21,333		21,907		—		1962 & 1986	1/72	40
Southside Plaza, Richmond, VA	6,728		10,695		1,878		15,545		17,423		12,280		5,143		—		1958	1/72	40
South Dekalb Plaza, Atlanta, GA	2,474		4,359		703		6,130		6,833		4,792		2,041		—		1970	2/76	40
Thruway, Winston-Salem, NC	7,848		24,821		7,693		24,976		32,669		16,735		15,934		37,998		1955 & 1965	5/72	40
Village Center, Centreville, VA	16,502		2,495		7,851		11,146		18,997		6,688		12,309		13,438		1990	8/93	40
Westview Village, Frederick, MD	6,047		25,227		6,047		25,227		31,274		7,511		23,763		—		2009	11/07, 02/15	50
White Oak, Silver Spring, MD	6,277		5,366		4,649		6,994		11,643		6,043		5,600		23,873		1958 & 1967	1/72	40
Other Buildings / Improvements			423				423		423		109		314		—
Total Shopping Centers	832,397		401,096		412,358		821,135		1,233,493		332,818		900,675		639,385
Mixed-Use Properties
Avenel Business Park, Gaithersburg, MD	21,459		30,409		3,756		48,112		51,868		36,469		15,399		28,115		1981-2000	12/84	35 & 40
Clarendon Center, Arlington, VA (1)	12,753		185,904		16,287		182,370		198,657		37,242		161,415		105,817		2010	7/73, 1/96 & 4/02	50
Park Van Ness, Washington, DC	2,242		91,617		2,242		91,617		93,859		4,801		89,058		71,211		2016	7/73 & 2/11	50
601 Pennsylvania Ave., Washington, DC	5,479		67,995		5,667		67,807		73,474		52,194		21,280		—		1986	7/73	35
Washington Square, Alexandria, VA	2,034		56,735		544		58,225		58,769		24,642		34,127		60,000		2000	7/73	50
Total Mixed-Use Properties	43,967		432,660		28,496		448,131		476,627		155,348		321,279		265,143
Development Land
Ashland Square Phase II, Manassas, VA	5,292		1,917		7,028		181		7,209		—		7,209		—			12/04
New Market, New Market, MD	2,088		286		2,374		—		2,374		—		2,374		—			9/05
North Glebe Road, Arlington, VA	52,067		31,430		—		83,497		83,497		—		83,497		—		—	8/14-8/16
Total Development Land	59,447		33,633		9,402		83,678		93,080		—		93,080		—
Total	$	935,811	$	867,389	$	450,256	$	1,352,944	$	1,803,200	$	488,166	$	1,315,034	$	904,528

(1) Includes the North and South Blocks and Residential

Depreciation and amortization related to the real estate investments reflected in the statements of operations is calculated over the estimated useful lives of the assets as follows:

Base building	Generally 35 - 50 years or a shorter period if management determines that
	the building has a shorter useful life.
Building components	Up to 20 years
Tenant improvements	The shorter of the term of the lease or the useful life
	of the improvements

The aggregate remaining net basis of the real estate investments for federal income tax purposes was approximately $1.3 billion at December 31, 2017. Depreciation and amortization are provided on the declining balance and straight-line methods over the estimated useful lives of the assets.

The changes in total real estate investments and related accumulated depreciation for each of the years in the three year period ended December 31, 2017 are summarized as follows:

(In thousands)	2017			2016			2015
Total real estate investments:
Balance, beginning of year	$	1,700,813		$	1,622,710		$	1,560,159
Acquisitions	77,258			48,123			4,894
Improvements	42,640			35,826			70,067
Retirements	(17,511		)	(5,846		)	(1,981		)
Transfers to assets held for sale	—			—			(10,429		)
Balance, end of year	$	1,803,200		$	1,700,813		$	1,622,710
Total accumulated depreciation:
Balance, beginning of year	$	458,279		$	425,370		$	396,617
Depreciation expense	40,197			38,755			37,698
Retirements	(10,310		)	(5,846		)	(1,911		)
Transfers to assets held for sale	—			$	—		(7,034		)
Balance, end of year	$	488,166		$	458,279		$	425,370

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Nature of Operations

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-used properties, primarily in the Washington, DC/Baltimore metropolitan area. Because the properties are located primarily in the Washington, DC/Baltimore metropolitan area, a disproportionate economic downturn in the local economy would have a greater negative impact on our overall financial performance than on the overall financial performance of a company with a portfolio that is more geographically diverse. A majority of the Shopping Centers are anchored by several major tenants.

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Saul Centers, its subsidiaries, and 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 74.4% of the net income of the Operating Partnership. Because the Operating Partnership was already consolidated into the financial statements of the Company, the identification of it as a VIE has no impact on the consolidated financial statements of the Company.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

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 then 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 property may be improved with an existing structure that would be demolished as part of the development. In such cases, the fair value of the building may be determined based only on existing leases and not include estimated cash flows related to future leases. In certain circumstances, such as if the building is vacant and the Company intends to demolish the building in the near term, the entire purchase price will be allocated to land.

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 a below market lease component is recorded as deferred income and accreted as additional lease revenue over the remaining contractual lease period. If the fair value of the below market lease intangible includes fair value associated with a renewal option, such amounts are not accreted until the renewal option is exercised. If the renewal option is not exercised the value is recognized at that time. The fair value of above market lease intangibles is recorded as a deferred asset and is amortized as a reduction of lease 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. Acquisition-related transaction costs are either (a) expensed as incurred when related to business combinations or (b) capitalized to land and/or building when related to asset acquisitions.

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 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. The Company did not recognize an impairment loss on any of its real estate in 2017, 2016, or 2015.

Interest, real estate taxes, development related salary costs and other carrying costs are capitalized on projects under development and construction. Once construction is substantially completed and the assets are placed in service, their 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. Property operating expenses are charged to operations as incurred. Interest expense capitalized totaled $3.5 million, $2.5 million, and $2.2 million during 2017, 2016, and 2015, 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 improvements 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 improvement, using the straight-line method.

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 and amounts attributed to in place leases associated with acquired properties and are amortized, using the straight-line method, over the term of the lease or the remaining term of an acquired lease. 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 costs are charged to expense if the applicable lease is terminated prior to expiration of the initial lease term.

Construction in Progress

Construction in Progress

Construction in progress includes 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.

Accounts Receivable and Accrued Income

Accounts Receivable and Accrued Income

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. Substantially all of the Company’s cash balances at December 31, 2017 are held in non-interest bearing accounts at various banks. From time to time the Company may maintain deposits with financial institutions in amounts in excess of federally insured limits. The Company has not experienced any losses on such deposits and believes it is not exposed to any significant credit risk on those deposits.

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.

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 on the consolidated balance sheets. For those derivative instruments that qualify, the Company may designate the hedging instrument, based upon the exposure being hedged, as a fair value hedge or a cash flow hedge. Derivative instruments that are designated as a hedge are evaluated to ensure they continue to qualify for hedge accounting. The effective portion of any 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 meet the criteria for hedge accounting, or that qualify and are not designated, changes in fair value are immediately recognized in earnings.

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 stepped increases, income is recognized on a straight-line basis. Expense recoveries represent a portion of property operating expenses billed to the 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 (“percentage rent”) is accrued when a tenant reports sales that exceed a specified breakpoint, pursuant to the terms of their respective leases.

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 complies with certain other requirements. Therefore, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

As of December 31, 2017, the Company had no material unrecognized tax benefits and there exist no potentially significant unrecognized tax benefits which are reasonably expected to occur within the next twelve months. The Company recognizes penalties and interest accrued related to unrecognized tax benefits, if any, as general and administrative expense.

Stock Based Employee Compensation, Deferred Compensation and Stock Plan for Directors

Stock Based Employee Compensation, Deferred Compensation and Stock 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 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 common stock’s closing market price on the first trading day of the following quarter to determine the number of shares to be allocated to the director. As of December 31, 2017, the directors’ deferred fee accounts comprise 183,818 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 Shareholders, and their issuance may not be deferred.

Noncontrolling Interest

Noncontrolling Interest

Saul Centers is the sole general partner of the Operating Partnership, owning a 74.4% common interest as of December 31, 2017. Noncontrolling interest in the Operating Partnership is comprised of limited partnership units owned by the Saul Organization. Noncontrolling interest 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 interest reflected on the consolidated statements of operations represents earnings allocated to limited partnership interests held by the Saul Organization.

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 anti-dilutive. The treasury stock method was used to measure the effect of the dilution.

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. 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.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In May 2014, the FASB issued ASU No. 2014-09 titled “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 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. Management believes the majority of the Company's revenue falls outside of the scope of this guidance and does not anticipate any significant changes to the timing of the Company's revenue recognition. The Company intends to implement the standard retrospectively with the cumulative effect recognized in retained earnings at the date of adoption.

In February 2015, the FASB issued ASU No. 2015-02, “Consolidation” ("ASU 2015-02"). ASU 2015-02 modifies existing consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. ASU 2015-02 is effective for annual periods beginning after December 15, 2015, and interim periods within those years. The adoption of ASU 2015-02 effective January 1, 2016, resulted in the Operating Partnership being classified as a variable interest entity. Because the Operating Partnership was already consolidated into the financial statements, adoption had no impact on the Company’s consolidated financial statements or disclosures.

In April 2015, the FASB issued ASU No. 2015-03, “Interest - Imputation of Interest” (“ASU 2015-03”). ASU 2015-03 simplifies the presentation of debt issuance costs and will require an entity to deduct transaction costs from the carrying value of the related financial liability and not record those transaction costs as a separate asset. Recognition and measurement guidance for debt issuance costs are not affected by ASU 2015-03. ASU 2015-03 is effective for annual periods beginning after December 15, 2015, and interim periods within those years, and must be applied retrospectively by adjusting the balance sheet of each individual period presented. The Company retrospectively adopted ASU 2015-03 effective January 1, 2016. As a result of the adoption of ASU 2015-03, the Company no longer reports its net deferred debt costs as an asset and instead reports those amounts as reduction of the carrying value of the associated debt.

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 our consolidated financial statements or 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 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 during the first quarter of 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 assessment liabilities at relative fair value, instead of fair value. 

Reclassifications

Reclassifications

Certain reclassifications have been made to prior years to conform to the presentation used for year ended December 31, 2017.

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Organization, Formation, and Basis of Presentation (Tables)

12 Months Ended

Dec. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Significant Properties Acquired, Developed and/or Disposed

The following table lists the significant properties acquired, developed and/or disposed of by the Company since January 1, 2015.

Name of Property	Location	Type	Year of Acquisition/ Development/ Disposal
Acquisitions
726 N. Glebe Road*	Arlington, Virginia	Shopping Center	September 2015
700 N. Glebe Road	Arlington, Virginia	Development	August 2016
Burtonsville Town Square	Burtonsville, Maryland	Shopping Center	January 2017
Developments
Park Van Ness	Washington, DC	Mixed-Use	2013-2016
750 N. Glebe Road	Arlington, Virginia	Mixed-Use	2017
Dispositions
Crosstown Business Center	Tulsa, Oklahoma	Mixed-Use	December 2016
Great Eastern	District Heights, Maryland	Shopping Center	September 2017

*As of August 2016, this property was removed from operations and reclassified to development.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Schedule of construction in progress

The following table shows the components of construction in progress.

	December 31,
(in thousands)	2017		2016
N. Glebe Road	$	83,462	$	58,147
Other	7,652		5,423
Total	$	91,114	$	63,570

Allowance for doubtful accounts

Accounts receivable in the accompanying consolidated financial statements are shown net of an allowance for doubtful accounts of $0.4 million and $2.0 million, at December 31, 2017 and 2016, respectively.

(In thousands)	Year ended December 31,
	2017			2016			2015
Beginning Balance	$	1,958		$	1,263		$	677
Provision for Credit Losses	906			1,494			915
Charge-offs	(2,459		)	(799		)	(329		)
Ending Balance	$	405		$	1,958		$	1,263

Basic and diluted shares outstanding

	December 31,
(Shares in thousands)	2017		2016		2015
Weighted average common shares outstanding - Basic	21,901		21,505		21,127
Effect of dilutive options	107		110		69
Weighted average common shares outstanding - Diluted	22,008		21,615		21,196
Average share price	$	61.63	$	58.96	$	53.38
Non-dilutive options	—		129		111
Years non-dilutive options were issued			2007, 2015, and 2016		2007 and 2015

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Real Estate Acquired (Tables)

12 Months Ended

Dec. 31, 2017

Real Estate [Abstract]

Allocation of purchase prices to acquired assets and liabilities

The purchase price was allocated to the assets acquired and liabilities assumed based on their fair value as shown in the following table.

(in thousands)	700 N. Glebe Road		Thruway Pad			Total
Land	$	7,236	$	2,196		$	9,432
Buildings	—		874			874
In-place Leases	—		93			93
Above Market Rent	—		—			—
Below Market Rent	—		(63		)	(63		)
Total Purchase Price	$	7,236	$	3,100		$	10,336

Amortization of intangible assets and deferred income related to in place leases

As of December 31, 2017, scheduled amortization of intangible assets and deferred income related to in place leases is as follows:

(In thousands)	Lease acquisition costs		Above market leases		Below market leases
2018	$	982	$	33	$	1,652
2019	780		33		1,515
2020	653		33		1,433
2021	530		33		1,409
2022	390		33		1,306
Thereafter	1,547		409		6,029
Total	$	4,882	$	574	$	13,344

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

12 Months Ended

Dec. 31, 2017

Debt Disclosure [Abstract]

Summary of notes payable

The following is a summary of notes payable as of December 31, 2017 and 2016.

Notes Payable	December 31,					Interest		Scheduled
(Dollars in thousands)	2017			2016		Rate *		Maturity *
Fixed rate mortgages:	$	—	(a)	$	29,428	6.01	%	Feb-2018
	30,201		(b)	32,036		5.88	%	Jan-2019
	9,783		(c)	10,372		5.76	%	May-2019
	13,529		(d)	14,335		5.62	%	Jul-2019
	13,543		(e)	14,325		5.79	%	Sep-2019
	12,029		(f)	12,725		5.22	%	Jan-2020
	9,948		(g)	10,277		5.60	%	May-2020
	8,244		(h)	8,697		5.30	%	Jun-2020
	37,998		(i)	39,213		5.83	%	Jul-2020
	7,325		(j)	7,685		5.81	%	Feb-2021
	5,649		(k)	5,808		6.01	%	Aug-2021
	32,673		(l)	33,571		5.62	%	Jun-2022
	9,999		(m)	10,253		6.08	%	Sep-2022
	10,877		(n)	11,129		6.43	%	Apr-2023
	12,577		(o)	13,401		6.28	%	Feb-2024
	15,452		(p)	15,917		7.35	%	Jun-2024
	13,438		(q)	13,832		7.60	%	Jun-2024
	23,873		(r)	24,504		7.02	%	Jul-2024
	28,115		(s)	28,945		7.45	%	Jul-2024
	28,025		(t)	28,822		7.30	%	Jan-2025
	14,537		(u)	14,961		6.18	%	Jan-2026
	105,817		(v)	109,144		5.31	%	Apr-2026
	32,016		(w)	33,097		4.30	%	Oct-2026
	36,507		(x)	37,701		4.53	%	Nov-2026
	17,086		(y)	17,630		4.70	%	Dec-2026
	64,472		(z)	66,210		5.84	%	May-2027
	15,859		(aa)	16,352		4.04	%	Apr-2028
	39,968		(bb)	41,753		3.51	%	Jun-2028
	16,055		(cc)	16,543		3.99	%	Sep-2028
	27,884		(dd)	28,679		3.69	%	Mar-2030
	14,950		(ee)	15,357		3.99	%	Apr-2030
	39,140		(ff)	—		3.39	%	Feb-2032
	71,211		(gg)	70,144		4.88	%	Sep-2032
	60,000		(hh)	—		3.75	%	Dec-2032
	11,613		(ii)	11,446		8.00	%	Apr-2034
Total fixed rate	890,393			844,292		5.25	%	8.6 Years
Variable rate loans:
	61,000		(jj)	49,000		LIBOR + 1.45	%	Jun-2018
	14,135		(kk)	14,482		LIBOR + 1.65	%	Feb-2018
Total variable rate	$	75,135		$	63,482	2.86	%	0.4 Years
Total notes payable	$	965,528		$	907,774	5.07	%	7.9 Years

* Interest rate and scheduled maturity data presented as of December 31, 2017. Totals computed using weighted averages. Amounts shown are principal amounts and have not been reduced by any deferred debt issuance costs.

(a) The loan was collateralized by Washington Square and required equal monthly principal and interest payments of $264,000 based upon a 27.5-year amortization schedule and a final payment of $28.0 million at loan maturity. In 2017, the loan was repaid in full and replaced with a new $60.0 million loan. See (hh) below.

(b) The loan is collateralized by three shopping centers, Broadlands Village, The Glen and Kentlands Square I, and requires equal monthly principal and interest payments of $306,000 based upon a 25-year amortization schedule and a final payment of $28.4 million at loan maturity. Principal of $1.8 million was amortized during 2017.

(c) The loan is collateralized by Olde Forte Village and requires equal monthly principal and interest payments of $98,000 based upon a 25-year amortization schedule and a final payment of $9.0 million at loan maturity. Principal of $589,000 was amortized during 2017.

(d) The loan is collateralized by Countryside and requires equal monthly principal and interest payments of $133,000 based upon a 25-year amortization schedule and a final payment of $12.3 million at loan maturity. Principal of $806,000 was amortized during 2017.

(e) The loan is collateralized by Briggs Chaney MarketPlace and requires equal monthly principal and interest payments of $133,000 based upon a 25-year amortization schedule and a final payment of $12.2 million at loan maturity. Principal of $782,000 was amortized during 2017.

(f) The loan is collateralized by Shops at Monocacy and requires equal monthly principal and interest payments of $112,000 based upon a 25-year amortization schedule and a final payment of $10.6 million at loan

maturity. Principal of $696,000 was amortized during 2017.

(g) The loan is collateralized by Boca Valley Plaza and requires equal monthly principal and interest payments of $75,000 based upon a 30-year amortization schedule and a final payment of $9.1 million at loan maturity. Principal of $329,000 was amortized during 2017.

(h) The loan is collateralized by Palm Springs Center and requires equal monthly principal and interest payments of $75,000 based upon a 25-year amortization schedule and a final payment of $7.1 million at loan maturity. Principal of $453,000 was amortized during 2017.

(i) The loan and a corresponding interest-rate swap closed on June 29, 2010 and are collateralized by Thruway. On a combined basis, the loan and the interest-rate swap require equal monthly principal and interest payments of $289,000 based upon a 25-year amortization schedule and a final payment of $34.8 million at loan maturity. Principal of $1.2 million was amortized during 2017.

(j) The loan is collateralized by Jamestown Place and requires equal monthly principal and interest payments of $66,000 based upon a 25-year amortization schedule and a final payment of $6.1 million at loan maturity. Principal of $360,000 was amortized during 2017.

(k) The loan is collateralized by Hunt Club Corners and requires equal monthly principal and interest payments of $42,000 based upon a 30-year amortization schedule and a final payment of $5.0 million, at loan maturity. Principal of $159,000 was amortized during 2017.

(l) The loan is collateralized by Lansdowne Town Center and requires monthly principal and interest payments of $230,000 based on a 30-year amortization schedule and a final payment of $28.2 million at loan maturity. Principal of $898,000 was amortized during 2017.

(m) The loan is collateralized by Orchard Park and requires equal monthly principal and interest payments of $73,000 based upon a 30-year amortization schedule and a final payment of $8.6 million at loan maturity. Principal of $254,000 was amortized during 2017.

(n) The loan is collateralized by BJ’s Wholesale and requires equal monthly principal and interest payments of $80,000 based upon a 30-year amortization schedule and a final payment of $9.3 million at loan maturity. Principal of $252,000 was amortized during 2017.

(o) The loan is collateralized by Great Falls shopping center. The loan consists of three notes which require equal monthly principal and interest payments of $138,000 based upon a weighted average 26-year amortization schedule and a final payment of $6.3 million at maturity. Principal of $824,000 was amortized during 2017.

(p) The loan is collateralized by Leesburg Pike and requires equal monthly principal and interest payments of $135,000 based upon a 25-year amortization schedule and a final payment of $11.5 million at loan maturity. Principal of $465,000 was amortized during 2017.

(q) The loan is collateralized by Village Center and requires equal monthly principal and interest payments of $119,000 based upon a 25-year amortization schedule and a final payment of $10.1 million at loan maturity. Principal of $394,000 was amortized during 2017.

(r) The loan is collateralized by White Oak and requires equal monthly principal and interest payments of $193,000 based upon a 24.4 year weighted amortization schedule and a final payment of $18.5 million at loan maturity. The loan was previously collateralized by Van Ness Square. During 2012, the Company substituted White Oak as the collateral and borrowed an additional $10.5 million. Principal of $631,000 was amortized during 2017.

(s) The loan is collateralized by Avenel Business Park and requires equal monthly principal and interest payments of $246,000 based upon a 25-year amortization schedule and a final payment of $20.9 million at loan maturity. Principal of $830,000 was amortized during 2017.

(t) The loan is collateralized by Ashburn Village and requires equal monthly principal and interest payments of $240,000 based upon a 25-year amortization schedule and a final payment of $20.5 million at loan maturity. Principal of $797,000 was amortized during 2017.

(u) The loan is collateralized by Ravenwood and requires equal monthly principal and interest payments of $111,000 based upon a 25-year amortization schedule and a final payment of $10.1 million at loan maturity. Principal of $424,000 was amortized during 2017.

(v) The loan is collateralized by Clarendon Center and requires equal monthly principal and interest payments of $753,000 based upon a 25-year amortization schedule and a final payment of $70.5 million at loan maturity. Principal of $3.3 million was amortized during 2017.

(w) The loan is collateralized by Severna Park MarketPlace and requires equal monthly principal and interest payments of $207,000 based upon a 25-year amortization schedule and a final payment of $20.3 million at loan maturity. Principal of $1.1 million was amortized during 2017.

(x) The loan is collateralized by Kentlands Square II and requires equal monthly principal and interest payments of $240,000 based upon a 25-year amortization schedule and a final payment of $23.1 million at loan maturity. Principal of $1.2 million was amortized during 2017.

(y) The loan is collateralized by Cranberry Square and requires equal monthly principal and interest payments of $113,000 based upon a 25-year amortization schedule and a final payment of $10.9 million at loan maturity. Principal of $544,000 was amortized during 2017.

(z) The loan in the original amount of $73.0 million closed in May 2012, is collateralized by Seven Corners and requires equal monthly principal and interest payments of $463,200 based upon a 25-year amortization schedule and a final payment of $42.3 million at loan maturity. Principal of $1.7 million was amortized during 2017.

(aa) The loan is collateralized by Hampshire Langley and requires equal monthly principal and interest payments of $95,400 based upon a 25 -year amortization schedule and a final payment of $9.5 million at loan maturity. Principal of $493,000 was amortized in 2017.

(bb) The loan is collateralized by Beacon Center and requires equal monthly principal and interest payments of $268,500 based upon a 20-year amortization schedule and a final payment of $17.1 million at loan maturity. Principal of $1.8 million was amortized in 2017.

(cc) The loan is collateralized by Seabreeze Plaza and requires equal monthly principal and interest payments of $94,900 based upon a 25-year amortization schedule and a final payment of $9.5 million at loan maturity. Principal of $488,000 was amortized in 2017.

(dd) The loan is collateralized by Shops at Fairfax and Boulevard shopping centers and requires equal monthly principal and interest payments totaling $153,300 based upon a 25-year amortization schedule and a final payment of $15.5 million at maturity. Principal of $795,000 was amortized in 2017.

(ee) The loan is collateralized by Northrock and requires equal monthly principal and interest payments totaling $84,400 based upon a 25-year amortization schedule and a final payment of $8.4 million at maturity. Principal of $407,000 was amortized in 2017.

(ff) The loan is collateralized by Burtonsville Town Square and requires equal monthly principal and interest payments of $198,000 based on a 25-year amortization schedule and a final payment of $20.3 million at loan maturity. Principal of $860,000 was amortized in 2017.

(gg) The loan is a $71.6 million construction-to-permanent facility that is collateralized by and financed a portion of the construction costs of Park Van Ness. During the construction period, interest was funded by the loan. Effective September 1, 2017, the loan converted to permanent financing and requires monthly principal and interest payments totaling $413,500 based upon a 25-year amortization schedule. A final payment of $39.6 million will be due at maturity. Principal of $369,000 was amortized in 2017.

(hh) The loan is collateralized by Washington Square and requires equal monthly principal and interest payments of $308,000 based upon a 25-year amortization schedule and a final payment of $31.1 million at loan maturity.

(ii) The Company entered into a sale-leaseback transaction with its Olney property and is accounting for that transaction as a secured financing. The arrangement requires monthly payments of $60,400 which increase by 1.5% on May 1, 2015, and every May 1 thereafter. The arrangement provides for a final payment of $14.7 million and has an implicit interest rate of 8.0%. Negative amortization in 2017 totaled $167,000.

(jj) The loan is a $275.0 million unsecured revolving credit facility. Interest accrues at a rate equal to the sum of one-month LIBOR plus a spread of 145 basis points. The line may be extended at the Company’s option for one year with payment of a fee of 0.15%. Monthly payments, if required, are interest only and vary depending upon the amount outstanding and the applicable interest rate for any given month.

(kk) The loan is collateralized by Metro Pike Center and requires monthly principal and interest payments of approximately $48,000 and a final payment of $14.2 million at loan maturity. Principal of $347,000 was amortized during 2017.

Scheduled maturities of all debt, including scheduled principal amortization

As of December 31, 2017, the scheduled maturities of all debt including scheduled principal amortization for years ended December 31 are as follows:

(in thousands)	Balloon Payments			Scheduled Principal Amortization		Total
2018	$	75,105	(a)	$	30,160	$	105,265
2019	60,793			29,272		90,065
2020	61,163			26,743		87,906
2021	11,012			26,456		37,468
2022	36,503			26,958		63,461
Thereafter	436,325			145,038		581,363
Principal amount	$	680,901		$	284,627	965,528
Unamortized deferred debt costs						6,906
Net						$	958,622

(a) Includes $61.0 million outstanding under the line of credit.

Components of interest expense

The components of interest expense are set forth below.

(in thousands)	Year ended December 31,
	2017			2016			2015
Interest incurred	$	49,322		$	46,867		$	45,898
Amortization of deferred debt costs	1,392			1,343			1,433
Capitalized interest	(3,489		)	(2,527		)	(2,166		)
Total	$	47,225		$	45,683		$	45,165

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Lease Agreements (Tables)

12 Months Ended

Dec. 31, 2017

Leases [Abstract]

Future contractual payments under noncancelable leases

Future contractual payments under noncancelable leases for years ended December 31 (which exclude the effect of straight-line rents), are as follows: 

(in thousands)
2018	$	160,025
2019	141,097
2020	120,369
2021	100,766
2022	77,312
Thereafter	245,103
	$	844,672

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Stock Option Plan (Tables)

12 Months Ended

Dec. 31, 2017

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

Stock Options Issued

The following table summarizes the amount and activity of each grant, 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 years ended December 31, 2017, 2016 and 2015.

SAUL CENTERS, INC. Notes to Consolidated Financial Statements (Dollars in thousands, except per share data)
Stock options issued
	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 December 31, 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		$	255		$	223		$	288		$	297		$	257		$	278		$	110		$	125		$	151		$	166		$	2,150
Expensed in previous years		255			223			288			297			257			278			110			—			—			—			1,708
Expensed in 2015		—			—			—			—			—			—			—			125			—			—			125
Expensed in 2016		—			—			—			—			—			—			—			—			151			—			151
Expensed in 2017		—			—			—			—			—			—			—			—			—			166			166
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			Subtotals									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			116,500			41,250			20,000			3,750			—			369,430									546,930
Forfeited		43,750			135,000			30,625			1,875			3,125			1,875			—			216,250									228,750
Exercisable at December 31, 2017		22,650			15,670			55,375			85,625			74,375			44,750			—			298,445									430,945
Remaining unexercised		22,650			15,670			55,375			126,875			166,875			188,375			205,000			780,820									913,320
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		$	1,518		$	1,401		$	1,350		$	1,585		$	1,137		$	1,324		$	9,681								$	11,831
Estimated forfeitures		368			845			212			169			142			86			92			1,914									1,914
Expensed in previous years		909			419			493			197			—			—			—			2,018									3,726
Expensed in 2015		89			157			269			296			240			—			—			1,051									1,176
Expensed in 2016		—			97			269			295			361			175			—			1,197									1,348
Expensed in 2017		—			—			158			295			361			263			205			1,282									1,448
Future expense		—			—			—			98			481			613			1,027			2,219									2,219
Weighted average term of remaining future expense		2.5			years

Summary of Option Activity

The table below summarizes the option activity for the years 2017, 2016, and 2015:

	2017				2016				2015
	Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
Outstanding at January 1	833,630		$	49.92	860,274		$	46.58	748,208		$	44.79
Granted	232,500		59.41		226,500		57.74		225,000		51.07
Exercised	(149,060	)	46.97		(246,894	)	45.59		(112,934	)	43.67
Expired/Forfeited	(3,750	)	53.73		(6,250	)	45.31		—		—
Outstanding December 31	913,320		52.80		833,630		49.92		860,274		46.58
Exercisable at December 31	430,945		48.94		375,255		46.68		435,899		45.33

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Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Changes in Fair Value of Swaps

The following chart summarizes the changes in fair value of the Company’s swap for the indicated periods.

(Dollars in thousands)	Year ended December 31,
	2017		2016			2015
Increase (decrease) in fair value:
Recognized in earnings	$	70	$	(6	)	$	(10	)
Recognized in other comprehensive income	812		678			124
Total	$	882	$	672		$	114

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Distributions (Tables)

12 Months Ended

Dec. 31, 2017

Equity [Abstract]

Summary of distributions paid including activity in plan as well as limited partnership units issued from reinvestment of unit distributions

The following summarizes distributions paid during the years ended December 31, 2017, 2016, and 2015, and includes activity in the Plan as well as limited partnership units issued from the reinvestment of unit distributions:

	Total Distributions to						Dividend Reinvestments
(Dollars in thousands, except per share amounts)	Preferred Stockholders		Common Stockholders		Limited Partnership Unitholders		Common Stock Shares Issued	Discounted Share Price		Limited Partnership Units Issued	Average Unit Price
Distributions during 2017
October 31	$	3,094	$	11,221	$	3,838	82,991	$	59.33	15,596	$	60.08
July 31	3,094		11,160		3,830		85,731	57.40		16,021	58.13
April 30	3,094		11,119		3,810		51,003	59.64		40,623	59.96
January 31	3,093		11,076		3,790		46,286	61.85		39,111	62.15
Total 2017	$	12,375	$	44,576	$	15,268	266,011			111,351
Distributions during 2016
October 31	$	3,094	$	10,168	$	3,478	44,176	$	57.18	30,891	$	57.18
July 31	3,094		10,133		3,465		39,487	65.64		26,897	65.64
April 30	3,094		10,029		3,449		48,854	51.59		34,201	51.59
January 31	3,093		9,142		3,141		54,280	49.24		32,769	49.24
Total 2016	$	12,375	$	39,472	$	13,533	186,797			124,758
Distributions during 2015
October 31	$	3,094	$	9,106	$	3,129	47,313	$	55.73	28,936	$	55.73
July 31	3,094		9,081		3,115		56,003	50.30		32,041	50.30
April 30	3,094		9,055		3,104		54,921	50.21		25,264	50.21
January 31	3,093		8,403		2,880		42,975	56.74		20,796	56.74
Total 2015	$	12,375	$	35,645	$	12,228	201,212			107,037

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Interim Results (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2017

Quarterly Financial Information Disclosure [Abstract]

Summary of results of operations for quarterly periods

The following summary presents the results of operations of the Company for the quarterly periods of calendar years 2017 and 2016.

(In thousands, except per share amounts)	2017
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Revenue	$	58,466	$	55,907	$	56,237	$	56,675
Operating income before loss on early extinguishment of debt, gain on casualty settlement, and noncontrolling interests	17,374		14,422		14,386		14,416
Gain on sales of properties	—		—		—		—
Net income attributable to Saul Centers, Inc.	13,704		11,510		11,483		11,560
Net income available to common stockholders	10,610		8,416		8,390		8,466
Net income available to common stockholders per diluted share	0.49		0.38		0.38		0.38

(In thousands, except per share amounts)	2016
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Revenue	$	56,926	$	52,710	$	53,233	$	54,201
Operating income before loss on early extinguishment of debt, gain on casualty settlement, and noncontrolling interests	16,381		13,250		12,722		13,360
Gain on sales of properties	—		—		—		1,013
Net income attributable to Saul Centers, Inc.	12,948		10,627		10,239		11,465
Net income available to common stockholders	9,854		7,533		7,146		8,371
Net income available to common stockholders per diluted share	0.46		0.35		0.33		0.38

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Business Segments (Tables)

12 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Business Segments

SAUL CENTERS, INC. Notes to Consolidated Financial Statements
(In thousands)	Shopping			Mixed-Use			Corporate			Consolidated
As of or for the year ended December 31, 2017	Centers			Properties			and Other			Totals
Real estate rental operations:
Revenue	$	165,853		$	61,352		$	80		$	227,285
Expenses	(34,675		)	(20,917		)	—			(55,592		)
Income from real estate	131,178			40,435			80			171,693
Interest expense and amortization of deferred debt costs	—			—			(47,225		)	(47,225		)
General and administrative	—			—			(18,176		)	(18,176		)
Subtotal	131,178			40,435			(65,321		)	106,292
Depreciation and amortization of deferred leasing costs	(29,977		)	(15,717		)	—			(45,694		)
Change in fair value of derivatives	—			—			70			70
Net income (loss)	$	101,201		$	24,718		$	(65,251	)	$	60,668
Capital investment	$	90,896		$	29,098		$	—		$	119,994
Total assets	$	974,061		$	438,283		$	10,108		$	1,422,452
As of or for the year ended December 31, 2016
Real estate rental operations:
Revenue	$	160,179		$	56,840		$	51		$	217,070
Expenses	(34,931		)	(18,770		)	—			(53,701		)
Income from real estate	125,248			38,070			51			163,369
Interest expense and amortization of deferred debt costs	—			—			(45,683		)	(45,683		)
General and administrative	—			—			(17,496		)	(17,496		)
Subtotal	125,248			38,070			(63,128		)	100,190
Depreciation and amortization of deferred leasing costs	(29,964		)	(14,453		)	—			(44,417		)
Acquisition related costs	(60		)	—			—			(60		)
Change in fair value of derivatives	—			—			(6		)	(6		)
Gain on sale of property	—			1,013			—			1,013
Net income (loss)	$	95,224		$	24,630		$	(63,134	)	$	56,720
Capital investment	$	64,044		$	27,001		$	—		$	91,045
Total assets	$	976,545		$	358,419		$	8,061		$	1,343,025

SAUL CENTERS, INC. Notes to Consolidated Financial Statements (continued)
(In thousands)	Shopping			Mixed-Use			Corporate			Consolidated
As of or for the year ended December 31, 2015	Centers			Properties			and Other			Totals
Real estate rental operations:
Revenue	$	156,110		$	52,916		$	51		$	209,077
Expenses	(33,877		)	(17,266		)	—			(51,143		)
Income from real estate	122,233			35,650			51			157,934
Interest expense and amortization of deferred debt costs	—			—			(45,165		)	(45,165		)
General and administrative	—			—			(16,353		)	(16,353		)
Subtotal	122,233			35,650			(61,467		)	96,416
Depreciation and amortization of deferred leasing costs	(30,171		)	(13,099		)	—			(43,270		)
Acquisition related costs	(84		)	—			—			(84		)
Predevelopment expenses	(57		)	(75		)	—			(132		)
Change in fair value of derivatives	—			—			(10		)	(10		)
Gain on sale of property	11			—			—			11
Net income (loss)	$	91,932		$	22,476		$	(61,477	)	$	52,931
Capital investment	$	17,159		$	52,460		$	—		$	69,619
Total assets	$	931,256		$	354,254		$	9,898		$	1,295,408

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Organization, Formation And Basis of Presentation - Additional Information (Detail)	Dec. 31, 2017 partnership property
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Distribution of REIT taxable income (excluding net capital gains) to its stockholders	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 - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2017 USD ($) ft² tenant store property shares	Dec. 31, 2016 USD ($) shares	Dec. 31, 2015 USD ($) shares	Dec. 31, 2014 USD ($)
Significant Accounting Policies [Line Items]
Number of shopping centers | store	32
Percentage of ownership in operating partnership	74.41803%
Interest expense capitalized	$ 3,489,000	$ 2,527,000	$ 2,166,000
Depreciation and amortization of deferred leasing costs	40,197,000	38,755,000	37,698,000
Repairs and maintenance expense	11,600,000	11,800,000	11,600,000
Deferred leasing costs, net	27,255,000	25,983,000
Accumulated amortization deferred leasing cost	35,300,000	30,400,000
Amortization expense deferred leasing cost	5,500,000	5,600,000	5,600,000
Allowance for doubtful accounts receivables	405,000	1,958,000	1,263,000	$ 677,000
Accounts receivable, net representing rental income accrued	44,100,000	43,100,000
Allowance for doubtful accounts receivables representing rental income accrued	200,000	500,000
Real estate held-for-sale	3,400,000
Real estate, accumulated depreciation	488,166,000	458,279,000	425,370,000	$ 396,617,000
Real estate, costs to sell and liabilities	200,000
Unamortized deferred debt costs	6,906,000	7,500,000
Accumulated amortization	8,200,000	7,300,000
Accrued penalties and interest	0	0	$ 0
Tax basis of the company's real estate investments	$ 1,320,000,000	$ 1,260,000,000
Shares issued to directors (in shares) | shares	152,758	251,323	117,886
Shares issued to directors	$ 1,448,000	$ 1,348,000	$ 1,176,000
Director
Significant Accounting Policies [Line Items]
Shares credited to deferred fee accounts (in shares) | shares	183,818
Shares issued to directors (in shares) | shares	200	200	200
Shares issued to directors	$ 130,700	$ 150,100	$ 143,000
Property Held-for-sale
Significant Accounting Policies [Line Items]
Number of real estate properties | property	1
Net rentable area (in square feet) | ft²	197,100
Real estate, accumulated depreciation	$ 7,000,000
Minimum | Building
Significant Accounting Policies [Line Items]
Estimated useful life	35 years
Maximum | Building
Significant Accounting Policies [Line Items]
Estimated useful life	50 years
Maximum | Building Improvements
Significant Accounting Policies [Line Items]
Estimated useful life	20 years
Revenue
Significant Accounting Policies [Line Items]
Number of tenants | tenant	2
Revenue | Minimum
Significant Accounting Policies [Line Items]
Percentage of total revenue	2.50%
Revenue | Giant Food
Significant Accounting Policies [Line Items]
Percentage of total revenue	4.70%
Number of shopping centers | store	10
Revenue | Capital One
Significant Accounting Policies [Line Items]
Percentage of total revenue	2.80%
Number of shopping centers | store	18
Glebe Road Construction Loan
Significant Accounting Policies [Line Items]
Unamortized deferred debt costs	$ 1,800,000

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Summary of Significant Accounting Policies - Construction in Progress (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Construction in progress	$ 91,114	$ 63,570
N. Glebe Road
Property, Plant and Equipment [Line Items]
Construction in progress	83,462	58,147
Other
Property, Plant and Equipment [Line Items]
Construction in progress	$ 7,652	$ 5,423

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Summary of Significant Accounting Policies - Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Allowance for Doubtful Accounts Receivable [Roll Forward]
Beginning Balance	$ 1,958	$ 1,263	$ 677
Provision for Credit Losses	906	1,494	915
Charge-offs	(2,459)	(799)	(329)
Ending Balance	$ 405	$ 1,958	$ 1,263

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Summary of Significant Accounting Policies - Basic and Diluted Shares Outstanding (Detail) - $ / shares shares in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted average common shares outstanding - basic (in shares)	21,901	21,505	21,127
Effect of dilutive options (in shares)	107	110	69
Weighted average common shares outstanding - diluted (in shares)	22,008	21,615	21,196
Average share price (in usd per share)	$ 61.63	$ 58.96	$ 53.38
Options
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive options (in shares)	0	129	111

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Real Estate Acquired - Additional Information (Detail)	1 Months Ended							3 Months Ended	12 Months Ended
	Mar. 31, 2017 USD ($)	Jan. 31, 2017 USD ($)	Aug. 31, 2016 USD ($)	Sep. 30, 2015 USD ($)	Feb. 28, 2015 USD ($) a	Dec. 31, 2014 USD ($)	Aug. 31, 2014 USD ($)	Dec. 31, 2016 USD ($) property	Dec. 31, 2017 USD ($) property	Dec. 31, 2016 USD ($) property	Dec. 31, 2015 USD ($) property
Real Estate Properties [Line Items]
Payments to acquire real estate									$ 17,653,000	$ 15,564,000	$ 18,855,000
Acquisition costs										60,400
Rent expense									$ 774,700	$ 843,300	$ 904,900
Number of properties acquired | property								2	1	2	1
Purchase price allocated to land									$ 450,256,000
Purchase price allocated to buildings									1,352,944,000
Below market lease, carrying amount								$ 25,100,000	25,100,000	$ 25,100,000
Below market lease, accumulated amortization								10,600,000	11,800,000	10,600,000
Accretion income, intangible liabilities									1,700,000	1,800,000	$ 1,800,000
Lease acquisition costs
Real Estate Properties [Line Items]
Intangible assets gross carrying amount								10,100,000	12,300,000	10,100,000
Intangible assets, accumulated amortization								6,400,000	7,500,000	6,400,000
Amortization expense									$ 1,100,000	1,000,000	1,300,000
Weighted-average amortization period									4 years 6 months 26 days
Above Market Rent
Real Estate Properties [Line Items]
Intangible assets gross carrying amount								10,200	$ 600,000	10,200
Intangible assets, accumulated amortization								7,800	39,500	7,800
Amortization expense									$ 31,600	1,500	1,500
Weighted-average amortization period									8 years 9 months 9 days
Below Market Rent
Real Estate Properties [Line Items]
Weighted-average amortization period									5 years 9 months 10 days
750 N. Glebe Road
Real Estate Properties [Line Items]
Payments to acquire real estate							$ 40,000,000
Acquisition costs							$ 400,000
730 N. Glebe Road
Real Estate Properties [Line Items]
Payments to acquire real estate						$ 2,800,000
Acquisition costs						$ 40,400.00
726 N Glebe Road
Real Estate Properties [Line Items]
Payments to acquire real estate				$ 4,000,000							4,000,000
Acquisition costs				$ 100,000							100,000
Purchase price allocated to land											3,900,000
Purchase price allocated to buildings											$ 100,000
700 N. Glebe Road
Real Estate Properties [Line Items]
Payments to acquire real estate			$ 7,200,000
Purchase price allocated to land								7,236,000		7,236,000
Purchase price allocated to buildings								0		0
700 N. Glebe Road | In-place Leases
Real Estate Properties [Line Items]
Leasehold Interests								0		0
700 N. Glebe Road | Above Market Rent
Real Estate Properties [Line Items]
Leasehold Interests								0		0
700 N. Glebe Road | Below Market Rent
Real Estate Properties [Line Items]
Leasehold Interests								0		0
Westview Pad
Real Estate Properties [Line Items]
Payments to acquire real estate					$ 900,000
Area of real estate property (in square feet) | a					1.1
Thruway Pad
Real Estate Properties [Line Items]
Payments to acquire real estate			3,100,000
Acquisition costs			$ 60,400
Purchase price allocated to land								2,196,000		2,196,000
Purchase price allocated to buildings								874,000		874,000
Thruway Pad | In-place Leases
Real Estate Properties [Line Items]
Leasehold Interests								93,000		93,000
Thruway Pad | Above Market Rent
Real Estate Properties [Line Items]
Leasehold Interests								0		0
Thruway Pad | Below Market Rent
Real Estate Properties [Line Items]
Leasehold Interests								63,000		63,000
Beacon Center
Real Estate Properties [Line Items]
Payments to acquire real estate								22,700,000
Rent expense										60,000
Mortgage loans on real estate, period increase (decrease)								11,250,000
Southdale
Real Estate Properties [Line Items]
Payments to acquire real estate								15,300,000
Rent expense										60,000
Burtonsville Town Square
Real Estate Properties [Line Items]
Payments to acquire real estate		$ 76,400,000
Purchase price allocated to land									$ 28,400,000
Purchase price allocated to buildings									45,800,000
Burtonsville Town Square | In-place Leases
Real Estate Properties [Line Items]
Leasehold Interests									2,200,000
Burtonsville Town Square | Above Market Rent
Real Estate Properties [Line Items]
Leasehold Interests									600,000
Burtonsville Town Square | Below Market Rent
Real Estate Properties [Line Items]
Leasehold Interests									$ 600,000
2016 Acquisitions
Real Estate Properties [Line Items]
Payments to acquire real estate										10,300,000
Purchase price allocated to land								9,432,000		9,432,000
Purchase price allocated to buildings								874,000		874,000
2016 Acquisitions | In-place Leases
Real Estate Properties [Line Items]
Leasehold Interests								93,000		93,000
2016 Acquisitions | Above Market Rent
Real Estate Properties [Line Items]
Leasehold Interests								0		0
2016 Acquisitions | Below Market Rent
Real Estate Properties [Line Items]
Leasehold Interests								$ 63,000		$ 63,000
Olney
Real Estate Properties [Line Items]
Payments to acquire real estate	$ 3,100,000
Rent expense	$ 56,000

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Real Estate Acquired - Allocation of Purchase Prices to Acquired Assets and Liabilities (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Real Estate Properties [Line Items]
Land	$ 450,256
Buildings	1,352,944
Total Purchase Price	$ 1,803,200	$ 1,700,813	$ 1,622,710	$ 1,560,159
700 N. Glebe Road
Real Estate Properties [Line Items]
Land		7,236
Buildings		0
Total Purchase Price		7,236
700 N. Glebe Road | In-place Leases
Real Estate Properties [Line Items]
Intangible assets		0
700 N. Glebe Road | Above Market Rent
Real Estate Properties [Line Items]
Intangible assets		0
700 N. Glebe Road | Below Market Rent
Real Estate Properties [Line Items]
Intangible assets		0
Thruway Pad
Real Estate Properties [Line Items]
Land		2,196
Buildings		874
Total Purchase Price		3,100
Thruway Pad | In-place Leases
Real Estate Properties [Line Items]
Intangible assets		93
Thruway Pad | Above Market Rent
Real Estate Properties [Line Items]
Intangible assets		0
Thruway Pad | Below Market Rent
Real Estate Properties [Line Items]
Intangible assets		63
2016 Acquisitions
Real Estate Properties [Line Items]
Land		9,432
Buildings		874
Total Purchase Price		10,336
2016 Acquisitions | In-place Leases
Real Estate Properties [Line Items]
Intangible assets		93
2016 Acquisitions | Above Market Rent
Real Estate Properties [Line Items]
Intangible assets		0
2016 Acquisitions | Below Market Rent
Real Estate Properties [Line Items]
Intangible assets		$ 63

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Real Estate Acquired - Amortization of Intangible Assets and Deferred Income Related to in Place Leases (Detail) $ in Thousands	Dec. 31, 2017 USD ($)
Below market leases
2018	$ 1,652
2019	1,515
2020	1,433
2021	1,409
2022	1,306
Thereafter	6,029
Total	13,344
Lease acquisition costs
Finite-Lived Intangible Assets [Line Items]
2018	982
2019	780
2020	653
2021	530
2022	390
Thereafter	1,547
Total	4,882
Above market leases
Finite-Lived Intangible Assets [Line Items]
2018	33
2019	33
2020	33
2021	33
2022	33
Thereafter	409
Total	$ 574

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Noncontrolling Interests - Holders of Convertible Limited Partnership Units in Operating Partnership - Additional Information (Detail) - Noncontrolling Interests	12 Months Ended
	Dec. 31, 2017 shares	Dec. 31, 2016 shares	Dec. 31, 2015 shares
Noncontrolling Interest [Line Items]
Percentage of ownership interest of noncontrolling interest	25.60%
Limited partnership units (in shares)	7,541,867
Limited partnership units, conversion ratio	1
Outstanding stock percent that should be acquired for rights to be exercised	39.90%
Limited partnership units convertible to shares of common stock, eligible for conversion (in partnership units)	740,000
Fully converted partnership units and diluted weighted average shares outstanding (in shares)	29,510,900	28,989,900	28,449,400

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Mortgage Notes Payable, Revolving Credit Facility, Interest Expense and Amortization of Deferred Debt Costs - Additional Information (Detail) - USD ($)						1 Months Ended	3 Months Ended	12 Months Ended
	Nov. 20, 2017	Aug. 14, 2017	Jan. 18, 2017	Apr. 01, 2015	Mar. 03, 2015	Sep. 30, 2017	Dec. 31, 2021	Dec. 31, 2017	Sep. 01, 2017	Dec. 31, 2016	Nov. 30, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Outstanding debt								$ 965,500,000
Fixed rate mortgages								897,888,000		$ 783,400,000
Principal amount								965,528,000		907,800,000
Debt outstanding with fixed-rate										844,300,000
Debt outstanding with variable-rate										63,500,000
Remaining loan balance								284,627,000
Capitalization of debt issuance cost								2,600,000		100,000		$ 300,000
3.69% Due March 2030 | Shops at Fairfax and Boulevard
Debt Instrument [Line Items]
Loan term					15 years
Loan amount					$ 30,000,000
Loan fixed interest rate					3.69%
Loan required periodic principal and interest payment					$ 153,300
Amortization schedule					25 years
Balloon payment to be paid					$ 15,500,000
3.99% Due April 2030 | Northrock
Debt Instrument [Line Items]
Loan term				15 years
Loan amount				$ 16,000,000
Loan fixed interest rate				3.99%
Mortgage Notes Payable
Debt Instrument [Line Items]
Guarantor obligations, maximum exposure								$ 51,000,000		51,000,000
Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Extension in line of credit facility period								1 year
Available borrowing capacity								$ 213,800,000
Outstanding line of credit								61,000,000
Letter of credit available borrowing capacity								$ 185,000
Interest rate spread on LIBOR								1.45%
Revolving Credit Facility | Line of Credit | Minimum
Debt Instrument [Line Items]
Interest rate spread on LIBOR								1.45%
Revolving Credit Facility | Line of Credit | Maximum
Debt Instrument [Line Items]
Interest rate spread on LIBOR								2.00%
Fixed rate mortgage notes payable
Debt Instrument [Line Items]
Fixed rate mortgages								$ 890,393,000		844,292,000
Fixed rate mortgage notes payable | Shops at Fairfax and Boulevard
Debt Instrument [Line Items]
Remaining loan balance					$ 15,200,000
Fixed rate mortgage notes payable | Northrock
Debt Instrument [Line Items]
Remaining loan balance				$ 14,500,000
Fixed rate mortgage notes payable | Washington Square
Debt Instrument [Line Items]
Remaining loan balance	$ 28,100,000
Fixed rate mortgage notes payable | 3.69% Due March 2030
Debt Instrument [Line Items]
Fixed rate mortgages								27,884,000		28,679,000
Fixed rate mortgage notes payable | 3.99% Due April 2030
Debt Instrument [Line Items]
Fixed rate mortgages								14,950,000		15,357,000
Fixed rate mortgage notes payable | 3.99% Due April 2030 | Northrock
Debt Instrument [Line Items]
Loan required periodic principal and interest payment				$ 84,400
Amortization schedule				25 years
Balloon payment to be paid				$ 8,400,000
Fixed rate mortgage notes payable | 3.51% due June 2028
Debt Instrument [Line Items]
Fixed rate mortgages								39,968,000		41,753,000
Fixed rate mortgage notes payable | 3.51% due June 2028 | Beacon Center
Debt Instrument [Line Items]
Loan amount											$ 11,250,000.00
Loan required periodic principal and interest payment								268,500
Fixed rate mortgage notes payable | 3.39% due January 2032
Debt Instrument [Line Items]
Fixed rate mortgages								39,140,000		0
Fixed rate mortgage notes payable | 4.88% due September 2032
Debt Instrument [Line Items]
Fixed rate mortgages								71,211,000		70,144,000
Fixed rate mortgage notes payable | 3.75% due December 2032
Debt Instrument [Line Items]
Fixed rate mortgages								60,000,000		0
Variable rate loans payable
Debt Instrument [Line Items]
Variable rate debt								$ 75,135,000		63,482,000
Interest rate spread on LIBOR								2.86%
Variable rate loans payable | Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity								$ 275,000,000
Metro Pike Center Bank Loan | Fixed rate mortgage notes payable
Debt Instrument [Line Items]
Guarantor obligations, maximum exposure								7,800,000
Remaining loan balance								14,100,000
Kentlands Square II Bank Loan | Fixed rate mortgage notes payable
Debt Instrument [Line Items]
Guarantor obligations, maximum exposure								9,200,000
Remaining loan balance								36,500,000
Burtonsville Fixed Rate Mortgage | 3.39% due January 2032
Debt Instrument [Line Items]
Loan term			15 years
Loan amount			$ 40,000,000
Loan fixed interest rate			3.39%
Loan required periodic principal and interest payment			$ 197,900
Amortization schedule			25 years
Balloon payment to be paid			$ 20,300,000
Glebe Road Construction Loan | 4.67% Construction To Permanent Loan Due 2035
Debt Instrument [Line Items]
Loan amount		$ 157,000,000.0
Loan fixed interest rate		4.67%
Amortization schedule		25 years
Park Van Ness Loan | Fixed rate mortgage notes payable
Debt Instrument [Line Items]
Guarantor obligations, maximum exposure								53,700,000
Remaining loan balance								71,200,000
Park Van Ness Loan | 4.88% due September 2032
Debt Instrument [Line Items]
Fixed rate mortgages									$ 71,600,000
Loan fixed interest rate									4.88%
Loan required periodic principal and interest payment						$ 413,460
Amortization schedule						25 years
Balloon payment to be paid						$ 39,600,000
Washington Square 2017 Mortgage | 3.75% due December 2032
Debt Instrument [Line Items]
Loan term	15 years
Loan amount	$ 60,000,000
Loan fixed interest rate	3.75%
Loan required periodic principal and interest payment	$ 308,500
Amortization schedule	25 years
Balloon payment to be paid	$ 31,100,000
Debt Covenant
Debt Instrument [Line Items]
Carrying value of properties collateralized								$ 1,000,000,000		$ 957,200,000
Debt covenant, percentage of net proceeds of additional equity issuance								80.00%
Credit agreement leverage ratio								60.00%
Interest coverage ratio required minimum								2.0
Required fixed charge coverage ratio								1.3
Debt Covenant | Minimum
Debt Instrument [Line Items]
Debt covenant required net assets								$ 542,100,000
Scenario, Forecast | Glebe Road Construction Loan | 4.67% Construction To Permanent Loan Due 2035
Debt Instrument [Line Items]
Loan required periodic principal and interest payment							$ 887,900

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Mortgage Notes Payable, Revolving Credit Facility, Interest Expense and Amortization of Deferred Debt Costs - Summary of Notes Payable (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Notes Payable [Line Items]
Fixed rate mortgages	$ 897,888	$ 783,400
Interest rate	3.90%	4.25%
Scheduled maturity period	7 years 11 months 6 days
Total notes payable	$ 965,528	$ 907,774
Interest rate during period	5.07%
Fixed rate mortgage notes payable
Notes Payable [Line Items]
Fixed rate mortgages	$ 890,393	844,292
Interest rate	5.25%
Scheduled maturity period	8 years 6 months 26 days
Fixed rate mortgage notes payable | 6.01% due February 2018
Notes Payable [Line Items]
Fixed rate mortgages	$ 0	29,428
Interest rate	6.01%
Fixed rate mortgage notes payable | 5.88% due January 2019
Notes Payable [Line Items]
Fixed rate mortgages	$ 30,201	32,036
Interest rate	5.88%
Fixed rate mortgage notes payable | 5.76% due May 2019
Notes Payable [Line Items]
Fixed rate mortgages	$ 9,783	10,372
Interest rate	5.76%
Fixed rate mortgage notes payable | 5.62% due July 2019
Notes Payable [Line Items]
Fixed rate mortgages	$ 13,529	14,335
Interest rate	5.62%
Fixed rate mortgage notes payable | 5.79% due September 2019
Notes Payable [Line Items]
Fixed rate mortgages	$ 13,543	14,325
Interest rate	5.79%
Fixed rate mortgage notes payable | 5.22% due January 2020
Notes Payable [Line Items]
Fixed rate mortgages	$ 12,029	12,725
Interest rate	5.22%
Fixed rate mortgage notes payable | 5.60% due May 2020
Notes Payable [Line Items]
Fixed rate mortgages	$ 9,948	10,277
Interest rate	5.60%
Fixed rate mortgage notes payable | 5.30% due June 2020
Notes Payable [Line Items]
Fixed rate mortgages	$ 8,244	8,697
Interest rate	5.30%
Fixed rate mortgage notes payable | 5.83% due July 2020
Notes Payable [Line Items]
Fixed rate mortgages	$ 37,998	39,213
Interest rate	5.83%
Fixed rate mortgage notes payable | 5.81% due February 2021
Notes Payable [Line Items]
Fixed rate mortgages	$ 7,325	7,685
Interest rate	5.81%
Fixed rate mortgage notes payable | 6.01% due August 2021
Notes Payable [Line Items]
Fixed rate mortgages	$ 5,649	5,808
Interest rate	6.01%
Fixed rate mortgage notes payable | 5.62% due June 2022
Notes Payable [Line Items]
Fixed rate mortgages	$ 32,673	33,571
Interest rate	5.62%
Fixed rate mortgage notes payable | 6.08% due September 2022
Notes Payable [Line Items]
Fixed rate mortgages	$ 9,999	10,253
Interest rate	6.08%
Fixed rate mortgage notes payable | 6.43% due April 2023
Notes Payable [Line Items]
Fixed rate mortgages	$ 10,877	11,129
Interest rate	6.43%
Fixed rate mortgage notes payable | 6.28% due February 2024
Notes Payable [Line Items]
Fixed rate mortgages	$ 12,577	13,401
Interest rate	6.28%
Fixed rate mortgage notes payable | 7.35% due June 2024
Notes Payable [Line Items]
Fixed rate mortgages	$ 15,452	15,917
Interest rate	7.35%
Fixed rate mortgage notes payable | 7.60% due June 2024
Notes Payable [Line Items]
Fixed rate mortgages	$ 13,438	13,832
Interest rate	7.60%
Fixed rate mortgage notes payable | 7.02% due July 2024
Notes Payable [Line Items]
Fixed rate mortgages	$ 23,873	24,504
Interest rate	7.02%
Fixed rate mortgage notes payable | 7.45% due July 2024
Notes Payable [Line Items]
Fixed rate mortgages	$ 28,115	28,945
Interest rate	7.45%
Fixed rate mortgage notes payable | 7.30% due January 2025
Notes Payable [Line Items]
Fixed rate mortgages	$ 28,025	28,822
Interest rate	7.30%
Fixed rate mortgage notes payable | 6.18% due January 2026
Notes Payable [Line Items]
Fixed rate mortgages	$ 14,537	14,961
Interest rate	6.18%
Fixed rate mortgage notes payable | 5.31% due April 2026
Notes Payable [Line Items]
Fixed rate mortgages	$ 105,817	109,144
Interest rate	5.31%
Fixed rate mortgage notes payable | 4.30% due October 2026
Notes Payable [Line Items]
Fixed rate mortgages	$ 32,016	33,097
Interest rate	4.30%
Fixed rate mortgage notes payable | 4.53% due November 2026
Notes Payable [Line Items]
Fixed rate mortgages	$ 36,507	37,701
Interest rate	4.53%
Fixed rate mortgage notes payable | 4.70% due December 2026
Notes Payable [Line Items]
Fixed rate mortgages	$ 17,086	17,630
Interest rate	4.70%
Fixed rate mortgage notes payable | 5.84% due May 2027
Notes Payable [Line Items]
Fixed rate mortgages	$ 64,472	66,210
Interest rate	5.84%
Fixed rate mortgage notes payable | 4.04% due April 2028
Notes Payable [Line Items]
Fixed rate mortgages	$ 15,859	16,352
Interest rate	4.04%
Fixed rate mortgage notes payable | 3.51% due June 2028
Notes Payable [Line Items]
Fixed rate mortgages	$ 39,968	41,753
Interest rate	3.51%
Fixed rate mortgage notes payable | 3.99% due September 2028
Notes Payable [Line Items]
Fixed rate mortgages	$ 16,055	16,543
Interest rate	3.99%
Fixed rate mortgage notes payable | 3.69% Due March 2030
Notes Payable [Line Items]
Fixed rate mortgages	$ 27,884	28,679
Interest rate	3.69%
Fixed rate mortgage notes payable | 3.99% Due April 2030
Notes Payable [Line Items]
Fixed rate mortgages	$ 14,950	15,357
Interest rate	3.99%
Fixed rate mortgage notes payable | 3.39% due January 2032
Notes Payable [Line Items]
Fixed rate mortgages	$ 39,140	0
Interest rate	3.39%
Fixed rate mortgage notes payable | 4.88% due September 2032
Notes Payable [Line Items]
Fixed rate mortgages	$ 71,211	70,144
Interest rate	4.88%
Fixed rate mortgage notes payable | 3.75% due December 2032
Notes Payable [Line Items]
Fixed rate mortgages	$ 60,000	0
Interest rate	3.75%
Fixed rate mortgage notes payable | 8.00% due April 2034
Notes Payable [Line Items]
Fixed rate mortgages	$ 11,613	11,446
Interest rate	8.00%
Variable rate loans payable
Notes Payable [Line Items]
Variable rate debt	$ 75,135	63,482
Interest rate spread on LIBOR	2.86%
Scheduled maturity period	4 months 8 days
Variable rate loans payable | Revolving credit facility
Notes Payable [Line Items]
Variable rate debt	$ 61,000	49,000
Interest rate spread on LIBOR	1.45%
Variable rate loans payable | Metro Pike Center Bank Loan
Notes Payable [Line Items]
Variable rate debt	$ 14,135	$ 14,482
Interest rate spread on LIBOR	1.65%

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Mortgage Notes Payable, Revolving Credit Facility, Interest Expense and Amortization of Deferred Debt Costs - Summary of Notes Payable (Additional Information) (Detail)	12 Months Ended
	Dec. 31, 2017 USD ($) note shopping_center	Dec. 31, 2016	Dec. 31, 2012 USD ($)
Notes Payable [Line Items]
Interest rate	3.90%	4.25%
Fixed rate mortgage notes payable
Notes Payable [Line Items]
Interest rate	5.25%
Fixed rate mortgage notes payable | 6.01% due February 2018
Notes Payable [Line Items]
Interest rate	6.01%
Fixed rate mortgage notes payable | 6.01% due February 2018 | Washington Square
Notes Payable [Line Items]
Principal and interest payments	$ 264,000
Balloon payment to be paid	$ 28,000,000
Amortization period	27 years 6 months
Loan amount	$ 60,000,000.0
Fixed rate mortgage notes payable | 5.88% due January 2019
Notes Payable [Line Items]
Interest rate	5.88%
Fixed rate mortgage notes payable | 5.88% due January 2019 | Broadlands Village, The Glen and Kentlands Square I
Notes Payable [Line Items]
Principal and interest payments	$ 306,000
Balloon payment to be paid	$ 28,400,000
Amortization period	25 years
Number of shopping centers | shopping_center	3
Amortization of principal	$ 1,800,000
Fixed rate mortgage notes payable | 5.76% due May 2019
Notes Payable [Line Items]
Interest rate	5.76%
Fixed rate mortgage notes payable | 5.76% due May 2019 | Olde Forte Village
Notes Payable [Line Items]
Principal and interest payments	$ 98,000
Balloon payment to be paid	$ 9,000,000
Amortization period	25 years
Amortization of principal	$ 589,000
Fixed rate mortgage notes payable | 5.62% due July 2019
Notes Payable [Line Items]
Interest rate	5.62%
Fixed rate mortgage notes payable | 5.62% due July 2019 | Countryside
Notes Payable [Line Items]
Principal and interest payments	$ 133,000
Balloon payment to be paid	$ 12,300,000
Amortization period	25 years
Amortization of principal	$ 806,000
Fixed rate mortgage notes payable | 5.79% due September 2019
Notes Payable [Line Items]
Interest rate	5.79%
Fixed rate mortgage notes payable | 5.79% due September 2019 | Briggs Chancy MarketPlace
Notes Payable [Line Items]
Principal and interest payments	$ 133,000
Balloon payment to be paid	$ 12,200,000
Amortization period	25 years
Amortization of principal	$ 782,000
Fixed rate mortgage notes payable | 5.22% due January 2020
Notes Payable [Line Items]
Interest rate	5.22%
Fixed rate mortgage notes payable | 5.22% due January 2020 | Shops at Monocacy
Notes Payable [Line Items]
Principal and interest payments	$ 112,000
Balloon payment to be paid	$ 10,600,000
Amortization period	25 years
Amortization of principal	$ 696,000
Fixed rate mortgage notes payable | 5.60% due May 2020
Notes Payable [Line Items]
Interest rate	5.60%
Fixed rate mortgage notes payable | 5.60% due May 2020 | Boca Valley Plaza
Notes Payable [Line Items]
Principal and interest payments	$ 75,000
Balloon payment to be paid	$ 9,100,000
Amortization period	30 years
Amortization of principal	$ 329,000
Fixed rate mortgage notes payable | 5.30% due June 2020
Notes Payable [Line Items]
Interest rate	5.30%
Fixed rate mortgage notes payable | 5.30% due June 2020 | Palm Springs Center
Notes Payable [Line Items]
Principal and interest payments	$ 75,000
Balloon payment to be paid	$ 7,100,000
Amortization period	25 years
Amortization of principal	$ 453,000
Fixed rate mortgage notes payable | 5.83% due July 2020
Notes Payable [Line Items]
Interest rate	5.83%
Fixed rate mortgage notes payable | 5.83% due July 2020 | Thruway
Notes Payable [Line Items]
Principal and interest payments	$ 289,000
Balloon payment to be paid	$ 34,800,000
Amortization period	25 years
Amortization of principal	$ 1,200,000
Fixed rate mortgage notes payable | 5.81% due February 2021
Notes Payable [Line Items]
Interest rate	5.81%
Fixed rate mortgage notes payable | 5.81% due February 2021 | Jamestown Place
Notes Payable [Line Items]
Principal and interest payments	$ 66,000
Balloon payment to be paid	$ 6,100,000
Amortization period	25 years
Amortization of principal	$ 360,000
Fixed rate mortgage notes payable | 6.01% due August 2021
Notes Payable [Line Items]
Interest rate	6.01%
Fixed rate mortgage notes payable | 6.01% due August 2021 | Hunt Club Corners
Notes Payable [Line Items]
Principal and interest payments	$ 42,000
Balloon payment to be paid	$ 5,000,000
Amortization period	30 years
Amortization of principal	$ 159,000
Fixed rate mortgage notes payable | 5.62% due June 2022
Notes Payable [Line Items]
Interest rate	5.62%
Fixed rate mortgage notes payable | 5.62% due June 2022 | Landsowne Town Center
Notes Payable [Line Items]
Principal and interest payments	$ 230,000
Balloon payment to be paid	$ 28,200,000
Amortization period	30 years
Amortization of principal	$ 898,000
Fixed rate mortgage notes payable | 6.08% due September 2022
Notes Payable [Line Items]
Interest rate	6.08%
Fixed rate mortgage notes payable | 6.08% due September 2022 | Orchard Park
Notes Payable [Line Items]
Principal and interest payments	$ 73,000
Balloon payment to be paid	$ 8,600,000
Amortization period	30 years
Amortization of principal	$ 254,000
Fixed rate mortgage notes payable | 6.43% due April 2023
Notes Payable [Line Items]
Interest rate	6.43%
Fixed rate mortgage notes payable | 6.43% due April 2023 | BJs Wholesale
Notes Payable [Line Items]
Principal and interest payments	$ 80,000
Balloon payment to be paid	$ 9,300,000
Amortization period	30 years
Amortization of principal	$ 252,000
Fixed rate mortgage notes payable | 6.28% due February 2024
Notes Payable [Line Items]
Interest rate	6.28%
Fixed rate mortgage notes payable | 6.28% due February 2024 | Great Falls Shopping Center
Notes Payable [Line Items]
Principal and interest payments	$ 138,000
Balloon payment to be paid	$ 6,300,000
Amortization period	26 years
Amortization of principal	$ 824,000
Number of notes | note	3
Fixed rate mortgage notes payable | 7.35% due June 2024
Notes Payable [Line Items]
Interest rate	7.35%
Fixed rate mortgage notes payable | 7.35% due June 2024 | Leesburg Pike
Notes Payable [Line Items]
Principal and interest payments	$ 135,000
Balloon payment to be paid	$ 11,500,000
Amortization period	25 years
Amortization of principal	$ 465,000
Fixed rate mortgage notes payable | 7.60% due June 2024
Notes Payable [Line Items]
Interest rate	7.60%
Fixed rate mortgage notes payable | 7.60% due June 2024 | Village Center
Notes Payable [Line Items]
Principal and interest payments	$ 119,000
Balloon payment to be paid	$ 10,100,000
Amortization period	25 years
Amortization of principal	$ 394,000
Fixed rate mortgage notes payable | 7.02% due July 2024
Notes Payable [Line Items]
Interest rate	7.02%
Fixed rate mortgage notes payable | 7.02% due July 2024 | White Oak Shopping Center
Notes Payable [Line Items]
Principal and interest payments	$ 193,000
Balloon payment to be paid	$ 18,500,000
Amortization period	24 years 4 months 24 days
Loan amount			$ 10,500,000
Amortization of principal	$ 631,000
Fixed rate mortgage notes payable | 7.45% due July 2024
Notes Payable [Line Items]
Interest rate	7.45%
Fixed rate mortgage notes payable | 7.45% due July 2024 | Avenel Business Park
Notes Payable [Line Items]
Principal and interest payments	$ 246,000
Balloon payment to be paid	$ 20,900,000
Amortization period	25 years
Amortization of principal	$ 830,000
Fixed rate mortgage notes payable | 7.30% due January 2025
Notes Payable [Line Items]
Interest rate	7.30%
Fixed rate mortgage notes payable | 7.30% due January 2025 | Ashburn Village
Notes Payable [Line Items]
Principal and interest payments	$ 240,000
Balloon payment to be paid	$ 20,500,000
Amortization period	25 years
Amortization of principal	$ 797,000
Fixed rate mortgage notes payable | 6.18% due January 2026
Notes Payable [Line Items]
Interest rate	6.18%
Fixed rate mortgage notes payable | 6.18% due January 2026 | Ravenwood
Notes Payable [Line Items]
Principal and interest payments	$ 111,000
Balloon payment to be paid	$ 10,100,000
Amortization period	25 years
Amortization of principal	$ 424,000
Fixed rate mortgage notes payable | 5.31% due April 2026
Notes Payable [Line Items]
Interest rate	5.31%
Fixed rate mortgage notes payable | 5.31% due April 2026 | Clarendon Center
Notes Payable [Line Items]
Principal and interest payments	$ 753,000
Balloon payment to be paid	$ 70,500,000
Amortization period	25 years
Amortization of principal	$ 3,300,000
Fixed rate mortgage notes payable | 4.30% due October 2026
Notes Payable [Line Items]
Interest rate	4.30%
Fixed rate mortgage notes payable | 4.30% due October 2026 | Severna Park Market Place
Notes Payable [Line Items]
Principal and interest payments	$ 207,000
Balloon payment to be paid	$ 20,300,000
Amortization period	25 years
Amortization of principal	$ 1,100,000
Fixed rate mortgage notes payable | 4.53% due November 2026
Notes Payable [Line Items]
Interest rate	4.53%
Fixed rate mortgage notes payable | 4.53% due November 2026 | Kentlands Square II
Notes Payable [Line Items]
Principal and interest payments	$ 240,000
Balloon payment to be paid	$ 23,100,000
Amortization period	25 years
Amortization of principal	$ 1,200,000
Fixed rate mortgage notes payable | 4.70% due December 2026
Notes Payable [Line Items]
Interest rate	4.70%
Fixed rate mortgage notes payable | 4.70% due December 2026 | Cranberry Square
Notes Payable [Line Items]
Principal and interest payments	$ 113,000
Balloon payment to be paid	$ 10,900,000
Amortization period	25 years
Amortization of principal	$ 544,000
Fixed rate mortgage notes payable | 5.84% due May 2027
Notes Payable [Line Items]
Interest rate	5.84%
Fixed rate mortgage notes payable | 5.84% due May 2027 | Seven Corners
Notes Payable [Line Items]
Principal and interest payments	$ 463,200
Balloon payment to be paid	$ 42,300,000
Amortization period	25 years
Loan amount	$ 73,000,000
Amortization of principal	$ 1,700,000
Fixed rate mortgage notes payable | 4.04% due April 2028
Notes Payable [Line Items]
Interest rate	4.04%
Fixed rate mortgage notes payable | 4.04% due April 2028 | Hampshire Langley
Notes Payable [Line Items]
Principal and interest payments	$ 95,400
Balloon payment to be paid	$ 9,500,000
Amortization period	25 years
Amortization of principal	$ 493,000
Fixed rate mortgage notes payable | 3.51% due June 2028
Notes Payable [Line Items]
Interest rate	3.51%
Fixed rate mortgage notes payable | 3.51% due June 2028 | Beacon Center
Notes Payable [Line Items]
Balloon payment to be paid	$ 17,100,000
Amortization period	20 years
Amortization of principal	$ 1,800,000
Fixed rate mortgage notes payable | 3.99% due September 2028
Notes Payable [Line Items]
Interest rate	3.99%
Fixed rate mortgage notes payable | 3.99% due September 2028 | Seabreeze Plaza
Notes Payable [Line Items]
Principal and interest payments	$ 94,900
Balloon payment to be paid	$ 9,500,000
Amortization period	25 years
Amortization of principal	$ 488,000
Fixed rate mortgage notes payable | 3.69% Due March 2030
Notes Payable [Line Items]
Interest rate	3.69%
Fixed rate mortgage notes payable | 3.69% Due March 2030 | Shops at Fairfax and Boulevard
Notes Payable [Line Items]
Principal and interest payments	$ 153,300
Balloon payment to be paid	$ 15,500,000
Amortization period	25 years
Amortization of principal	$ 795,000
Fixed rate mortgage notes payable | 3.99% Due April 2030
Notes Payable [Line Items]
Interest rate	3.99%
Fixed rate mortgage notes payable | 3.99% Due April 2030 | Northrock
Notes Payable [Line Items]
Principal and interest payments	$ 84,400
Balloon payment to be paid	$ 8,400,000
Amortization period	25 years
Amortization of principal	$ 407,000
Fixed rate mortgage notes payable | 3.39% due January 2032
Notes Payable [Line Items]
Interest rate	3.39%
Fixed rate mortgage notes payable | 3.39% due January 2032 | Burtonsville Town Square
Notes Payable [Line Items]
Principal and interest payments	$ 198,000
Balloon payment to be paid	$ 20,300,000
Amortization period	25 years
Amortization of principal	$ 860,000
Fixed rate mortgage notes payable | 4.88% due September 2032
Notes Payable [Line Items]
Interest rate	4.88%
Fixed rate mortgage notes payable | 4.88% due September 2032 | Park Van Ness
Notes Payable [Line Items]
Principal and interest payments	$ 413,500
Balloon payment to be paid	$ 39,600,000
Amortization period	25 years
Amortization of principal	$ 369,000
Fixed rate mortgage notes payable | 3.75% due December 2032
Notes Payable [Line Items]
Interest rate	3.75%
Fixed rate mortgage notes payable | 3.75% due December 2032 | Washington Square
Notes Payable [Line Items]
Principal and interest payments	$ 308,000
Balloon payment to be paid	$ 31,100,000
Amortization period	25 years
Fixed rate mortgage notes payable | 8.00% due April 2034
Notes Payable [Line Items]
Interest rate	8.00%
Fixed rate mortgage notes payable | 8.00% due April 2034 | Olney
Notes Payable [Line Items]
Principal and interest payments	$ 60,400
Balloon payment to be paid	$ 14,700,000
Fixed rate increase on note	1.50%
Interest rate	8.00%
Negative amortization	$ (167,000)
Variable rate loans payable
Notes Payable [Line Items]
Interest rate spread on LIBOR	2.86%
Variable rate loans payable | Revolving credit facility
Notes Payable [Line Items]
Debt maturity extension period	1 year
Debt instrument fee	0.15%
Interest rate spread on LIBOR	1.45%
Variable rate loans payable | Metro Pike Center Bank Loan
Notes Payable [Line Items]
Interest rate spread on LIBOR	1.65%
Variable rate loans payable | Metro Pike Center Bank Loan | Metro Pike Center
Notes Payable [Line Items]
Principal and interest payments	$ 48,000
Balloon payment to be paid	14,200,000
Amortization of principal	$ 347,000

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Mortgage Notes Payable, Revolving Credit Facility, Interest Expense and Amortization of Deferred Debt Costs - Scheduled Maturities of All Debt, Including Scheduled Principal Amortization (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Balloon Payments
2018	$ 75,105
2019	60,793
2020	61,163
2021	11,012
2022	36,503
Thereafter	436,325
Balloon Payments	680,901
Scheduled Principal Amortization
2018	30,160
2019	29,272
2020	26,743
2021	26,456
2022	26,958
Thereafter	145,038
Scheduled Principal Amortization	284,627
Total
2018	105,265
2019	90,065
2020	87,906
2021	37,468
2022	63,461
Thereafter	581,363
Principal amount	965,528	$ 907,800
Unamortized deferred debt costs	6,906	$ 7,500
Net	$ 958,622

XML

Mortgage Notes Payable, Revolving Credit Facility, Interest Expense and Amortization of Deferred Debt Costs - Interest Expense and Amortization of Deferred Debt Costs (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Debt Disclosure [Abstract]
Interest incurred	$ 49,322	$ 46,867	$ 45,898
Amortization of deferred debt costs	1,392	1,343	1,433
Capitalized interest	(3,489)	(2,527)	(2,166)
Total	$ 47,225	$ 45,683	$ 45,165

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Lease Agreements - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Leases [Abstract]
Base rent (including straight-line rent)	$ 181,141	$ 172,381	$ 168,303
Expense recoveries	35,347	34,269	32,911
Percentage rent	$ 1,458	$ 1,379	$ 1,608

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Lease Agreements - Future Contractual Payments Under Noncancelable Leases (Detail) $ in Thousands	Dec. 31, 2017 USD ($)
Leases [Abstract]
2018	$ 160,025
2019	141,097
2020	120,369
2021	100,766
2022	77,312
Thereafter	245,103
Total future contractual payments	$ 844,672

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Long Term Lease Obligations - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2017 USD ($) property	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Leases Disclosure [Line Items]
Number of properties subject to noncancelable long-term lease | property	0
Minimum rental obligations	$ 10,500	$ 159,000	$ 176,000
Rent expense	$ 774,700	$ 843,300	$ 904,900
90-year Ground Leasehold Interest
Leases Disclosure [Line Items]
Ground leasehold interest period	90 years
Minimum annual lease rent over lease term	$ 1
99-year Ground Lease
Leases Disclosure [Line Items]
Ground leasehold interest period	99 years
Minimum annual lease rent over lease term	$ 1
Percent of underlying land held under a 99-year ground lease	3.40%
Flagship Center
Leases Disclosure [Line Items]
Number of developed parcels | property	2

XML

Equity and Noncontrolling Interest - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions		12 Months Ended
	Feb. 12, 2013	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Class of Stock [Line Items]
Income attributable to noncontrolling interests		$ 12,411	$ 11,441	$ 10,463
Depositary shares outstanding (in shares)		7.2
Series C Preferred Stock
Class of Stock [Line Items]
Depository shares to cumulative redeemable preferred stock ratio		1.00%
Dividend rate on preferred stock		6.875%
Liquidation preference (in usd per share)	$ 25.00
Annual dividend on depositary shares (in usd per share)	$ 1.71875
Percentage of redeemable preferred stock	6.875%

XML

Related Party Transactions - Additional Information (Detail)		1 Months Ended	12 Months Ended
	Dec. 08, 2016	Aug. 31, 2016 USD ($) a	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
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			$ 349,500	$ 329,000	$ 400,000
Deferred compensation, employee contribution, percentage			2.00%
Deferred compensation, employer contribution, percentage			3	3	3
Deferred compensation, company contribution, amount			$ 228,500	$ 250,800	$ 224,900
Deferred compensation, cumulative unfunded liability			2,400,000	2,100,000
Ancillary costs and expenses			8,100,000	7,200,000	8,200,000
Liability due to the Saul Organization for the company's share of these ancillary costs and expenses			993,200	829,000
Automatic renewal period	12 months
Insurance commissions and fees expense			$ 288,400	$ 360,500	$ 443,500
Initial purchase price		$ 8,800,000
Area of real estate property (in square feet) | a		14.3

XML

Stock Option Plan - Additional Information (Detail)											12 Months Ended
	May 05, 2017 USD ($) person $ / shares shares	May 06, 2016 USD ($) person $ / shares shares	May 08, 2015 USD ($) person $ / shares shares	May 09, 2014 USD ($) person $ / shares shares	May 10, 2013 USD ($) person $ / shares shares	May 04, 2012 USD ($) person $ / shares shares	May 13, 2011 USD ($) person $ / shares shares	May 07, 2010 USD ($) person $ / shares shares	Apr. 24, 2009 USD ($) person $ / shares shares	Apr. 25, 2008 USD ($) person $ / shares shares	Dec. 31, 2017 USD ($) $ / shares	Dec. 31, 2016 $ / shares	Dec. 31, 2015 $ / shares	Dec. 31, 2004 shares	Dec. 31, 1993 shares
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price of options (in usd per share) | $ / shares											$ 59.41	$ 57.74	$ 51.07
Fair value stock option grant | $											$ 11,831,000
the 1993 Plan | Stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Authorized shares for a grant (in shares)															400,000
Amended 2004 Plan | Stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Authorized shares for a grant (in shares)														2,000,000
Amended 2004 Plan | Stock options | Director
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Authorized shares for a grant (in shares)														200,000
2008 Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price of options (in usd per share) | $ / shares										$ 50.15
Fair value stock option grant | $										$ 254,700
2008 Options | Director
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person										12
2008 Options | Stock options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)										0
2008 Options | Stock options | Director
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)										30,000
2009 Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price of options (in usd per share) | $ / shares									$ 32.68
Fair value stock option grant | $									$ 222,950
2009 Options | Director
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person									13
2009 Options | Stock options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)									0
2009 Options | Stock options | Director
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)									32,500
2010 Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price of options (in usd per share) | $ / shares								$ 38.76
Fair value stock option grant | $								$ 287,950
2010 Options | Director
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person								13
2010 Options | Stock options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)								0
2010 Options | Stock options | Director
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)								32,500
2011 Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price of options (in usd per share) | $ / shares							$ 41.82
Fair value stock option grant | $							$ 1,600,000
2011 Options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person							15
Fair value stock option grant | $							$ 1,300,000
Options vested							25.00%
2011 Options | Director
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person							13
Fair value stock option grant | $							$ 297,375
2011 Options | Stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)							195,000
2011 Options | Stock options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Option vesting period							4 years
2011 Options | Incentive stock option
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)							65,300
2011 Options | Nonqualified stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)							129,700
2012 Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price of options (in usd per share) | $ / shares						$ 39.29
Fair value stock option grant | $						$ 1,700,000
2012 Options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person						15
Fair value stock option grant | $						$ 1,400,000
Options vested						25.00%
2012 Options | Director
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person						14
Fair value stock option grant | $						$ 257,250
2012 Options | Stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)						277,500
2012 Options | Stock options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Option vesting period						4 years
2012 Options | Incentive stock option
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)						26,157
2012 Options | Nonqualified stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)						251,343
2013 Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person					15
Exercise price of options (in usd per share) | $ / shares					$ 44.42
Fair value stock option grant | $					$ 1,500,000
2013 Options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Fair value stock option grant | $					$ 1,200,000
Options vested					25.00%
2013 Options | Director
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person					14
Fair value stock option grant | $					$ 278,250
2013 Options | Stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)					237,500
2013 Options | Stock options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Option vesting period					4 years
2013 Options | Incentive stock option
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)					35,592
2013 Options | Nonqualified stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)					201,908
2014 Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price of options (in usd per share) | $ / shares				$ 47.03
Fair value stock option grant | $				$ 1,300,000
2014 Options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person				18
Fair value stock option grant | $				$ 1,200,000
Options vested				25.00%
2014 Options | Director
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person				12
Fair value stock option grant | $				$ 109,500
2014 Options | Stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)				200,000
2014 Options | Stock options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Option vesting period				4 years
2014 Options | Incentive stock option
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)				29,300
2014 Options | Nonqualified stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)				170,700
2015 Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price of options (in usd per share) | $ / shares			$ 51.07
Fair value stock option grant | $			$ 1,570,000
2015 Options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person			19
Fair value stock option grant | $			$ 1,440,000
Options vested			25.00%
2015 Options | Director
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person			14
Fair value stock option grant | $			$ 125,300
2015 Options | Stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)			225,000
2015 Options | Stock options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Option vesting period			4 years
2015 Options | Incentive stock option
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)			33,690
2015 Options | Nonqualified stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)			191,310
2016 Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price of options (in usd per share) | $ / shares		$ 57.74
Fair value stock option grant | $		$ 1,200,000
2016 Options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person		19
Fair value stock option grant | $		$ 1,000,000
Options vested		25.00%
2016 Options | Director
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person		13
Fair value stock option grant | $		$ 151,125
2016 Options | Stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)		226,500
2016 Options | Stock options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Option vesting period		4 years
2016 Options | Incentive stock option
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)		24,248
2016 Options | Nonqualified stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)		202,252
2017 Options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise price of options (in usd per share) | $ / shares	$ 59.41
Fair value stock option grant | $	$ 1,400,000
2017 Options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person	20
Fair value stock option grant | $	$ 1,200,000
Options vested	25.00%
2017 Options | Director
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number of individuals granted options | person	11
Fair value stock option grant | $	$ 165,550
2017 Options | Stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)	232,500
2017 Options | Stock options | Officer
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Option vesting period	4 years
2017 Options | Incentive stock option
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)	21,492
2017 Options | Nonqualified stock options
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options granted to purchase stocks (in shares)	211,008

XML

Stock Option Plan - Stock Options Issued (Detail)	12 Months Ended
	Dec. 31, 2017 USD ($) $ / shares shares	Dec. 31, 2016 USD ($) $ / shares shares	Dec. 31, 2015 USD ($) $ / shares shares	Dec. 31, 2014 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grant (in shares)	1,689,000
Vested (in shares)	990,375
Exercised (in shares)	546,930
Forfeited (in shares)	228,750
Exercisable at December 31 (in shares)	430,945	375,255	435,899
Remaining unexercised (in shares)	913,320
Exercise price (in usd per share) | $ / shares	$ 46.97	$ 45.59	$ 43.67
Total value at grant date | $	$ 11,831,000
Estimated forfeitures | $	1,914,000
Expensed in previous years | $	3,726,000
Allocated share based compensation | $	1,448,000	$ 1,348,000	$ 1,176,000
Future expense | $	2,219,000
Directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated share based compensation | $	$ 130,700	150,100	143,000
Directors | 4/25/2008
Share-based Compensation Arrangement by Share-based Payment Award [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 December 31 (in shares)	2,500
Remaining unexercised (in shares)	2,500
Exercise price (in usd per share) | $ / shares	$ 50.15
Volatility	0.237
Expected life (years)	7 years
Assumed yield	4.09%
Risk-free rate	3.49%
Total value at grant date | $	$ 255,000
Expensed in previous years | $	255,000
Allocated share based compensation | $	0	0	0
Future expense | $	$ 0
Directors | 4/24/2009
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grant (in shares)	32,500
Vested (in shares)	32,500
Exercised (in shares)	27,500
Forfeited (in shares)	0
Exercisable at December 31 (in shares)	5,000
Remaining unexercised (in shares)	5,000
Exercise price (in usd per share) | $ / shares	$ 32.68
Volatility	0.344
Expected life (years)	6 years
Assumed yield	4.54%
Risk-free rate	2.19%
Total value at grant date | $	$ 223,000
Expensed in previous years | $	223,000
Allocated share based compensation | $	0	0	0
Future expense | $	$ 0
Directors | 5/7/2010
Share-based Compensation Arrangement by Share-based Payment Award [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 December 31 (in shares)	5,000
Remaining unexercised (in shares)	5,000
Exercise price (in usd per share) | $ / shares	$ 38.76
Volatility	0.369
Expected life (years)	5 years
Assumed yield	4.23%
Risk-free rate	2.17%
Total value at grant date | $	$ 288,000
Expensed in previous years | $	288,000
Allocated share based compensation | $	0	0	0
Future expense | $	$ 0
Directors | 5/13/2011
Share-based Compensation Arrangement by Share-based Payment Award [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 December 31 (in shares)	7,500
Remaining unexercised (in shares)	7,500
Exercise price (in usd per share) | $ / shares	$ 41.82
Volatility	0.358
Expected life (years)	5 years
Assumed yield	4.16%
Risk-free rate	1.86%
Total value at grant date | $	$ 297,000
Expensed in previous years | $	297,000
Allocated share based compensation | $	0	0	0
Future expense | $	$ 0
Directors | 5/4/2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grant (in shares)	35,000
Vested (in shares)	35,000
Exercised (in shares)	22,500
Forfeited (in shares)	0
Exercisable at December 31 (in shares)	12,500
Remaining unexercised (in shares)	12,500
Exercise price (in usd per share) | $ / shares	$ 39.29
Volatility	0.348
Expected life (years)	5 years
Assumed yield	4.61%
Risk-free rate	0.78%
Total value at grant date | $	$ 257,000
Expensed in previous years | $	257,000
Allocated share based compensation | $	0	0	0
Future expense | $	$ 0
Directors | 5/10/2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grant (in shares)	35,000
Vested (in shares)	35,000
Exercised (in shares)	22,500
Forfeited (in shares)	0
Exercisable at December 31 (in shares)	12,500
Remaining unexercised (in shares)	12,500
Exercise price (in usd per share) | $ / shares	$ 44.42
Volatility	0.333
Expected life (years)	5 years
Assumed yield	4.53%
Risk-free rate	0.82%
Total value at grant date | $	$ 278,000
Expensed in previous years | $	278,000
Allocated share based compensation | $	0	0	0
Future expense | $	$ 0
Directors | 5/9/2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grant (in shares)	30,000
Vested (in shares)	30,000
Exercised (in shares)	17,500
Forfeited (in shares)	0
Exercisable at December 31 (in shares)	12,500
Remaining unexercised (in shares)	12,500
Exercise price (in usd per share) | $ / shares	$ 47.03
Volatility	0.173
Expected life (years)	5 years
Assumed yield	4.48%
Risk-free rate	1.63%
Total value at grant date | $	$ 110,000
Expensed in previous years | $	110,000
Allocated share based compensation | $	0	0	0
Future expense | $	$ 0
Directors | 5/8/2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grant (in shares)	35,000
Vested (in shares)	35,000
Exercised (in shares)	12,500
Forfeited (in shares)	0
Exercisable at December 31 (in shares)	22,500
Remaining unexercised (in shares)	22,500
Exercise price (in usd per share) | $ / shares	$ 51.07
Volatility	0.166
Expected life (years)	5 years
Assumed yield	4.54%
Risk-free rate	1.50%
Total value at grant date | $	$ 125,000
Expensed in previous years | $	0
Allocated share based compensation | $	0	0	125,000
Future expense | $	$ 0
Directors | 5/6/2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grant (in shares)	32,500
Vested (in shares)	32,500
Exercised (in shares)	7,500
Forfeited (in shares)	0
Exercisable at December 31 (in shares)	25,000
Remaining unexercised (in shares)	25,000
Exercise price (in usd per share) | $ / shares	$ 57.74
Volatility	0.166
Expected life (years)	5 years
Assumed yield	3.75%
Risk-free rate	1.23%
Total value at grant date | $	$ 151,000
Expensed in previous years | $	0
Allocated share based compensation | $	0	151,000	0
Future expense | $	$ 0
Directors | 5/5/2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grant (in shares)	27,500
Vested (in shares)	27,500
Exercised (in shares)	0
Forfeited (in shares)	0
Exercisable at December 31 (in shares)	27,500
Remaining unexercised (in shares)	27,500
Exercise price (in usd per share) | $ / shares	$ 59.41
Volatility	0.173
Expected life (years)	5 years
Assumed yield	3.45%
Risk-free rate	1.89%
Total value at grant date | $	$ 166,000
Expensed in previous years | $	0
Allocated share based compensation | $	166,000	0	0
Future expense | $	$ 0
Directors | Subtotals
Share-based Compensation Arrangement by Share-based Payment Award [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 December 31 (in shares)	132,500
Remaining unexercised (in shares)	132,500
Total value at grant date | $	$ 2,150,000
Expensed in previous years | $	1,708,000
Allocated share based compensation | $	166,000	151,000	125,000
Future expense | $	$ 0
Officers | 5/13/2011
Share-based Compensation Arrangement by Share-based Payment Award [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 December 31 (in shares)	22,650
Remaining unexercised (in shares)	22,650
Exercise price (in usd per share) | $ / shares	$ 41.82
Volatility	0.330
Expected life (years)	8 years
Assumed yield	4.81%
Risk-free rate	2.75%
Total value at grant date | $	$ 1,366,000
Estimated forfeitures | $	368,000
Expensed in previous years | $	909,000
Allocated share based compensation | $	0	0	89,000
Future expense | $	$ 0
Weighted average term of remaining future expense	2 years 5 months 27 days
Officers | 5/4/2012
Share-based Compensation Arrangement by Share-based Payment Award [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 December 31 (in shares)	15,670
Remaining unexercised (in shares)	15,670
Exercise price (in usd per share) | $ / shares	$ 39.29
Volatility	0.315
Expected life (years)	8 years
Assumed yield	5.28%
Risk-free rate	1.49%
Total value at grant date | $	$ 1,518,000
Estimated forfeitures | $	845,000
Expensed in previous years | $	419,000
Allocated share based compensation | $	0	97,000	157,000
Future expense | $	$ 0
Officers | 5/10/2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grant (in shares)	202,500
Vested (in shares)	171,875
Exercised (in shares)	116,500
Forfeited (in shares)	30,625
Exercisable at December 31 (in shares)	55,375
Remaining unexercised (in shares)	55,375
Exercise price (in usd per share) | $ / shares	$ 44.42
Volatility	0.304
Expected life (years)	8 years
Assumed yield	5.12%
Risk-free rate	1.49%
Total value at grant date | $	$ 1,401,000
Estimated forfeitures | $	212,000
Expensed in previous years | $	493,000
Allocated share based compensation | $	158,000	269,000	269,000
Future expense | $	$ 0
Officers | 5/9/2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grant (in shares)	170,000
Vested (in shares)	126,875
Exercised (in shares)	41,250
Forfeited (in shares)	1,875
Exercisable at December 31 (in shares)	85,625
Remaining unexercised (in shares)	126,875
Exercise price (in usd per share) | $ / shares	$ 47.03
Volatility	0.306
Expected life (years)	7 years
Assumed yield	4.89%
Risk-free rate	2.17%
Total value at grant date | $	$ 1,350,000
Estimated forfeitures | $	169,000
Expensed in previous years | $	197,000
Allocated share based compensation | $	295,000	295,000	296,000
Future expense | $	$ 98,000
Officers | 5/8/2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grant (in shares)	190,000
Vested (in shares)	94,375
Exercised (in shares)	20,000
Forfeited (in shares)	3,125
Exercisable at December 31 (in shares)	74,375
Remaining unexercised (in shares)	166,875
Exercise price (in usd per share) | $ / shares	$ 51.07
Volatility	0.298
Expected life (years)	7 years
Assumed yield	4.94%
Risk-free rate	1.89%
Total value at grant date | $	$ 1,585,000
Estimated forfeitures | $	142,000
Expensed in previous years | $	0
Allocated share based compensation | $	361,000	361,000		$ 240,000
Future expense | $	$ 481,000
Officers | 5/6/2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grant (in shares)	194,000
Vested (in shares)	48,500
Exercised (in shares)	3,750
Forfeited (in shares)	1,875
Exercisable at December 31 (in shares)	44,750
Remaining unexercised (in shares)	188,375
Exercise price (in usd per share) | $ / shares	$ 57.74
Volatility	0.185
Expected life (years)	7 years
Assumed yield	3.80%
Risk-free rate	1.55%
Total value at grant date | $	$ 1,137,000
Estimated forfeitures | $	86,000
Expensed in previous years | $	0
Allocated share based compensation | $	263,000	175,000	0
Future expense | $	$ 613,000
Officers | 5/5/2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grant (in shares)	205,000
Vested (in shares)	0
Exercised (in shares)	0
Forfeited (in shares)	0
Exercisable at December 31 (in shares)	0
Remaining unexercised (in shares)	205,000
Exercise price (in usd per share) | $ / shares	$ 59.41
Volatility	0.170
Expected life (years)	7 years
Assumed yield	3.50%
Risk-free rate	2.17%
Total value at grant date | $	$ 1,324,000
Estimated forfeitures | $	92,000
Expensed in previous years | $	0
Allocated share based compensation | $	205,000	0	0
Future expense | $	$ 1,027,000
Officers | Subtotals
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total grant (in shares)	1,366,500
Vested (in shares)	667,875
Exercised (in shares)	369,430
Forfeited (in shares)	216,250
Exercisable at December 31 (in shares)	298,445
Remaining unexercised (in shares)	780,820
Total value at grant date | $	$ 9,681,000
Estimated forfeitures | $	1,914,000
Expensed in previous years | $	2,018,000
Allocated share based compensation | $	1,282,000	$ 1,197,000	$ 1,051,000
Future expense | $	$ 2,219,000

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Stock Option Plan - Summary of Option Activity (Detail) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Shares
Outstanding at January 1 (in shares)	833,630	860,274	748,208
Granted (in shares)	232,500	226,500	225,000
Exercised (in shares)	(149,060)	(246,894)	(112,934)
Expired/Forfeited (in shares)	(3,750)	(6,250)	0
Outstanding December 31 (in shares)	913,320	833,630	860,274
Options exercisable (in shares)	430,945	375,255	435,899
Weighted Average Exercise Price
Outstanding at January 1 (in usd per share)	$ 49.92	$ 46.58	$ 44.79
Granted (in usd per share)	59.41	57.74	51.07
Exercised (in usd per share)	46.97	45.59	43.67
Expired/Forfeited (in usd per share)	53.73	45.31	0.00
Outstanding December 31 (in usd per share)	52.80	49.92	46.58
Exercisable at December 31 (in usd per share)	$ 48.94	$ 46.68	$ 45.33
Intrinsic value of options exercised	$ 2.2	$ 3.4	$ 1.5
Intrinsic value of options outstanding	8.2
Intrinsic value of options exercisable	$ 5.5
Closing price (in usd per share)	$ 61.75
Weighted average remaining life of options exercisable	6 years 5 months 13 days
Weighted average remaining life of options outstanding	7 years 5 months 24 days

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Fair Value of Financial Instruments - Additional Information (Detail) $ in Thousands	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Jun. 30, 2011 instrument
Fair Value of Financial Instruments [Line Items]
Interest rate	3.90%	4.25%
Notes payable, fair value	$ 951,700	$ 851,300
Fixed rate mortgages	897,888	783,400
Interest rate swap
Fair Value of Financial Instruments [Line Items]
Fair value of derivative liability	$ 1,100
Cash flow hedging | Designated as hedging instrument | Interest rate swap
Fair Value of Financial Instruments [Line Items]
Derivative, number of instruments held | instrument			1
Fixed rate mortgage notes payable
Fair Value of Financial Instruments [Line Items]
Interest rate	5.25%
Fixed rate mortgages	$ 890,393	$ 844,292

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Fair Value of Financial Instruments - Changes in Fair Value of Swaps (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Increase (decrease) in fair value:
Recognized in earnings	$ 70	$ (6)	$ (10)
Recognized in other comprehensive income	812	678	124
Total	$ 882	$ 672	$ 114

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Distributions - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands				1 Months Ended	12 Months Ended
	Jan. 31, 2018	Jan. 15, 2018	Jan. 02, 2018	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Dividends [Line Items]
Common stock issued, discount rate					3.00%
Common stock distributions (in usd per share)					$ 2.04	$ 1.84	$ 1.69
Dividends declared per common share outstanding (in usd per share)				$ 0.52
Distribution to limited partnership unitholders					$ 15,268	$ 13,533	$ 12,228
Dividend Income
Dividends [Line Items]
Common stock distributions (in usd per share)					$ 1.7	$ 1.75	$ 1.69
Return on Invested Capital
Dividends [Line Items]
Return of capital (in usd per share)				$ 0.34	0.34	0.09
Series C Preferred Stock
Dividends [Line Items]
Preferred stock dividend (in usd per share)					$ 1.72	$ 1.72	$ 1.72
Subsequent Event
Dividends [Line Items]
Common stock dividend paid	$ 11,500
Distribution to limited partnership unitholders	$ 3,900
Distributions partnership units (in usd per share)	$ 0.52
Subsequent Event | Series C Preferred Stock
Dividends [Line Items]
Dividends declared per preferred share outstanding (in usd per share)			$ 0.4297
Preferred stock distributions		$ 3,100

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Distributions - Summary of Distributions Paid Including Activity in Plan as well as Limited Partnership Units Issued from Reinvestment of Unit Distributions (Detail) - USD ($) $ / shares in Units, $ in Thousands												1 Months Ended	12 Months Ended
	Oct. 31, 2017	Jul. 31, 2017	Apr. 30, 2017	Oct. 31, 2016	Jul. 31, 2016	Apr. 30, 2016	Jan. 31, 2016	Oct. 31, 2015	Jul. 31, 2015	Apr. 30, 2015	Jan. 31, 2015	Jan. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Dividends [Line Items]
Preferred Stockholders													$ 12,375	$ 12,375	$ 12,375
Common Stockholders													44,576	39,472	35,645
Limited Partnership Unitholders													$ 15,268	$ 13,533	$ 12,228
Common Stock Shares Issued (in shares)													266,011	186,797	201,212
Limited Partnership Units Issued (in shares)													111,351	124,758	107,037
October 31
Dividends [Line Items]
Preferred Stockholders	$ 3,094			$ 3,094				$ 3,094
Common Stockholders	11,221			10,168				9,106
Limited Partnership Unitholders	$ 3,838			$ 3,478				$ 3,129
Common Stock Shares Issued (in shares)	82,991			44,176				47,313
Discounted Share Price (in usd per share)	$ 59.33			$ 57.18				$ 55.73
Limited Partnership Units Issued (in shares)	15,596			30,891				28,936
Average Unit Price (in usd per share)	$ 60.08			$ 57.18				$ 55.73
July 31
Dividends [Line Items]
Preferred Stockholders		$ 3,094			$ 3,094				$ 3,094
Common Stockholders		11,160			10,133				9,081
Limited Partnership Unitholders		$ 3,830			$ 3,465				$ 3,115
Common Stock Shares Issued (in shares)		85,731			39,487				56,003
Discounted Share Price (in usd per share)		$ 57.40			$ 65.64				$ 50.30
Limited Partnership Units Issued (in shares)		16,021			26,897				32,041
Average Unit Price (in usd per share)		$ 58.13			$ 65.64				$ 50.30
April 30
Dividends [Line Items]
Preferred Stockholders			$ 3,094			$ 3,094				$ 3,094
Common Stockholders			11,119			10,029				9,055
Limited Partnership Unitholders			$ 3,810			$ 3,449				$ 3,104
Common Stock Shares Issued (in shares)			51,003			48,854				54,921
Discounted Share Price (in usd per share)			$ 59.64			$ 51.59				$ 50.21
Limited Partnership Units Issued (in shares)			40,623			34,201				25,264
Average Unit Price (in usd per share)			$ 59.96			$ 51.59				$ 50.21
January 31
Dividends [Line Items]
Preferred Stockholders							$ 3,093				$ 3,093	$ 3,093
Common Stockholders							9,142				8,403	11,076
Limited Partnership Unitholders							$ 3,141				$ 2,880	$ 3,790
Common Stock Shares Issued (in shares)							54,280				42,975	46,286
Discounted Share Price (in usd per share)							$ 49.24				$ 56.74	$ 61.85
Limited Partnership Units Issued (in shares)							32,769				20,796	39,111
Average Unit Price (in usd per share)							$ 49.24				$ 56.74	$ 62.15

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Interim Results (Unaudited) - Summary of Results of Operations for Quarterly Periods (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Quarterly Financial Information Disclosure [Abstract]
Revenue	$ 56,675	$ 56,237	$ 55,907	$ 58,466	$ 54,201	$ 53,233	$ 52,710	$ 56,926	$ 227,285	$ 217,070	$ 209,077
Operating income before loss on early extinguishment of debt, gain on casualty settlement, and noncontrolling interests	14,416	14,386	14,422	17,374	13,360	12,722	13,250	16,381	60,598	55,713	52,930
Gains on sales of properties	0	0	0	0	1,013	0	0	0	0	1,013	11
Net income attributable to Saul Centers, Inc.	11,560	11,483	11,510	13,704	11,465	10,239	10,627	12,948	48,257	45,279	42,468
Net income available to common stockholders	$ 8,466	$ 8,390	$ 8,416	$ 10,610	$ 8,371	$ 7,146	$ 7,533	$ 9,854	$ 35,882	$ 32,904	$ 30,093
Net income available to common stockholders per diluted share (in usd per share)	$ 0.38	$ 0.38	$ 0.38	$ 0.49	$ 0.38	$ 0.33	$ 0.35	$ 0.46	$ 1.63	$ 1.52	$ 1.42

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Business Segments - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2017 segment
Segment Reporting [Abstract]
Number of reportable business segments	2

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Business Segments (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Segment Reporting Information [Line Items]
Revenue	$ 56,675	$ 56,237	$ 55,907	$ 58,466	$ 54,201	$ 53,233	$ 52,710	$ 56,926	$ 227,285	$ 217,070	$ 209,077
Expenses									(55,592)	(53,701)	(51,143)
Income from real estate									171,693	163,369	157,934
Interest expense and amortization of deferred debt costs									(47,225)	(45,683)	(45,165)
General and administrative									(18,176)	(17,496)	(16,353)
Subtotal									106,292	100,190	96,416
Depreciation and amortization of deferred leasing costs									(45,694)	(44,417)	(43,270)
Acquisition related costs									0	(60)	(84)
Predevelopment expenses									0	0	(132)
Change in fair value of derivatives									70	(6)	(10)
Gain on sale of property	0	$ 0	$ 0	$ 0	1,013	$ 0	$ 0	$ 0	0	1,013	11
Net income (loss)									60,668	56,720	52,931
Capital investment									119,994	91,045	69,619
Total assets	1,422,452				1,343,025				1,422,452	1,343,025	1,295,408
Operating Segments | Shopping Centers
Segment Reporting Information [Line Items]
Revenue									165,853	160,179	156,110
Expenses									(34,675)	(34,931)	(33,877)
Income from real estate									131,178	125,248	122,233
Interest expense and amortization of deferred debt costs									0	0	0
General and administrative									0	0	0
Subtotal									131,178	125,248	122,233
Depreciation and amortization of deferred leasing costs									(29,977)	(29,964)	(30,171)
Acquisition related costs										(60)	(84)
Predevelopment expenses											(57)
Change in fair value of derivatives									0	0	0
Gain on sale of property										0	11
Net income (loss)									101,201	95,224	91,932
Capital investment									90,896	64,044	17,159
Total assets	974,061				976,545				974,061	976,545	931,256
Operating Segments | Mixed-Use Properties
Segment Reporting Information [Line Items]
Revenue									61,352	56,840	52,916
Expenses									(20,917)	(18,770)	(17,266)
Income from real estate									40,435	38,070	35,650
Interest expense and amortization of deferred debt costs									0	0	0
General and administrative									0	0	0
Subtotal									40,435	38,070	35,650
Depreciation and amortization of deferred leasing costs									(15,717)	(14,453)	(13,099)
Acquisition related costs										0	0
Predevelopment expenses											(75)
Change in fair value of derivatives									0	0	0
Gain on sale of property										1,013	0
Net income (loss)									24,718	24,630	22,476
Capital investment									29,098	27,001	52,460
Total assets	438,283				358,419				438,283	358,419	354,254
Corporate
Segment Reporting Information [Line Items]
Revenue									80	51	51
Expenses									0	0	0
Income from real estate									80	51	51
Interest expense and amortization of deferred debt costs									(47,225)	(45,683)	(45,165)
General and administrative									(18,176)	(17,496)	(16,353)
Subtotal									(65,321)	(63,128)	(61,467)
Depreciation and amortization of deferred leasing costs									0	0	0
Acquisition related costs										0	0
Predevelopment expenses											0
Change in fair value of derivatives									70	(6)	(10)
Gain on sale of property										0	0
Net income (loss)									(65,251)	(63,134)	(61,477)
Capital investment									0	0	0
Total assets	$ 10,108				$ 8,061				$ 10,108	$ 8,061	$ 9,898

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Subsequent Events (Details) - USD ($) $ / shares in Units, shares in Millions					12 Months Ended
	Feb. 22, 2018	Jan. 23, 2018	Jan. 12, 2018	Feb. 12, 2013	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Jan. 26, 2018
Class of Stock [Line Items]
Payments to acquire real estate					$ 17,653,000	$ 15,564,000	$ 18,855,000
Series C Preferred Stock
Class of Stock [Line Items]
Depository shares to cumulative redeemable preferred stock ratio					1.00%
Dividend rate on preferred stock					6.875%
Percentage of redeemable preferred stock				6.875%
Liquidation preference (in usd per share)				$ 25.00
Annual dividend on depositary shares (in usd per share)				$ 1.71875
Subsequent Event | Series D Preferred Stock
Class of Stock [Line Items]
Depositary shares issued (in shares)		3.0
Depository shares to cumulative redeemable preferred stock ratio		1.00%
Dividend rate on preferred stock		6.125%
Percentage of redeemable preferred stock		6.125%
Net proceeds from shares sold		$ 72,600,000
Liquidation preference (in usd per share)		$ 25.00
Annual dividend on depositary shares (in usd per share)		$ 1.53125
Subsequent Event | Series C Preferred Stock
Class of Stock [Line Items]
Depository shares to cumulative redeemable preferred stock ratio	1.00%
Liquidation preference (in usd per share)	$ 25.00
Stock redeemed during period (in shares)	3.0
Line of Credit | Term Facility | Subsequent Event
Class of Stock [Line Items]
Line of credit facility, maximum borrowing capacity								$ 75,000,000.0
Line of Credit | Revolving Credit Facility | Subsequent Event
Class of Stock [Line Items]
Line of credit facility, maximum borrowing capacity								$ 325,000,000.0
7316 Wisconsin Avenue | Subsequent Event
Class of Stock [Line Items]
Payments to acquire real estate			$ 35,500,000
Acquisition costs			700,000
Earnest money deposit			$ 3,500,000

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Real Estate and Accumulated Depreciation (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Real Estate Properties [Line Items]
Initial Basis	$ 935,811
Cost capitalized subsequent to acquisition	867,389
Land	450,256
Buildings	1,352,944
Total Purchase Price	1,803,200	$ 1,700,813	$ 1,622,710	$ 1,560,159
Accumulated Depreciation	488,166	458,279	$ 425,370	$ 396,617
Book Value	1,315,034	1,242,534
Related Debt	897,888	783,400
Development land, related debt	0	$ 68,672
Total, related debt	904,528
Shopping Centers
Real Estate Properties [Line Items]
Initial Basis	832,397
Cost capitalized subsequent to acquisition	401,096
Land	412,358
Buildings	821,135
Total Purchase Price	1,233,493
Accumulated Depreciation	332,818
Book Value	900,675
Related Debt	639,385
Shopping Centers | Ashburn Village, Ashburn, VA
Real Estate Properties [Line Items]
Initial Basis	11,431
Cost capitalized subsequent to acquisition	20,278
Land	6,764
Buildings	24,945
Total Purchase Price	31,709
Accumulated Depreciation	12,993
Book Value	18,716
Related Debt	$ 28,025
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Ashland Square Phase I, Dumfries, VA
Real Estate Properties [Line Items]
Initial Basis	$ 1,178
Cost capitalized subsequent to acquisition	7,503
Land	1,178
Buildings	7,503
Total Purchase Price	8,681
Accumulated Depreciation	1,764
Book Value	6,917
Related Debt	$ 0
Shopping Centers | Ashland Square Phase I, Dumfries, VA | Minimum
Real Estate Properties [Line Items]
Buildings and Improvements Depreciable Lives in Years	20 years
Shopping Centers | Ashland Square Phase I, Dumfries, VA | Maximum
Real Estate Properties [Line Items]
Buildings and Improvements Depreciable Lives in Years	50 years
Shopping Centers | Beacon Center, Alexandria, VA
Real Estate Properties [Line Items]
Initial Basis	$ 24,161
Cost capitalized subsequent to acquisition	18,426
Land	22,674
Buildings	19,913
Total Purchase Price	42,587
Accumulated Depreciation	14,288
Book Value	28,299
Related Debt	$ 39,968
Shopping Centers | Beacon Center, Alexandria, VA | Minimum
Real Estate Properties [Line Items]
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Beacon Center, Alexandria, VA | Maximum
Real Estate Properties [Line Items]
Buildings and Improvements Depreciable Lives in Years	50 years
Shopping Centers | BJ’s Wholesale Club, Alexandria, VA
Real Estate Properties [Line Items]
Initial Basis	$ 22,623
Cost capitalized subsequent to acquisition	0
Land	22,623
Buildings	0
Total Purchase Price	22,623
Accumulated Depreciation	0
Book Value	22,623
Related Debt	$ 10,877
Buildings and Improvements Depreciable Lives in Years	0 years
Shopping Centers | Boca Valley Plaza, Boca Raton, FL
Real Estate Properties [Line Items]
Initial Basis	$ 16,720
Cost capitalized subsequent to acquisition	1,768
Land	5,735
Buildings	12,753
Total Purchase Price	18,488
Accumulated Depreciation	4,424
Book Value	14,064
Related Debt	$ 9,948
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Boulevard, Fairfax, VA
Real Estate Properties [Line Items]
Initial Basis	$ 4,883
Cost capitalized subsequent to acquisition	4,461
Land	3,687
Buildings	5,657
Total Purchase Price	9,344
Accumulated Depreciation	2,808
Book Value	6,536
Related Debt	$ 16,730
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Briggs Chaney MarketPlace, Silver Spring, MD
Real Estate Properties [Line Items]
Initial Basis	$ 27,037
Cost capitalized subsequent to acquisition	4,143
Land	9,789
Buildings	21,391
Total Purchase Price	31,180
Accumulated Depreciation	7,908
Book Value	23,272
Related Debt	$ 13,543
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Broadlands Village, Ashburn, VA
Real Estate Properties [Line Items]
Initial Basis	$ 5,316
Cost capitalized subsequent to acquisition	27,954
Land	5,300
Buildings	27,970
Total Purchase Price	33,270
Accumulated Depreciation	10,933
Book Value	22,337
Related Debt	$ 16,082
Shopping Centers | Broadlands Village, Ashburn, VA | Minimum
Real Estate Properties [Line Items]
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Broadlands Village, Ashburn, VA | Maximum
Real Estate Properties [Line Items]
Buildings and Improvements Depreciable Lives in Years	50 years
Shopping Centers | Burtonsville Town Square, Burtonsville, MD
Real Estate Properties [Line Items]
Initial Basis	$ 74,212
Cost capitalized subsequent to acquisition	342
Land	28,401
Buildings	46,153
Total Purchase Price	74,554
Accumulated Depreciation	1,095
Book Value	73,459
Related Debt	$ 39,140
Shopping Centers | Burtonsville Town Square, Burtonsville, MD | Minimum
Real Estate Properties [Line Items]
Buildings and Improvements Depreciable Lives in Years	20 years
Shopping Centers | Burtonsville Town Square, Burtonsville, MD | Maximum
Real Estate Properties [Line Items]
Buildings and Improvements Depreciable Lives in Years	45 years
Shopping Centers | Countryside Marketplace, Sterling, VA
Real Estate Properties [Line Items]
Initial Basis	$ 28,912
Cost capitalized subsequent to acquisition	3,752
Land	7,666
Buildings	24,998
Total Purchase Price	32,664
Accumulated Depreciation	8,838
Book Value	23,826
Related Debt	$ 13,529
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Cranberry Square, Westminster, MD
Real Estate Properties [Line Items]
Initial Basis	$ 31,578
Cost capitalized subsequent to acquisition	640
Land	6,700
Buildings	25,518
Total Purchase Price	32,218
Accumulated Depreciation	4,105
Book Value	28,113
Related Debt	$ 17,086
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Cruse MarketPlace, Cumming, GA
Real Estate Properties [Line Items]
Initial Basis	$ 12,226
Cost capitalized subsequent to acquisition	448
Land	3,901
Buildings	8,773
Total Purchase Price	12,674
Accumulated Depreciation	3,057
Book Value	9,617
Related Debt	$ 0
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Flagship Center, Rockville, MD
Real Estate Properties [Line Items]
Initial Basis	$ 160
Cost capitalized subsequent to acquisition	9
Land	169
Buildings	0
Total Purchase Price	169
Accumulated Depreciation	0
Book Value	169
Related Debt	$ 0
Buildings and Improvements Depreciable Lives in Years	0 years
Shopping Centers | French Market, Oklahoma City, OK
Real Estate Properties [Line Items]
Initial Basis	$ 5,781
Cost capitalized subsequent to acquisition	13,829
Land	1,118
Buildings	18,492
Total Purchase Price	19,610
Accumulated Depreciation	11,191
Book Value	8,419
Related Debt	$ 0
Buildings and Improvements Depreciable Lives in Years	50 years
Shopping Centers | Germantown, Germantown, MD
Real Estate Properties [Line Items]
Initial Basis	$ 2,034
Cost capitalized subsequent to acquisition	567
Land	2,034
Buildings	567
Total Purchase Price	2,601
Accumulated Depreciation	297
Book Value	2,304
Related Debt	$ 0
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | The Glen, Woodbridge, VA
Real Estate Properties [Line Items]
Initial Basis	$ 12,918
Cost capitalized subsequent to acquisition	8,098
Land	5,300
Buildings	15,716
Total Purchase Price	21,016
Accumulated Depreciation	9,026
Book Value	11,990
Related Debt	$ 7,696
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Great Falls Center, Great Falls, VA
Real Estate Properties [Line Items]
Initial Basis	$ 41,750
Cost capitalized subsequent to acquisition	3,178
Land	14,766
Buildings	30,162
Total Purchase Price	44,928
Accumulated Depreciation	7,719
Book Value	37,209
Related Debt	$ 12,577
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Hampshire Langley, Takoma, MD
Real Estate Properties [Line Items]
Initial Basis	$ 3,159
Cost capitalized subsequent to acquisition	3,499
Land	1,856
Buildings	4,802
Total Purchase Price	6,658
Accumulated Depreciation	3,702
Book Value	2,956
Related Debt	$ 15,859
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Hunt Club Corners, Apopka, FL
Real Estate Properties [Line Items]
Initial Basis	$ 12,584
Cost capitalized subsequent to acquisition	4,034
Land	4,822
Buildings	11,796
Total Purchase Price	16,618
Accumulated Depreciation	3,801
Book Value	12,817
Related Debt	$ 5,649
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Jamestown Place, Altamonte Springs, FL
Real Estate Properties [Line Items]
Initial Basis	$ 14,055
Cost capitalized subsequent to acquisition	1,603
Land	4,455
Buildings	11,203
Total Purchase Price	15,658
Accumulated Depreciation	3,477
Book Value	12,181
Related Debt	$ 7,325
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Kentlands Square I, Gaithersburg, MD
Real Estate Properties [Line Items]
Initial Basis	$ 14,379
Cost capitalized subsequent to acquisition	507
Land	5,006
Buildings	9,880
Total Purchase Price	14,886
Accumulated Depreciation	3,713
Book Value	11,173
Related Debt	$ 6,423
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Kentlands Square II, Gaithersburg, MD
Real Estate Properties [Line Items]
Initial Basis	$ 76,723
Cost capitalized subsequent to acquisition	1,602
Land	22,800
Buildings	55,525
Total Purchase Price	78,325
Accumulated Depreciation	9,092
Book Value	69,233
Related Debt	$ 36,507
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Kentlands Place, Gaithersburg, MD
Real Estate Properties [Line Items]
Initial Basis	$ 1,425
Cost capitalized subsequent to acquisition	7,255
Land	1,425
Buildings	7,255
Total Purchase Price	8,680
Accumulated Depreciation	3,744
Book Value	4,936
Related Debt	$ 0
Buildings and Improvements Depreciable Lives in Years	50 years
Shopping Centers | Lansdowne Town Center, Leesburg, VA
Real Estate Properties [Line Items]
Initial Basis	$ 6,545
Cost capitalized subsequent to acquisition	37,312
Land	6,546
Buildings	37,311
Total Purchase Price	43,857
Accumulated Depreciation	13,727
Book Value	30,130
Related Debt	$ 32,673
Buildings and Improvements Depreciable Lives in Years	50 years
Shopping Centers | Leesburg Pike Plaza, Baileys Crossroads, VA
Real Estate Properties [Line Items]
Initial Basis	$ 2,418
Cost capitalized subsequent to acquisition	6,243
Land	1,132
Buildings	7,529
Total Purchase Price	8,661
Accumulated Depreciation	5,934
Book Value	2,727
Related Debt	$ 15,452
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Lumberton Plaza, Lumberton, NJ
Real Estate Properties [Line Items]
Initial Basis	$ 4,400
Cost capitalized subsequent to acquisition	11,220
Land	950
Buildings	14,670
Total Purchase Price	15,620
Accumulated Depreciation	12,751
Book Value	2,869
Related Debt	$ 0
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Metro Pike Center, Rockville, MD
Real Estate Properties [Line Items]
Initial Basis	$ 33,123
Cost capitalized subsequent to acquisition	4,095
Land	26,064
Buildings	11,154
Total Purchase Price	37,218
Accumulated Depreciation	1,375
Book Value	35,843
Related Debt	$ 14,135
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Shops at Monocacy, Frederick, MD
Real Estate Properties [Line Items]
Initial Basis	$ 9,541
Cost capitalized subsequent to acquisition	13,926
Land	9,260
Buildings	14,207
Total Purchase Price	23,467
Accumulated Depreciation	5,565
Book Value	17,902
Related Debt	$ 12,029
Buildings and Improvements Depreciable Lives in Years	50 years
Shopping Centers | Northrock, Warrenton, VA
Real Estate Properties [Line Items]
Initial Basis	$ 12,686
Cost capitalized subsequent to acquisition	15,414
Land	12,686
Buildings	15,414
Total Purchase Price	28,100
Accumulated Depreciation	3,871
Book Value	24,229
Related Debt	$ 14,950
Buildings and Improvements Depreciable Lives in Years	50 years
Shopping Centers | Olde Forte Village, Ft. Washington, MD
Real Estate Properties [Line Items]
Initial Basis	$ 15,933
Cost capitalized subsequent to acquisition	6,643
Land	5,409
Buildings	17,167
Total Purchase Price	22,576
Accumulated Depreciation	7,158
Book Value	15,418
Related Debt	$ 9,783
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Olney, Olney, MD
Real Estate Properties [Line Items]
Initial Basis	$ 4,963
Cost capitalized subsequent to acquisition	1,961
Land	3,079
Buildings	3,845
Total Purchase Price	6,924
Accumulated Depreciation	3,318
Book Value	3,606
Related Debt	$ 11,613
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Orchard Park, Dunwoody, GA
Real Estate Properties [Line Items]
Initial Basis	$ 19,377
Cost capitalized subsequent to acquisition	1,014
Land	7,751
Buildings	12,640
Total Purchase Price	20,391
Accumulated Depreciation	3,432
Book Value	16,959
Related Debt	$ 9,999
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Palm Springs Center, Altamonte Springs, FL
Real Estate Properties [Line Items]
Initial Basis	$ 18,365
Cost capitalized subsequent to acquisition	1,435
Land	5,739
Buildings	14,061
Total Purchase Price	19,800
Accumulated Depreciation	4,606
Book Value	15,194
Related Debt	$ 8,244
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Ravenwood, Baltimore, MD
Real Estate Properties [Line Items]
Initial Basis	$ 1,245
Cost capitalized subsequent to acquisition	4,227
Land	703
Buildings	4,769
Total Purchase Price	5,472
Accumulated Depreciation	3,067
Book Value	2,405
Related Debt	$ 14,537
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | 11503 Rockville Pike/5541 Nicholson Lane, Rockville, MD
Real Estate Properties [Line Items]
Initial Basis	$ 26,561
Cost capitalized subsequent to acquisition	24
Land	22,113
Buildings	4,472
Total Purchase Price	26,585
Accumulated Depreciation	806
Book Value	25,779
Related Debt	$ 0
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | 1500/1580/1582/1584 Rockville Pike, Rockville, MD
Real Estate Properties [Line Items]
Initial Basis	$ 51,149
Cost capitalized subsequent to acquisition	1,553
Land	43,863
Buildings	8,839
Total Purchase Price	52,702
Accumulated Depreciation	5,656
Book Value	47,046
Related Debt	0
Shopping Centers | Seabreeze Plaza, Palm Harbor, FL
Real Estate Properties [Line Items]
Initial Basis	24,526
Cost capitalized subsequent to acquisition	1,960
Land	8,665
Buildings	17,821
Total Purchase Price	26,486
Accumulated Depreciation	5,611
Book Value	20,875
Related Debt	$ 16,055
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Market Place at Sea Colony, Bethany Beach, DE
Real Estate Properties [Line Items]
Initial Basis	$ 2,920
Cost capitalized subsequent to acquisition	203
Land	1,147
Buildings	1,976
Total Purchase Price	3,123
Accumulated Depreciation	491
Book Value	2,632
Related Debt	$ 0
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Seven Corners, Falls Church, VA
Real Estate Properties [Line Items]
Initial Basis	$ 4,848
Cost capitalized subsequent to acquisition	44,108
Land	4,913
Buildings	44,043
Total Purchase Price	48,956
Accumulated Depreciation	28,790
Book Value	20,166
Related Debt	$ 64,472
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Severna Park Marketplace, Severna Park, MD
Real Estate Properties [Line Items]
Initial Basis	$ 63,254
Cost capitalized subsequent to acquisition	232
Land	12,700
Buildings	50,786
Total Purchase Price	63,486
Accumulated Depreciation	7,927
Book Value	55,559
Related Debt	$ 32,016
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Shops at Fairfax, Fairfax, VA
Real Estate Properties [Line Items]
Initial Basis	$ 2,708
Cost capitalized subsequent to acquisition	9,924
Land	992
Buildings	11,640
Total Purchase Price	12,632
Accumulated Depreciation	7,989
Book Value	4,643
Related Debt	$ 11,154
Buildings and Improvements Depreciable Lives in Years	50 years
Shopping Centers | Smallwood Village Center, Waldorf, MD
Real Estate Properties [Line Items]
Initial Basis	$ 17,819
Cost capitalized subsequent to acquisition	7,975
Land	6,402
Buildings	19,392
Total Purchase Price	25,794
Accumulated Depreciation	7,278
Book Value	18,516
Related Debt	$ 0
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Southdale, Glen Burnie, MD
Real Estate Properties [Line Items]
Initial Basis	$ 18,895
Cost capitalized subsequent to acquisition	24,345
Land	15,254
Buildings	27,986
Total Purchase Price	43,240
Accumulated Depreciation	21,333
Book Value	21,907
Related Debt	$ 0
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Southside Plaza, Richmond, VA
Real Estate Properties [Line Items]
Initial Basis	$ 6,728
Cost capitalized subsequent to acquisition	10,695
Land	1,878
Buildings	15,545
Total Purchase Price	17,423
Accumulated Depreciation	12,280
Book Value	5,143
Related Debt	$ 0
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | South Dekalb Plaza, Atlanta, GA
Real Estate Properties [Line Items]
Initial Basis	$ 2,474
Cost capitalized subsequent to acquisition	4,359
Land	703
Buildings	6,130
Total Purchase Price	6,833
Accumulated Depreciation	4,792
Book Value	2,041
Related Debt	$ 0
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Thruway, Winston-Salem, NC
Real Estate Properties [Line Items]
Initial Basis	$ 7,848
Cost capitalized subsequent to acquisition	24,821
Land	7,693
Buildings	24,976
Total Purchase Price	32,669
Accumulated Depreciation	16,735
Book Value	15,934
Related Debt	$ 37,998
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Village Center, Centreville, VA
Real Estate Properties [Line Items]
Initial Basis	$ 16,502
Cost capitalized subsequent to acquisition	2,495
Land	7,851
Buildings	11,146
Total Purchase Price	18,997
Accumulated Depreciation	6,688
Book Value	12,309
Related Debt	$ 13,438
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Westview Village, Frederick, MD
Real Estate Properties [Line Items]
Initial Basis	$ 6,047
Cost capitalized subsequent to acquisition	25,227
Land	6,047
Buildings	25,227
Total Purchase Price	31,274
Accumulated Depreciation	7,511
Book Value	23,763
Related Debt	$ 0
Buildings and Improvements Depreciable Lives in Years	50 years
Shopping Centers | White Oak, Silver Spring, MD
Real Estate Properties [Line Items]
Initial Basis	$ 6,277
Cost capitalized subsequent to acquisition	5,366
Land	4,649
Buildings	6,994
Total Purchase Price	11,643
Accumulated Depreciation	6,043
Book Value	5,600
Related Debt	$ 23,873
Buildings and Improvements Depreciable Lives in Years	40 years
Shopping Centers | Other Buildings / Improvements
Real Estate Properties [Line Items]
Cost capitalized subsequent to acquisition	$ 423
Buildings	423
Total Purchase Price	423
Accumulated Depreciation	109
Book Value	314
Related Debt	0
Mixed-Use Properties
Real Estate Properties [Line Items]
Initial Basis	43,967
Cost capitalized subsequent to acquisition	432,660
Land	28,496
Buildings	448,131
Total Purchase Price	476,627
Accumulated Depreciation	155,348
Book Value	321,279
Related Debt	$ 265,143
Mixed-Use Properties | 1500/1580/1582/1584 Rockville Pike, Rockville, MD | Acquisition Date One
Real Estate Properties [Line Items]
Buildings and Improvements Depreciable Lives in Years	5 years
Mixed-Use Properties | 1500/1580/1582/1584 Rockville Pike, Rockville, MD | Acquisition Date Two
Real Estate Properties [Line Items]
Buildings and Improvements Depreciable Lives in Years	10 years
Mixed-Use Properties | 1500/1580/1582/1584 Rockville Pike, Rockville, MD | Acquisition Date Three
Real Estate Properties [Line Items]
Buildings and Improvements Depreciable Lives in Years	5 years
Mixed-Use Properties | 1500/1580/1582/1584 Rockville Pike, Rockville, MD | Acquisition Date Four
Real Estate Properties [Line Items]
Buildings and Improvements Depreciable Lives in Years	4 years
Mixed-Use Properties | Avenel Business Park, Gaithersburg, MD
Real Estate Properties [Line Items]
Initial Basis	$ 21,459
Cost capitalized subsequent to acquisition	30,409
Land	3,756
Buildings	48,112
Total Purchase Price	51,868
Accumulated Depreciation	36,469
Book Value	15,399
Related Debt	$ 28,115
Mixed-Use Properties | Avenel Business Park, Gaithersburg, MD | Minimum
Real Estate Properties [Line Items]
Buildings and Improvements Depreciable Lives in Years	35 years
Mixed-Use Properties | Avenel Business Park, Gaithersburg, MD | Maximum
Real Estate Properties [Line Items]
Buildings and Improvements Depreciable Lives in Years	40 years
Mixed-Use Properties | Clarendon Center, Arlington, VA (1)
Real Estate Properties [Line Items]
Initial Basis	$ 12,753
Cost capitalized subsequent to acquisition	185,904
Land	16,287
Buildings	182,370
Total Purchase Price	198,657
Accumulated Depreciation	37,242
Book Value	161,415
Related Debt	$ 105,817
Buildings and Improvements Depreciable Lives in Years	50 years
Mixed-Use Properties | Park Van Ness, Washington, DC
Real Estate Properties [Line Items]
Initial Basis	$ 2,242
Cost capitalized subsequent to acquisition	91,617
Land	2,242
Buildings	91,617
Total Purchase Price	93,859
Accumulated Depreciation	4,801
Book Value	89,058
Development land, related debt	$ 71,211
Buildings and Improvements Depreciable Lives in Years	50 years
Mixed-Use Properties | 601 Pennsylvania Ave., Washington, DC
Real Estate Properties [Line Items]
Initial Basis	$ 5,479
Cost capitalized subsequent to acquisition	67,995
Land	5,667
Buildings	67,807
Total Purchase Price	73,474
Accumulated Depreciation	52,194
Book Value	21,280
Related Debt	$ 0
Buildings and Improvements Depreciable Lives in Years	35 years
Mixed-Use Properties | Washington Square, Alexandria, VA
Real Estate Properties [Line Items]
Initial Basis	$ 2,034
Cost capitalized subsequent to acquisition	56,735
Land	544
Buildings	58,225
Total Purchase Price	58,769
Accumulated Depreciation	24,642
Book Value	34,127
Related Debt	$ 60,000
Buildings and Improvements Depreciable Lives in Years	50 years
Development Land
Real Estate Properties [Line Items]
Initial Basis	$ 59,447
Cost capitalized subsequent to acquisition	33,633
Land	9,402
Buildings	83,678
Total Purchase Price	93,080
Accumulated Depreciation	0
Book Value	93,080
Development land, related debt	0
Development Land | Ashland Square Phase II, Manassas, VA
Real Estate Properties [Line Items]
Initial Basis	5,292
Cost capitalized subsequent to acquisition	1,917
Land	7,028
Buildings	181
Total Purchase Price	7,209
Accumulated Depreciation	0
Book Value	7,209
Development land, related debt	0
Development Land | New Market, New Market, MD
Real Estate Properties [Line Items]
Initial Basis	2,088
Cost capitalized subsequent to acquisition	286
Land	2,374
Buildings	0
Total Purchase Price	2,374
Accumulated Depreciation	0
Book Value	2,374
Development land, related debt	0
Development Land | North Glebe Road, Arlington, VA
Real Estate Properties [Line Items]
Initial Basis	52,067
Cost capitalized subsequent to acquisition	31,430
Land	0
Buildings	83,497
Total Purchase Price	83,497
Accumulated Depreciation	0
Book Value	83,497
Development land, related debt	$ 0

XML

Real Estate and Accumulated Depreciation - Estimated Useful Lives of Assets (Detail)	12 Months Ended
	Dec. 31, 2017
Base building | Minimum
Property Plant and Equipment Estimated Useful Lives [Line Items]
Estimated useful life	35 years
Base building | Maximum
Property Plant and Equipment Estimated Useful Lives [Line Items]
Estimated useful life	50 years
Building components | Maximum
Property Plant and Equipment Estimated Useful Lives [Line Items]
Estimated useful life	20 years

XML

Real Estate and Accumulated Depreciation - Additional Information (Detail) - USD ($) $ in Millions	Dec. 31, 2017	Dec. 31, 2016
SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract]
Real estate investments for federal income tax	$ 1,320	$ 1,260

XML

Real Estate and Accumulated Depreciation - Changes in Total Real Estate Investments and Related Accumulated Depreciation (Detail) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Total real estate investments:
Balance, beginning of year	$ 1,700,813	$ 1,622,710	$ 1,560,159
Acquisitions	77,258	48,123	4,894
Improvements	42,640	35,826	70,067
Retirements	(17,511)	(5,846)	(1,981)
Transfers to assets held for sale	0	0	(10,429)
Balance, end of year	1,803,200	1,700,813	1,622,710
Total accumulated depreciation:
Balance, beginning of year	458,279	425,370	396,617
Depreciation expense	40,197	38,755	37,698
Retirements	(10,310)	(5,846)	(1,911)
Transfers to assets held for sale	0	0	(7,034)
Balance, end of year	$ 488,166	$ 458,279	$ 425,370