bfs-20200930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM			10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended September 30, 2020

☐ 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, Bethesda, Maryland 20814

(Address of principal executive office) (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 exchange on which registered:	Trading symbol:
Common Stock, Par Value $0.01 Per Share	New York Stock Exchange	BFS
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	BFS/PRD
Depositary Shares each representing 1/100th of a share of 6.000% Series E Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share	New York Stock Exchange	BFS/PRE

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted 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 such files). Yes ☒ No ☐

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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

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

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

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

Number of shares of common stock, par value $0.01 per share outstanding as of October 31, 2020: 23.4 million.

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SAUL CENTERS, INC.

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			Page
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

(a) Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019			4
(b) Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019			5
(c) Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2020 and 2019			6
(d) Consolidated Statements of Equity for the three and nine months ended September 30, 2020 and 2019			7
(e) Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019			11
(f) Notes to Consolidated Financial Statements			12

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

(a) Critical Accounting Policies			29

(b) Results of Operations:
Three months ended September 30, 2020 compared to three months ended September 30, 2019			30
Nine months ended September 30, 2020 compared to nine months ended September 30, 2019			32
Same Property Revenue			33
Same Property Operating Income			35

(c) Liquidity and Capital Resources			35

Item 3. Quantitative and Qualitative Disclosures About Market Risk			40

Item 4. Controls and Procedures			41

PART II. OTHER INFORMATION

Item 1. Legal Proceedings			42
Item 1A. Risk Factors			42
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			43
Item 3. Defaults Upon Senior Securities			43
Item 4. Mine Safety Disclosures			43
Item 5. Other Information			43
Item 6. Exhibits			43
Signatures			44

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(Dollars in thousands, except per share amounts)	September 30, 2020		December 31, 2019

Assets
Real estate investments
Land	$	509,902	$	453,322
Buildings and equipment	1,533,103		1,292,631
Construction in progress	74,476		335,644
	2,117,481		2,081,597
Accumulated depreciation	(595,785)		(563,474)
	1,521,696		1,518,123
Cash and cash equivalents	54,305		13,905
Accounts receivable and accrued income, net	65,701		52,311
Deferred leasing costs, net	27,468		24,083
Prepaid expenses, net	8,387		5,363
Other assets	3,817		4,555
Total assets	$	1,681,374	$	1,618,340
Liabilities
Notes payable	$	835,613	$	821,503
Term loan facility payable	74,766		74,691
Revolving credit facility payable	123,778		86,371
Construction loan payable	141,626		108,623
Dividends and distributions payable	19,373		19,291
Accounts payable, accrued expenses and other liabilities	27,874		35,199
Deferred income	26,727		29,306
Total liabilities	1,249,757		1,174,984
Equity
Preferred stock, 1,000,000 shares authorized:


Series D Cumulative Redeemable, 30,000 shares issued and outstanding	75,000		75,000
Series E Cumulative Redeemable, 44,000 shares issued and outstanding	110,000		110,000
Common stock, $0.01 par value, 40,000,000 shares authorized, 23,358,208 and 23,231,240 shares issued and outstanding, respectively	234		232
Additional paid-in capital	417,504		410,926
Distributions in excess of accumulated earnings	(235,720)		(221,177)

Total Saul Centers, Inc. equity	367,018		374,981
Noncontrolling interests	64,599		68,375
Total equity	431,617		443,356
Total liabilities and equity	$	1,681,374	$	1,618,340

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

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Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


(Dollars in thousands, except per share amounts)	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Revenue
Rental revenue	$	55,749	$	55,487	$	163,167	$	168,242
Other	1,011		1,565		3,756		6,701
Total revenue	56,760		57,052		166,923		174,943
Expenses
Property operating expenses	7,416		7,525		20,862		22,641
Real estate taxes	7,523		7,114		22,027		21,081
Interest expense, net and amortization of deferred debt costs	12,398		10,325		34,011		32,185
Depreciation and amortization of deferred leasing costs	13,713		12,018		37,593		35,185
General and administrative	4,107		4,742		13,790		14,696
Total expenses	45,157		41,724		128,283		125,788








Net Income	11,603		15,328		38,640		49,155
Noncontrolling interests
Income attributable to noncontrolling interests	(2,236)		(3,102)		(7,681)		(10,250)
Net income attributable to Saul Centers, Inc.	9,367		12,226		30,959		38,905

Preferred stock dividends	(2,798)		(3,210)		(8,394)		(9,116)
Net income available to common stockholders	$	6,569	$	9,016	$	22,565	$	29,789
Per share net income available to common stockholders



Basic and diluted	$	0.28	$	0.39	$	0.97	$	1.30

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

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Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in thousands)	2020		2019		2020		2019
Net income	$	11,603	$	15,328	$	38,640	$	49,155
Other comprehensive income
Change in unrealized loss on cash flow hedge	—		55		—		(118)
Total comprehensive income	11,603		15,383		38,640		49,037
Comprehensive income attributable to noncontrolling interests	(2,236)		(3,117)		(7,681)		(10,220)
Total comprehensive income attributable to Saul Centers, Inc.	9,367		12,266		30,959		38,817

Preferred stock dividends	(2,798)		(3,210)		(8,394)		(9,116)
Total comprehensive income available to common stockholders	$	6,569	$	9,056	$	22,565	$	29,701

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

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Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


(Dollars in thousands, except per share amounts)	Preferred Stock		Common Stock		Additional Paid-in Capital		Distributions in Excess of Accumulated Earnings		Accumulated Other Comprehensive (Loss)		Total Saul Centers, Inc.		Noncontrolling Interests		Total
Balance at January 1, 2020	$	185,000	$	232	$	410,926	$	(221,177)	$	—	$	374,981	$	68,375	$	443,356


Issuance of shares of common stock:
83,978 shares pursuant to dividend reinvestment plan	—		1		4,080		—		—		4,081		—		4,081
11,745 shares due to exercise of stock options and issuance of directors’ deferred stock	—		—		956		—		—		956		—		956
Issuance of 15,101 partnership units pursuant to dividend reinvestment plan	—		—		—		—		—		—		734		734
Net income	—		—		—		13,264		—		13,264		3,565		16,829





Distributions payable preferred stock:

Series D, $38.28 per share	—		—		—		(1,148)		—		(1,148)		—		(1,148)
Series E, $37.50 per share	—		—		—		(1,650)		—		(1,650)		—		(1,650)
Distributions payable common stock ($0.53/share) and distributions payable partnership units ($0.53/unit)	—		—		—		(12,364)		—		(12,364)		(4,188)		(16,552)
Balance, March 31, 2020	185,000		233		415,962		(223,075)		—		378,120		68,486		446,606

Issuance of shares of common stock:
12,627 shares pursuant to dividend reinvestment plan	—		—		407		—		—		407		—		407
3,109 shares due to exercise of stock options and issuance of directors’ deferred stock	—		—		424		—		—		424		—		424

Net income	—		—		—		8,328		—		8,328		1,880		10,208





Distributions payable preferred stock:
Series D, $38.28 per share	—		—		—		(1,148)		—		(1,148)		—		(1,148)
Series E, $37.50 per share	—		—		—		(1,650)		—		(1,650)		—		(1,650)
Distributions payable common stock ($0.53/share) and distributions payable partnership units ($0.53/unit)	—		—		—		(12,373)		—		(12,373)		(4,188)		(16,561)
Balance, June 30, 2020	185,000		233		416,793		(229,918)		—		372,108		66,178		438,286

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Saul Centers, Inc.


(Dollars in thousands, except per share amounts)	Preferred Stock		Common Stock		Additional Paid-in Capital		Distributions in Excess of Accumulated Earnings		Accumulated Other Comprehensive (Loss)		Total Saul Centers, Inc.		Noncontrolling Interests		Total

Issuance of shares of common stock:
14,525 shares pursuant to dividend reinvestment plan	—		1		421		—		—		422		—		422
984 shares due to exercise of stock options and issuance of directors’ deferred stock	—		—		290		—		—		290		—		290
Issuance of 13,108 partnership units pursuant to dividend reinvestment plan	—		—		—		—		—		—		380		380
Net income	—		—		—		9,367		—		9,367		2,236		11,603





Distributions payable preferred stock:

Series D, $38.28 per share	—		—		—		(1,148)		—		(1,148)		—		(1,148)
Series E, $37.50 per share	—		—		—		(1,650)		—		(1,650)		—		(1,650)
Distributions payable common stock ($0.53/share) and distributions payable partnership units ($0.53/unit)	—		—		—		(12,371)		—		(12,371)		(4,195)		(16,566)
Balance, September 30, 2020	$	185,000	$	234	$	417,504	$	(235,720)	$	—	$	367,018	$	64,599	$	431,617

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Saul Centers, Inc.


(Dollars in thousands, except per share amounts)	Preferred Stock		Common Stock		Additional Paid-in Capital		Distributions in Excess of Accumulated Earnings		Accumulated Other Comprehensive (Loss)		Total Saul Centers, Inc.		Noncontrolling Interests		Total
Balance at January 1, 2019	$	180,000	$	227	$	384,533	$	(208,593)	$	(255)	$	355,912	$	69,308	$	425,220


Issuance of shares of common stock:
120,347 shares pursuant to dividend reinvestment plan	—		1		6,170		—		—		6,171		—		6,171
485 shares due to exercise of stock options and issuance of directors’ deferred stock	—		1		419		—		—		420		—		420
Issuance of 13,742 partnership units pursuant to dividend reinvestment plan	—		—		—		—		—		—		705		705
Net income	—		—		—		13,447		—		13,447		3,630		17,077
Change in unrealized loss on cash flow hedge	—		—		—		—		(34)		(34)		(12)		(46)


Distributions payable preferred stock:
Series C, $42.97 per share	—		—		—		(1,805)		—		(1,805)		—		(1,805)
Series D, $38.28 per share	—		—		—		(1,148)		—		(1,148)		—		(1,148)
Distributions payable common stock ($0.53/share) and distributions payable partnership units ($0.53/unit)	—		—		—		(12,108)		—		(12,108)		(4,155)		(16,263)
Balance, March 31, 2019	180,000		229		391,122		(210,207)		(289)		360,855		69,476		430,331



Issuance of shares of common stock:
99,804 shares pursuant to dividend reinvestment plan	—		1		5,127		—		—		5,128		—		5,128
48,772 shares due to exercise of stock options and issuance of directors’ deferred stock	—		—		2,798		—		—		2,798		—		2,798
Issuance of 20,041 partnership units pursuant to dividend reinvestment plan	—		—		—		—		—		—		1,029		1,029
Net income	—		—		—		13,232		—		13,232		3,518		16,750
Change in unrealized loss on cash flow hedge	—		—		—		—		(95)		(95)		(32)		(127)




Distributions payable preferred stock:
Series C, $42.97 per share	—		—		—		(1,805)		—		(1,805)		—		(1,805)
Series D, $38.28 per share	—		—		—		(1,148)		—		(1,148)		—		(1,148)
Distributions payable common stock ($0.53/share) and distributions payable partnership units ($0.53/unit)	—		—		—		(12,181)		—		(12,181)		(4,166)		(16,347)
Balance, June 30, 2019	180,000		230		399,047		(212,109)		(384)		366,784		69,825		436,609

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Saul Centers, Inc.


(Dollars in thousands, except per share amounts)	Preferred Stock		Common Stock		Additional Paid-in Capital		Distributions in Excess of Accumulated Earnings		Accumulated Other Comprehensive (Loss)		Total Saul Centers, Inc.		Noncontrolling Interests		Total
Issuance of 44,000 shares of Series E Cumulative preferred stock	110,000		—		(3,731)		—		—		106,269		—		106,269

Issuance of shares of common stock:
105,753 shares pursuant to dividend reinvestment plan	—		1		5,673		—		—		5,674		—		5,674
1,645 shares due to exercise of stock options and issuance of directors’ deferred stock	—		—		406		—		—		406		—		406
Issuance of 13,406 partnership units pursuant to dividend reinvestment plan	—		—		—		—		—		—		720		720
Net income	—		—		—		12,226		—		12,226		3,102		15,328
Change in unrealized loss on cash flow hedge	—		—		—		—		41		41		14		55





Distributions payable preferred stock:
Series C, $42.97 per share	—		—		—		(1,805)		—		(1,805)		—		(1,805)
Series D, $38.28 per share	—		—		—		(1,148)		—		(1,148)		—		(1,148)
Series E, $5.83 per share	—		—		—		(257)		—		(257)		—		(257)
Distributions payable common stock ($0.53/share) and distributions payable partnership units ($0.53/unit)	—		—		—		(12,241)		—		(12,241)		(4,173)		(16,414)
Balance, September 30, 2019	$	290,000	$	231	$	401,395	$	(215,334)	$	(343)	$	475,949	$	69,488	$	545,437

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

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Saul Centers, Inc.


CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Nine months ended September 30,
(Dollars in thousands)	2020		2019
Cash flows from operating activities:
Net income	$	38,640	$	49,155
Adjustments to reconcile net income to net cash provided by operating activities:



Depreciation and amortization of deferred leasing costs	37,593		35,185
Amortization of deferred debt costs	1,163		1,130
Compensation costs of stock grants and options	1,141		1,501
Credit losses on operating lease receivables	4,162		986
Increase in accounts receivable and accrued income	(17,552)		(2,317)
Additions to deferred leasing costs	(7,383)		(1,380)
Increase in prepaid expenses	(3,024)		(4,182)
(Increase) decrease in other assets	738		(2,049)
Increase in accounts payable, accrued expenses and other liabilities	3,871		5,696
Decrease in deferred income	(2,579)		(1,627)
Net cash provided by operating activities	56,770		82,098
Cash flows from investing activities:

Additions to real estate investments	(13,665)		(13,398)
Additions to development and redevelopment projects	(34,698)		(91,657)



Net cash used in investing activities	(48,363)		(105,055)
Cash flows from financing activities:
Proceeds from notes payable	52,100		22,100
Repayments on notes payable	(37,431)		(55,992)

Proceeds from revolving credit facility	90,000		47,000
Repayments on revolving credit facility	(53,000)		(94,000)
Proceeds from construction loan	32,928		71,807
Additions to deferred debt costs	(1,196)		(432)
Proceeds from the issuance of:
Common stock	5,440		19,096
Partnership units	1,114		2,454

Series E preferred stock	—		106,269



Distributions to:
Series C preferred stockholders	—		(5,415)
Series D preferred stockholders	(3,444)		(3,444)
Series E preferred stockholders	(4,950)		—
Common stockholders	(37,012)		(36,326)
Noncontrolling interests	(12,556)		(12,469)
Net cash provided by financing activities	31,993		60,648
Net increase (decrease) in cash and cash equivalents	40,400		37,691
Cash and cash equivalents, beginning of period	13,905		14,578
Cash and cash equivalents, end of period	$	54,305	$	52,269
Supplemental disclosure of cash flow information:
Cash paid for interest	$	32,951	$	31,266
Increase (decrease) in accrued real estate investments and development costs	$	(11,196)	$	1,507

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Notes to Consolidated Financial Statements (Unaudited)

1. Organization, Basis of Presentation

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

The Company, which conducts all of its activities through its subsidiaries, Saul Holdings Limited Partnership, a Maryland limited partnership (the “Operating Partnership”) and two subsidiary limited partnerships (the “Subsidiary Partnerships,” and, collectively with the Operating Partnership, the “Partnerships”), engages in the ownership, operation, management, leasing, acquisition, renovation, expansion, development and financing of community and neighborhood shopping centers and mixed-use properties, primarily in the Washington, DC/Baltimore metropolitan area.

As of September 30, 2020, the Company’s properties (the “Current Portfolio Properties”) consisted of 50 shopping center properties (the “Shopping Centers”), seven mixed-use properties, which are comprised of office, retail and multi-family residential uses (the “Mixed-Use Properties”) and three (non-operating) development properties.

Because the properties are located primarily in the Washington, DC/Baltimore metropolitan area, the Company is subject to a concentration of credit risk related to these properties. A majority of the Shopping Centers are anchored by one or more major tenants. As of September 30, 2020, 33 of the Shopping Centers were anchored by a grocery store and offer primarily day-to-day necessities and services. Giant Food, a tenant at 11 Shopping Centers, individually accounted for 5.4% of the Company's total revenue for the nine months ended September 30, 2020. No other tenant individually accounted for 2.5% or more of the Company’s total revenue, excluding lease termination fees, for the nine months ended September 30, 2020.

The accompanying consolidated financial statements of the Company include the accounts of Saul Centers and its subsidiaries, including the Operating Partnership and Subsidiary Partnerships, which are majority owned by Saul Centers. Substantially all assets and liabilities of the Company as of September 30, 2020 and December 31, 2019, are comprised of the assets and liabilities of the Operating Partnership. The debt arrangements which are subject to recourse are described in Note 5. All significant intercompany balances and transactions have been eliminated in consolidation.

The Operating Partnership is a variable interest entity ("VIE") 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 its activities and the rights to absorb 74.6% of its net income. Because the Operating Partnership is consolidated into the financial statements of the Company, classification of it as a VIE has no impact on the consolidated financial statements of the Company.

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments necessary for the fair presentation of the financial position and results of operations of the Company for the interim periods have been included. All such adjustments are of a normal recurring nature. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2019, which are included in its Annual Report on Form 10-K. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to those instructions. The results of operations for interim periods are not necessarily indicative of results to be expected for the year.

2. Summary of Significant Accounting Policies

Our significant accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019 have not changed significantly in amount or composition.

Use of Estimates

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

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Notes to Consolidated Financial Statements (Unaudited)

significant estimates and assumptions relate to collectability of operating lease receivables and impairment of real estate properties. Actual results could differ from those estimates.

Accounts Receivable, Accrued Income and Allowance for Doubtful Accounts

Accounts receivable primarily represent amounts currently due from tenants in accordance with the terms of their respective leases. Individual leases are assessed for collectability and upon the determination that the collection of rents is not probable, accrued rent and accounts receivable are charged off, which is reflected as an adjustment to rental revenue. Revenue from leases where collection is not probable is recorded on a cash basis until collectability is determined to be probable. Further, we assess whether operating lease receivables, at the portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical bad debt levels and current economic trends.

At September 30, 2020 and December 31, 2019, accounts receivable was comprised of:


(In thousands)	September 30, 2020		December 31, 2019
Rents currently due	$	14,553	$	7,235
Deferred rents	6,783		474
Straight-line rent	44,266		42,088
Other receivables	5,018		2,967
Allowance for doubtful accounts	(4,919)		(453)

Total	$	65,701	$	52,311

Recently Issued Accounting Standards

In February 2016, the Financial Accounting Standards Board (‘‘FASB’’) issued Accounting Standards Update (‘‘ASU’’) 2016-02, ‘‘Leases’’ (“ASU 2016-02”). ASU 2016-02 amended the 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 became effective for annual periods beginning after December 15, 2018, interim periods within those years, and required 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. Upon adoption of ASU 2016-02 effective January 1, 2019, we elected the practical expedient for all leases with respect to lease identification, lease classification, and initial direct costs. We made a policy election not to separate lease and nonlease components and have accounted for each lease component and the related nonlease components together as a single component. There were no significant changes to our lessor accounting for operating leases as a result of ASU 2016-02.

We lease Shopping Centers and Mixed-Use Properties to lessees in exchange for monthly payments that cover rent, and, where applicable, reimbursement for property taxes, insurance, and certain property operating expenses. Our leases have been determined to be operating leases and generally range in term from one to 15 years.

Some of our leases have termination options and/or extension options. Termination options allow the lessee and/or lessor to terminate the lease prior to the end of the lease term, provided certain conditions are met. Termination options generally require advance notification from the lessee and/or lessor and payment of a termination fee. Termination fees are recognized as revenue over the modified lease term. Extension options are subject to terms and conditions stated in the lease.

On January 1, 2019, a right of use asset and corresponding lease liability related to our headquarters lease were recorded in other assets and other liabilities, respectively. The lease expires on February 28, 2022, with one option to renew for an additional five years. The right of use asset and corresponding lease liability totaled $1.1 million and $1.1 million, respectively, at September 30, 2020.

Due to the business disruptions and challenges severely affecting the global economy caused by the novel strain of coronavirus (“COVID-19”) pandemic, many lessees have requested rent relief, including rent deferrals and other lease concessions. The lease modification guidance in ASU 2016-02 does not contemplate the rapid execution of concessions for multiple tenants in response to sudden liquidity constraints of lessees. In April 2020, the FASB staff issued a question and answer document that provided guidance allowing the Company to elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. The Company has elected to apply such relief, which, in the case of rent deferrals, results in the accrual of rent due from tenants and defers the payment of that rent to a future date, and will monitor the collectability of rent receivables.

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Table of Contents

Notes to Consolidated Financial Statements (Unaudited)

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. The adoption of ASU 2016-13 effective January 1, 2020, did not have a material impact on our consolidated financial statements and related disclosures because the vast majority of the Company's receivables relate to operating leases which are accounted for under ASC 842, "Leases."

Reclassifications

Certain reclassifications have been made to the prior year financial statements to conform to the presentation used for the nine months ended September 30, 2020.

3. Real Estate

Construction In Progress

Construction in progress includes land, preconstruction and development costs of active projects. Preconstruction costs include legal, zoning and permitting costs and other project carrying costs incurred prior to the commencement of construction. Development costs include direct construction costs and indirect costs incurred subsequent to the start of construction such as architectural, engineering, construction management and carrying costs consisting of interest, real estate taxes and insurance. During the nine months ended September 30, 2020, assets totaling $284.7 million were placed in service in conjunction with the substantial completion of The Waycroft and Ashbrook Marketplace. Construction in progress as of September 30, 2020 and December 31, 2019, is composed of the following:


(In thousands)	September 30, 2020		December 31, 2019
The Waycroft	$	8,567	$	255,443
7316 Wisconsin Avenue	49,629		44,638
Ashbrook Marketplace	3,727		19,128
Other	12,553		16,435
Total	$	74,476	335,644

Deferred Leasing Costs

Deferred leasing costs consist of commissions paid to third-party and internal leasing agents, internal costs such as payroll-related fringe benefits that are direct and incremental to successful commercial leases, amounts attributed to in-place leases associated with acquired properties and lease inducement costs. Effective with the adoption of ASU 2016-02 on January 1, 2019, all costs incurred prior to the execution of a lease are charged to expense and not capitalized. Unamortized deferred leasing costs are charged to expense if the applicable lease is terminated prior to expiration of the initial lease term. Deferred leasing costs are amortized over the term of the lease or remaining term of acquired leases. Collectively, deferred leasing costs totaled $27.5 million and $24.1 million, net of accumulated amortization of $43.8 million and $41.6 million, as of September 30, 2020 and December 31, 2019, respectively. Amortization expense, included in depreciation and amortization of deferred leasing costs in the Consolidated Statements of Operations, totaled $4.0 million and $4.5 million for the nine months ended September 30, 2020 and 2019, respectively.

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Table of Contents

Notes to Consolidated Financial Statements (Unaudited)

Real Estate Investment Properties

Depreciation is calculated using the straight-line method and estimated useful lives of generally between 35 and 50 years for base buildings, or a shorter period if management determines that the building has a shorter useful life, and up to 20 years for certain other improvements that extend the useful lives. Leasehold improvement expenditures are capitalized when certain criteria are met, including when the Company supervises construction and will own the improvements. Tenant improvements are amortized, over the shorter of the lives of the related leases or the useful life of the improvements, using the straight-line method. Depreciation expense in the Consolidated Statements of Operations totaled $33.6 million and $30.7 million for the nine months ended September 30, 2020 and 2019, respectively. Repairs and maintenance expense totaled $8.0 million and $9.7 million for the nine months ended September 30, 2020 and 2019, respectively, and is included in property operating expenses in the Consolidated Statements of Operations.

As of September 30, 2020, we have not identified any impairment triggering events, including the impact of COVID-19 and corresponding tenant requests for rent relief. Therefore, under applicable GAAP guidance, no impairment charges were recorded.

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

As of September 30, 2020, 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”) holds a 25.4% limited partnership interest in the Operating Partnership represented by approximately 7.9 million convertible limited partnership units. These units are convertible into shares of Saul Centers’ common stock, at the option of the unit holder, on a one-for-one basis provided that, in accordance with the Company’s Articles of Incorporation, the rights may not be exercised at any time that the Saul Organization beneficially owns or will own after the exercise, directly or indirectly, in the aggregate more than 39.9% of the value of the outstanding common stock and preferred stock of Saul Centers (the “Equity Securities”). As of September 30, 2020, approximately 3.0 million units could be converted into shares of Saul Centers common stock.

The impact of the Saul Organization’s approximately 25.4% limited partnership interest in the Operating Partnership is reflected as Noncontrolling Interests in the accompanying consolidated financial statements. Fully converted partnership units and diluted weighted average common stock outstanding for the three months ended September 30, 2020 and 2019, were approximately 31.3 million and 31.0 million, respectively, and for the nine months ended September 30, 2020 and 2019, were approximately 31.2 million and 30.8 million, respectively.

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

The principal amount of the Company’s outstanding debt totaled approximately $1.2 billion at September 30, 2020, of which approximately $986.0 million was fixed-rate debt and approximately $199.5 million was variable rate debt outstanding under the credit facility. The carrying value of the properties collateralizing the notes payable totaled approximately $1.2 billion as of September 30, 2020.

At September 30, 2020, the Company had a $400.0 million credit facility comprised of a $325.0 million revolving facility and a $75.0 million term loan. As of September 30, 2020, the applicable spread for borrowings was 140 basis points under the revolving credit facility and 135 basis points under the term loan. Letters of credit may be issued under the revolving credit facility. As of September 30, 2020, based on the value of the Company’s unencumbered properties, approximately $200.3 million was available under the revolving credit facility, $124.5 million was outstanding and approximately $185,000 was committed for letters of credit.

On February 10, 2020, the Company repaid in full the remaining principal balance of $9.2 million of the mortgage loan secured by Boca Valley Plaza, which was scheduled to mature on May 10, 2020.

On March 3, 2020, the Company repaid in full the remaining principal balance of $7.1 million of the mortgage loan secured by Palm Springs Center, which was scheduled to mature on June 1, 2020.

In March and April, 2020, the Company borrowed $71.0 million under its revolving credit facility to provide additional liquidity and flexibility as the effects of the COVID-19 pandemic continue to evolve.

On July 14, 2020, the Company closed on a 15-year, non-recourse $22.1 million mortgage loan secured by Ashbrook Marketplace. The loan matures in 2035, bears interest at a fixed rate of 3.80%, requires monthly principal and interest payments of $114,226 based on a 25-year amortization schedule and requires a final payment of $11.5 million at maturity. The proceeds from the loan were used to pay down the revolving credit facility.

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Table of Contents

Notes to Consolidated Financial Statements (Unaudited)

On July 24, 2020, the Company closed on a 15-year, non-recourse $30.0 million mortgage loan secured by Kentlands Place and Kentlands Square I. The loan matures in 2035, bears interest at a fixed rate of 3.43%, requires monthly principal and interest payments of $149,064 based on a 25-year amortization schedule and requires a final payment of $15.3 million at maturity. The proceeds from the loan were used to pay down the revolving credit facility.

Saul Centers and certain consolidated subsidiaries of the Operating Partnership have guaranteed the payment obligations of the Operating Partnership under the credit facility. The Operating Partnership is the guarantor of (a) a portion of the Park Van Ness mortgage (approximately $6.7 million of the $66.8 million outstanding balance at September 30, 2020, which guarantee will be reduced to (i) $3.3 million on October 1, 2020 and (ii) zero on October 1, 2021), (b) a portion of the Broadlands mortgage (approximately $3.8 million of the $30.7 million outstanding balance at September 30, 2020), (c) a portion of the Avenel Business Park mortgage (approximately $6.3 million of the $25.5 million outstanding balance at September 30, 2020), (d) a portion of The Waycroft mortgage (approximately $23.6 million of the $143.1 million outstanding balance at September 30, 2020), (e) the Ashbrook Marketplace mortgage (totaling $22.1 million at September 30, 2020), and (f) the mortgage secured by Kentlands Place, Kentlands Square I and Kentlands pad (totaling $29.9 million at September 30, 2020). All other notes payable are non-recourse. The guarantee on the Kentlands Square II mortgage loan was released on February 5, 2020.

At December 31, 2019, the principal amount of the Company’s outstanding debt totaled approximately $1.1 billion, of which $938.4 million was fixed rate debt and $162.5 million was variable rate debt, including $87.5 million outstanding under an unsecured revolving credit facility. The carrying value of the properties collateralizing the notes payable totaled approximately $1.1 billion as of December 31, 2019.

At September 30, 2020, the scheduled maturities of debt, including scheduled principal amortization, for years ending December 31, were as follows:


(In thousands)	Balloon Payments			Scheduled Principal Amortization		Total
October 1 through December 31, 2020	$	—		$	7,453	$	7,453
2021	11,012			30,323		41,335
2022	161,002		(a)	30,984		191,986
2023	84,225			31,447		115,672
2024	66,164			30,815		96,979
2025	20,363			27,823		48,186
Thereafter	566,375			117,532		683,907
Principal amount	$	909,141		$	276,377	1,185,518
Unamortized deferred debt costs						9,735
Net						$	1,175,783

(a) Includes $124.5 million outstanding under the revolving credit facility.

Deferred debt costs consist of fees and costs incurred to obtain long-term financing, construction financing and the credit facility. 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 $9.7 million and $9.7 million, net of accumulated amortization of $8.3 million and $7.5 million, at September 30, 2020 and December 31, 2019, respectively, and are reflected as a reduction of the related debt in the Consolidated Balance Sheets.

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Table of Contents

Notes to Consolidated Financial Statements (Unaudited)

Interest expense, net and amortization of deferred debt costs for the three and nine months ended September 30, 2020 and 2019, were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2020		2019		2020		2019
Interest incurred	$	12,933	$	13,103	$	38,788	$	38,972
Amortization of deferred debt costs	402		370		1,163		1,130
Capitalized interest	(909)		(3,088)		(5,813)		(7,756)
Interest expense	12,426		10,385		34,138		32,346
Less: Interest income	28		60		127		161
Interest expense, net and amortization of deferred debt costs	$	12,398	$	10,325	$	34,011	$	32,185

6. Equity

The consolidated statements of operations for the nine months ended September 30, 2020 and 2019, reflect noncontrolling interests of $7.7 million and $10.3 million, respectively, representing income attributable to the Saul Organization for each period.

At September 30, 2020, the Company had outstanding 3.0 million depositary shares, each representing 1/100th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock (the "Series D Stock"). 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 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 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.

At September 30, 2020, the Company had outstanding 4.4 million depositary shares, each representing 1/100th of a share of 6.000% Series E Cumulative Redeemable Preferred Stock (the “Series E Stock”). The depositary shares may be redeemed at the Company’s option, in whole or in part, on or after September 17, 2024, at the $25.00 liquidation preference, plus accrued but unpaid dividends to but not including the redemption date. The depositary shares pay an annual dividend of $1.50 per share, equivalent to 6.000% of the $25.00 liquidation preference. The Series E 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.

Per Share Data

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

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Table of Contents

Notes to Consolidated Financial Statements (Unaudited)


	Three months ended September 30,		Nine months ended September 30,
(In thousands)	2020	2019	2020	2019
Weighted average common stock outstanding-Basic	23,353	23,081	23,329	22,947
Effect of dilutive options	—	40	1	46
Weighted average common stock outstanding-Diluted	23,353	23,121	23,330	22,993
Non-dilutive options	1,516	698	1,418	612
Years non-dilutive options were issued	2011 through 2020	2016, 2017 and 2019	2014 through 2020	2016, 2017 and 2019

7. Related Party Transactions

The Chairman, Chief Executive Officer and President, the Executive Vice President-Real Estate, 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 $255,200 and $264,300 for the nine months ended September 30, 2020 and 2019, respectively. All amounts contributed by employees and the Company are fully vested.

The Company also participates in a multiemployer nonqualified deferred compensation plan with entities in the Saul Organization which covers those full-time employees who meet the requirements as specified in the plan. According to the plan, which can be modified or discontinued at any time, participating employees defer 2% of their compensation in excess of a specified amount. For the nine months ended September 30, 2020 and 2019, the Company credited to employee accounts $164,800 and $186,300, respectively, which is the sum of accrued earnings and up to three times the amount deferred by employees and is included in general and administrative expense. All amounts contributed by employees and credited by the Company are fully vested. The cumulative unfunded liability under this plan was $2.8 million and $3.1 million, at September 30, 2020 and December 31, 2019, respectively, and is included in accounts payable, accrued expenses and other liabilities in the Consolidated Balance Sheets.

The Company has entered into a shared services agreement (the “Agreement”) with the Saul Organization that provides for the sharing of certain personnel and ancillary functions such as computer hardware, software, and support services and certain direct and indirect administrative personnel. The method for determining the cost of the shared services is provided for in the Agreement and is based upon head count, estimates of usage or estimates of time incurred, as applicable. The terms of the Agreement and the payments made thereunder are deemed reasonable by management and are reviewed annually by the Audit Committee of the Board of Directors, which consists entirely of independent directors. Billings by the Saul Organization for the Company’s share of these ancillary costs and expenses for the nine months ended September 30, 2020 and 2019, which included rental expense for the Company’s headquarters lease, totaled approximately $6.0 million and $6.4 million, net, respectively. The amounts are generally expensed as incurred and are primarily reported as general and administrative expenses in the Consolidated Statements of Operations. As of September 30, 2020 and December 31, 2019, accounts payable, accrued expenses and other liabilities included approximately $659,000 and $918,700, respectively, representing amounts 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 (the “Predevelopment Agreement”) with the B. F. Saul Real Estate Investment Trust (the “Trust”). The Predevelopment Agreement 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. 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.

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Table of Contents

Notes to Consolidated Financial Statements (Unaudited)

case with the improvements located thereon, located at the Twinbrook Metro Station in Rockville, Maryland (the “Contributed Property”). In exchange for the Contributed Property, the Company will issue to the Trust 1,416,071 limited partnership units at an agreed upon value of $56.00 per unit, representing an aggregate value of $79.3 million for the Contributed Property. Deed to the Contributed Property and the units were placed in escrow until certain conditions of the Contribution Agreement are satisfied.

In August 2016, the Company entered into an agreement to acquire from the Trust approximately 13.7 acres of land located at the intersection of Ashburn Village Boulevard and Russell Branch Parkway in Ashburn, Virginia. The transaction closed on May 9, 2018, and the Company issued 176,680 limited partnership units to the Trust. The Company constructed a shopping center, Ashbrook Marketplace, and may be obligated to issue additional limited partnership units to the Trust in the second quarter of 2021. As of September 30, 2020, the Company estimates this obligation to range in value from $3.2 million to $3.5 million, based on projected net operating income of Ashbrook Marketplace for the 12 months ending May 31, 2021.

The Company subleases its corporate headquarters space from a member of the Saul Organization. The lease commenced in March 2002, expires in 2022, and provides for base rent increases of 3% per year, with payment of a pro-rata share of operating expenses over a base year amount. The Agreement requires each party to pay an allocation of total rental payments based on a percentage proportionate to the number of employees employed by each party. The Company’s rent expense for its headquarters location was $609,200 and $593,500 for the nine months ended September 30, 2020 and 2019, respectively, and is included in general and administrative expense.

The B. F. Saul Insurance Agency, Inc., a subsidiary of the B. F. Saul Company and a member of the Saul Organization, is a general insurance agency that receives commissions and fees in connection with the Company’s insurance program. Such commissions and fees amounted to $320,300 and $284,900 for the nine months ended September 30, 2020 and 2019, respectively.

8. Stock-based Employee Compensation, Stock Option Plans, and Deferred Compensation Plan for Directors

In 2004, the Company established a stock incentive plan (the "Plan"), as amended. Under the Plan, options are granted at an exercise price not less than the market value of the common stock on the date of grant and expire ten years from the date of grant. Officer options vest ratably over four years following the grant and are charged to expense using the straight-line method over the vesting period. Director options vest immediately and are charged to expense as of the date of grant.

The 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 the grant 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 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, the Company’s yield in relation to other retail REITs and the Company’s market yield at the grant date; and (4) a Risk-free Interest Rate based upon the market yields of US Treasury obligations with maturities corresponding to the average expected term of the options at the grant date. The Company amortizes the value of options granted ratably over the vesting period and includes the amounts as compensation expense in general and administrative expenses.

Pursuant to the Plan, the Compensation Committee established a Deferred Compensation Plan for Directors for the benefit of the Company’s directors and their beneficiaries, which replaced a previous Deferred Compensation and Stock Plan for Directors. Annually, directors are given the ability to make an election to defer all or part of their fees and have the option to have their 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 a director elects to have their fees paid in stock, fees earned during a calendar quarter are aggregated and divided by the closing market price of the Company’s common stock on the first trading day of the following quarter to determine the number of shares to be credited to the director. During the nine months ended September 30, 2020, 7,969 shares were credited to director's deferred fee accounts and 7,354 shares were issued. As of September 30, 2020, the director's deferred fee accounts comprise 115,023 shares.

Effective April 24, 2020, the Company granted 238,000 options to its directors and certain officers. The following table summarizes the assumptions used in the valuation of the 2020 and 2019 option grants. During the nine months ended September 30, 2020, stock option expense totaling $969,200 was included in general and administrative expense in the Consolidated Statements of Operations. As of September 30, 2020, the estimated future expense related to unvested stock options was $1.9 million.

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Table of Contents

Notes to Consolidated Financial Statements (Unaudited)


	Directors						Officers
Grant date	May 3, 2019			April 24, 2020			May 3, 2019			April 24, 2020
Exercise price	$	55.71		$	50.00		$	55.71		$	50.00
Volatility	0.236			0.258			0.206			0.240
Expected life (years)	5.0			5.0			7.0			7.0
Assumed yield	3.75		%	3.80		%	3.80		%	3.85		%
Risk-free rate	2.33		%	0.36		%	2.43		%	0.51		%

The table below summarizes the option activity for the nine months ended September 30, 2020:


	Number of Shares	Weighted Average Exercise Price per share		Aggregate Intrinsic Value
Outstanding at January 1	1,309,614	$	53.38	$	2,528,463
Granted	238,000	50.00		—
Exercised	(10,749)	49.19		85,268
Expired/Forfeited	(21,250)	53.96		—
Outstanding at September 30	1,515,615	52.87		—
Exercisable at September 30	978,240	53.03		—

The intrinsic value measures the price difference between the options’ exercise price and the closing share price quoted by the New York Stock Exchange as of the date of measurement. The intrinsic value for shares exercised during the period was calculated by using the closing share price on the date of exercise. At September 30, 2020, the final trading day of the third quarter, the closing share price of $26.58 was lower than the exercise price of all outstanding options. The weighted average remaining contractual life of the Company’s outstanding and exercisable options is 5.2 years and 5.5 years, respectively.

The Compensation Committee has also approved an annual award of 200 shares of the Company’s common stock as additional compensation to each director serving on the Board of Directors as of the date of the annual meeting of stockholders. The issuance of these shares may not be deferred.

9. Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair value. The aggregate fair value of the notes payable with fixed-rate payment terms was determined using Level 3 data in a discounted cash flow approach, which is based upon management’s estimate of borrowing rates and loan terms currently available to the Company for fixed-rate financing and, assuming long-term market interest rates of approximately 3.25% and 3.55%, would be approximately $1.0 billion and $957.4 million, respectively, compared to the principal balance of $986.0 million and $938.4 million at September 30, 2020 and December 31, 2019, respectively. A change in any of the significant inputs may lead to a change in the Company’s fair value measurement of its debt.

10. Commitments and Contingencies

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

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Table of Contents

Notes to Consolidated Financial Statements (Unaudited)

11. Business Segments

The Company has two reportable business segments: Shopping Centers and Mixed-Use Properties. The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2). The Company evaluates performance based upon income and cash flows from real estate of the combined properties in each segment. All of our properties within each segment generate similar types of revenues and expenses related to tenant rent, reimbursements and operating expenses. Although services are provided to a range of tenants, the types of services provided to them are similar within each segment. The properties in each portfolio have similar economic characteristics and the nature of the products and services provided to our tenants and the method to distribute such services are consistent throughout the portfolio. Certain reclassifications have been made to prior year information to conform to the 2020 presentation.


(In thousands)	Shopping Centers		Mixed-Use Properties		Corporate and Other		Consolidated Totals
Three months ended September 30, 2020
Real estate rental operations:
Revenue	$	40,336	$	16,424	$	—	$	56,760
Expenses	(8,755)		(6,184)		—		(14,939)
Income from real estate	31,581		10,240		—		41,821

Interest expense, net and amortization of deferred debt costs	—		—		(12,398)		(12,398)
Depreciation and amortization of deferred leasing costs	(8,169)		(5,544)		—		(13,713)
General and administrative	—		—		(4,107)		(4,107)






Net income (loss)	$	23,412	$	4,696	$	(16,505)	$	11,603
Capital investment	$	2,733	$	6,703	$	—	$	9,436
Total assets	$	982,381	$	643,395	$	55,598	$	1,681,374


Three months ended September 30, 2019
Real estate rental operations:
Revenue	$	41,313	$	15,739	$	—	$	57,052
Expenses	(8,974)		(5,665)		—		(14,639)
Income from real estate	32,339		10,074		—		42,413

Interest expense, net and amortization of deferred debt costs	—		—		(10,325)		(10,325)
Depreciation and amortization of deferred leasing costs	(7,260)		(4,758)		—		(12,018)
General and administrative	—		—		(4,742)		(4,742)








Net income (loss)	$	25,079	$	5,316	$	(15,067)	$	15,328
Capital investment	$	9,166	$	27,290	$	—	$	36,456
Total assets	$	985,244	$	609,560	$	51,960	$	1,646,764

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Notes to Consolidated Financial Statements (Unaudited)




(In thousands)	Shopping Centers		Mixed-Use Properties		Corporate and Other		Consolidated Totals
Nine Months Ended September 30, 2020
Real estate rental operations:
Revenue	$	120,236	$	46,687	$	—	$	166,923
Expenses	(26,041)		(16,848)		—		(42,889)
Income from real estate	94,195		29,839		—		124,034

Interest expense, net and amortization of deferred debt costs	—		—		(34,011)		(34,011)
Depreciation and amortization of deferred leasing costs	(22,812)		(14,781)		—		(37,593)
General and administrative	—		—		(13,790)		(13,790)






Net income (loss)	$	71,383	$	15,058	$	(47,801)	$	38,640
Capital investment	$	11,622	$	36,741	$	—	$	48,363
Total assets	$	982,381	$	643,395	$	55,598	$	1,681,374

Nine Months Ended September 30, 2019
Real estate rental operations:
Revenue	$	126,730	$	48,213	$	—	$	174,943
Expenses	(27,214)		(16,508)		—		(43,722)
Income from real estate	99,516		31,705		—		131,221

Interest expense, net and amortization of deferred debt costs	—		—		(32,185)		(32,185)
Depreciation and amortization of deferred leasing costs	(21,917)		(13,268)		—		(35,185)
General and administrative	—		—		(14,696)		(14,696)








Net income (loss)	$	77,599	$	18,437	$	(46,881)	$	49,155
Capital investment	$	22,746	$	82,309	$	—	$	105,055
Total assets	$	985,244	$	609,560	$	51,960	$	1,646,764

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Notes to Consolidated Financial Statements (Unaudited)

12. Impact of COVID-19

On March 11, 2020, the World Health Organization declared a novel strain of coronavirus ("COVID-19") a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. As a result, the COVID-19 pandemic is negatively affecting almost every industry directly or indirectly.

The actions taken by federal, state and local governments to mitigate the spread of COVID-19 by ordering closure of nonessential businesses and ordering residents to generally stay at home, and subsequent phased re-openings, have resulted in many of our tenants announcing mandated or temporary closures of their operations and/or requesting adjustments to their lease terms. Experts predict that the COVID-19 pandemic will trigger a period of global economic slowdown or a global recession. COVID-19 could have a material and adverse effect on or cause disruption to our business or financial condition, results from operations, cash flows and the market value and trading price of our securities.

While the Company’s grocery stores, pharmacies, banks and home improvement stores generally remain open, restaurants, if open, are operating at limited capacity, with many offering only delivery and curbside pick-up, and most health, beauty supply and services, fitness centers, and other non-essential businesses are in various phases of re-opening depending on location. The Company is generally not charging late fees or delinquent interest on past due rent payments and, in many cases, rent deferral agreements are being negotiated to allow tenants temporary relief where needed. As of November 3, 2020, payments by tenants of contractual base rent and operating expense and real estate tax recoveries totaled approximately 83% and 91% for the second quarter and third quarter, respectively.

The following is a summary of the Company's consolidated total collections of the second quarter and third quarter rent billings, including minimum rent, operating expense recoveries, and real estate tax reimbursements as of November 3, 2020:

2020 second quarter

•83% of 2020 second quarter total billings has been paid by our tenants.

▪79% of retail

▪95% of office

▪100% of residential

▪Additionally, rent deferral agreements comprising approximately 11% of 2020 second quarter total billings have been executed (or 67% of the total unpaid balance) including 4% with anchor/national tenants. The executed deferrals typically cover three months of rent and are generally scheduled to be repaid during 2021 and 2022. As a condition to granted rent deferrals, we have sought, and in some cases received, extended lease terms, or waivers of certain adjacent use or common area restrictions. Through October 31, 2020, 3% of second quarter deferred rents have come due. Of the deferred rents that have come due, the majority have been repaid.

2020 third quarter

•91% of 2020 third quarter total billings has been paid by our tenants.

▪89% of retail

▪95% of office

▪100% of residential

▪Additionally, rent deferral agreements comprising approximately 2% of 2020 third quarter total billings have been executed (or 24% of the total unpaid balance) including 1% with anchor/national tenants. The executed deferrals typically cover three months of rent and are generally scheduled to be repaid during 2021 and 2022. As a condition to granted rent deferrals, we have sought, and and in some cases received, extended lease terms, or waivers of certain adjacent use or common area restrictions. Through October 31, 2020, no third quarter deferred rents have come due.

13. Subsequent Events

The Company has reviewed operating activities for the period subsequent to September 30, 2020, and determined there are no subsequent events required to be disclosed.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This section should be read in conjunction with the consolidated financial statements of the Company and the accompanying notes in “Item 1. Financial Statements” of this report and the more detailed information contained in the Company’s Form 10-K for the year ended December 31, 2019. Historical results and percentage relationships set forth in Item 1 and this section should not be taken as indicative of future operations of the Company. Capitalized terms used but not otherwise defined in this section have the meanings given to them in Item 1 of this Form 10-Q.

Forward-Looking Statements

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-Q. Although management believes that the expectations reflected in such forward-looking statements are based upon present expectations and reasonable assumptions, our actual results could differ materially from those set forth in the forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law. The following are some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements:

•challenging domestic and global credit markets and their effect on discretionary spending;

•the ability of our tenants to pay rent;

•our reliance on shopping center “anchor” tenants and other significant tenants;

•our substantial relationships with members of the Saul Organization;

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

•our development activities;

•our access to additional capital;

•our ability to successfully complete additional acquisitions, developments or redevelopments, or if they are completed, whether such acquisitions, developments or redevelopments perform as expected;

•risks generally incident to the ownership of real property, including adverse changes in economic conditions, changes in the investment climate for real estate, changes in real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal policies, the relative illiquidity of real estate and environmental risks;

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

•an epidemic or pandemic (such as the outbreak and worldwide spread of COVID-19), and the measures that international, federal, state and local governments, agencies, law enforcement and/or health authorities implement to address it, which may (as with COVID-19) precipitate or exacerbate one or more of the above-mentioned and/or other risks, and significantly disrupt or prevent us from operating our business in the ordinary course for an extended period.

Additional information related to these risks and uncertainties are included in “Risk Factors” (Part I, Item 1A of this Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2019), “Quantitative and Qualitative Disclosures about Market Risk” (Part I, Item 3 of this Form 10-Q and Part II, Item 7A of our Annual Report on Form 10-K for the year ended December 31, 2019), and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” (Part I, Item 2 of this Form 10-Q).

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Impact of COVID-19

If the effects of COVID-19 result in continued deterioration of economic and market conditions, or if the Company’s expected holding period for assets changes, subsequent tests for impairment could result in impairment charges in the future. The Company can provide no assurance that material impairment charges with respect to the Company’s investment properties will not occur during the remainder of 2020 or future periods. As of September 30, 2020, we have not identified any impairment triggering events, including the impact of COVID-19 and corresponding tenant requests for rent relief. Therefore, under applicable GAAP guidance, no impairment charges have been recorded. However, we have yet to see the long-term effects of COVID-19 and the extent to which it may impact our tenants in the future. Indications of a tenant’s inability to continue as a going concern, changes in our view or strategy relative to a tenant’s business or industry as a result of COVID-19, or changes in our long-term hold strategies, could be indicative of an impairment triggering event. Accordingly, the Company will continue to monitor circumstances and events in future periods to determine whether impairment charges are warranted.

While the Company’s grocery store, pharmacy, bank and home improvement store tenants generally remain open, restaurants are operating with limited indoor seating, supplemented with delivery and curbside pick-up, and most health, beauty supply and services, fitness centers, and other non-essential businesses are re-opening with limited customer capacity depending on location. As of November 3, 2020, payments by tenants of contractual base rent and operating expense and real estate tax recoveries totaled approximately 83% and 91% for the second quarter and third quarter, respectively. The Company is generally not charging late fees or delinquent interest on past due payments and, in many cases, rent deferral agreements have been negotiated to allow tenants temporary relief where needed. The deferral agreements, generally, permit tenants to defer 30 to 90 days of rent, operating expense and real estate tax recovery payments until a later time in their lease term with repayment typically occurring over a 12-month period generally commencing in 2021. We expect that our rent collections will continue to be below our tenants’ contractual rent obligations for so long as governmental orders require non-essential businesses to remain at limited capacity or closed and residents to stay at home. We will continue to accrue rental revenue during the deferral period. However, we anticipate that some tenants eventually will not be able to pay amounts due and we will incur losses against our rent receivables. The extent and timing of the recognition of such losses will depend on future developments, which are highly uncertain and cannot be predicted. Rent collections during the second quarter and third quarter rent relief requests to-date may not be indicative of collections or requests in any future period.

The following is a summary of the Company's executed rent deferral agreements and repayment dates as of November 3, 2020.


(In thousands)	Original Rent Due By Quarter (prior to deferral)		(In thousands)	Repayment Year (after deferral)

2020 First Quarter	$	53	2020	$	328
2020 Second Quarter	5,810		2021	5,259
2020 Third Quarter	1,101		2022	1,116
2020 Fourth Quarter	90		2023	215
Total	$	7,054	2024	101
			2025	18
			Thereafter	17
			Total	$	7,054

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The following is a summary of the Company's consolidated total collections of the second quarter and third quarter, and October rent billings, including minimum rent, operating expense recoveries, and real estate tax reimbursements, as of November 3, 2020:

2020 second quarter

•83% of 2020 second quarter total billings has been paid by our tenants.

▪79% of retail

▪95% of office

▪100% of residential

2020 third quarter

•91% of 2020 third quarter total billings has been paid by our tenants.

▪89% of retail

▪95% of office

▪100% of residential

▪Additionally, rent deferral agreements comprising approximately 2% of 2020 third quarter total billings have been executed (or 24% of the total unpaid balance) including 1% with anchor/national tenants. The executed deferrals typically cover three months of rent and are generally scheduled to be repaid during 2021 and 2022. As a condition to granted rent deferrals, we have sought, and in some cases received, extended lease terms, or waivers of certain adjacent use or common area restrictions. Through October 31, 2020, no third quarter deferred rents have come due.

October 2020

▪90% of October 2020 total billings has been paid by our tenants.

▪88% of retail

▪92% of office

▪99% of residential

▪Additionally, rent deferral agreements comprising approximately 0.4% of October total billings have been executed (or 3% of the total unpaid balance) none of which are with anchor/national tenants. These deferrals are structured similarly to the second quarter and third quarter deferrals.

Although the Company is and will continue to be actively engaged in rent collection efforts related to uncollected rent, and the Company will continue to work with certain tenants who have requested rent deferrals, the Company can provide no assurance that such efforts or our efforts in future periods will be successful, particularly in the event that the COVID-19 pandemic and restrictions intended to prevent its spread continue for a prolonged period. The Company strongly encouraged small business tenants to apply for Paycheck Protection Program loans, as available, under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The Company has information that many tenants applied for these loans and several tenants have communicated that loan proceeds are being received and have subsequently remitted rental payments.

As of October 31, 2020, the Company had $40.6 million of cash and cash equivalents and borrowing availability of approximately $200.3 million under its unsecured revolving credit facility.

The extent of the effects of COVID-19 on the Company’s business, results of operations, cash flows, and growth prospects is highly uncertain and will ultimately depend on future developments, none of which can be predicted with any certainty. See Item 1A. Risk Factors. However, we believe the actions we have taken and are continuing to take will help minimize interruptions to operations and will put the Company in the best position to participate in the recovery when the time comes. Management and the Board of Directors will continue to actively monitor the effects of the pandemic, including governmental directives in the jurisdictions in which we operate and the recommendations of public health authorities, and will,

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as needed, take further measures to adapt the Company’s business in the best interests of our stockholders and personnel. The extent to which COVID-19 impacts our operations and those of our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the outbreak, the actions taken to contain the outbreak or mitigate its impact, and the direct and indirect economic effects of the outbreak and containment measures, among others.

The Company was able to transition all but a limited number of essential employees to remote work and does not anticipate any adverse impact on its ability to continue to operate its business. Transitioning to a largely remote workforce has not had any material adverse impact on the Company’s financial reporting systems, internal controls over financial reporting or disclosure controls and procedures. Currently, we have a limited number of employees coming into offices as needed. We also made temporary changes to lower overhead expenses including salary reductions, which were restored effective October 1, 2020, a corporate hiring freeze, reduction of the company retirement plan match percentage, elimination of business travel and discretionary spending such as professional seminars.

General

The following discussion is based primarily on the consolidated financial statements of the Company as of and for the three and nine months ended September 30, 2020.

Overview

The Company’s primary strategy is to continue to focus on diversification of its assets through development of transit-centric, residential mixed-use projects in the Washington, D.C. metropolitan area. The Company’s operating strategy also includes improvement of the operating performance and internal growth of its Shopping Centers and supplementing its development of residential mixed-used projects with selective redevelopment and renovations of its core Shopping Centers. The residential component of The Waycroft, a project with 491 apartment units and 60,000 square feet of retail space, on North Glebe Road, within two blocks of the Ballston Metro Station, in Arlington, Virginia was placed into service in April 2020. The Company also has a development pipeline of zoned sites, either in its portfolio (some of which are currently shopping center operating properties) or under contract, for development of up to 3,700 apartment units and 975,000 square feet of retail and office space. All such sites are located adjacent to red line Metro stations in Montgomery County, Maryland.

The Company intends to selectively add free-standing pad site buildings within its Shopping Center portfolio, and replace underperforming tenants with tenants that generate strong traffic, generally anchor stores such as supermarkets, drug stores and fitness centers, as evidenced by the March 2020 addition of a 69,000 square foot Giant Food at Seven Corners, the June 2020 addition of a 36,000 square foot LA Fitness at Broadlands Village and the August 2020 addition of a 54,000 square foot 99 Ranch grocery store at Shops at Fairfax. The Company has seven new pad site tenants, including three at our newly developed Ashbrook Marketplace shopping center, that began paying rent in 2020. Annualized rent from these pad sites totals approximately $1.1 million. Additionally, the Company has executed leases or leases are under negotiation for seven more pad sites, tenants of six of which are expected to begin paying rent in 2021. The annualized rent from these pad sites totals approximately $1.1 million.

In recent years, there has been a limited amount of quality properties for sale and pricing of those properties has escalated. Accordingly, management believes acquisition opportunities for investment in existing and new shopping center and mixed-use properties in the near future is uncertain. Nevertheless, 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.

Prior to the COVID-19 pandemic, economic conditions within the local Washington, DC metropolitan area had remained relatively stable. Issues facing the Federal government relating to taxation, spending and interest rate policy will likely continue to 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 ways to maximize our future performance. The Company's commercial leasing percentage, on a same property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, decreased to 93.9% at September 30, 2020, from 94.8% at September 30, 2019. We expect the volume of lease renewals in 2020, and the rental rates

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at which leases renew, will be negatively impacted by the effects of COVID-19 when comparing executed retail leases to prior year leasing activity.

The Company maintains a ratio of total debt to total asset value of under 50%, which allows the Company to obtain additional secured borrowings if necessary. As of September 30, 2020, amortizing fixed-rate mortgage debt with staggered maturities from 2021 to 2035 represented approximately 83.2% of the Company’s notes payable, thus minimizing refinancing risk. The Company’s variable-rate debt consists of $199.5 million outstanding under the credit facility. As of September 30, 2020, the Company has availability of approximately $200.3 million under its $325.0 million unsecured revolving credit facility.

Although it is management’s present intention to concentrate future acquisition and development activities on transit-centric, primarily residential mixed-use properties in the Washington, D.C./Baltimore 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. The Company plans to continue to diversify in terms of property types, locations, size and market, and 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 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 Waycroft, 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. The $0.35 per square foot decrease in base rent in the 2020 Period compared to the 2019 Period is primarily attributable to a 100,046 square foot increase in commercial space relating to completed development projects. The space is fully leased, however, rent was not due for the entire period.


	Nine months ended September 30,
	2020		2019		2018		2017		2016
Base rent	$	19.80	$	20.15	$	20.13	$	19.30	$	18.67
Effective rent	$	18.09	$	18.27	$	18.25	$	17.49	$	16.87

Recent Developments

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 completed construction of The Waycroft, a project with 491 apartment units and 60,000 square feet of retail space on 2.8 acres of land, and apartment occupancy commenced in April 2020. The total cost of the project, including acquisition of land, is expected to be approximately $275.0 million, plus approximately $19.1 million of capitalized interest. A portion of the cost is being financed with a $157.0 million construction-to-permanent loan. Including approximately $19.0 million of capitalized interest and costs of $848,700 which are accrued and unpaid, costs incurred through September 30, 2020 total approximately $275.0 million, of which $143.1 million has been financed by the loan. Leases have been executed for a 41,500 square foot Target and 12,600 square feet of retail shop space, resulting in approximately 90% of the planned retail space being leased. Target began operating in August 2020. An additional 2,400 square feet of retail space became operational during the third quarter of 2020. Applications have been received for 303 residential leases, totaling approximately 62% of the available units, with 258 units occupied as of November 3, 2020.

Albertson's/Safeway is currently a tenant at seven of the Company's shopping centers, two locations of which are subleased to other grocers. In February 2017, the Company terminated the lease with Albertson's/Safeway at Broadlands Village. The Company executed a lease with Aldi Food Market for 20,000 square feet of this space, which opened in November 2017, and has executed a lease with LA Fitness for substantially all of the remaining space. LA Fitness opened for business in June 2020.

In the fourth quarter of 2018, the Company substantially completed construction of the shell of a 16,000 square foot small shop expansion at Burtonsville Town Square and construction of interior improvements for the final two tenants is underway. Delivery of the first leased tenant spaces occurred in late 2018, and tenant openings began in the first quarter of 2019. The total development cost was $5.7 million. Leases have been executed for all of the space. In addition, Taco Bell leased a pad site within the property, constructed a free-standing building, and began operations in August 2020.

In May 2018, the Company acquired from the Saul Trust, in exchange for 176,680 limited partnership units, approximately 13.7 acres of land located at the intersection of Ashburn Village Boulevard and Russell Branch Parkway in Ashburn, Virginia. The Company has substantially completed construction of Ashbrook Marketplace, an approximately 86,000 square foot neighborhood shopping center. A 29,000 square foot Lidl grocery store opened in November 2019, and the shopping center is 100% leased. The first small shop opened for business in April 2020, and all tenants, except one

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3,231 square foot shop tenant, were open and paying rent as of November 3, 2020. All four pad sites have been leased and three of the four were open and paying rent as of November 3, 2020. The Company may be obligated to issue additional limited partnership units to the Saul Trust in the second quarter of 2021. As of September 30, 2020, the Company estimates this obligation to range in value from $3.2 million to $3.5 million, based on projected net operating income of Ashbrook Marketplace for the 12 months ending May 31, 2021.

In September 2018, the Company purchased for $35.5 million, plus $0.7 million of acquisition costs, an office building and the underlying ground located at 7316 Wisconsin Avenue in Bethesda, Maryland. In December 2018, the Company purchased for $4.5 million, including acquisition costs, an interest in an adjacent parcel of land and retail building. The purchase price was funded through the Company's revolving credit facility. The Company has completed development plans for the combined property for the development of up to 366 apartment units and 10,300 square feet of retail space. In July 2019, the Montgomery County Planning Commission unanimously approved the Company's site plan. Design and construction documents are being prepared and a site plan amendment has been submitted incorporating final design parameters. Additional approvals from the Washington Metropolitan Area Transit Authority and the Maryland Transit Administration are in process and are expected to be received by the fourth quarter of 2020. Effective September 1, 2019, the asset was removed from service and transferred to construction in progress. The Company has completed interior demolition in preparation for future development. The timing of construction will depend on issuance of final building permits and market conditions.

On November 5, 2019, the Company entered into an agreement (the "Contribution Agreement") to acquire from the Trust, approximately 6.8 acres of land and its leasehold interest in approximately 1.3 acres of contiguous land, together in each case with the improvements located thereon, located at the Twinbrook Metro Station in Rockville, Maryland (the “Contributed Property”). In exchange for the Contributed Property, the Company will issue to the Trust 1,416,071 limited partnership units at an agreed upon value of $56.00 per unit, representing an aggregate value of $79.3 million for the Contributed Property. Deed to the Contributed Property and the units were placed in escrow until certain conditions of the Contribution Agreement are satisfied.

The Company, as contract purchaser, received unanimous approval of the project plan from the City of Rockville in June 2019 and unanimous approval of the site plan for Phase I of the Twinbrook Quarter development in August 2020. A single petitioner has appealed the approved site plan to the Circuit Court for Montgomery County, Maryland and that appeal is ongoing. The site plan includes approval for up to a 92,000 square foot Wegmans grocery store, 29,000 square feet of retail shop space, 460 residential units and 270,000 square feet of office space. The phasing of these improvements and the timing of construction will depend on removal of contingencies, favorable resolution of the site plan appeal, building permit approval and market conditions. The development potential of this 8.1 acre site, when combined with the Company’s adjacent 10.3 acre site, totals 1,865 residential units, 473,000 square feet of retail space, and 431,000 square feet of office space.

Critical Accounting Policies

The Company’s financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), which requires management to make certain estimates and assumptions that affect the reporting of financial position and results of operations. If judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied resulting in a different presentation of the financial statements. The Company has identified the following policies that, due to estimates and assumptions inherent in these policies, involve a relatively high degree of judgment and complexity.

Real Estate Investments

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

If there is an event or change in circumstance that indicates a potential impairment in the value of a real estate investment property, the Company prepares an analysis to determine whether the carrying value of the real estate investment property exceeds its estimated fair value. The Company considers both quantitative and qualitative factors including recurring operating losses, significant decreases in occupancy, and significant adverse changes in legal factors and business climate. If impairment indicators are present, the projected cash flows of the property over its remaining useful life, on an undiscounted basis, are

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compared to the carrying value of that property. The Company assesses its undiscounted projected cash flows based upon estimated capitalization rates, historic operating results and market conditions that may affect the property. If the carrying value is greater than the undiscounted projected cash flows, an impairment loss is recognized equivalent to an amount required to adjust the carrying amount to its then estimated fair value. The fair value of any property is sensitive to the actual results of any of the aforementioned estimated factors, either individually or taken as a whole. Should the actual results differ from management’s projections, the valuation could be negatively or positively affected.

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

Three months ended September 30, 2020 (the "2020 Quarter") compared to the three months ended September 30, 2019 (the "2019 Quarter")

Revenue


	Three months ended September 30,				2019 to 2020 Change
(Dollars in thousands)	2020		2019		Amount		Percent
Base rent	$	48,268	$	46,250	$	2,018	4.4	%
Expense recoveries	8,973		9,159		(186)		(2.0)	%
Percentage rent	60		147		(87)		(59.2)	%
Other property revenue	309		362		(53)		(14.6)	%
Credit losses on operating lease receivables	(1,861)		(431)		(1,430)		331.8	%
Rental revenue	55,749		55,487		262		0.5	%
Other revenue	1,011		1,565		(554)		(35.4)	%
Total revenue	$	56,760	$	57,052	$	(292)	(0.5)	%

Base rent includes $1.2 million and $(530,300) for the 2020 Quarter and 2019 Quarter, respectively, to recognize base rent on a straight-line basis. In addition, base rent includes $349,300 and $354,200, for the 2020 Quarter and 2019 Quarter, respectively, to recognize income from the amortization of in-place leases acquired in connection with purchased real estate investment properties.

Total revenue decreased 0.5% in the 2020 Quarter compared to the 2019 Quarter, as described below.

Base Rent. The $2.0 million increase in base rent in the 2020 Quarter compared to the 2019 Quarter is primarily attributable to the commencement of operations of The Waycroft in April 2020 and Ashbrook Marketplace in November 2019 (collectively, $2.2 million).

Expense Recoveries. Expense recoveries decreased 2.0% in the 2020 Quarter compared to the 2019 Quarter primarily due to a decrease in recoverable property operating expenses.

Credit Losses on Operating Lease Receivables. Credit losses on operating lease receivables for the 2020 Quarter increased $1.4 million from the 2019 Quarter. The increase is primarily due to increased reserves across the portfolio as a result of the impact of COVID-19 on tenant operations.

Other Revenue. Other revenue decreased $0.6 million primarily due to lower parking income ($0.4 million) and lower lease termination fees ($0.1 million).

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Expenses


	Three months ended September 30,				2019 to 2020 Change
(Dollars in thousands)	2020		2019		Amount		Percent
Property operating expenses	$	7,416	$	7,525	$	(109)	(1.4)	%

Real estate taxes	7,523		7,114		409		5.7	%
Interest expense, net and amortization of deferred debt costs	12,398		10,325		2,073		20.1	%
Depreciation and amortization of deferred leasing costs	13,713		12,018		1,695		14.1	%
General and administrative	4,107		4,742		(635)		(13.4)	%


Total expenses	$	45,157	$	41,724	$	3,433	8.2	%

Total expenses increased 8.2% in the 2020 Quarter compared to the 2019 Quarter, as described below. The Waycroft mixed-use development opened in April 2020 and, concurrent with the opening, interest, real estate taxes and all other costs associated with the residential portion of the property, including depreciation (collectively, $4.2 million), began to be charged to expense, while revenue continues to grow as occupancy increases.

Property Operating Expenses. Property operating expenses decreased 1.4% in the 2020 Quarter primarily due to the deferral of non-essential property expenses in response to the impact of COVID-19. The Company continues to complete emergency repairs and handle life and safety issues as needed.

Real Estate Taxes. Real estate taxes increased 5.7% in the 2020 Quarter primarily due to the substantial completion of The Waycroft ($0.3 million) and cessation of capitalization of those taxes.

Interest Expense, net and Amortization of Deferred Debt Costs. Interest expense, net and amortization of deferred debt costs increased 20.1% in the 2020 Quarter primarily due to lower capitalized interest as a result of the opening of The Waycroft in April 2020 ($2.4 million), partially offset by an increase in capitalized interest related to 7316 Wisconsin Avenue ($0.4 million).

Depreciation and Amortization of Deferred Leasing Costs. Depreciation and amortization increased 14.1% in the 2020 Quarter primarily due to The Waycroft being placed in service ($1.6 million).

General and Administrative. General and administrative expenses decreased 13.4% in the 2020 Quarter primarily due to reduced overhead expenses including salary reductions, a corporate hiring freeze, elimination of business travel and discretionary spending such as professional seminars.

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Nine months ended September 30, 2020 (the "2020 Period") compared to the nine months ended September 30, 2019 (the "2019 Period")

Revenue


	Nine Months Ended September 30,				2019 to 2020 Change
(Dollars in thousands)	2020		2019		Amount		Percent
Base rent	$	140,120	$	139,735	$	385	0.3	%
Expense recoveries	25,775		27,647		(1,872)		(6.8)	%
Percentage rent	496		760		(264)		(34.7)	%
Other property revenue	938		1,087		(149)		(13.7)	%
Credit losses on operating lease receivables	(4,162)		(987)		(3,175)		321.7	%
Rental revenue	163,167		168,242		(5,075)		(3.0)	%
Other revenue	3,756		6,701		(2,945)		(43.9)	%
Total revenue	$	166,923	$	174,943	$	(8,020)	(4.6)	%

Base rent includes $987,100 and $(742,000) for the 2020 Period and the 2019 Period, respectively, to recognize base rent on a straight-line basis. In addition, base rent includes $1.1 million and $1.1 million for the 2020 Period and the 2019 Period, respectively, to recognize income from the amortization of in-place leases acquired in connection with purchased real estate investment properties.

Total revenue decreased 4.6% in the 2020 Period compared to the 2019 Period, as described below.

Base Rent. The $0.4 million increase in base rent in the 2020 Period compared to 2019 Period is primarily attributable to (a) the commencement of operations of The Waycroft in April 2020 and Ashbrook Marketplace in November 2019 (collectively, $2.7 million), partially offset by (b) the lease expiration and re-leasing of the grocery anchor at Shops at Fairfax, which opened in August 2020 ($0.6 million), (c) 7316 Wisconsin Avenue, which was taken out of service for redevelopment in September 2019 ($0.5 million), (d) lower base rent at 601 Pennsylvania Avenue ($0.5 million) and (e) lower base rent at Clarendon Center ($0.5 million).

Expense Recoveries. Expense recoveries decreased 6.8% in the 2020 Period primarily due to a decrease in recoverable property operating expenses, largely repairs and maintenance and snow removal.

Credit Losses on Operating Lease Receivables. Credit losses on operating lease receivables for the 2020 Period represents 2.49% of the Company’s revenue, an increase from 0.56% for the 2019 Period. The increase is primarily due to increased reserves across the Shopping Center portfolio as a result of the impact of COVID-19 on tenant operations.

Other Revenue. Other revenue decreased $2.9 million primarily due to lower lease termination fees ($1.9 million) and lower parking income ($1.1 million).

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Expenses


	Nine Months Ended September 30,				2019 to 2020 Change
(Dollars in thousands)	2020		2019		Amount		Percent
Property operating expenses	$	20,862	$	22,641	$	(1,779)	(7.9)	%

Real estate taxes	22,027		21,081		946		4.5	%
Interest expense, net and amortization of deferred debt costs	34,011		32,185		1,826		5.7	%
Depreciation and amortization of deferred leasing costs	37,593		35,185		2,408		6.8	%
General and administrative	13,790		14,696		(906)		(6.2)	%


Total expenses	$	128,283	$	125,788	$	2,495	2.0	%

Total expenses increased 2.0% in the 2020 Period compared to the 2019 Period, as described below. The Waycroft mixed-use development opened in April 2020 and, concurrent with the opening, interest, real estate taxes and all other costs associated with the residential portion of the property, including depreciation, began to be charged to expense (collectively, $9.2 million), while revenue continues to grow as occupancy increases.

Property Operating Expenses. Property operating expenses decreased 7.9% in the 2020 Period primarily due to the deferral of non-essential property expenses in response to the impact of COVID-19. The Company continues to complete emergency repairs and handle life and safety issues as needed.

Real Estate Taxes. Real estate taxes increased 4.5% in the 2020 Period primarily due to the substantial completion of The Waycroft ($0.6 million) and cessation of capitalization of those taxes.

Interest Expense, net and Amortization of Deferred Debt Costs. Interest expense, net and amortization of deferred debt costs increased 5.7% in the 2020 Period primarily due to lower capitalized interest as a result of the opening of The Waycroft in April 2020 ($3.4 million), partially offset by an increase in capitalized interest related to 7316 Wisconsin Avenue ($1.6 million).

Depreciation and Amortization of Deferred Leasing Costs. The increase in depreciation and amortization to $37.6 million in the 2020 Period from $35.2 million in the 2019 Period was primarily due to (a) the commencement of operations of The Waycroft ($3.1 million) and (b) commencement of operations of Ashbrook Marketplace ($0.3 million), partially offset by 7316 Wisconsin Avenue, which was taken out of service for redevelopment in September 2019 ($1.3 million).

General and Administrative. General and administrative expenses decreased 6.2% primarily due to reduced overhead expenses including salary reductions, a corporate hiring freeze, elimination of business travel and discretionary spending such as professional seminars.

Same property revenue and same property operating income

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 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 (a) interest expense, net and amortization of deferred debt costs, (b) depreciation and amortization of deferred leasing costs, (c) general and administrative expenses, and (d) change in fair value of derivatives, minus (e) gains on property dispositions and (f) the operating income of properties which were not in operation for the entirety of the comparable periods.

Other REITs may use different methodologies for calculating same property revenue and same property operating income. Accordingly, our same property revenue and same property operating income may not be comparable to those of other REITs.

Same property revenue and same property operating income are used by management to evaluate and compare the operating performance of our properties, and to determine trends in earnings, because these measures are not affected by the cost of our funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of 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 property revenue and property operating income is useful because the resulting measures capture the actual revenue generated and actual expenses incurred by operating our properties.

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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 property revenue and property operating income under GAAP to same property revenue and operating income for the indicated periods. The same property results for the three and nine months ended September 30, 2020 and 2019 include 49 Shopping Centers and six Mixed-Use properties.

Same property revenue


(in thousands)	Three months ended September 30,				Nine months ended September 30,
	2020		2019		2020		2019
Total revenue	$	56,760	$	57,052	$	166,923	$	174,943
Less: Acquisitions, dispositions and development properties	(2,461)		(72)		(3,161)		(1,155)
Total same property revenue	$	54,299	$	56,980	$	163,762	$	173,788

Shopping Centers	$	39,727	$	41,313	$	119,226	$	126,730
Mixed-Use properties	14,572		15,667		44,536		47,058
Total same property revenue	$	54,299	$	56,980	$	163,762	$	173,788

Total Shopping Center revenue	$	40,336	$	41,313	$	120,236	$	126,730
Less: Shopping Center acquisitions, dispositions and development properties	(609)		—		(1,010)		—
Total same Shopping Center revenue	$	39,727	$	41,313	$	119,226	$	126,730

Total Mixed-Use property revenue	$	16,424	$	15,739	$	46,687	$	48,213
Less: Mixed-Use acquisitions, dispositions and development properties	(1,852)		(72)		(2,151)		(1,155)
Total same Mixed-Use revenue	$	14,572	$	15,667	$	44,536	$	47,058

The $2.7 million decrease in same property revenue for the 2020 Quarter compared to the 2019 Quarter, was primarily due to (a) higher credit losses on operating lease receivables and corresponding reserves (collectively, $1.6 million), (b) lower parking income ($0.4 million), (c) lower expense recoveries due to decreased recoverable expenses ($0.3 million), (d) lower lease termination fees ($0.2 million), (e) lower base rent, primarily due to the lease expiration and re-leasing of the grocery anchor at Shops at Fairfax, which opened in August 2020 ($0.1 million) and (f) lower percentage rent ($0.1 million).

The $10.0 million decrease in same property revenue for the 2020 Period compared to the 2019 Period, was primarily due to (a) higher credit losses on operating lease receivables and corresponding reserves (collectively, $4.3 million), (b) lower expense recoveries due to decreased recoverable expenses ($2.1 million), (c) lower lease termination fees ($1.3 million), (d) lower parking income ($1.0 million), (e) lower base rent, primarily due to the lease expiration and re-leasing of the grocery anchor at Shops at Fairfax, which opened in August 2020 ($0.6 million) and (f) lower percentage rent ($0.3 million).

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Same property operating income


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2020		2019		2020		2019












Net income	$	11,603	$	15,328	$	38,640	$	49,155
Add: Interest expense, net and amortization of deferred debt costs	12,398		10,325		34,011		32,185
Add: Depreciation and amortization of deferred leasing costs	13,713		12,018		37,593		35,185
Add: General and administrative	4,107		4,742		13,790		14,696


Property operating income	41,821		42,413		124,034		131,221
Add (Less): Acquisitions, dispositions and development properties	(1,159)		97		(901)		(519)
Total same property operating income	$	40,662	$	42,510	$	123,133	$	130,702

Shopping Centers	$	31,059	$	32,339	$	93,365	$	99,516
Mixed-Use properties	9,603		10,171		29,768		31,186
Total same property operating income	$	40,662	$	42,510	$	123,133	$	130,702

Shopping Center operating income	$	31,581	$	32,339	$	94,195	$	99,516
Less: Shopping Center acquisitions, dispositions and development properties	(522)		—		(830)		—
Total same Shopping Center operating income	$	31,059	$	32,339	$	93,365	$	99,516

Mixed-Use property operating income	$	10,240	$	10,074	$	29,839	$	31,705
Add (Less): Mixed-Use acquisitions, dispositions and development properties	(637)		97		(71)		(519)
Total same Mixed-Use property operating income	$	9,603	10,171		$	29,768	$	31,186

The $1.8 million decrease in same property operating income in the 2020 Quarter compared to the 2019 Quarter was primarily due to (a) higher credit losses on operating lease receivables and corresponding reserves (collectively, $1.6 million), (b) lower lease termination fees ($0.2 million) and (c) lower parking income, net of parking expenses ($0.2 million), partially offset by (d) lower recoverable expenses, net of expense recoveries ($0.3 million).

The $7.6 million decrease in same property operating income in the 2020 Period compared to the 2019 Period was primarily due to (a) higher credit losses on operating lease receivables and corresponding reserves (collectively, $4.3 million), (b) lower lease termination fees ($1.3 million), (c) lower base rent, primarily due to the lease expiration and re-leasing of the grocery anchor at Shops at Fairfax, which opened in August 2020 ($0.6 million), (d) lower parking income, net of parking expenses ($0.6 million), (e) lower percentage rent ($0.3 million) and (f) lower other property revenue ($0.3 million).

Liquidity and Capital Resources

Cash and cash equivalents totaled $54.3 million and $52.3 million at September 30, 2020 and 2019, respectively. The Company’s cash flow is affected by its operating, investing and financing activities, as described below.


	Nine Months Ended September 30,
(In thousands)	2020		2019
Net cash provided by operating activities	$	56,770	$	82,098
Net cash used in investing activities	(48,363)		(105,055)
Net cash provided by financing activities	31,993		60,648
Increase in cash and cash equivalents	$	40,400	$	37,691

Operating Activities

Net cash provided by operating activities represents cash received primarily from rental revenue, plus other revenue, less property operating expenses, leasing costs, normal recurring general and administrative expenses and interest payments on debt outstanding. We currently expect a short term decrease in cash provided by operating activities because our tenants are

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impacted by the COVID-19 pandemic and, while contractually obligated, some have not paid second or third quarter 2020 rent (see "Impact of COVID-19").

Investing Activities

Net cash used in investing activities includes property acquisitions, developments, redevelopments, tenant improvements and other property capital expenditures. The $56.7 million decrease in cash used in investing activities is primarily due to (a) lower development expenditures ($57.0 million) partially offset by (b) increased additions to real estate investments throughout the portfolio ($0.3 million).

Financing Activities

Net cash provided by financing activities represents (a) cash received from loan proceeds and issuance of common stock, preferred stock and limited partnership units minus (b) cash used to repay and curtail loans, redeem preferred stock and pay dividends and distributions to holders of common stock, preferred stock and limited partnership units. See note 5 to the consolidated financial statements for a discussion of financing activity.

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 completed construction of 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, plus approximately $19.1 million of capitalized interest. A portion of the cost is being financed with a $157.0 million construction-to-permanent loan. Including approximately $19.0 million of capitalized interest and costs of $848,700 which are accrued and unpaid, costs incurred through September 30, 2020 total approximately $275.0 million, of which $143.1 million has been financed by the loan. The Company may also redevelop certain of the Current Portfolio Properties and may develop additional freestanding outparcels or expansions within certain of the Shopping Centers.

Acquisition and development of properties are undertaken only after careful analysis and review, and management’s determination that such properties are expected to provide long-term earnings and cash flow growth. During the coming year, developments, expansions or acquisitions (if any) are expected to be funded with available cash, bank borrowings from the Company’s credit line, construction and permanent financing, proceeds from the operation of the Company’s dividend reinvestment plan or other external debt or equity capital resources available to the Company. Any future borrowings may be at the Saul Centers, Operating Partnership or Subsidiary Partnership level, and securities offerings may include (subject to certain limitations) the issuance of additional limited partnership interests in the Operating Partnership which can be converted into shares of Saul Centers common stock. The availability and terms of any such financing will depend upon market and other conditions.

Management believes that the Company’s capital resources, which at October 31, 2020 included cash balances of approximately $40.6 million and borrowing availability of approximately $200.3 million on its unsecured revolving credit facility, provide sufficient liquidity and flexibility to meet the needs of the Company's operations as the effects of the COVID-19 pandemic continue to evolve.

Dividend Reinvestments

The Company has a DRIP that allows its common stockholders and holders of limited partnership interests an opportunity to buy additional shares of common stock by reinvesting all or a portion of their dividends or distributions. The DRIP provides for investing in newly issued shares of common stock at a 3% discount from market price without payment of any brokerage commissions, service charges or other expenses. All expenses of the DRIP are paid by the Company. The Company issued 106,050 and 322,534 shares under the DRIP at a weighted average discounted price of $44.62 and $52.08 per share, during the nine months ended September 30, 2020 and 2019, respectively. The Company issued 28,209 and 47,189 limited partnership

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units under the DRIP at a weighted average price of $40.14 and $52.77 per unit during the nine months ended September 30, 2020 and 2019, respectively. The Company also credited 5,080 and 3,370 shares to directors pursuant to the reinvestment of dividends specified by the Directors’ Deferred Compensation Plan at a weighted average discounted price of $34.76 and $52.09 per share, during the nine months ended September 30, 2020 and 2019, respectively.

Capital Strategy and Financing Activity

As a general policy, the Company intends to maintain a ratio of its total debt to total asset value of 50% or less and to actively manage the Company’s leverage and debt expense on an ongoing basis in order to maintain prudent coverage of fixed charges. Asset value is the aggregate fair market value of the Current Portfolio Properties and any subsequently acquired properties as reasonably determined by management by reference to the properties’ aggregate cash flow. Given the Company’s current debt level, it is management’s belief that the ratio of the Company’s debt to total asset value was below 50% as of September 30, 2020.

The organizational documents of the Company do not limit the absolute amount or percentage of indebtedness that it may incur. The Board of Directors may, from time to time, reevaluate the Company’s debt/capitalization strategy in light of current economic conditions, relative costs of capital, market values of the Company’s property portfolio, opportunities for acquisition, development or expansion, and such other factors as the Board of Directors then deems relevant. The Board of Directors may modify the Company’s debt/capitalization policy based on such a reevaluation without shareholder approval and consequently, may increase or decrease the Company’s debt to total asset ratio above or below 50% or may waive the policy for certain periods of time. The Company selectively continues to refinance or renegotiate the terms of its outstanding debt in order to achieve longer maturities, and obtain generally more favorable loan terms, whenever management determines the financing environment is favorable.

At September 30, 2020, the Company had a $400.0 million credit facility comprised of a $325.0 million revolving facility and a $75.0 million term loan. As of September 30, 2020, the applicable spread for borrowings was 140 basis points under the revolving credit facility and 135 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 credit facility. Letters of credit may be issued under the revolving credit facility. As of September 30, 2020, based on the value of the Company’s unencumbered properties, approximately $200.3 million was available under the revolving credit facility, $124.5 million was outstanding and approximately $185,000 was committed for letters of credit.

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

•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 1.4x on a trailing four-quarter basis (fixed charge coverage).

As of September 30, 2020, the Company was in compliance with all such covenants.

On July 24, 2020, the Company closed on a 15-year, non-recourse $30.0 million mortgage loan secured by Kentlands Place, Kentlands Square I and Kentlands Pad. The loan matures in 2035, bears interest at a fixed rate of 3.43%, requires monthly principal and interest payments of $149,064 based on a 25-year amortization schedule and requires a final payment of $15.3 million at maturity. The proceeds from the loan were used to pay down the revolving credit facility.

Off-Balance Sheet Arrangements

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

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Funds From Operations

Funds From Operations (FFO)1 available to common stockholders and noncontrolling interests for the 2020 Period, totaled $67.8 million, a decrease of 9.8% compared to the 2019 Period. FFO available to common stockholders and noncontrolling interests decreased primarily due to (a) initial operations of The Waycroft ($3.9 million), (b) higher credit losses on operating lease receivables and corresponding reserves (collectively, $4.2 million), (c) lower lease termination fees ($1.9 million), (d) lower parking income, net of parking expenses ($0.6 million) and (e) lower base rent, primarily due to the lease expiration and re-leasing of the grocery anchor at Shops at Fairfax, which opened in August 2020 ($0.6 million), partially offset by (f) lower interest incurred due to lower average interest rates during the period, exclusive of the impact of The Waycroft ($2.5 million), (g) higher capitalized interest for 7316 Wisconsin Avenue ($1.6 million) and (h) lower recoverable expenses, net of expense recoveries ($0.5 million).

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


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands, except per share amounts)	2020		2019		2020		2019
Net income	$	11,603	$	15,328	$	38,640	$	49,155



Add:

Real estate depreciation and amortization	13,713		12,018		37,593		35,185
FFO	25,316		27,346		76,233		84,340
Subtract:

Preferred stock dividends	(2,798)		(3,210)		(8,394)		(9,116)

FFO available to common stockholders and noncontrolling interests	$	22,518	$	24,136	$	67,839	$	75,224
Weighted average shares:
Diluted weighted average common stock	23,353		23,121		23,330		22,993
Convertible limited partnership units	7,911		7,869		7,903		7,852
Average shares and units used to compute FFO per share	31,264		30,990		31,233		30,845
FFO per share available to common stockholders and noncontrolling interests	$	0.72	$	0.78	$	2.17	$	2.44

1 The National Association of Real Estate Investment Trusts (NAREIT) developed FFO as a relative non-GAAP financial measure of performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO is defined by NAREIT as net income, computed in accordance with GAAP, plus real estate depreciation and amortization, and excluding impairment charges on real estate assets and gains or losses from real estate dispositions. FFO does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs, which is disclosed in the Company’s Consolidated Statements of Cash Flows for the applicable periods. There are no material legal or functional restrictions on the use of FFO. FFO should not be considered as an alternative to net income, its most directly comparable GAAP measure, as an indicator of the Company’s operating performance, or as an alternative to cash flows as a measure of liquidity. Management considers FFO a meaningful supplemental measure of operating performance because it primarily excludes the assumption that the value of the real estate assets diminishes predictably over time (i.e. depreciation), which is contrary to what the Company believes occurs with its assets, and because industry analysts have accepted it as a performance measure. FFO may not be comparable to similarly titled measures employed by other REITs.

Acquisitions and Redevelopments

Management anticipates that during the coming year, the Company will complete its development activities at The Waycroft, may redevelop certain of the Current Portfolio Properties and may develop additional freestanding outparcels or expansions within certain of the Shopping Centers. Acquisition and development of properties are undertaken only after careful analysis and review, and management’s determination that such properties are expected to provide long-term earnings and cash flow growth. During the coming year, any developments, expansions or acquisitions are expected to be funded with bank borrowings from the Company’s credit line, construction financing, proceeds from the operation of the Company’s dividend reinvestment plan or other external capital resources available to the Company.

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The Company has been selectively involved in acquisition, development, redevelopment and renovation activities. It continues to evaluate the acquisition of land parcels for retail and mixed-use development and acquisitions of operating properties for opportunities to enhance operating income and cash flow growth. The Company also continues to analyze redevelopment, renovation and expansion opportunities within the portfolio.

Portfolio Leasing Status

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


	Total Properties		Total Square Footage		Percent Leased
	Shopping Centers	Mixed-Use	Shopping Centers	Mixed-Use	Shopping Centers		Mixed-Use
September 30, 2020	50	7	7,876,842	1,136,937	94.5	%	90.3	%
September 30, 2019	49	6	7,760,730	1,076,837	95.2	%	91.9	%

As of September 30, 2020, 94.0% of the Commercial portfolio was leased, compared to 94.8% September 30, 2019. On a same property basis, 93.9% of the Commercial portfolio was leased, compared to 94.8% at September 30, 2019. As of September 30, 2020, the Residential portfolio was 73.9% leased compared to 97.9% at September 30, 2019. The decrease in Residential portfolio occupancy is primarily due to the increase in units available as of a result of the opening of The Waycroft. On a same property basis, 94.4% of the residential portfolio was leased as of September 30, 2020, compared to 97.9% at September 30, 2019.

The following table shows selected data for leases executed in the indicated periods. The information is based on executed leases without adjustment for the timing of occupancy, tenant defaults, or landlord concessions. The base rent for an expiring lease is the annualized contractual base rent, on a cash basis, as of the expiration date of the lease. The base rent for a new or renewed lease is the annualized contractual base rent, on a cash basis, as of the expected rent commencement date. Because tenants that execute leases may not ultimately take possession of their space or pay all of their contractual rent, the changes presented in the table provide information only about trends in market rental rates. The actual changes in rental income received by the Company may be different.


			Average Base Rent per Square Foot
Three months ended September 30,	Square Feet	Number of Leases	New/Renewed Leases		Expiring Leases
2020	288,059	66	$	24.67	$	25.09
2019	179,919	54	23.76		24.17

Since December 2019, the Company has extended the leases of three significant tenants within the office portfolio. The earliest expiration of these resulting leases is now 2030. These leases comprise an aggregate of approximately 216,000 square feet (22%) of the office square footage contained within the Mixed-Use Properties.

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Additional information about the 2020 leasing activity is set forth below. The below information includes leases for space which had not been previously leased during the period of the Company's ownership, either a result of acquisition or development.


	New Leases		Renewed Leases
Number of leases	11		55
Square feet	23,338		264,721
Per square foot average annualized:
Base rent	$	15.41	$	25.49
Tenant improvements	(0.51)		(0.10)
Leasing costs	(0.34)		—
Rent concessions	(0.57)		(0.28)
Effective rents	$	13.99	$	25.11

During the three months ended September 30, 2020, on a same property basis, the Company entered into 181 new or renewed apartment leases. The average monthly rent per square foot decreased to $3.34 from $3.55. During the three months ended September 30, 2019, the Company entered into 199 new or renewed apartment leases. The average monthly rent per square foot increased to $3.52 from $3.45.

As of December 31, 2019, 746,234 square feet of Commercial space was subject to leases scheduled to expire in 2020. Of those leases, as of September 30, 2020, leases representing 379,057 square feet of Commercial space have not yet renewed and are scheduled to expire over the next three months. Below is information about existing and estimated market base rents per square foot for that space.


Expiring Leases:	Total
Square feet	379,057
Average base rent per square foot	$	24.08
Estimated market base rent per square foot	$	22.87

Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

The Company is exposed to interest rate fluctuations which will affect the amount of interest expense of its variable rate debt and the fair value of its fixed rate debt. As of September 30, 2020, the Company had variable rate indebtedness totaling $199.5 million. If the interest rates on the Company’s variable rate debt instruments outstanding at September 30, 2020 had been one percentage point higher, our annual interest expense relating to these debt instruments would have increased by $2.0 million based on those balances. As of September 30, 2020, the Company had fixed-rate indebtedness totaling $986.0 million with a weighted average interest rate of 4.94%. If interest rates on the Company’s fixed-rate debt instruments at September 30, 2020 had been one percentage point higher, the fair value of those debt instruments on that date would have been approximately $54.0 million less than the carrying value.

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Item 4. Controls and Procedures

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

The Company carried out an evaluation under the supervision and with the participation of the Company’s management, including its Chairman, Chief Executive Officer and President, its Executive Vice President-Chief Financial Officer and Treasurer, and its Senior Vice President-Chief Accounting Officer of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of September 30, 2020. Based on the foregoing, the Company’s Chairman, Chief Executive Officer and President, its Executive Vice President-Chief Financial Officer and Treasurer and its Senior Vice President-Chief Accounting Officer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2020.

During the quarter ended September 30, 2020, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

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Table of Contents

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None

Item 1A. Risk Factors

Except as set forth below, the Company has no material updates to the risk factors presented in Item 1A. Risk Factors in the 2019 Annual Report of the Company on Form 10-K.

The current outbreak of the novel coronavirus (“COVID-19”), or the future outbreak or pandemic of any other highly infectious or contagious diseases, could have a material and adverse effect on or cause disruption to our business or financial condition, results of operations, cash flows and the market value and trading price of our securities.

On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. As a result, the COVID-19 pandemic is negatively affecting almost every industry directly or indirectly. Many of our tenants have announced mandated or temporary closures of their operations and/or have requested adjustments to their lease terms during this pandemic. Experts predict that the COVID-19 pandemic will trigger a period of global economic slowdown or a global recession. COVID-19 (or a future pandemic) could have a material and adverse effect on or cause disruption to our business or financial condition, results from operations, cash flows and the market value and trading price of our securities due to, among other factors:

•a complete or partial closure of, or other operational issues at, our properties as a result of government or tenant action;

•the declines in or instability of the economy or financial markets may result in a recession or negatively impact consumer discretionary spending, which could adversely affect retailers and consumers;

•the reduction of economic activity severely impacts our tenants' business operations, financial condition and liquidity and may cause one or more of our tenants to be unable to meet their obligations to us in full, or at all, to default on their lease, or to otherwise seek modifications of such obligations;

•inability to access debt and equity capital on favorable terms, if at all, and a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital necessary to fund business operations, pursue acquisition and development opportunities, refinance existing debt, reduce our ability to make cash distributions to our stockholders and increase our future interest expense;

•a general decline in business activity and demand for real estate transactions could adversely affect our ability to successfully execute investment strategies or expand our property portfolio;

•a significant reduction in our cash flows could impact our ability to continue paying cash dividends to our common and preferred stockholders at expected levels or at all;

•the financial impact of COVID-19 could negatively affect our future compliance with financial and other covenants of our credit facility and other debt instruments, and the failure to comply with such covenants could result in a default that accelerates the payment of such indebtedness;

•the continued service and availability of personnel, including our executive officers and Board of Directors, and our ability to recruit, attract and retain skilled personnel, to the extent our management, Board of Directors or personnel are impacted in significant numbers by the outbreak of pandemic or epidemic disease and are not available or allowed to conduct work, could negatively impact our business and operating results; and

•our ability to ensure business continuity in the event our continuity of operations plan is not effective or is improperly implemented or deployed during a disruption.

The extent to which COVID-19 impacts our operations and those of our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the outbreak, the actions taken to contain the outbreak or mitigate its impact, and the direct and indirect economic effects of the outbreak and containment measures, among others. For example, as of September 30, 2020, approximately 39% of base rent is generated from tenants in lines of trade that have been significantly impacted by mandated temporary closures or other social-distancing guidelines issued by federal, state and local governments including:

•Full-service and limited-service restaurants (16%),

•Beauty services and dry cleaners (6%),

•Apparel and footwear (5%),

•Health and fitness (2%), and

•Other (10%)

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A prolonged imposition of mandated temporary closures or other social-distancing guidelines may adversely impact the ability of these tenants to generate sufficient revenues, and may cause tenants to request additional rent deferrals, and in limited cases, default on their leases, or result in the bankruptcy or insolvency of tenants, which would diminish our ability to receive rental revenue that is owed under their leases. The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19. Nevertheless, COVID-19 presents material uncertainty and risk with respect to our performance, business or financial condition, results from operations and cash flows.

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

B. Francis Saul II, the Company’s Chairman of the Board, Chief Executive Officer and President, his spouse and entities affiliated with Mr. Saul II, through participation in the Company’s Dividend Reinvestment and Stock Purchase Plan for the July 31, 2020 dividend distribution acquired 3,010 shares of common stock at a price of $28.98 per share and 13,108 limited partnership units at a price of $29.47 per unit. The limited partnership units were sold pursuant to Section 4(a)(2) of the Securities Act of 1933.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not Applicable

Item 5. Other Information

None

Item 6. Exhibits


31.		Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer and Chief Financial Officer (filed herewith).*

32.		Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer (filed herewith).*

99.	(a)	Schedule of Portfolio Properties (filed herewith).

101.		The following financial statements from the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2020, formatted in Extensible Business Reporting Language (“XBRL”): (i) consolidated balance sheets, (ii) consolidated statements of operations, (iii) consolidated statements of equity and comprehensive income, (iv) consolidated statements of cash flows, and (v) the notes to the consolidated financial statements.

104.		Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL document).

* In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

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SIGNATURES

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


			SAUL CENTERS, INC. (Registrant)

Date: November 5, 2020			/s/ B. Francis Saul II
			B. Francis Saul II Chairman, Chief Executive Officer and President

Date: November 5, 2020			/s/ Scott V. Schneider
			Scott V. Schneider Executive Vice President, Chief Financial Officer and Treasurer (principal financial officer)

Date: November 5, 2020			/s/ Joel A. Friedman
			Joel A. Friedman Senior Vice President, Chief Accounting Officer (principal accounting officer)

-44-

Cover Page - shares shares in Millions	9 Months Ended
Cover Page - shares shares in Millions	Sep. 30, 2020	Oct. 31, 2020
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Transition Report	false
Entity File Number	1-12254
Entity Registrant Name	SAUL CENTERS, INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	52-1833074
Entity Address, Address Line One	7501 Wisconsin Avenue
Entity Address, City or Town	Bethesda
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	20814
City Area Code	301
Local Phone Number	986-6200
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		23.4
Entity Central Index Key	0000907254
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Amendment Flag	false
Common Stock
Entity Information [Line Items]
Title of 12(b) Security	Common Stock, Par Value $0.01 Per Share
Security Exchange Name	NYSE
Trading Symbol	BFS
Depositary Shares each representing 1/100th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share
Entity Information [Line Items]
Title of 12(b) Security	Depositary Shares each representing 1/100th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share
Security Exchange Name	NYSE
Trading Symbol	BFS/PRD
Depositary Shares each representing 1/100th of a share of 6.000% Series E Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share
Entity Information [Line Items]
Title of 12(b) Security	Depositary Shares each representing 1/100th of a share of 6.000% Series E Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share
Security Exchange Name	NYSE
Trading Symbol	BFS/PRE

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000
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)	23,358,208	23,231,240
Common stock, shares outstanding (in shares)	23,358,208	23,231,240
Series D Cumulative Redeemable Preferred Stock
Cumulative redeemable preferred stock, shares issued (in shares)	30,000,000	30,000,000
Cumulative redeemable preferred stock, shares outstanding (in shares)	30,000,000	30,000,000
Series E Cumulative Redeemable Preferred Stock
Cumulative redeemable preferred stock, shares issued (in shares)	44,000,000	44,000,000
Cumulative redeemable preferred stock, shares outstanding (in shares)	44,000,000	44,000,000

Consolidated Statement of Equity (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2019
Shares pursuant to dividend reinvestment plan (in shares)	14,525,000	12,627,000	83,978,000	105,753,000	99,804,000	120,347,000
Shares due to exercise of employee stock options and issuance of directors' deferred stock (in shares)	984,000	3,109,000	11,745,000	1,645,000	48,772,000	485,000
Issuance of partnership units pursuant to dividend reinvestment plan (in shares)	13,108,000		15,101,000	13,406,000	20,041,000	13,742,000
Common stock, shares issued (in shares)	23,358,208						23,231,240
Dividend Distributions Payable
Distributions payable common stock, per share (in usd per share)	$ 0.53	$ 0.53	$ 0.53	$ 0.53	$ 0.53	$ 0.53
Distributions partnership units, per unit (in usd per share)	$ 0.53	0.53	0.53	0.53	0.53	0.53
Series C Cumulative Preferred Stock \| Dividend Distributions Payable
Distributions payable on preferred stock, per share (in usd per share)				42.97	42.97	42.97
Series D Cumulative Redeemable Preferred Stock
Cumulative redeemable preferred stock, shares issued (in shares)	30,000,000						30,000,000
Series D Cumulative Redeemable Preferred Stock \| Dividend Distributions Payable
Distributions payable on preferred stock, per share (in usd per share)	$ 38.28	38.28	38.28	$ 38.28	$ 38.28	$ 38.28
Series E Cumulative Redeemable Preferred Stock
Cumulative redeemable preferred stock, shares issued (in shares)	44,000,000			44,000,000			44,000,000
Series E Cumulative Redeemable Preferred Stock \| Dividend Distributions Payable
Distributions payable on preferred stock, per share (in usd per share)	$ 37.50	$ 37.50	$ 37.50	$ 5.83

Organization, Basis of Presentation	9 Months Ended
Organization, Basis of Presentation	Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Organization, Basis of Presentation	Organization, Basis of Presentation Saul Centers, Inc. (“Saul Centers”) was incorporated under the Maryland General Corporation Law on June 10, 1993, and operates as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). The Company is required to annually distribute at least 90% of its REIT taxable income (excluding net capital gains) to its stockholders and meet certain organizational and other requirements. Saul Centers has made and intends to continue to make regular quarterly distributions to its stockholders. Saul Centers, together with its wholly-owned subsidiaries and the limited partnerships of which Saul Centers or one of its subsidiaries is the sole general partner, are referred to collectively as the “Company.” B. Francis Saul II serves as Chairman of the Board of Directors, Chief Executive Officer and President of Saul Centers. The Company, which conducts all of its activities through its subsidiaries, Saul Holdings Limited Partnership, a Maryland limited partnership (the “Operating Partnership”) and two subsidiary limited partnerships (the “Subsidiary Partnerships,” and, collectively with the Operating Partnership, the “Partnerships”), engages in the ownership, operation, management, leasing, acquisition, renovation, expansion, development and financing of community and neighborhood shopping centers and mixed-use properties, primarily in the Washington, DC/Baltimore metropolitan area. As of September 30, 2020, the Company’s properties (the “Current Portfolio Properties”) consisted of 50 shopping center properties (the “Shopping Centers”), seven mixed-use properties, which are comprised of office, retail and multi-family residential uses (the “Mixed-Use Properties”) and three (non-operating) development properties. Because the properties are located primarily in the Washington, DC/Baltimore metropolitan area, the Company is subject to a concentration of credit risk related to these properties. A majority of the Shopping Centers are anchored by one or more major tenants. As of September 30, 2020, 33 of the Shopping Centers were anchored by a grocery store and offer primarily day-to-day necessities and services. Giant Food, a tenant at 11 Shopping Centers, individually accounted for 5.4% of the Company's total revenue for the nine months ended September 30, 2020. No other tenant individually accounted for 2.5% or more of the Company’s total revenue, excluding lease termination fees, for the nine months ended September 30, 2020. The accompanying consolidated financial statements of the Company include the accounts of Saul Centers and its subsidiaries, including the Operating Partnership and Subsidiary Partnerships, which are majority owned by Saul Centers. Substantially all assets and liabilities of the Company as of September 30, 2020 and December 31, 2019, are comprised of the assets and liabilities of the Operating Partnership. The debt arrangements which are subject to recourse are described in Note 5. All significant intercompany balances and transactions have been eliminated in consolidation. The Operating Partnership is a variable interest entity ("VIE") 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 its activities and the rights to absorb 74.6% of its net income. Because the Operating Partnership is consolidated into the financial statements of the Company, classification of it as a VIE has no impact on the consolidated financial statements of the Company. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments necessary for the fair presentation of the financial position and results of operations of the Company for the interim periods have been included. All such adjustments are of a normal recurring nature. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2019, which are included in its Annual Report on Form 10-K. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to those instructions. The results of operations for interim periods are not necessarily indicative of results to be expected for the year.

Noncontrolling Interests - Holders of Convertible Limited Partnership Units in the Operating Partnership	9 Months Ended
	Sep. 30, 2020
Noncontrolling Interest [Abstract]
Noncontrolling Interests - Holders of Convertible Limited Partnership Units in the Operating Partnership	Noncontrolling Interests - Holders of Convertible Limited Partnership Units in the Operating Partnership As of September 30, 2020, 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”) holds a 25.4% limited partnership interest in the Operating Partnership represented by approximately 7.9 million convertible limited partnership units. These units are convertible into shares of Saul Centers’ common stock, at the option of the unit holder, on a one-for-one basis provided that, in accordance with the Company’s Articles of Incorporation, the rights may not be exercised at any time that the Saul Organization beneficially owns or will own after the exercise, directly or indirectly, in the aggregate more than 39.9% of the value of the outstanding common stock and preferred stock of Saul Centers (the “Equity Securities”). As of September 30, 2020, approximately 3.0 million units could be converted into shares of Saul Centers common stock. The impact of the Saul Organization’s approximately 25.4% limited partnership interest in the Operating Partnership is reflected as Noncontrolling Interests in the accompanying consolidated financial statements. Fully converted partnership units and diluted weighted average common stock outstanding for the three months ended September 30, 2020 and 2019, were approximately 31.3 million and 31.0 million, respectively, and for the nine months ended September 30, 2020 and 2019, were approximately 31.2 million and 30.8 million, respectively.


																		Exhibit 99 (a)
Saul Centers, Inc.
Schedule of Current Portfolio Properties
September 30, 2020

					Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of September 30,										(1)
		Property	Location					2020		2019		2018		2017		2016		Anchor / Significant Tenants

Shopping Centers
	Ashbrook Marketplace		Ashburn, VA		85,572	2018 (2019)	13.7	100	%	N/A		N/A		N/A		N/A		Lidl, Planet Fitness, Starbucks, Dunkin Donuts, Valvoline, Cafe Rio, McAlisters Deli
	Ashburn Village		Ashburn, VA		221,596	1994-2006	26.4	96	%	97	%	99	%	93	%	91	%	Giant Food, Hallmark, McDonald's, Burger King, Dunkin Donuts, Kinder Care, Blue Ridge Grill
	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		359,671	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		121,365	2004	12.7	99	%	99	%	96	%	95	%	99	%	Publix, Wells Fargo, Palm Beach Fitness, Anthony's Clothing
	Boulevard		Fairfax, VA		49,140	1994 (1999/09)	5.0	97	%	100	%	100	%	100	%	100	%	Panera Bread, Party City, Petco, Capital One Bank
	Briggs Chaney MarketPlace		Silver Spring, MD		194,258	2004	18.2	97	%	97	%	92	%	98	%	100	%	Global Food, Ross Dress For Less, Advance Auto Parts, McDonald's, Dunkin Donuts, Enterprise Rent-A-Car, Dollar Tree, Dollar General, Salon Plaza
	Broadlands Village		Ashburn, VA		174,438	2003/4/6	24.0	93	%	99	%	77	%	76	%	99	%	Aldi Grocery, The All American Steakhouse, Bonefish Grill, Dollar Tree, Starbucks, Minnieland Day Care, Capital One Bank, LA Fitness
	Burtonsville Town Square		Burtonsville, MD		139,928	2017	26.3	100	%	99	%	100	%	100	%	N/A		Giant Food, Petco, Starbucks, Greene Turtle, Capital One Bank, CVS Pharmacy, Roy Rogers, Mr. Tire, Taco Bell
	Countryside Marketplace		Sterling, VA		138,804	2004	16.0	95	%	97	%	95	%	94	%	94	%	Safeway, CVS Pharmacy, Starbucks, McDonald's, 7-Eleven
	Cranberry Square		Westminster, MD		141,450	2011	18.9	87	%	96	%	100	%	100	%	100	%	Giant Food, Giant Gas Station, Staples, Party City, Wendy's
	Cruse MarketPlace		Cumming, GA		78,686	2004	10.6	92	%	94	%	89	%	89	%	92	%	Publix, Subway, Orange Theory, Anytime Fitness
	Flagship Center		Rockville, MD		21,500	1972, 1989	0.5	100	%	100	%	100	%	100	%	100	%	Chase Bank, Bank of America
	French Market		Oklahoma City, OK		246,148	1974 (1984/98)	13.8	97	%	96	%	96	%	97	%	98	%	Burlington Coat Factory, Bed Bath & Beyond, Staples, Petco, The Tile Shop, Lakeshore Learning Center, Dollar Tree, Verizon, Raising Cane's
	Germantown		Germantown, MD		18,982	1992	2.7	100	%	100	%	100	%	100	%	100	%	CVS Pharmacy, Jiffy Lube
	The Glen		Woodbridge, VA		136,440	1994 (2005)	14.7	98	%	98	%	96	%	98	%	94	%	Safeway, The All American Steakhouse, Panera Bread, Five Guys, Chipotle
	Great Falls Center		Great Falls, VA		91,666	2008	11.0	99	%	98	%	99	%	100	%	98	%	Safeway, CVS Pharmacy, Trustar Bank, Starbucks, Subway, Long & Foster
	Hampshire Langley		Takoma Park, MD		131,700	1972 (1979)	9.9	99	%	100	%	100	%	100	%	100	%	Mega Mart, Starbucks, Chuck E. Cheese's, Sardi's Chicken, Capital One Bank, Kool Smiles, Wells Fargo
	Hunt Club Corners		Apopka, FL		107,103	2006	13.9	100	%	100	%	93	%	93	%	93	%	Publix, Pet Supermarket, Boost Mobile
	Jamestown Place		Altamonte Springs, FL		96,201	2005	10.9	100	%	100	%	93	%	95	%	95	%	Publix, Carrabas Italian Grill, Orlando Health
	Kentlands Square I		Gaithersburg, MD		116,731	2002	11.5	100	%	100	%	98	%	98	%	100	%	Lowe's Home Improvement Center, Chipotle

	Saul Centers, Inc.
	Schedule of Current Portfolio Properties
	September 30, 2020

					Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of September 30,										(1)
		Property	Location					2020		2019		2018		2017		2016		Anchor / Significant Tenants

	Shopping Centers (continued)
	Kentlands Square II and Kentlands Pad		Gaithersburg, MD		253,052	2011	23.4	97	%	96	%	98	%	99	%	100	%	Giant Food, At Home, Party City, Panera Bread, Not Your Average Joe's, Hallmark, Chick-Fil-A, Coal Fire Pizza, Cava Mezza Grill
	Kentlands Place		Gaithersburg, MD		40,697	2005	3.4	75	%	93	%	93	%	93	%	100	%	Bonefish Grill
	Lansdowne Town Center		Leesburg, VA		196,817	2006	23.4	90	%	92	%	91	%	96	%	85	%	Harris Teeter, CVS Pharmacy, Panera Bread, Starbucks, Capital One Bank, Ford's Oyster House, Fusion Learning, Chick-Fil-A
	Leesburg Pike Plaza		Baileys Crossroads, VA		97,752	1966 (1982/95)	9.4	93	%	85	%	99	%	95	%	95	%	CVS Pharmacy, Party Depot, FedEx Office, Capital One Bank, Five Guys
	Lumberton Plaza		Lumberton, NJ		192,718	1975 (1992/96)	23.3	68	%	68	%	86	%	84	%	91	%	Aldi, Rite Aid, Family Dollar, Retro Fitness, Big Lots, Pet Valu, Burger King
	Metro Pike Center		Rockville, MD		67,488	2010	4.6	85	%	64	%	67	%	71	%	69	%	McDonald's, Dunkin Donuts, 7-Eleven, Palm Beach Tan, Mattress Warehouse, Salvation Army
	Shops at Monocacy		Frederick, MD		111,316	2004	13.0	97	%	95	%	99	%	100	%	100	%	Giant Food, Panera Bread, Five Guys, California Tortilla, Firehouse Subs, Comcast
	Northrock		Warrenton, VA		100,032	2009	15.4	94	%	100	%	99	%	99	%	95	%	Harris Teeter, Longhorn Steakhouse, Ledo's Pizza, Capital One Bank, Novant Health
	Olde Forte Village		Ft. Washington, MD		143,577	2003	16.0	92	%	96	%	98	%	99	%	97	%	Safeway, Advance Auto Parts, Dollar Tree, McDonald's, Wendy's, Ledo's Pizza
	Olney		Olney, MD		53,765	1975 (1990)	3.7	92	%	93	%	96	%	94	%	91	%	Walgreens, Olney Grille, Ledo's Pizza, Popeye's, Sardi's Fusion
	Orchard Park		Dunwoody, GA		87,365	2007	10.5	99	%	99	%	100	%	100	%	97	%	Kroger, Subway, Jett Ferry Dental
	Palm Springs Center		Altamonte Springs, FL		126,446	2005	12.0	100	%	100	%	100	%	100	%	100	%	Publix, Duffy's Sports Grill, Toojay's Deli, The Tile Shop, Rockler Tools, Humana Health, Sola Salons
	Ravenwood		Baltimore, MD		93,328	1972 (2006)	8.0	97	%	97	%	97	%	100	%	100	%	Giant Food, Dominos, Bank of America
	11503 Rockville Pk / 5541 Nicholson Ln		Rockville, MD		40,249	2010 / 2012	3.0	61	%	61	%	61	%	61	%	63	%	Dr. Boyd's Pet Resort, Metropolitan Emergency Animal Clinic
	1500/1580/1582/1584 Rockville Pike		Rockville, MD		110,128	2012/2014	10.3	87	%	97	%	93	%	96	%	87	%	Party City, CVS Pharmacy, Danker Furniture
	Seabreeze Plaza		Palm Harbor, FL		146,673	2005	18.4	96	%	99	%	99	%	98	%	98	%	Publix, Earth Origins Health Food, Petco, Planet Fitness, Vision Works
	Marketplace at Sea Colony		Bethany Beach, DE		21,677	2008	5.1	100	%	100	%	100	%	100	%	100	%	Resort Quest, Armand's Pizza, Candy Kitchen, Summer Salts, Fin's Alehouse
	Seven Corners		Falls Church, VA		573,481	1973 (1994-7/07)	31.6	97	%	97	%	100	%	100	%	100	%	The Home Depot, Giant Food, Michaels Arts & Crafts, Barnes & Noble, Ross Dress For Less, Ski Chalet, Off-Broadway Shoes, JoAnn Fabrics, Starbucks, Dogfish Head Ale House, Red Robin Gourmet Burgers, Chipotle, Wendy's, Burlington Coat Factory, Mattress Warehouse, J. P. Morgan Chase
	Severna Park Marketplace		Severna Park, MD		254,011	2011	20.6	89	%	100	%	100	%	100	%	98	%	Giant Food, Kohl's, Office Depot, Goodyear, Chipotle, McDonald's, Five Guys, Unleashed (Petco), Jersey Mike's, Bath & Body Works, Wells Fargo. MOD Pizza

	Saul Centers, Inc.
	Schedule of Current Portfolio Properties
	September 30, 2020

					Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of September 30,										(1)
		Property	Location					2020		2019		2018		2017		2016		Anchor / Significant Tenants

	Shopping Centers (continued)
	Shops at Fairfax		Fairfax, VA		68,762	1975 (1993/99)	6.7	97	%	98	%	100	%	97	%	97	%	99 Ranch
	Smallwood Village Center		Waldorf, MD		173,341	2006	25.1	75	%	77	%	78	%	83	%	69	%	Safeway, CVS Pharmacy, Family Dollar
	Southdale		Glen Burnie, MD		485,628	1972 (1986)	39.8	98	%	97	%	99	%	98	%	98	%	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, Banfield Pet Hospital, Glory Days Grill, Bank of America, Roses
	Southside Plaza		Richmond, VA		371,761	1972	32.8	97	%	92	%	92	%	91	%	91	%	Super Fresh, Citi Trends, City of Richmond, McDonald's, Burger King, Kool Smiles, Crafty Crab
	South Dekalb Plaza		Atlanta, GA		163,418	1976	14.6	87	%	87	%	91	%	89	%	88	%	Big Lots, Emory Clinic, Roses, Deal $
	Thruway		Winston-Salem, NC		365,816	1972 (1997)	31.5	92	%	92	%	96	%	96	%	98	%	Harris Teeter, Trader Joe's, Stein Mart, Talbots, Hanes Brands, Jos. A. Bank, Chico's, Loft, FedEx Office, Plow & Hearth, New Balance, Aveda Salon, Carter's Kids, McDonald's, Chick-Fil-A, Wells Fargo Bank, Francesca's Collections, Great Outdoor Provision Company, White House / Black Market, Soma, J. Crew, Chop't, Lululemon, Orange Theory, Athleta
	Village Center		Centreville, VA		145,651	1990	17.2	88	%	98	%	98	%	98	%	95	%	Giant Food, Starbucks, McDonald's, Pet Supplies Plus, Bikram Yoga, Capital One Bank, Truist Bank
	Westview Village		Frederick, MD		101,058	2009	11.6	99	%	97	%	95	%	95	%	100	%	Silver Diner, Sleepy's, Music & Arts, Firehouse Subs, CiCi's Pizza, Café Rio, Five Guys, Regus, Krispy Kreme, Wendy's
	White Oak		Silver Spring, MD		480,676	1972 (1993)	27.9	100	%	99	%	99	%	99	%	100	%	Giant Food, Sears, Walgreens, Sarku Japan
			Total Shopping Centers	(3)	7,876,842		766.9	94.5	%	95.2	%	95.7	%	95.6	%	95.8	%


Saul Centers, Inc.
Schedule of Current Portfolio Properties
September 30, 2020

					Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of September 30,										(1)
		Property	Location					2020		2019		2018		2017		2016		Anchor / Significant Tenants

Mixed-Use Properties
	Avenel Business Park		Gaithersburg, MD		390,683	1981-2000	37.1	94	%	90	%	84	%	86	%	85	%	General Services Administration, Gene Dx, Inc., American Type Culture Collection, Inc.
	Clarendon Center-North Block		Arlington, VA		108,386	2010	0.6	83	%	89	%	100	%	100	%	99	%	AT&T Mobility, Dunkin Donuts, Airlines Reporting Corporation
	Clarendon Center-South Block		Arlington, VA		104,894	2010	1.3	96	%	97	%	97	%	100	%	100	%	Trader Joe's, Circa, Burke & Herbert Bank, Bracket Room, South Block Blends, Winston Partners, Keppler Speakers Bureau, ECG Management Co., Leadership Institute, Capital One Bank, Massage Envy
	Clarendon Center Residential-South Block (244 units)		Arlington, VA		188,671	2010		94	%	97	%	95	%	96	%	97	%
	Park Van Ness- Residential (271 units)		Washington, DC		214,600	2016	1.4	94	%	99	%	96	%	94	%	61	%
	Park Van Ness-Retail		Washington, DC		8,847	2016		100	%	100	%	100	%	100	%	100	%	Uptown Market, Sfoglina Pasta House
	601 Pennsylvania Ave.		Washington, DC		227,651	1973 (1986)	1.0	94	%	94	%	98	%	100	%	99	%	National Gallery of Art, American Assn. of Health Plans, Credit Union National Assn., Southern Company, Regus, Capital Grille, Michael Best & Friedrich LLP
	Washington Square		Alexandria, VA		236,376	1975 (2000)	2.0	81	%	91	%	91	%	93	%	89	%	Academy of Managed Care Pharmacy, Cooper Carry, National PACE Association, Marketing General, Trader Joe's, FedEx Office, Talbots, Virginia ABC
	The Waycroft-Residential (491 units)		Arlington, VA		404,709	2020	2.8	52	%	N/A		N/A		N/A		N/A
	The Waycroft-Retail		Arlington, VA		60,100	2020		90	%	N/A		N/A		N/A		N/A		Target, Enterprise Rent-A-Car
			Total Mixed-Use Properties	(3)	1,944,917		46.2	90.3	%	91.9	%	91.7	%	93.4	%	91.9	%	(2)

			Total Portfolio	(3)	9,821,759		813.1	94.0	%	94.8	%	95.2	%	95.5	%	95.3	%	(2)

Land and Development Parcels
	7316 Wisconsin Avenue		Bethesda, MD			2018	0.6	Planned development of a mixed-use building with up to 366 apartment units and 10,300 square feet of retail space. Demolition of existing interior improvements is complete. A development timetable has not been determined.
	Ashland Square Phase II		Manassas, VA			2004	17.3	Marketing to grocers and other retail businesses, with a development timetable yet to be finalized.
	New Market		New Market, MD			2005	35.5	Parcel will accommodate retail development in excess of 120,000 SF near I-70, east of Frederick, Maryland. A development timetable has not been determined.
			Total Development Properties				53.4

		(1)	Percentage leased is a percentage of rentable square feet leased for commercial space and a percentage of units leased for apartments. Includes only operating properties owned as of September 30, 2020. 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.

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Real estate investments
Land	$ 509,902	$ 453,322
Buildings and equipment	1,533,103	1,292,631
Construction in progress	74,476	335,644
Total purchase price	2,117,481	2,081,597
Accumulated depreciation	(595,785)	(563,474)
Real estate investments, net	1,521,696	1,518,123
Cash and cash equivalents	54,305	13,905
Accounts receivable and accrued income, net	65,701	52,311
Deferred leasing costs, net	27,468	24,083
Prepaid expenses, net	8,387	5,363
Other assets	3,817	4,555
Total assets	1,681,374	1,618,340
Liabilities
Notes payable	835,613	821,503
Term loan facility payable	74,766	74,691
Revolving credit facility payable	123,778	86,371
Construction loan payable	141,626	108,623
Dividends and distributions payable	19,373	19,291
Accounts payable, accrued expenses and other liabilities	27,874	35,199
Deferred income	26,727	29,306
Total liabilities	1,249,757	1,174,984
Equity
Common stock, $0.01 par value, 40,000,000 shares authorized, 23,358,208 and 23,231,240 shares issued and outstanding, respectively	234	232
Additional paid-in capital	417,504	410,926
Distributions in excess of accumulated earnings	(235,720)	(221,177)
Total Saul Centers, Inc. equity	367,018	374,981
Noncontrolling interests	64,599	68,375
Total equity	431,617	443,356
Total liabilities and equity	1,681,374	1,618,340
Series D Cumulative Redeemable Preferred Stock
Equity
Preferred stock, 1,000,000 shares authorized: Series D Cumulative Redeemable, 33,000 shares issued and outstanding, Series E Cumulative Redeemable, 44,000 shares issued and outstanding respectively	75,000	75,000
Series E Cumulative Redeemable Preferred Stock
Equity
Preferred stock, 1,000,000 shares authorized: Series D Cumulative Redeemable, 33,000 shares issued and outstanding, Series E Cumulative Redeemable, 44,000 shares issued and outstanding respectively	$ 110,000	$ 110,000

Consolidated Statement of Equity (Unaudited) - USD ($) $ in Thousands	Total	Series C Cumulative Preferred Stock	Series D Cumulative Redeemable Preferred Stock	Series E Cumulative Redeemable Preferred Stock	Total Saul Centers, Inc.	Total Saul Centers, Inc. Series C Cumulative Preferred Stock	Total Saul Centers, Inc. Series D Cumulative Redeemable Preferred Stock	Total Saul Centers, Inc. Series E Cumulative Redeemable Preferred Stock	Preferred Stock	Common Stock	Additional Paid-in Capital	Distributions in Excess of Accumulated Earnings	Distributions in Excess of Accumulated Earnings Series C Cumulative Preferred Stock	Distributions in Excess of Accumulated Earnings Series D Cumulative Redeemable Preferred Stock	Distributions in Excess of Accumulated Earnings Series E Cumulative Redeemable Preferred Stock	Accumulated Other Comprehensive (Loss)	Noncontrolling Interests
Beginning Balance at Dec. 31, 2018	$ 425,220				$ 355,912				$ 180,000	$ 227	$ 384,533	$ (208,593)				$ (255)	$ 69,308
Issuance of shares of common stock:
Issuance of shares pursuant to dividend reinvestment plan	6,171				6,171					1	6,170
Issuance of shares due to exercise of employee stock options and issuance of directors’ deferred shares	420				420					1	419
Issuance of partnership units pursuant to dividend reinvestment plan	705																705
Net income	17,077				13,447							13,447					3,630
Change in unrealized loss on cash flow hedge	(46)				(34)											(34)	(12)
Distributions payable preferred stock:
Preferred stock distributions		$ (1,805)	$ (1,148)			$ (1,805)	$ (1,148)						$ (1,805)	$ (1,148)
Distributions payable, common stock and partnership units	(16,263)				(12,108)							(12,108)					(4,155)
Ending Balance at Mar. 31, 2019	430,331				360,855				180,000	229	391,122	(210,207)				(289)	69,476
Beginning Balance at Dec. 31, 2018	425,220				355,912				180,000	227	384,533	(208,593)				(255)	69,308
Issuance of shares of common stock:
Net income	49,155
Change in unrealized loss on cash flow hedge	(118)
Ending Balance at Sep. 30, 2019	545,437				475,949				290,000	231	401,395	(215,334)				(343)	69,488
Beginning Balance at Mar. 31, 2019	430,331				360,855				180,000	229	391,122	(210,207)				(289)	69,476
Issuance of shares of common stock:
Issuance of shares pursuant to dividend reinvestment plan	5,128				5,128					1	5,127
Issuance of shares due to exercise of employee stock options and issuance of directors’ deferred shares	2,798				2,798					0	2,798
Issuance of partnership units pursuant to dividend reinvestment plan	1,029																1,029
Net income	16,750				13,232							13,232					3,518
Change in unrealized loss on cash flow hedge	(127)				(95)											(95)	(32)
Distributions payable preferred stock:
Preferred stock distributions		(1,805)	(1,148)			(1,805)	(1,148)						(1,805)	(1,148)
Distributions payable, common stock and partnership units	(16,347)				(12,181)							(12,181)					(4,166)
Ending Balance at Jun. 30, 2019	436,609				366,784				180,000	230	399,047	(212,109)				(384)	69,825
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of cumulative preferred stock	106,269				106,269				110,000		(3,731)
Issuance of shares of common stock:
Issuance of shares pursuant to dividend reinvestment plan	5,674				5,674					1	5,673
Issuance of shares due to exercise of employee stock options and issuance of directors’ deferred shares	406				406					0	406
Issuance of partnership units pursuant to dividend reinvestment plan	720																720
Net income	15,328				12,226							12,226					3,102
Change in unrealized loss on cash flow hedge	55				41											41	14
Distributions payable preferred stock:
Preferred stock distributions		$ (1,805)	(1,148)	$ (257)		$ (1,805)	(1,148)	$ (257)					$ (1,805)	(1,148)	$ (257)
Distributions payable, common stock and partnership units	(16,414)				(12,241)							(12,241)					(4,173)
Ending Balance at Sep. 30, 2019	545,437				475,949				290,000	231	401,395	(215,334)				(343)	69,488
Beginning Balance at Dec. 31, 2019	443,356				374,981				185,000	232	410,926	(221,177)				0	68,375
Issuance of shares of common stock:
Issuance of shares pursuant to dividend reinvestment plan	4,081				4,081					1	4,080
Issuance of shares due to exercise of employee stock options and issuance of directors’ deferred shares	956				956					0	956
Issuance of partnership units pursuant to dividend reinvestment plan	734																734
Net income	16,829				13,264							13,264					3,565
Distributions payable preferred stock:
Preferred stock distributions			(1,148)	(1,650)			(1,148)	(1,650)						(1,148)	(1,650)
Distributions payable, common stock and partnership units	(16,552)				(12,364)							(12,364)					(4,188)
Ending Balance at Mar. 31, 2020	446,606				378,120				185,000	233	415,962	(223,075)				0	68,486
Beginning Balance at Dec. 31, 2019	443,356				374,981				185,000	232	410,926	(221,177)				0	68,375
Issuance of shares of common stock:
Net income	38,640
Change in unrealized loss on cash flow hedge	0
Ending Balance at Sep. 30, 2020	431,617				367,018				185,000	234	417,504	(235,720)				0	64,599
Beginning Balance at Mar. 31, 2020	446,606				378,120				185,000	233	415,962	(223,075)				0	68,486
Issuance of shares of common stock:
Issuance of shares pursuant to dividend reinvestment plan	407				407					0	407
Issuance of shares due to exercise of employee stock options and issuance of directors’ deferred shares	424				424					0	424
Net income	10,208				8,328							8,328					1,880
Distributions payable preferred stock:
Preferred stock distributions			(1,148)	(1,650)			(1,148)	(1,650)						(1,148)	(1,650)
Distributions payable, common stock and partnership units	(16,561)				(12,373)							(12,373)					(4,188)
Ending Balance at Jun. 30, 2020	438,286				372,108				185,000	233	416,793	(229,918)				0	66,178
Issuance of shares of common stock:
Issuance of shares pursuant to dividend reinvestment plan	422				422					1	421
Issuance of shares due to exercise of employee stock options and issuance of directors’ deferred shares	290				290					0	290
Issuance of partnership units pursuant to dividend reinvestment plan	380																380
Net income	11,603				9,367							9,367					2,236
Change in unrealized loss on cash flow hedge	0
Distributions payable preferred stock:
Preferred stock distributions			$ (1,148)	$ (1,650)			$ (1,148)	$ (1,650)						$ (1,148)	$ (1,650)
Distributions payable, common stock and partnership units	(16,566)				(12,371)							(12,371)					(4,195)
Ending Balance at Sep. 30, 2020	$ 431,617				$ 367,018				$ 185,000	$ 234	$ 417,504	$ (235,720)				$ 0	$ 64,599

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities:
Net income	$ 38,640	$ 49,155
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of deferred leasing costs	37,593	35,185
Amortization of deferred debt costs	1,163	1,130
Compensation costs of stock grants and options	1,141	1,501
Credit losses on operating lease receivables	4,162	986
Increase in accounts receivable and accrued income	(17,552)	(2,317)
Additions to deferred leasing costs	(7,383)	(1,380)
Increase in prepaid expenses	(3,024)	(4,182)
(Increase) decrease in other assets	738	(2,049)
Increase in accounts payable, accrued expenses and other liabilities	3,871	5,696
Decrease in deferred income	(2,579)	(1,627)
Net cash provided by operating activities	56,770	82,098
Cash flows from investing activities:
Additions to real estate investments	(13,665)	(13,398)
Additions to development and redevelopment projects	(34,698)	(91,657)
Net cash used in investing activities	(48,363)	(105,055)
Cash flows from financing activities:
Proceeds from notes payable	52,100	22,100
Repayments on notes payable	(37,431)	(55,992)
Proceeds from revolving credit facility	90,000	47,000
Repayments on revolving credit facility	(53,000)	(94,000)
Proceeds from construction loan	32,928	71,807
Additions to deferred debt costs	(1,196)	(432)
Proceeds from the issuance of:
Common stock	5,440	19,096
Partnership units	1,114	2,454
Distributions to:
Common stockholders	(37,012)	(36,326)
Noncontrolling interests	(12,556)	(12,469)
Net cash provided by financing activities	31,993	60,648
Net increase (decrease) in cash and cash equivalents	40,400	37,691
Cash and cash equivalents, beginning of period	13,905	14,578
Cash and cash equivalents, end of period	54,305	52,269
Supplemental disclosure of cash flow information:
Cash paid for interest	32,951	31,266
Increase (decrease) in accrued real estate investments and development costs	(11,196)	1,507
Series C Cumulative Preferred Stock
Distributions to:
Preferred stockholders	0	(5,415)
Series D Cumulative Redeemable Preferred Stock
Distributions to:
Preferred stockholders	(3,444)	(3,444)
Series E Cumulative Redeemable Preferred Stock
Proceeds from the issuance of:
Series E preferred stock	0	106,269
Distributions to:
Preferred stockholders	$ (4,950)	$ 0

Related Party Transactions	9 Months Ended
Related Party Transactions	Sep. 30, 2020
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions The Chairman, Chief Executive Officer and President, the Executive Vice President-Real Estate, 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 $255,200 and $264,300 for the nine months ended September 30, 2020 and 2019, respectively. All amounts contributed by employees and the Company are fully vested. The Company also participates in a multiemployer nonqualified deferred compensation plan with entities in the Saul Organization which covers those full-time employees who meet the requirements as specified in the plan. According to the plan, which can be modified or discontinued at any time, participating employees defer 2% of their compensation in excess of a specified amount. For the nine months ended September 30, 2020 and 2019, the Company credited to employee accounts $164,800 and $186,300, respectively, which is the sum of accrued earnings and up to three times the amount deferred by employees and is included in general and administrative expense. All amounts contributed by employees and credited by the Company are fully vested. The cumulative unfunded liability under this plan was $2.8 million and $3.1 million, at September 30, 2020 and December 31, 2019, respectively, and is included in accounts payable, accrued expenses and other liabilities in the Consolidated Balance Sheets. The Company has entered into a shared services agreement (the “Agreement”) with the Saul Organization that provides for the sharing of certain personnel and ancillary functions such as computer hardware, software, and support services and certain direct and indirect administrative personnel. The method for determining the cost of the shared services is provided for in the Agreement and is based upon head count, estimates of usage or estimates of time incurred, as applicable. The terms of the Agreement and the payments made thereunder are deemed reasonable by management and are reviewed annually by the Audit Committee of the Board of Directors, which consists entirely of independent directors. Billings by the Saul Organization for the Company’s share of these ancillary costs and expenses for the nine months ended September 30, 2020 and 2019, which included rental expense for the Company’s headquarters lease, totaled approximately $6.0 million and $6.4 million, net, respectively. The amounts are generally expensed as incurred and are primarily reported as general and administrative expenses in the Consolidated Statements of Operations. As of September 30, 2020 and December 31, 2019, accounts payable, accrued expenses and other liabilities included approximately $659,000 and $918,700, respectively, representing amounts 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 (the “Predevelopment Agreement”) with the B. F. Saul Real Estate Investment Trust (the “Trust”). The Predevelopment Agreement 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. 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. On November 5, 2019, the Company entered into an agreement (the "Contribution Agreement") to acquire from the Trust, approximately 6.8 acres of land and its leasehold interest in approximately 1.3 acres of contiguous land, together in each case with the improvements located thereon, located at the Twinbrook Metro Station in Rockville, Maryland (the “Contributed Property”). In exchange for the Contributed Property, the Company will issue to the Trust 1,416,071 limited partnership units at an agreed upon value of $56.00 per unit, representing an aggregate value of $79.3 million for the Contributed Property. Deed to the Contributed Property and the units were placed in escrow until certain conditions of the Contribution Agreement are satisfied. In August 2016, the Company entered into an agreement to acquire from the Trust approximately 13.7 acres of land located at the intersection of Ashburn Village Boulevard and Russell Branch Parkway in Ashburn, Virginia. The transaction closed on May 9, 2018, and the Company issued 176,680 limited partnership units to the Trust. The Company constructed a shopping center, Ashbrook Marketplace, and may be obligated to issue additional limited partnership units to the Trust in the second quarter of 2021. As of September 30, 2020, the Company estimates this obligation to range in value from $3.2 million to $3.5 million, based on projected net operating income of Ashbrook Marketplace for the 12 months ending May 31, 2021. The Company subleases its corporate headquarters space from a member of the Saul Organization. The lease commenced in March 2002, expires in 2022, and provides for base rent increases of 3% per year, with payment of a pro-rata share of operating expenses over a base year amount. The Agreement requires each party to pay an allocation of total rental payments based on a percentage proportionate to the number of employees employed by each party. The Company’s rent expense for its headquarters location was $609,200 and $593,500 for the nine months ended September 30, 2020 and 2019, respectively, and is included in general and administrative expense. The B. F. Saul Insurance Agency, Inc., a subsidiary of the B. F. Saul Company and a member of the Saul Organization, is a general insurance agency that receives commissions and fees in connection with the Company’s insurance program. Such commissions and fees amounted to $320,300 and $284,900 for the nine months ended September 30, 2020 and 2019, respectively.

Fair Value of Financial Instruments	9 Months Ended
Fair Value of Financial Instruments	Sep. 30, 2020
Fair Value Disclosures [Abstract]
Fair Value of Financial Instruments	Fair Value of Financial InstrumentsThe 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 market interest rates of approximately 3.25% and 3.55%, would be approximately $1.0 billion and $957.4 million, respectively, compared to the principal balance of $986.0 million and $938.4 million at September 30, 2020 and December 31, 2019, respectively. A change in any of the significant inputs may lead to a change in the Company’s fair value measurement of its debt.

Commitments and Contingencies	9 Months Ended
Commitments and Contingencies	Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesNeither 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.

Impact of COVID-19	9 Months Ended
Impact of COVID-19	Sep. 30, 2020
Unusual or Infrequent Items, or Both [Abstract]
Impact of COVID-19	Impact of COVID-19 On March 11, 2020, the World Health Organization declared a novel strain of coronavirus ("COVID-19") a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. As a result, the COVID-19 pandemic is negatively affecting almost every industry directly or indirectly. The actions taken by federal, state and local governments to mitigate the spread of COVID-19 by ordering closure of nonessential businesses and ordering residents to generally stay at home, and subsequent phased re-openings, have resulted in many of our tenants announcing mandated or temporary closures of their operations and/or requesting adjustments to their lease terms. Experts predict that the COVID-19 pandemic will trigger a period of global economic slowdown or a global recession. COVID-19 could have a material and adverse effect on or cause disruption to our business or financial condition, results from operations, cash flows and the market value and trading price of our securities. While the Company’s grocery stores, pharmacies, banks and home improvement stores generally remain open, restaurants, if open, are operating at limited capacity, with many offering only delivery and curbside pick-up, and most health, beauty supply and services, fitness centers, and other non-essential businesses are in various phases of re-opening depending on location. The Company is generally not charging late fees or delinquent interest on past due rent payments and, in many cases, rent deferral agreements are being negotiated to allow tenants temporary relief where needed. As of November 3, 2020, payments by tenants of contractual base rent and operating expense and real estate tax recoveries totaled approximately 83% and 91% for the second quarter and third quarter, respectively. The following is a summary of the Company's consolidated total collections of the second quarter and third quarter rent billings, including minimum rent, operating expense recoveries, and real estate tax reimbursements as of November 3, 2020: 2020 second quarter •83% of 2020 second quarter total billings has been paid by our tenants. ▪79% of retail ▪95% of office ▪100% of residential ▪Additionally, rent deferral agreements comprising approximately 11% of 2020 second quarter total billings have been executed (or 67% of the total unpaid balance) including 4% with anchor/national tenants. The executed deferrals typically cover three months of rent and are generally scheduled to be repaid during 2021 and 2022. As a condition to granted rent deferrals, we have sought, and in some cases received, extended lease terms, or waivers of certain adjacent use or common area restrictions. Through October 31, 2020, 3% of second quarter deferred rents have come due. Of the deferred rents that have come due, the majority have been repaid. 2020 third quarter •91% of 2020 third quarter total billings has been paid by our tenants. ▪89% of retail ▪95% of office ▪100% of residential ▪Additionally, rent deferral agreements comprising approximately 2% of 2020 third quarter total billings have been executed (or 24% of the total unpaid balance) including 1% with anchor/national tenants. The executed deferrals typically cover three months of rent and are generally scheduled to be repaid during 2021 and 2022. As a condition to granted rent deferrals, we have sought, and and in some cases received, extended lease terms, or waivers of certain adjacent use or common area restrictions. Through October 31, 2020, no third quarter deferred rents have come due.

Subsequent Events	9 Months Ended
Subsequent Events	Sep. 30, 2020
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsThe Company has reviewed operating activities for the period subsequent to September 30, 2020, and determined there are no subsequent events required to be disclosed.

Summary of Significant Accounting Policies (Policies)	9 Months Ended
Summary of Significant Accounting Policies (Policies)	Sep. 30, 2020
Accounting Policies [Abstract]
Nature of Operations	The Company, which conducts all of its activities through its subsidiaries, Saul Holdings Limited Partnership, a Maryland limited partnership (the “Operating Partnership”) and two subsidiary limited partnerships (the “Subsidiary Partnerships,” and, collectively with the Operating Partnership, the “Partnerships”), engages in the ownership, operation, management, leasing, acquisition, renovation, expansion, development and financing of community and neighborhood shopping centers and mixed-use properties, primarily in the Washington, DC/Baltimore metropolitan area. As of September 30, 2020, the Company’s properties (the “Current Portfolio Properties”) consisted of 50 shopping center properties (the “Shopping Centers”), seven mixed-use properties, which are comprised of office, retail and multi-family residential uses (the “Mixed-Use Properties”) and three (non-operating) development properties. Because the properties are located primarily in the Washington, DC/Baltimore metropolitan area, the Company is subject to a concentration of credit risk related to these properties. A majority of the Shopping Centers are anchored by one or more major tenants.
Principles of Consolidation	The accompanying consolidated financial statements of the Company include the accounts of Saul Centers and its subsidiaries, including the Operating Partnership and Subsidiary Partnerships, which are majority owned by Saul Centers. Substantially all assets and liabilities of the Company as of September 30, 2020 and December 31, 2019, are comprised of the assets and liabilities of the Operating Partnership. The debt arrangements which are subject to recourse are described in Note 5. All significant intercompany balances and transactions have been eliminated in consolidation.
Consolidation, Variable Interest Entity	The Operating Partnership is a variable interest entity ("VIE") 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 its activities and the rights to absorb 74.6% of its net income. Because the Operating Partnership is consolidated into the financial statements of the Company, classification of it as a VIE has no impact on the consolidated financial statements of the Company.
Basis of Presentation	The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments necessary for the fair presentation of the financial position and results of operations of the Company for the interim periods have been included. All such adjustments are of a normal recurring nature. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2019, which are included in its Annual Report on Form 10-K. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to those instructions. The results of operations for interim periods are not necessarily indicative of results to be expected for the year.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The most significant estimates and assumptions relate to collectability of operating lease receivables and impairment of real estate properties. Actual results could differ from those estimates.
Accounts Receivable, Accrued Income and Allowance for Doubtful Accounts	Accounts Receivable, Accrued Income and Allowance for Doubtful AccountsAccounts receivable primarily represent amounts currently due from tenants in accordance with the terms of their respective leases. Individual leases are assessed for collectability and upon the determination that the collection of rents is not probable, accrued rent and accounts receivable are charged off, which is reflected as an adjustment to rental revenue. Revenue from leases where collection is not probable is recorded on a cash basis until collectability is determined to be probable. Further, we assess whether operating lease receivables, at the portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical bad debt levels and current economic trends.
Recently Issued Accounting Standards	Recently Issued Accounting Standards In February 2016, the Financial Accounting Standards Board (‘‘FASB’’) issued Accounting Standards Update (‘‘ASU’’) 2016-02, ‘‘Leases’’ (“ASU 2016-02”). ASU 2016-02 amended the 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 became effective for annual periods beginning after December 15, 2018, interim periods within those years, and required 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. Upon adoption of ASU 2016-02 effective January 1, 2019, we elected the practical expedient for all leases with respect to lease identification, lease classification, and initial direct costs. We made a policy election not to separate lease and nonlease components and have accounted for each lease component and the related nonlease components together as a single component. There were no significant changes to our lessor accounting for operating leases as a result of ASU 2016-02. We lease Shopping Centers and Mixed-Use Properties to lessees in exchange for monthly payments that cover rent, and, where applicable, reimbursement for property taxes, insurance, and certain property operating expenses. Our leases have been determined to be operating leases and generally range in term from one to 15 years. Some of our leases have termination options and/or extension options. Termination options allow the lessee and/or lessor to terminate the lease prior to the end of the lease term, provided certain conditions are met. Termination options generally require advance notification from the lessee and/or lessor and payment of a termination fee. Termination fees are recognized as revenue over the modified lease term. Extension options are subject to terms and conditions stated in the lease. On January 1, 2019, a right of use asset and corresponding lease liability related to our headquarters lease were recorded in other assets and other liabilities, respectively. The lease expires on February 28, 2022, with one option to renew for an additional five years. The right of use asset and corresponding lease liability totaled $1.1 million and $1.1 million, respectively, at September 30, 2020. Due to the business disruptions and challenges severely affecting the global economy caused by the novel strain of coronavirus (“COVID-19”) pandemic, many lessees have requested rent relief, including rent deferrals and other lease concessions. The lease modification guidance in ASU 2016-02 does not contemplate the rapid execution of concessions for multiple tenants in response to sudden liquidity constraints of lessees. In April 2020, the FASB staff issued a question and answer document that provided guidance allowing the Company to elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. The Company has elected to apply such relief, which, in the case of rent deferrals, results in the accrual of rent due from tenants and defers the payment of that rent to a future date, and will monitor the collectability of rent receivables. 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. The adoption of ASU 2016-13 effective January 1, 2020, did not have a material impact on our consolidated financial statements and related disclosures because the vast majority of the Company's receivables relate to operating leases which are accounted for under ASC 842, "Leases."
Reclassifications	Reclassifications Certain reclassifications have been made to the prior year financial statements to conform to the presentation used for the nine months ended September 30, 2020.

Organization, Formation and Structure (Details)	9 Months Ended
Organization, Formation and Structure (Details)	Sep. 30, 2020 property store
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of shopping centers \| store	33
Saul Holdings Limited Partnership
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Percentage of ownership in operating partnership	74.60%
Giant Food
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of shopping centers \| store	11
Giant Food \| Revenue
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Percentage of total revenue	5.40%
No Individual Tenant \| Revenue
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Percentage of total revenue	2.50%
Shopping Centers
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of real estate properties	50
Mixed-Use Properties
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of real estate properties	7
Non-operating Development Properties
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of real estate properties	3

Summary of Significant Accounting Policies - Narrative (Details) $ in Millions	Sep. 30, 2020 USD ($)	Jan. 01, 2019 lease_option
Significant Accounting Policies [Line Items]
Right-of-use asset	$ 1.1
Operating lease liability	$ 1.1
Corporate Headquarters
Significant Accounting Policies [Line Items]
Number of options to extend lease \| lease_option		1
Lease renewal term		5 years
Minimum
Significant Accounting Policies [Line Items]
Operating lease term of contract	1 year
Maximum
Significant Accounting Policies [Line Items]
Operating lease term of contract	15 years

Summary of Significant Accounting Policies - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for doubtful accounts	$ (4,919)	$ (453)
Total	65,701	52,311
Rents currently due
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, before allowance for doubtful accounts	14,553	7,235
Deferred rents
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, before allowance for doubtful accounts	6,783	474
Straight-line rent
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, before allowance for doubtful accounts	44,266	42,088
Other receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, before allowance for doubtful accounts	$ 5,018	$ 2,967

Real Estate - Schedule of Construction in Progress (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Real Estate [Line Items]
Construction in progress	$ 74,476	$ 335,644
The Waycroft
Real Estate [Line Items]
Construction in progress	8,567	255,443
7316 Wisconsin Avenue
Real Estate [Line Items]
Construction in progress	49,629	44,638
Ashbrook Marketplace
Real Estate [Line Items]
Construction in progress	3,727	19,128
Other
Real Estate [Line Items]
Construction in progress	$ 12,553	$ 16,435

Noncontrolling Interests - Holders of Convertible Limited Partnership Units in the Operating Partnership (Details) - Noncontrolling Interests shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020 shares	Sep. 30, 2019 shares	Sep. 30, 2020 shares	Sep. 30, 2019 shares
Noncontrolling Interest [Line Items]
Limited partnership units (in shares)	7.9		7.9
Limited partnership units, conversion ratio	1		1
Outstanding stock percent that should be acquired for rights to be exercised	39.90%		39.90%
Limited partnership units convertible into shares of common stock, eligible for conversion (in shares)	3.0		3.0
Fully converted partnership units and diluted weighted average shares outstanding (in shares)	31.3	31.0	31.2	30.8
Saul Holdings Limited Partnership
Noncontrolling Interest [Line Items]
Percentage of ownership interest of noncontrolling interest	25.40%		25.40%

Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs - Narrative (Details) - USD ($)					9 Months Ended
	Jul. 24, 2020	Jul. 14, 2020	Mar. 03, 2020	Feb. 10, 2020	Sep. 30, 2020	Sep. 30, 2019	Oct. 01, 2021	Oct. 01, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Principal amount					$ 1,185,518,000				$ 1,100,000,000
Debt outstanding with fixed-rate					986,000,000.0				938,400,000
Debt outstanding with variable-rate					199,500,000				162,500,000
Carrying value of properties collateralizing mortgage notes					1,200,000,000				1,100,000,000
Outstanding line of credit					123,778,000				86,371,000
Repayments of secured debt					37,431,000	$ 55,992,000
Proceeds from revolving credit facility					90,000,000	$ 47,000,000
Principal amount					1,175,783,000
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid					909,141,000
Notes payable					835,613,000				821,503,000
Unamortized deferred debt costs					9,735,000				9,700,000
Debt issuance costs amortization					8,300,000				7,500,000
Unsecured Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, remaining borrowing capacity					200,300,000
Outstanding line of credit					124,500,000				$ 87,500,000
Letter of Credit
Debt Instrument [Line Items]
Outstanding line of credit					185,000
New Facility \| Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity					$ 400,000,000.0
New Facility \| Revolving Credit Facility \| LIBOR
Debt Instrument [Line Items]
Interest rate spread on LIBOR					1.40%
New Facility \| Revolving Credit Facility \| Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity					$ 325,000,000.0
Proceeds from revolving credit facility					$ 71,000,000.0
New Facility \| Term Facility \| LIBOR
Debt Instrument [Line Items]
Interest rate spread on LIBOR					1.35%
New Facility \| Term Facility \| Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity					$ 75,000,000.0
Boca Valley Plaza Loan
Debt Instrument [Line Items]
Repayments of secured debt				$ 9,200,000
Palm Springs Center Loan
Debt Instrument [Line Items]
Repayments of secured debt			$ 7,100,000
Park Van Ness Loan
Debt Instrument [Line Items]
Guarantor obligations, maximum exposure					6,700,000
Notes payable					66,800,000
Park Van Ness Loan \| Subsequent Event
Debt Instrument [Line Items]
Guarantor obligations, maximum exposure							$ 0	$ 3,300,000
Broadlands Village Mortgage
Debt Instrument [Line Items]
Principal amount					30,700,000
Guarantor obligations, maximum exposure					3,800,000
Avenel Business Park
Debt Instrument [Line Items]
Guarantor obligations, maximum exposure					6,300,000
Avenel Business Park \| Mortgages
Debt Instrument [Line Items]
Principal amount					25,500,000
The Waycroft Mortgage
Debt Instrument [Line Items]
Guarantor obligations, maximum exposure					23,600,000
The Waycroft Mortgage \| Mortgages
Debt Instrument [Line Items]
Principal amount					143,100,000
Ashbrook Marketplace Mortgage \| Mortgages
Debt Instrument [Line Items]
Long-term debt, term		15 years
Principal amount		$ 22,100,000			22,100,000
Debt instrument, interest rate, stated percentage		3.80%
Debt Instrument, Periodic Payment		$ 114,226
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid		$ 11,500,000
Kentlands Place Mortgage \| Mortgages
Debt Instrument [Line Items]
Long-term debt, term	15 years
Principal amount	$ 30,000,000.0				$ 29,900,000
Debt instrument, interest rate, stated percentage	3.43%
Debt Instrument, Periodic Payment	$ 149,064
Debt Instrument, Periodic Payment Terms, Balloon Payment to be Paid	$ 15,300,000

Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs - Scheduled Maturities of Debt, Including Scheduled Principal Amortization (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Balloon Payments
October 1 through December 31, 2020	$ 0
2021	11,012
2022	161,002
2023	84,225
2024	66,164
2025	20,363
Thereafter	566,375
Principal amount	909,141
Scheduled Principal Amortization
October 1 through December 31, 2020	7,453
2021	30,323
2021	30,984
2022	31,447
2023	30,815
2024	27,823
Thereafter	117,532
Principal amount	276,377
Total
October 1 through December 31, 2020	7,453
2021	41,335
2022	191,986
2023	115,672
2024	96,979
2025	48,186
Thereafter	683,907
Principal amount	1,185,518	$ 1,100,000
Unamortized deferred debt costs	9,735	9,700
Net	1,175,783
Debt Instrument [Line Items]
Outstanding line of credit	123,778	86,371
Unsecured Revolving Credit Facility
Debt Instrument [Line Items]
Outstanding line of credit	$ 124,500	$ 87,500

Related Party Transactions (Details)			1 Months Ended	9 Months Ended		12 Months Ended
Related Party Transactions (Details)	Nov. 05, 2019 USD ($) a $ / shares shares	May 09, 2018 shares	Aug. 31, 2016 a	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	May 31, 2021 USD ($)	Dec. 31, 2019 USD ($)
Related Party Transaction [Line Items]
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				$ 255,200	$ 264,300
Deferred compensation, employee contribution				2.00%
Deferred compensation, company contribution				$ 164,800	$ 186,300
Deferred compensation, company contribution (in percent)				3	3
Deferred compensation, cumulative unfunded liability				$ 2,800,000			$ 3,100,000
Ancillary costs and expenses				6,000,000.0	$ 6,400,000
Liability due to The Saul Organization for the Company's share of these ancillary costs and expenses				$ 659,000			$ 918,700
Percentage of annual increase in base rent				3.00%
Rent expense				$ 609,200	593,500
Insurance commissions and fees expense				$ 320,300	$ 284,900
Contribution Agreement
Related Party Transaction [Line Items]
Number of partnership units issued in transaction (in shares) \| shares	1,416,071
Value of units issued (in dollars per share) \| $ / shares	$ 56.00
Value assigned to units issued	$ 79,300,000
BF Saul Real Estate Investment Trust \| Land Contributed In Contribution Agreement
Related Party Transaction [Line Items]
Area of land \| a	6.8
BF Saul Real Estate Investment Trust \| Leasehold Interest Contributed In Contribution Agreement
Related Party Transaction [Line Items]
Area of land \| a	1.3
Ashbrook Marketplace \| BF Saul Real Estate Investment Trust
Related Party Transaction [Line Items]
Area of real estate acquired (in acres) \| a			13.7
Limited partnership units issued for purchase (in shares) \| shares		176,680
Minimum \| Ashbrook Marketplace \| BF Saul Real Estate Investment Trust \| Forecast
Related Party Transaction [Line Items]
Partnership units potentially issuable						$ 3,200,000
Maximum \| Ashbrook Marketplace \| BF Saul Real Estate Investment Trust \| Forecast
Related Party Transaction [Line Items]
Partnership units potentially issuable						$ 3,500,000

Stock Option Plans - Narrative (Details) - USD ($)			3 Months Ended						9 Months Ended
Stock Option Plans - Narrative (Details) - USD ($)	Sep. 30, 2020	Apr. 24, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Sep. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred compensation (in shares)	115,023								7,969
Shares due to exercise of employee stock options and issuance of directors' deferred stock (in shares)			984,000	3,109,000	11,745,000	1,645,000	48,772,000	485,000
Granted (in shares)									238,000
Stock option expense									$ 969,200
Future expense	$ 1,900,000		$ 1,900,000						$ 1,900,000
Closing share price (in usd per share)	$ 26.58		$ 26.58						$ 26.58
Weighted average remaining contractual life of the Company's outstanding options									5 years 2 months 12 days
Weighted average remaining contractual life of the Company's exercisable options									5 years 6 months
Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares due to exercise of employee stock options and issuance of directors' deferred stock (in shares)									7,354
Directors and Certain Officers
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)		238,000
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expiration period									10 years
Employee Stock Option \| Officers
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period									4 years
Additional Compensation Plan \| Directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized for annual award (in shares)		200

Stock-based Employee Compensation, Stock Option Plans, and Deferred Compensation Plan for Directors - Stock Options Issued (Details)	9 Months Ended
	Sep. 30, 2020 $ / shares
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Exercise price (in usd per share)	$ 49.19
Directors \| May 3, 2019
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Exercise price (in usd per share)	$ 55.71
Volatility	0.236
Expected life (years)	5 years
Assumed yield	3.75%
Risk-free rate	2.33%
Directors \| April 24, 2020
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Exercise price (in usd per share)	$ 50.00
Volatility	0.258
Expected life (years)	5 years
Assumed yield	3.80%
Risk-free rate	0.36%
Officers \| May 3, 2019
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Exercise price (in usd per share)	$ 55.71
Volatility	0.206
Expected life (years)	7 years
Assumed yield	3.80%
Risk-free rate	2.43%
Officers \| April 24, 2020
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Exercise price (in usd per share)	$ 50.00
Volatility	0.240
Expected life (years)	7 years
Assumed yield	3.85%
Risk-free rate	0.51%

Stock-based Employee Compensation, Stock Option Plans, and Deferred Compensation Plan for Directors - Summary of Option Activity (Details)	9 Months Ended
	Sep. 30, 2020 USD ($) $ / shares shares
Number of Shares
Outstanding at beginning of period (in shares) \| shares	1,309,614
Granted (in shares) \| shares	238,000
Exercised (in shares) \| shares	(10,749)
Expired/Forfeited (in shares) \| shares	(21,250)
Outstanding at end of period (in shares) \| shares	1,515,615
Exercisable at end of period (in shares) \| shares	978,240
Weighted Average Exercise Price per share
Outstanding at beginning of period (in usd per share) \| $ / shares	$ 53.38
Granted (in usd per share) \| $ / shares	50.00
Exercised (in usd per share) \| $ / shares	49.19
Expired/Forfeited (in usd per share) \| $ / shares	53.96
Outstanding at end of period (in usd per share) \| $ / shares	52.87
Exercisable at end of period (in usd per share) \| $ / shares	$ 53.03
Aggregate Intrinsic Value
Outstanding at beginning of period \| $	$ 2,528,463
Granted \| $	0
Exercised \| $	85,268
Expired/Forfeited \| $	0
Outstanding at end of period \| $	0
Exercisable at end of period \| $	$ 0

Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2020	Dec. 31, 2019
Fair Value Disclosures [Abstract]
Notes payable, fixed interest rate	3.25%	3.55%
Notes payable, aggregate fair value	$ 1,000.0	$ 957.4
Notes payable, principal balance	$ 986.0	$ 938.4

Business Segments - Narrative (Details)	9 Months Ended
Business Segments - Narrative (Details)	Sep. 30, 2020 segment
Segment Reporting [Abstract]
Number of reportable business segments	2

Impact of COVID-19 - Narrative (Details) $ in Thousands	3 Months Ended			4 Months Ended	9 Months Ended
Impact of COVID-19 - Narrative (Details) $ in Thousands	Sep. 30, 2020 USD ($)	Jun. 30, 2020	Sep. 30, 2019 USD ($)	Oct. 31, 2020	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)
Subsequent Event [Line Items]
Rental revenue	$ 55,749		$ 55,487		$ 163,167	$ 168,242
Rent deferral period	3 months	3 months
Subsequent Event
Subsequent Event [Line Items]
Deferred Rent, Percent Due				0.03
Contractual Base Rent, Operating Expense And Real Estate Recoveries Collected \| Revenue
Subsequent Event [Line Items]
Percentage of total revenue	91.00%	83.00%
Operating lease income subject to deferral agreements \| Outstanding Billings \| Revenue
Subsequent Event [Line Items]
Percentage of total revenue	2.00%	11.00%
Operating lease income subject to deferral agreements \| April, May, June 2020 unpaid balance as percent of total unpaid balance \| Revenue
Subsequent Event [Line Items]
Percentage of total revenue	24.00%	67.00%
Operating lease income subject to deferral agreements, anchor or national tenants \| Outstanding Billings \| Revenue
Subsequent Event [Line Items]
Percentage of total revenue	1.00%	4.00%
Retail Real Estate \| Contractual Base Rent, Operating Expense And Real Estate Recoveries Collected \| Revenue
Subsequent Event [Line Items]
Percentage of total revenue	89.00%	79.00%
Office Real Estate \| Contractual Base Rent, Operating Expense And Real Estate Recoveries Collected \| Revenue
Subsequent Event [Line Items]
Percentage of total revenue	95.00%	95.00%
Residential Real Estate \| Contractual Base Rent, Operating Expense And Real Estate Recoveries Collected \| Revenue
Subsequent Event [Line Items]
Percentage of total revenue	100.00%	100.00%