10-Q

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, 2021

OR

        ☐ 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:	Trading symbol:	Name of exchange on which registered:
Common Stock, Par Value $0.01 Per Share	BFS	New York Stock Exchange
Depositary Shares each representing 1/100th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share	BFS/PRD	New York Stock Exchange
Depositary Shares each representing 1/100th of a share of 6.000% Series E Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share	BFS/PRE	New York Stock Exchange

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   ☐

-1-

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, 2021: 23.7 million.

-2-

SAUL CENTERS, INC.

Table of Contents

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
(a) Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020	4
(b) Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020	5
(c) Consolidated Statements of Equity for the three and nine months ended September 30, 2021 and 2020	6
(d) Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020	10
(e) Notes to Consolidated Financial Statements	11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
(a) Critical Accounting Policies	28
(b) Results of Operations:
Three months ended September 30, 2021 compared to three months ended September 30, 2020	29
Nine months ended September 30, 2021 compared to nine months ended September 30, 2020	30
Same property revenue and same property operating income	31
(c) Liquidity and Capital Resources	34
Item 3. Quantitative and Qualitative Disclosures About Market Risk	38
Item 4. Controls and Procedures	39
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	40
Item 1A. Risk Factors	40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3. Defaults Upon Senior Securities	41
Item 4. Mine Safety Disclosures	41
Item 5. Other Information	41
Item 6. Exhibits	41
Signatures	42

-3-

PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(Dollars in thousands, except per share amounts)	September 30, 2021		December 31, 2020
Assets
Real estate investments
Land	$	511,596	$	511,482
Buildings and equipment	1,563,059		1,543,837
Construction in progress	191,707		69,477
	2,266,362		2,124,796
Accumulated depreciation	(639,241)		(607,706)
	1,627,121		1,517,090
Cash and cash equivalents	11,917		26,856
Accounts receivable and accrued income, net	61,855		64,917
Deferred leasing costs, net	24,638		26,872
Other assets	13,969		9,837
Total assets	$	1,739,500	$	1,645,572
Liabilities
Notes payable	$	794,586	$	827,603
Construction loan payable	147,112		144,607
Revolving credit facility payable	95,028		103,913
Term loan facility payable	99,209		74,791
Accounts payable, accrued expenses and other liabilities	27,199		24,384
Deferred income	26,216		23,293
Dividends and distributions payable	20,543		19,448
Total liabilities	1,209,893		1,218,039
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, 23,713,961 and 23,476,626 shares issued and outstanding, respectively	237		235
Additional paid-in capital	430,537		420,625
Partnership units in escrow	79,300		—
Distributions in excess of accumulated earnings	(252,309)		(241,535)
Total Saul Centers, Inc. equity	442,765		364,325
Noncontrolling interests	86,842		63,208
Total equity	529,607		427,533
Total liabilities and equity	$	1,739,500	$	1,645,572

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

-4-

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,
	2021		2020		2021		2020
Revenue
Rental revenue	$	59,058	$	55,749	$	175,634	$	163,167
Other	1,198		1,011		3,351		3,756
Total revenue	60,256		56,760		178,985		166,923
Expenses
Property operating expenses	8,210		7,416		24,420		20,862
Real estate taxes	7,154		7,523		22,121		22,027
Interest expense, net and amortization of deferred debt costs	10,914		12,398		34,559		34,011
Depreciation and amortization of lease costs	12,467		13,713		37,852		37,593
General and administrative	4,626		4,107		14,234		13,790
Total expenses	43,371		45,157		133,186		128,283
Net Income	16,885		11,603		45,799		38,640
Noncontrolling interests
Income attributable to noncontrolling interests	(3,747)		(2,236)		(9,653)		(7,681)
Net income attributable to Saul Centers, Inc.	13,138		9,367		36,146		30,959
Preferred stock dividends	(2,798)		(2,798)		(8,395)		(8,394)
Net income available to common stockholders	$	10,340	$	6,569	$	27,751	$	22,565
Per share net income available to common stockholders
Basic and diluted	$	0.44	$	0.28	$	1.17	$	0.97

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

-5-

Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited) 

(Dollars in thousands, except per share amounts)	Preferred Stock		Common Stock		Additional Paid-in Capital		Partnership Units in Escrow		Distributions in Excess of Accumulated Earnings		Total Saul Centers, Inc.		Noncontrolling Interests		Total
Balance at January 1, 2021	$	185,000	$	235	$	420,625	$	—	$	(241,535)	$	364,325	$	63,208	$	427,533
Issuance of shares of common stock:
96,268 shares pursuant to dividend reinvestment plan	—		1		2,839		—		—		2,840		—		2,840
910 shares due to exercise of stock options and issuance of directors’ deferred stock	—		—		323		—		—		323		—		323
Issuance of 19,493 partnership units pursuant to dividend reinvestment plan	—		—		—		—		—		—		575		575
1,416,071 partnership units placed in escrow pursuant to Twinbrook contribution	—		—		—		79,300		—		79,300		—		79,300
Net income	—		—		—		—		10,262		10,262		2,533		12,795
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)	—		—		—		—		(12,488)		(12,488)		(4,218)		(16,706)
Balance, March 31, 2021	185,000		236		423,787		79,300		(246,559)		441,764		62,098		503,862
Issuance of shares of common stock:
68,206 shares pursuant to dividend reinvestment plan	—		—		2,855		—		—		2,855		—		2,855
6,038 shares due to share grants, exercise of stock options and issuance of directors’ deferred stock	—		—		705		—		—		705		—		705
Issuance of partnership units:	—		—		—		—		—		—		—		—
13,978 units pursuant to the dividend reinvestment plan	—		—		—		—		—		—		585		585
469,740 units pursuant to the contribution of Twinbrook leasehold interest	—		—		—		—		—		—		21,500		21,500
93,674 units pursuant to the contribution of Ashbrook Marketplace	—		—		—		—		—		—		4,320		4,320
Net income	—		—		—		—		12,746		12,746		3,373		16,119
Distributions payable preferred stock:
Series D, $38.28 per share	—		—		—		—		(1,149)		(1,149)		—		(1,149)
Series E, $37.50 per share	—		—		—		—		(1,650)		(1,650)		—		(1,650)
Distributions payable common stock ($0.55/share) and distributions payable partnership units ($0.55/unit)	—		—		—		—		(13,000)		(13,000)		(4,694)		(17,694)
Balance, June 30, 2021	185,000		236		427,347		79,300		(249,612)		442,271		87,182		529,453

-6-

Saul Centers, Inc.

(Dollars in thousands, except per share amounts)	Preferred Stock		Common Stock		Additional Paid-in Capital		Partnership Units in Escrow		Distributions in Excess of Accumulated Earnings		Total Saul Centers, Inc.		Noncontrolling Interests		Total
Issuance of shares of common stock:
65,171 shares pursuant to dividend reinvestment plan	—		1		2,896		—		—		2,897		—		2,897
743 shares due to exercise of stock options and issuance of directors’ deferred stock	—		—		294		—		—		294		—		294
Issuance of 13,841 partnership units pursuant to dividend reinvestment plan	—		—		—		—		—		—		615		615
Net income	—		—		—		—		13,138		13,138		3,747		16,885
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 ($0.55/share) and distributions payable partnership units ($0.55/unit)	—		—		—		—		(13,037)		(13,037)		(4,702)		(17,739)
Balance, September 30, 2021	$	185,000	$	237	$	430,537	$	79,300	$	(252,309)	$	442,765	$	86,842	$	529,607

-7-

Saul Centers, Inc.

(Dollars in thousands, except per share amounts)	Preferred Stock		Common Stock		Additional Paid-in Capital		Partnership Units in Escrow		Distributions in Excess of Accumulated Earnings		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 share grants, 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

-8-

Saul Centers, Inc.

(Dollars in thousands, except per share amounts)	Preferred Stock		Common Stock		Additional Paid-in Capital		Partnership Units in Escrow		Distributions in Excess of Accumulated Earnings		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

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

-9-

Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
	Nine months ended September 30,
(Dollars in thousands)	2021		2020
Cash flows from operating activities:
Net income	$	45,799	$	38,640
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of lease costs	37,852		37,593
Amortization of deferred debt costs	1,237		1,163
Compensation costs of stock and option grants	1,197		1,141
Credit losses on operating lease receivables	802		4,162
(Increase) decrease in accounts receivable and accrued income	2,260		(17,552)
Additions to deferred leasing costs	(1,316)		(7,383)
Increase in other assets	(4,124)		(2,286)
Increase in accounts payable, accrued expenses and other liabilities	2,432		3,871
Increase (decrease) in deferred income	2,923		(2,579)
Net cash provided by operating activities	89,062		56,770
Cash flows from investing activities:
Acquisitions of real estate investments (1) (2) (3)	(9,011)		—
Additions to real estate investments	(14,593)		(13,665)
Additions to development and redevelopment projects	(15,227)		(34,698)
Net cash used in investing activities	(38,831)		(48,363)
Cash flows from financing activities:
Proceeds from notes payable	—		52,100
Repayments on notes payable	(33,670)		(37,431)
Proceeds from term loan facility	25,000		—
Proceeds from revolving credit facility	36,000		90,000
Repayments on revolving credit facility	(42,500)		(53,000)
Proceeds from construction loan	2,430		32,928
Additions to deferred debt costs	(3,474)		(1,196)
Proceeds from the issuance of:
Common stock	8,717		5,440
Partnership units (1) (2) (3)	1,775		1,114
Distributions to:
Series D preferred stockholders	(3,445)		(3,444)
Series E preferred stockholders	(4,950)		(4,950)
Common stockholders	(37,926)		(37,012)
Noncontrolling interests	(13,127)		(12,556)
Net cash provided by (used in) financing activities	(65,170)		31,993
Net increase (decrease) in cash and cash equivalents	(14,939)		40,400
Cash and cash equivalents, beginning of period	26,856		13,905
Cash and cash equivalents, end of period	$	11,917	$	54,305
Supplemental disclosure of cash flow information:
Cash paid for interest	$	33,738	$	32,951
Increase (decrease) in accrued real estate investments and development costs	$	504	$	(11,196)

(1) The 2021 acquisition of real estate and proceeds from the issuance of partnership units each excludes $79,300 in connection with the contribution of Twinbrook Quarter by the B. F. Saul Real Estate Investment Trust in exchange for limited partnership units that are held in escrow. See Notes 3 and 4 to the Consolidated Financial Statements.

(2) The 2021 acquisition of real estate and proceeds from the issuance of partnership units each excludes $21,500 in connection with the contribution of the Twinbrook Quarter leasehold interest in exchange for limited partnership units. See Notes 3 and 4 to the Consolidated Financial Statements.

(3) The 2021 acquisition of real estate and proceeds from the issuance of partnership units each excludes $4,320 in connection with the issuance of additional limited partnership units to B. F. Saul Real Estate Investment Trust as additional consideration pursuant to the terms of the 2016 contribution agreement, as amended, related to Ashbrook Marketplace. See Note 7 to the Consolidated Financial Statements.

-10-

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 and Chief Executive Officer 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, 2021, 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 four (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, 2021, 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 5.3% of the Company's total revenue for the nine months ended September 30, 2021. 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, 2021.

The accompanying consolidated financial statements of the Company include the accounts of Saul Centers and its subsidiaries, including the Partnerships, which are majority owned by Saul Centers. Substantially all assets and liabilities of the Company as of September 30, 2021 and December 31, 2020, are comprised of the assets and liabilities of the Operating Partnership. Debt arrangements 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 73.4% 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, 2020, 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.

-11-

Notes to Consolidated Financial Statements (Unaudited)

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, 2020 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 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 represents amounts due from tenants, whether current or deferred, in accordance with the terms of their respective leases and base rent recognized on a straight-line basis. 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. As of September 30, 2021, $4.6 million of rents previously deferred have come due. Of the amounts that have come due, $4.5 million has been paid.

At September 30, 2021 and December 31, 2020, accounts receivable was comprised of:

(In thousands)	September 30, 2021		December 31, 2020
Rents currently due	$	7,576	$	13,321
Deferred rents	5,388		8,205
Straight-line rent	46,429		44,863
Other receivables	5,974		3,751
Allowance for doubtful accounts	(3,512)		(5,223)
Total	$	61,855	$	64,917

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, 2021.

-12-

Notes to Consolidated Financial Statements (Unaudited)

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, 2021, assets totaling $8.7 million were placed in service in conjunction with the substantial completion of The Waycroft. Construction in progress as of September 30, 2021 and December 31, 2020, is composed of the following:

(In thousands)	September 30, 2021		December 31, 2020
Twinbrook Quarter	$	127,348	$	—
Hampden House	53,619		50,723
The Waycroft	—		8,651
Ashbrook Marketplace	—		153
Other	10,740		9,950
Total	$	191,707	$	69,477

Leases

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.

An operating lease right of use asset and corresponding lease liability related to our headquarters lease are reflected 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 $321,900 and $334,500, respectively, at September 30, 2021.

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 Accounting Standards Update 2016-02, "Accounting for Leases"
("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 staff of the Financial Accounting Standards Board 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.

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 $24.6 million and $26.9 million, net of accumulated amortization of $47.7 million and $44.5 million, as of September 30, 2021 and December 31, 2020, respectively. Amortization expense, included in depreciation and amortization of

-13-

Notes to Consolidated Financial Statements (Unaudited)

lease costs in the Consolidated Statements of Operations, totaled $3.6 million and $4.0 million for the nine months ended September 30, 2021 and 2020, respectively.

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 $34.2 million and $33.6 million for the nine months ended September 30, 2021 and 2020, respectively. Repairs and maintenance expense totaled $10.2 million and $8.0 million for the nine months ended September 30, 2021 and 2020, respectively, and is included in property operating expenses in the Consolidated Statements of Operations.

As of September 30, 2021, 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.

Acquisitions

On November 5, 2019, the Company entered into an agreement (the “Twinbrook Contribution Agreement”) to acquire from 1592 Rockville Pike LLC ("1592 Rockville Pike"), a wholly-owned subsidiary of the B. F. Saul Real Estate Investment Trust (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”). The Contributed Property is immediately adjacent to approximately 10.3 acres owned by the Company. In exchange for the Contributed Property, the Company will issue to 1592 Rockville Pike 1,416,071 limited partnership units in the Operating Partnership. Title to the Contributed Property and the units were placed in escrow until certain conditions of the Twinbrook Contribution Agreement were satisfied.

The units issued to 1592 Rockville Pike will remain in escrow until the conditions of the Twinbrook Contribution Agreement, as amended, are satisfied. Half of the units held in escrow were released on the October 18, 2021. The remaining units held in escrow are scheduled to be released on October 18, 2023.

On March 5, 2021, the Company entered into an amendment to the Twinbrook Contribution Agreement in which it and 1592 Rockville Pike agreed to release to the Company from escrow the deed and assignment of the leasehold interest of the Contributed Property, as of that date. The Company also reimbursed 1592 Rockville Pike for certain expenses pursuant to the Twinbrook Contribution Agreement totaling $7.4 million. Acquisition costs totaled $1.2 million. The Company recorded a finance lease right-of-use asset of $19.4 million and corresponding lease liability of $19.4 million related to the leasehold interest assumed in the transaction. The incremental borrowing rate used to calculate the lease liability was 5.63%.

On June 29, 2021, the third-party landlord under the ground lease contributed to the Company the fee simple interest in the land underlying the leasehold interest in exchange for 469,740 limited partnership units in the Operating Partnership, representing an aggregate value of $21.5 million. Acquisition costs were paid in cash and totaled $0.7 million. Accordingly, the finance lease right-of-use asset and finance lease liability were extinguished. Amortization expense and interest expense related to the lease totaled $104,000 and $362,800, respectively, for the nine months ended September 30, 2021.

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

As of September 30, 2021, 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”) held an aggregate 25.1% limited partnership interest in the Operating Partnership represented by approximately 8.1 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, 2021, approximately 1.0 million units could be converted into shares of Saul Centers common stock.

-14-

Notes to Consolidated Financial Statements (Unaudited)

As of September 30, 2021, a third party investor holds a 1.5% limited partnership interest in the Operating Partnership represented by 469,740 convertible limited partnership units. At the option of the unit holder, these units are convertible into shares of Saul Centers’ common stock on a one-for-one basis; provided that, in lieu of the delivery of Saul Centers' common stock, Saul Centers may, in its sole discretion, deliver cash in an amount equal to the value of such Saul Centers' common stock.

The impact of the aggregate 26.6% limited partnership interest in the Operating Partnership held by parties other than Saul Centers is reflected as Noncontrolling Interests in the accompanying consolidated financial statements. Weighted average fully diluted partnership units and common stock outstanding for the three months ended September 30, 2021 and 2020, was approximately 33.7 million and 31.3 million, respectively, and for the nine months ended September 30, 2021 and 2020, was approximately 32.9 million and 31.2 million, respectively.

The 0.7 million limited partnership units remaining in escrow after October 18, 2021, in connection with the Twinbrook Contribution Agreement are not eligible to receive distributions from the Operating Partnership until such time as they are released from escrow.

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

The principal amount of the Company’s outstanding debt totaled approximately $1.1 billion at September 30, 2021, of which approximately $949.5 million was fixed-rate debt and approximately $198.0 million was variable rate debt outstanding under the credit facility. The carrying value of the properties collateralizing the notes payable totaled approximately $1.1 billion as of September 30, 2021.

On August 31, 2021, the Company replaced its credit facility. The new credit facility, which can be used for working capital, property acquisitions, development projects or letters of credit, totals $525.0 million (the “New Facility”), of which $425.0 million is a revolving credit facility (the “Revolving Line”) and $100.0 million is a term loan (the “Term Loan”). The Revolving Line matures on August 29, 2025, which term may be extended by the Company for one additional year, subject to satisfaction of certain conditions. The Term Loan matures on February 26, 2027, and may not be extended. In general, loan availability under the New Facility is primarily determined by operating income from the Company’s existing unencumbered properties. Interest accrues at a rate of LIBOR plus a spread of 135 basis points to 195 basis points under the Revolving Line, and 130 basis points to 190 basis points under the Term Loan, each as determined by certain leverage tests. As of September 30, 2021, the applicable spread for borrowings is 140 basis points under the Revolving Line 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 New Facility. Letters of credit may be issued under the revolving credit facility. On September 30, 2021, based on the value of the Company’s unencumbered properties, approximately $228.2 million was available under the Revolving Line, $98.0 million was outstanding and approximately $185,000 was committed for letters of credit.

On January 5, 2021, the Company repaid in full the remaining principal balance of $6.1 million of the mortgage loan secured by Jamestown Place, which was scheduled to mature in February 2021.

On June 11, 2021, the Company repaid in full the remaining principal balance of $5.0 million of the mortgage loan secured by Hunt Club Corners, which was scheduled to mature in August 2021.

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 $3.3 million of the $65.1 million outstanding balance at September 30, 2021, which guarantee will be reduced to zero on October 1, 2021), (b) a portion of the Broadlands mortgage (approximately $3.7 million of the $29.9 million outstanding balance at September 30, 2021), (c) a portion of the Avenel Business Park mortgage (approximately $6.3 million of the $24.4 million outstanding balance at September 30, 2021), (d) a portion of The Waycroft mortgage (approximately $23.6 million of the $148.5 million outstanding balance at September 30, 2021), (e) the Ashbrook Marketplace mortgage (totaling $21.5 million at September 30, 2021), and (f) the mortgage secured by Kentlands Place, Kentlands Square I and Kentlands Pad (totaling $29.2 million at September 30, 2021). All other notes payable are non-recourse.

At December 31, 2020, the principal amount of the Company’s outstanding debt totaled approximately $1.2 billion, of which $980.8 million was fixed rate debt and $179.5 million was variable rate debt, including $104.5 million outstanding under an unsecured revolving credit facility. The carrying value of the properties collateralizing the notes payable totaled approximately $1.2 billion as of December 31, 2020.

-15-

Notes to Consolidated Financial Statements (Unaudited)

At September 30, 2021, 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, 2021	$	—		$	7,679	$	7,679
2022	36,502			31,016		67,518
2023	9,225			31,479		40,704
2024	66,164			30,876		97,040
2025	118,363		(a)	27,860		146,223
2026	134,088			24,333		158,421
Thereafter	537,673			92,253		629,926
Principal amount	$	902,015		$	245,496	1,147,511
Unamortized deferred debt costs						11,576
Net						$	1,135,935

(a) Includes $98.0 million outstanding under the Revolving Line.

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 $11.6 million and $9.3 million, net of accumulated amortization of $7.2 million and $8.7 million, at September 30, 2021 and December 31, 2020, respectively, and are reflected as a reduction of the related debt in the Consolidated Balance Sheets.

Interest expense, net and amortization of deferred debt costs for the three and nine months ended September 30, 2021 and 2020, were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Interest incurred	$	12,481	$	12,933	$	38,062	$	38,788
Amortization of deferred debt costs	425		402		1,237		1,163
Capitalized interest	(1,991)		(909)		(4,734)		(5,813)
Interest expense	10,915		12,426		34,565		34,138
Less: Interest income	1		28		6		127
Interest expense, net and amortization of deferred debt costs	$	10,914	$	12,398	$	34,559	$	34,011

6.    Equity

The consolidated statements of operations for the nine months ended September 30, 2021 and 2020, reflect noncontrolling interests of $9.7 million and $7.7 million, respectively, representing income attributable to limited partnership units not held by Saul Centers.

At September 30, 2021, 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.

-16-

Notes to Consolidated Financial Statements (Unaudited)

At September 30, 2021, 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.

	Three months ended September 30,		Nine months ended September 30,
(In thousands)	2021	2020	2021	2020
Weighted average common stock outstanding-Basic	23,692	23,353	23,619	23,329
Effect of dilutive options	4	—	2	1
Weighted average common stock outstanding-Diluted	23,696	23,353	23,621	23,330
Non-dilutive options	1,350	1,516	1,474	1,418
Years non-dilutive options were issued	2014 through 2020	2011 through 2020	2011 and 2014 through 2020	2014 through 2020

7.     Related Party Transactions

The Chairman and Chief Executive Officer, the President and Chief Operating Officer, the Executive Vice President-Chief Legal and Administrative Officer and the Senior Vice President-Chief Accounting Officer and Treasurer 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 and Treasurer 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 6% of the employee’s cash compensation, subject to certain limits, were $328,500 and $255,200 for the nine months ended September 30, 2021 and 2020, 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, 2021 and 2020, the Company credited to employee accounts $120,800 and $164,800, 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 $3.0 million and $2.9 million, at September 30, 2021 and December 31, 2020, respectively, and is included in accounts payable, accrued expenses and other liabilities in the Consolidated Balance Sheets.

-17-

Notes to Consolidated Financial Statements (Unaudited)

The Company and the Saul Organization are parties to a shared services agreement (the “Agreement”) 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. Net billings by the Saul Organization for the Company’s share of these ancillary costs and expenses for the nine months ended September 30, 2021 and 2020, which included rental expense for the Company’s headquarters lease, totaled approximately $5.9 million and $6.0 million, 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, 2021 and December 31, 2020, accounts payable, accrued expenses and other liabilities included approximately $883,900 and $782,700, respectively, representing amounts due to the Saul Organization for the Company’s share of these ancillary costs and expenses.

On March 5, 2021, the Company acquired from 1592 Rockville Pike, 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. See Notes 3 and 4.

In August 2016, the Company entered into an agreement (the "Ashbrook Contribution 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. On June 30, 2021, the Company issued 93,674 additional limited partnership units as additional consideration to the Trust in accordance with the Ashbrook Contribution Agreement, as amended.

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 $611,200 and $609,200 for the nine months ended September 30, 2021 and 2020, 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 $280,700 and $320,300 for the nine months ended September 30, 2021 and 2020, 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

-18-

Notes to Consolidated Financial Statements (Unaudited)

quarter to determine the number of shares to be credited to the director. During the nine months ended September 30, 2021, 7,429 shares were credited to director's deferred fee accounts and 7,874 shares were issued. As of September 30, 2021, the director's deferred fee accounts comprise 118,183 shares.

Effective May 7, 2021, the Company granted 250,500 options to its directors and certain officers. The following table summarizes the assumptions used in the valuation of the 2021 and 2020 option grants. During the nine months ended September 30, 2021, stock option expense totaling $1.0 million was included in general and administrative expense in the Consolidated Statements of Operations. As of September 30, 2021, the estimated future expense related to unvested stock options was $2.0 million.

	Directors						Officers
Grant date	April 24, 2020			May 7, 2021			April 24, 2020			May 7, 2021
Exercise price	$	50.00		$	43.89		$	50.00		$	43.89
Volatility	0.258			0.297			0.240			0.275
Expected life (years)	5.0			5.0			7.0			7.0
Assumed yield	3.80		%	4.96		%	3.85		%	4.97		%
Risk-free rate	0.36		%	0.77		%	0.51		%	1.24		%

The table below summarizes the option activity for the nine months ended  September 30, 2021:

	Number of Shares	Weighted Average Exercise Price per share		Aggregate Intrinsic Value
Outstanding at January 1	1,502,670	$	52.86	$	—
Granted	250,500	43.89		—
Exercised	(3,000)	41.82		3,450
Expired/Forfeited	(87,000)	53.60		—
Outstanding at September 30	1,663,170	51.49		171,250
Exercisable at September 30	1,137,295	52.89		133,340

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 of stock options exercised during the nine months ended September 30, 2021 was calculated by using the transaction price on the date of exercise and totaled $3,450. The intrinsic value of stock options exercised during the nine months ended September 30, 2020 totaled $85,268. At September 30, 2021, the final trading day of the 2021 third quarter, the closing share price of $44.06 was lower than the exercise price of 1,397,625 outstanding options granted in 2013 through 2020. The weighted average remaining contractual life of the Company’s outstanding and exercisable options is 6.3 years and 5.3 years, respectively.

9.     Fair Value of Financial Instruments

The carrying values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reasonable estimates of their fair value. The aggregate fair value of the notes payable with fixed-rate payment terms was determined using Level 3 data in a discounted cash flow approach, which is based upon management’s estimate of borrowing rates and loan terms currently available to the Company for fixed-rate financing and, assuming long-term market interest rates of approximately 3.60% and 3.40%, would be approximately $937.3 million and $981.0 million, respectively, compared to the principal balance of $949.5 million and $980.8 million at September 30, 2021 and December 31, 2020, 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.

-19-

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 variety 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 2021 presentation.

(In thousands)	Shopping Centers		Mixed-Use Properties		Corporate and Other		Consolidated Totals
Three months ended September 30, 2021
Real estate rental operations:
Revenue	$	42,485	$	17,771	$	—	$	60,256
Expenses	(8,640)		(6,724)		—		(15,364)
Income from real estate	33,845		11,047		—		44,892
Interest expense, net and amortization of deferred debt costs	—		—		(10,914)		(10,914)
Depreciation and amortization of lease costs	(7,203)		(5,264)		—		(12,467)
General and administrative	—		—		(4,626)		(4,626)
Net income (loss)	$	26,642	$	5,783	$	(15,540)	$	16,885
Capital investment	$	2,629	$	8,722	$	—	$	11,351
Total assets	$	960,247	$	766,761	$	12,492	$	1,739,500
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 lease 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

-20-

Notes to Consolidated Financial Statements (Unaudited)

(In thousands)	Shopping Centers		Mixed-Use Properties		Corporate and Other		Consolidated Totals
Nine Months Ended September 30, 2021
Real estate rental operations:
Revenue	$	126,935	$	52,050	$	—	$	178,985
Expenses	(27,087)		(19,454)		—		(46,541)
Income from real estate	99,848		32,596		—		132,444
Interest expense, net and amortization of deferred debt costs	—		—		(34,559)		(34,559)
Depreciation and amortization of deferred leasing costs	(21,639)		(16,213)		—		(37,852)
General and administrative	—		—		(14,234)		(14,234)
Net income (loss)	$	78,209	$	16,383	$	(48,793)	$	45,799
Capital investment	$	8,200	$	30,631	$	—	$	38,831
Total assets	$	960,247	$	766,761	$	12,492	$	1,739,500
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

-21-

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, resulted in many of our tenants announcing mandated or temporary closures of their operations and/or requesting adjustments to their lease terms. While most of our tenants have re-opened their businesses, there remains significant uncertainty around the long-term economic impact of the COVID-19 pandemic, which 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 store, pharmacy, bank and home improvement store tenants have generally remained fully open, many restaurants have operated with reduced hours and/or limited indoor seating, supplemented with delivery and curbside pick-up, and most health, beauty supply and services, fitness centers, and other non-essential businesses have
re-opened, some with limited customer capacity. The Company is generally not charging late fees or delinquent interest on past due rent payments and, in certain cases, rent deferral agreements have been negotiated to allow tenants temporary relief where needed. As of September 30, 2021, $4.6 million of rents previously deferred have come due. Of the amounts that have come due, $4.5 million has been paid.

13. Subsequent Events

The Company has reviewed operating activities for the period subsequent to September 30, 2021, and determined there are no subsequent events required to be disclosed.

-22-

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, 2020. 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, 2020), “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, 2020), and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” (Part I, Item 2 of this Form 10-Q).

-23-

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, resulted in many of our tenants announcing mandated or temporary closures of their operations and/or requesting adjustments to their lease terms. While most of our tenants have re-opened their businesses, there remains significant uncertainty around the long-term economic impact of the COVID-19 pandemic, which 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.

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 2021 or future periods. As of September 30, 2021, 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 have generally remained fully open, many restaurants have operated with reduced hours and/or limited indoor seating, supplemented with delivery and curbside pick-up, and most health, beauty supply and services, fitness centers, and other non-essential businesses have
re-opened, some with limited customer capacity. As of October 31, 2021, payments by tenants of contractual base rent and operating expense and real estate tax recoveries totaled approximately 98% for the third quarter. The Company is generally not charging late fees or delinquent interest on past due payments and, in limited 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 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. Management considers reserves established as of September 30, 2021, against such potential losses to be reasonable and adequate. Rent collections during the third quarter and 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 October 31, 2021, with the exception of amounts due, which are as of September 30, 2021.

(In thousands)
Original Rent Due By Quarter	Original Rent Amount		Repayment Year	Repayment Amount		Amount Due		Amount Collected		Collection Percentage
	(prior to deferral)			(after deferral)						(based on payments currently due)
2020 First Quarter	$	67	2020	$	331	$	331	$	331	100	%
2020 Second Quarter	6,282		2021	5,533		4,301		4,136		96	%
2020 Third Quarter	1,487		2022	2,089
2020 Fourth Quarter	368		2023	628
2021 First Quarter	193		2024	165
2021 Second Quarter	216		2025	38
2021 Third Quarter	206		Thereafter	73
October 2021	38		Total	$	8,857	$	4,632	$	4,467	96	%
Total	$	8,857

-24-

While we expect collections of rent billings, including minimum rent, operating expense recoveries and real estate tax reimbursements, to remain below pre-pandemic levels in the near-term, when taking into account the amount of time elapsed since the due date of the payment, we continue to experience sequential improvement in our collection rates. The following table summarizes the Company's consolidated total collections of the first quarter, second quarter, third quarter and October 2021 rent billings as of November 1, 2021:

	Retail		Office		Residential		Total
2021 First Quarter	99	%	100	%	99	%	99	%
2021 Second Quarter	99	%	100	%	99	%	99	%
2021 Third Quarter	97	%	100	%	99	%	98	%
October 2021	95	%	99	%	99	%	96	%

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 Act. The Company has information that many tenants applied for these loans and several tenants have communicated that loan proceeds were received and have subsequently remitted rental payments.

As of October 31, 2021, the Company had $8.9 million of cash and cash equivalents and borrowing availability of approximately $220.2 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 have helped minimize interruptions to operations and will put the Company in the best position as the economic recovery continues. 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, 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 continues to impact 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.

In accordance with state and local health authority guidance and with safety protocols in place as recommended by the Centers for Disease Control and Prevention, on June 1, 2021, the Company began transitioning employees from a remote working environment to working in the office. On November 1, 2021, the Company formally reopened, without occupancy restrictions, its corporate office in Bethesda, Maryland. The Company does not anticipate any adverse impact on its ability to continue to operate its business during the transition back to the office.

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, 2021.

Overview

The Company’s primary strategy is to continue to focus on diversification of its assets through development of transit-oriented, residential mixed-use projects in the Washington, D.C. metropolitan area. The Company’s operating strategy also includes improvement of the operating performance of its assets, internal growth of its Shopping Centers through the addition of pad sites, and supplementing its development pipeline with selective redevelopment and renovations of its core Shopping Centers. The Company has a pipeline of entitled sites in its portfolio, some of which are currently shopping center operating properties, 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.

-25-

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, including anchor stores such as supermarkets and drug stores. The Company has executed leases or leases are under negotiation for ten more pad sites.

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 were 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 92.5% at September 30, 2021, from 94.0% at September 30, 2020.

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, 2021, amortizing fixed-rate mortgage debt with staggered maturities from 2022 to 2035 represented approximately 82.7% of the Company’s notes payable, thus minimizing refinancing risk. The Company’s variable-rate debt consists of $198.0 million outstanding under the credit facility. As of September 30, 2021, the Company has availability of approximately $228.2 million under its $425.0 million unsecured revolving credit facility.

Although management intends to concentrate future acquisition and development activities on transit-oriented, 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.

	Nine months ended September 30,
	2021		2020		2019		2018		2017
Base rent	$	20.59	$	19.80	$	20.15	$	20.13	$	19.30
Effective rent	$	18.87	$	18.09	$	18.27	$	18.25	$	17.49

-26-

Recent Developments

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 located on North Glebe Road in Arlington, Virginia, and apartment occupancy commenced in April 2020. The total cost of the project, including acquisition of land, is expected to be approximately $279.0 million. A portion of the cost was financed with a $157.0 million construction-to-permanent loan. Including approximately $19.1 million of capitalized interest, costs incurred through September 30, 2021 total approximately $277.9 million, of which $148.5 million has been financed by the loan. Leases have been executed for approximately 90% of the total planned retail space, including a 41,500 square foot Target and 12,600 square feet of retail shop space. Target began operating in August 2020 and 2,400 square feet of retail space became operational during the third quarter of 2020. As of September 30, 2021, the residential component of The Waycroft was 98.0% leased.

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, which, as of September 30, 2021, is 100% leased. On June 30, 2021, the Company issued 93,674 additional limited partnership units as additional consideration to the Trust in accordance with the Ashbrook Contribution Agreement, as amended.

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, known as Hampden House, for the development of up to 366 apartment units and 10,100 square feet of retail space. In June 2020, the Montgomery County Planning Commission unanimously approved the Company's amended site plan. Design and construction documents are being prepared. Approval from the Washington Metropolitan Area Transit Authority was received in 2020 and the approval from Maryland Transit Administration is in process and is expected to be received by the fourth quarter of 2021. Effective September 1, 2019, the asset was removed from service and transferred to construction in progress. The Company is working with a lender that has offered to make a $133.0 million construction-to-permanent loan, the proceeds of which will be used to partially finance the project. The timing of construction of the project has not yet been determined. However, the Company anticipates that demolition of the existing vacant building will begin during the fourth quarter of 2021 to prepare the site for future development.

On November 5, 2019, the Company entered into the Twinbrook Contribution Agreement to acquire the Contributed Property from 1592 Rockville Pike. The Contributed Property is immediately adjacent to approximately 10.3 acres owned by the Company. In exchange for the Contributed Property, the Company will issue to 1592 Rockville Pike 1,416,071 limited partnership units in the Operating Partnership. Title to the Contributed Property and the units were placed in escrow pending satisfaction of certain conditions of the Twinbrook Contribution Agreement.

On March 5, 2021, the Company entered into an amendment to the Twinbrook Contribution Agreement in which it and 1592 Rockville Pike agreed to release to the Company from escrow the deed and assignment of the leasehold interest of the Contributed Property, as of that date, and reimburse 1592 Rockville Pike for certain expenses pursuant to the Twinbrook Contribution Agreement. The units continued to remain in escrow pending satisfaction of the conditions of the Twinbrook Contribution Agreement, as amended.

The Company acquired title to the Contributed Property earlier than originally contemplated in order to have complete control over the final aspects of predevelopment, project bidding, contractor selection and lender discussions in support of Phase I. This control will also assure the preservation of the Wegmans lease and its value to this site and, as importantly, to the Company’s adjacent holdings.

On June 29, 2021, the third-party landlord under the ground lease contributed the fee simple interest in the land underlying the leasehold interest to the Company in exchange for 469,740 limited partnership units in the Operating Partnership, representing an aggregate value of $21.5 million. Acquisition costs were paid in cash and totaled $0.7 million.

The remaining conditions of the Twinbrook Contribution Agreement were satisfied during the third quarter of 2021, and, effective October 18, 2021, 708,036 units were released to 1592 Rockville Pike from escrow. The remaining 708,035 units continue to be held in escrow and will be released to 1592 Rockville Pike on October 18, 2023.

The full project plan for redevelopment of a major mixed-use project spanning both the Company’s property and the Contributed Property was finalized in 2019 and rights to develop the project extend for a thirty-year term to 2049. A site plan allowing for development of a planned Phase I within the Contributed Property, which includes an 80,000 square foot

-27-

Wegmans, adjacent small shop space, 450 apartments and a 230,000 square foot office building, was approved by the City of Rockville in August 2020. The approval of the site plan was unanimous, however, it was appealed by a local resident. The Circuit Court for Montgomery County has issued a decision affirming the City's approval of the site plan and that decision is now final and unappealable. Demolition of the existing improvements within Phase I has been completed and site excavation is in process. The phasing of remaining improvements and the timing of construction will depend on removal of contingencies, building permit approval and market conditions. The development potential of the entire 18.4 acre Twinbrook Quarter 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 when identifying impairment indicators including recurring operating losses, significant decreases in occupancy, and significant adverse changes in market conditions, legal factors and business climate. If impairment indicators are present, the Company compares the projected cash flows of the property over its remaining useful life, on an undiscounted basis, to the carrying value of that property. The Company assesses its undiscounted projected cash flows based upon estimated capitalization rates, historic operating results and market conditions that may affect the property. If the carrying value is greater than the undiscounted projected cash flows, the Company would recognize an impairment loss equivalent to an amount required to adjust the carrying amount to its then estimated fair value. The fair value of any property is sensitive to the actual results of any of the aforementioned estimated factors, either individually or taken as a whole. Should the actual results differ from management’s projections, the valuation could be negatively or positively affected.

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, and the charge off 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. We also assess whether operating lease receivables, at the portfolio level, are appropriately valued based upon an analysis of balances outstanding, effects of tenant bankruptcies, historical levels of bad debt and current economic trends. Additionally, because of the uncertainties related to the impact of the COVID-19 pandemic, our assessment also takes into consideration the types of business conducted by tenants and current discussions with the tenants, as well as recent rent collection experience. Evaluating and estimating uncollectable lease payments and related receivables requires a significant amount of judgment by management and is based on the best information available to management at the time of evaluation. Actual results could differ from these estimates.

-28-

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, 2021 (the "2021 Quarter") compared to the three months ended September 30, 2020 (the "2020 Quarter")

Revenue 

	Three months ended September 30,				2020 to 2021 Change
(Dollars in thousands)	2021		2020		Amount		Percent
Base rent	$	49,829	$	48,268	$	1,561	3.2	%
Expense recoveries	8,488		8,973		(485)		(5.4)	%
Percentage rent	208		60		148		246.7	%
Other property revenue	384		309		75		24.3	%
Credit (losses) recoveries on operating lease receivables	149		(1,861)		2,010		(108.0)	%
Rental revenue	59,058		55,749		3,309		5.9	%
Other revenue	1,198		1,011		187		18.5	%
Total revenue	$	60,256	$	56,760	$	3,496	6.2	%

Base rent includes $310,900 and $1.2 million for the 2021 Quarter and 2020 Quarter, respectively, to recognize base rent on a straight-line basis. In addition, base rent includes $343,000 and $349,300, for the 2021 Quarter and 2020 Quarter, respectively, to recognize income from the amortization of in-place leases acquired in connection with purchased real estate investment properties.

Total revenue increased 6.2% in the 2021 Quarter compared to the 2020 Quarter, as described below.

Base Rent. The $1.6 million increase in base rent in the 2021 Quarter compared to the 2020 Quarter is primarily attributable to the increase in occupancy at The Waycroft, which opened in April 2020 ($2.1 million) partially offset by lower base rent at 601 Pennsylvania Avenue ($0.5 million).

Percentage Rent. The 246.7% increase in percentage rent in the 2021 Quarter compared to the 2020 Quarter is primarily attributable to increased sales reported by anchor tenants at multiple Shopping Centers.

Credit (Losses) Recoveries on Operating Lease Receivables. Credit losses on operating lease receivables for the 2021 Quarter decreased $2.0 million from the 2020 Quarter. The decrease is primarily due to net collections across the portfolio as tenant operations have improved due to restrictions related to COVID-19 being removed or lessened.

-29-

Expenses

	Three months ended September 30,				2020 to 2021 Change
(Dollars in thousands)	2021		2020		Amount		Percent
Property operating expenses	$	8,210	$	7,416	$	794	10.7	%
Real estate taxes	7,154		7,523		(369)		(4.9)	%
Interest expense, net and amortization of deferred debt costs	10,914		12,398		(1,484)		(12.0)	%
Depreciation and amortization of lease costs	12,467		13,713		(1,246)		(9.1)	%
General and administrative	4,626		4,107		519		12.6	%
Total expenses	$	43,371	$	45,157	$	(1,786)	(4.0)	%

Total expenses decreased 4.0% in the 2021 Quarter compared to the 2020 Quarter, as described below.

Property Operating Expenses. Property operating expenses increased 10.7% in the 2021 Quarter primarily due to increased expenses throughout the portfolio as a result of the deferral of certain maintenance costs in 2020 ($0.7 million).

Real Estate Taxes. Real estate taxes decreased 4.9% in the 2021 Quarter primarily due to lower assessments at several properties throughout the portfolio.

Interest Expense, net and Amortization of Deferred Debt Costs. Interest expense, net and amortization of deferred debt costs decreased 12.0% in the 2021 Quarter primarily due to higher capitalized interest ($1.1 million). The increase was largely driven by the Twinbrook development project.

General and Administrative. General and administrative expenses increased 12.6% in the 2021 Quarter primarily due to increased salaries and benefits ($0.3 million).

Nine months ended September 30, 2021 (the "2021 Period") compared to the nine months ended September 30, 2020 (the "2020 Period")

Revenue 

	Nine Months Ended   September 30,				2020 to 2021 Change
(Dollars in thousands)	2021		2020		Amount		Percent
Base rent	$	147,877	$	140,120	$	7,757	5.5	%
Expense recoveries	26,235		25,775		460		1.8	%
Percentage rent	1,294		496		798		160.9	%
Other property revenue	1,030		938		92		9.8	%
Credit losses on operating lease receivables	(802)		(4,162)		3,360		(80.7)	%
Rental revenue	175,634		163,167		12,467		7.6	%
Other revenue	3,351		3,756		(405)		(10.8)	%
Total revenue	$	178,985	$	166,923	$	12,062	7.2	%

Base rent includes $1.8 million and $987,100 for the 2021 Period and the 2020 Period, respectively, to recognize base rent on a straight-line basis. In addition, base rent includes $1.0 million and $1.1 million for the 2021 Period and the
2020 Period, respectively, to recognize income from the amortization of in-place leases acquired in connection with purchased real estate investment properties.

Total revenue increased 7.2% in the 2021 Period compared to the 2020 Period, as described below.

-30-

Base Rent. The $7.8 million increase in base rent in the 2021 Period compared to 2020 Period is primarily attributable to (a) increased occupancy at The Waycroft, which opened in April 2020 ($8.3 million) and (b) increased occupancy at Ashbrook Marketplace, which opened in November 2019 ($1.0 million), partially offset by (c) lower rent at 601 Pennsylvania Avenue ($1.0 million) and (d) lower rent at Washington Square ($0.7 million).

Percentage Rent. The 160.9% increase in percentage rent in the 2021 Period compared to the 2020 Period is primarily attributable to increased sales reported by anchor and retail tenants at multiple Shopping Centers.

Credit Losses on Operating Lease Receivables. Credit losses on operating lease receivables for the 2021 Period represents 0.4% of the Company’s revenue, a decrease from 2.5% for the 2020 Period. The decrease is primarily due to collections across the portfolio as tenant operations have improved due to restrictions related to COVID-19 being removed or lessened.

Other Revenue. Other revenue decreased $0.4 million primarily due to (a) lower lease termination fees ($0.8 million) partially offset by (b) higher parking revenue ($0.4 million).

Expenses

	Nine Months Ended   September 30,				2020 to 2021 Change
(Dollars in thousands)	2021		2020		Amount		Percent
Property operating expenses	$	24,420	$	20,862	$	3,558	17.1	%
Real estate taxes	22,121		22,027		94		0.4	%
Interest expense, net and amortization of deferred debt costs	34,559		34,011		548		1.6	%
Depreciation and amortization of deferred leasing costs	37,852		37,593		259		0.7	%
General and administrative	14,234		13,790		444		3.2	%
Total expenses	$	133,186	$	128,283	$	4,903	3.8	%

Total expenses increased 3.8% in the 2021 Period compared to the 2020 Period, as described below.

Property Operating Expenses. Property operating expenses increased 17.1% in the 2021 Period primarily due to (a) increased expenses at The Waycroft, which opened in April 2020 ($1.6 million), (b) increased expenses throughout the portfolio related to snow removal ($1.3 million), and (c) increased expenses throughout the portfolio, exclusive of The Waycroft ($0.7 million).

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 lease 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.

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.

-31-

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 months ended September 30, 2021 and 2020 include 50 Shopping Centers and seven Mixed-Use properties. The same property results for the nine months ended September 30, 2021 and 2020 include 50 Shopping Centers and six Mixed-Use properties.

Same property revenue

(in thousands)	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020
Total revenue	$	60,256	$	56,760	$	178,985	$	166,923
Less: Acquisitions, dispositions and development properties	—		—		(11,309)		(2,151)
Total same property revenue	$	60,256	$	56,760	$	167,676	$	164,772
Shopping Centers	$	42,485	$	40,336	$	126,935	$	120,236
Mixed-Use properties	17,771		16,424		40,741		44,536
Total same property revenue	$	60,256	$	56,760	$	167,676	$	164,772
Total Shopping Center revenue	$	42,485	$	40,336	$	126,935	$	120,236
Less: Shopping Center acquisitions, dispositions and development properties	—		—		—		—
Total same Shopping Center revenue	$	42,485	$	40,336	$	126,935	$	120,236
Total Mixed-Use property revenue	$	17,771	$	16,424	$	52,050	$	46,687
Less: Mixed-Use acquisitions, dispositions and development properties	—		—		(11,309)		(2,151)
Total same Mixed-Use revenue	$	17,771	$	16,424	$	40,741	$	44,536

The $3.5 million increase in same property revenue for the 2021 Quarter compared to the 2020 Quarter, was primarily due to (a) lower credit losses on operating lease receivables and corresponding reserves ($2.3 million), (b) higher base rent, largely due to increased occupancy at The Waycroft ($1.3 million) and (c) higher parking income ($0.4 million), partially offset by (d) lower expense recoveries ($0.5 million).

The $2.9 million increase in same property revenue for the 2021 Period compared to the 2020 Period, was primarily due to (a) lower credit losses on operating lease receivables and corresponding reserves ($4.9 million), (b) higher percentage rent ($0.8 million) and (c) higher expense recoveries ($0.2 million), partially offset by (d) lower base rent ($2.0 million) and (e) lower termination fees ($0.9 million).

-32-

Same property operating income

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Net income	$	16,885	$	11,603	$	45,799	$	38,640
Add: Interest expense, net and amortization of deferred debt costs	10,914		12,398		34,559		34,011
Add: Depreciation and amortization of lease costs	12,467		13,713		37,852		37,593
Add: General and administrative	4,626		4,107		14,234		13,790
Property operating income	44,892		41,821		132,444		124,034
Less: Acquisitions, dispositions and development properties	—		—		(6,655)		(71)
Total same property operating income	$	44,892	$	41,821	$	125,789	$	123,963
Shopping Centers	$	33,845	$	31,581	$	99,848	$	94,195
Mixed-Use properties	11,047		10,240		25,941		29,768
Total same property operating income	$	44,892	$	41,821	$	125,789	$	123,963
Shopping Center operating income	$	33,845	$	31,581	$	99,848	$	94,195
Less: Shopping Center acquisitions, dispositions and development properties	—		—		—		—
Total same Shopping Center operating income	$	33,845	$	31,581	$	99,848	$	94,195
Mixed-Use property operating income	$	11,047	$	10,240	$	32,596	$	29,839
Less: Mixed-Use acquisitions, dispositions and development properties	—		—		(6,655)		(71)
Total same Mixed-Use property operating income	$	11,047	10,240		$	25,941	$	29,768

Same property operating income increased $3.1 million (7.3%) for the 2021 Quarter compared to the 2020 Quarter. Shopping Center same property operating income for the 2021 Quarter totaled $33.8 million, a $2.3 million increase from the 2020 Quarter. Mixed-Use same property operating income totaled $11.0 million, a $0.8 million increase from the 2020 Quarter. The increase in Shopping Center same property operating income was primarily the result of (a) lower credit losses on operating lease receivables and corresponding reserves (collectively, $2.0 million) and (b) higher base rent ($0.3 million). The increase in Mixed-Use same property operating income was primarily the result of (a) higher base rent ($1.0 million), (b) lower credit losses on operating lease receivables and corresponding reserves (collectively, $0.3 million) and (c) higher parking income, net of expenses ($0.3 million), partially offset by (d) lower expense recoveries, net of expenses ($0.7 million) and (e) lower lease termination fees ($0.2 million).

Same property operating income increased $1.8 million (1.5%) for the 2021 Period, compared to the 2020 Period. Shopping Center same property operating income increased $5.7 million (6.0%) and Mixed-Use same property operating income decreased $3.8 million (12.9%). Shopping Center same property operating income increased primarily due to (a) lower credit losses on operating lease receivables and corresponding reserves (collectively, $4.3 million), (b) higher base rent ($1.5 million) and (c) higher percentage rent ($0.6 million), partially offset by (d) lower expense recoveries, net of expenses ($0.5 million) and (e) lower termination fees ($0.2 million). Mixed-use same property operating income decreased primarily due to (a) lower base rent ($3.5 million), (b) lower termination fees ($0.7 million) and (c) lower expense recoveries, net of expenses ($0.4 million), partially offset by (d) lower credit losses on operating lease receivables and corresponding reserves (collectively, $0.6 million).

-33-

Liquidity and Capital Resources

Cash and cash equivalents totaled $11.9 million and $54.3 million at September 30, 2021 and 2020, 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)	2021		2020
Net cash provided by operating activities	$	89,062	$	56,770
Net cash used in investing activities	(38,831)		(48,363)
Net cash provided by (used in) financing activities	(65,170)		31,993
Net increase (decrease) in cash and cash equivalents	$	(14,939)	$	40,400

Operating Activities

Net cash provided by operating activities represents cash received primarily from rental revenue, plus other revenue, less property operating expenses, leasing costs, normal recurring general and administrative expenses and interest payments on debt outstanding.

Investing Activities

Net cash used in investing activities includes property acquisitions, developments, redevelopments, tenant improvements and other property capital expenditures. The $9.5 million decrease in cash used in investing activities is primarily due to (a) decreased development expenditures ($19.5 million), partially offset by (b) increased acquisitions of real estate investments ($9.0 million) and (c) increased additions to real estate investments throughout the portfolio ($0.9 million).

Financing Activities

Net cash provided by (used in) 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. The Company anticipates that long-term liquidity requirements will also include amounts required for property acquisitions and developments. The Company is in the early stages of the development of Phase I of the Twinbrook Quarter, a project that includes an 80,000 square foot Wegmans, adjacent small shop space, 450 apartments and a 230,000 square foot office building in Rockville, Maryland. The Company is working with a lender that has offered to make a $145.0 million construction-to-permanent loan, the proceeds of which will be used to partially finance the project. The loan is expected to close in the fourth quarter of 2021, subject to customary loan closing conditions. Costs incurred are currently funded through working capital, including the Company's existing line of credit. The Company has completed development plans for the combined property, known as Hampden House, for the development of up to 366 apartment units and 10,100 square feet of retail space. The Company is working with a lender that has offered to make a $133.0 million construction-to-permanent loan, the proceeds of which will be used to partially finance the project. The timing of construction of the project has not yet been determined. However, the Company anticipates that demolition of the existing vacant building will begin during the fourth quarter of 2021 to prepare the site for future development. The Company may also redevelop certain of the

-34-

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, 2021 included cash balances of approximately $8.9 million and borrowing availability of approximately $220.2 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 224,706 and 106,050 shares under the DRIP at a weighted average discounted price of $37.41 and $44.62 per share, during the nine months ended September 30, 2021 and 2020, respectively. The Company issued 47,312 and 28,209 limited partnership units under the DRIP at a weighted average price of $37.94 and $40.14 per unit during the nine months ended September 30, 2021 and 2020, respectively. The Company also credited 4,939 and 5,080 shares to directors pursuant to the reinvestment of dividends specified by the Directors’ Deferred Compensation Plan at a weighted average discounted price of $37.52 and $34.76 per share, during the nine months ended September 30, 2021 and 2020, 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, 2021.

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, 2021, the Company had a $525.0 million credit facility comprised of a $425.0 million revolving credit facility and a $100.0 million term loan. As of September 30, 2021, the applicable spread for borrowings was 140 basis points under the Revolving Line 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 New Facility. Letters of credit may be issued under the revolving credit facility. As of September 30, 2021, based on the value of the Company’s unencumbered properties, approximately $228.2 million was available under the Revolving Line, $98.0 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:

-35-

•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, 2021, the Company was in compliance with all such covenants.

Off-Balance Sheet Arrangements

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

Funds From Operations

Funds From Operations (FFO)1 available to common stockholders and noncontrolling interests for the 2021 Period, totaled $75.3 million, an increase of 10.9% compared to the 2020 Period. FFO available to common stockholders and noncontrolling interests increased primarily due to (a) lower credit losses on operating lease receivables and corresponding reserves (collectively, $4.8 million), (b) increased occupancy at The Waycroft, which opened in April 2020 ($1.2 million), (c) higher percentage rent (0.8 million), and (d) increased occupancy at Ashbrook Marketplace, which opened in November 2019 ($0.6 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)	2021		2020		2021		2020
Net income	$	16,885	$	11,603	$	45,799	$	38,640
Add:
Real estate depreciation and amortization	12,467		13,713		37,852		37,593
FFO	29,352		25,316		83,651		76,233
Subtract:
Preferred stock dividends	(2,798)		(2,798)		(8,395)		(8,394)
FFO available to common stockholders and noncontrolling interests	$	26,554	$	22,518	$	75,256	$	67,839
Weighted average shares and units:
Basic	32,237		31,264		31,774		31,232
Diluted (2)	33,656		31,264		32,877		31,233
Basic FFO per share available to common stockholders and noncontrolling interests	$	0.82	$	0.72	$	2.37	$	2.17
Diluted FFO per share available to common stockholders and noncontrolling interests	$	0.79	$	0.72	$	2.29	$	2.17

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

-36-

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.

2    Beginning March 5, 2021, fully diluted shares and units includes 1,416,071 limited partnership units that are held in escrow related to the contribution of Twinbrook Quarter by 1592 Rockville Pike. The units will remain in escrow until the conditions of the Twinbrook Contribution Agreement, as amended, are satisfied.

Acquisitions and Redevelopments

Management anticipates that during the coming year, the Company will complete the remaining retail spaces at The Waycroft. The Company 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.

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, 2021	50	7	7,872,002	1,136,937	93.6	%	85.0	%
September 30, 2020	50	7	7,876,842	1,136,937	94.5	%	90.3	%

As of September 30, 2021, 92.5% of the Commercial portfolio was leased, compared to 94.0% September 30, 2020. On a same property basis, 92.5% of the Commercial portfolio was leased, compared to 94.0% at September 30, 2020. As of September 30, 2021, the Residential portfolio was 97.8% leased compared to 73.9% at September 30, 2020. As of September 30, 2021, excluding The Waycroft, the Residential portfolio was 97.7% leased compared to 94.4% at September 30, 2020.

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.

Commercial Property Leasing Activity			Average Base Rent per Square Foot
Three months ended September 30,	Square Feet	Number of Leases	New/Renewed Leases		Expiring Leases
2021	242,172	59	$	20.64	$	20.95
2020	288,059	66	24.67		25.09

-37-

Additional information about the leasing activity during the three months ended September 30, 2021 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.

	Commercial Property Leasing Activity
	New Leases		First Generation/Development Leases		Renewed Leases
Number of leases	13		1		46
Square feet	37,545		1,739		204,627
Per square foot average annualized:
Base rent	$	22.82	$	63.00	$	20.24
Tenant improvements	(2.64)		—		(0.32)
Leasing costs	(0.77)		—		(0.04)
Rent concessions	(0.67)		—		(0.11)
Effective rents	$	18.74	$	63.00	$	19.77

During the three months ended September 30, 2021, on a same property basis, the Company entered into 331 new or renewed apartment leases. The average monthly rent per square foot increased to $3.38 from $3.30. 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.

As of December 31, 2020, 889,250 square feet of Commercial space was subject to leases scheduled to expire in 2021. Of those leases, as of September 30, 2021, leases representing 406,442 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 Commercial Property Leases	Total
Square feet	406,442
Average base rent per square foot	$	24.77
Estimated market base rent per square foot	$	23.52

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, 2021, the Company had variable rate indebtedness totaling $198.0 million. If the interest rates on the Company’s variable rate debt instruments outstanding at September 30, 2021 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, 2021, the Company had fixed-rate indebtedness totaling $949.5 million with a weighted average interest rate of 4.93%. If interest rates on the Company’s fixed-rate debt instruments at September 30, 2021 had been one percentage point higher, the fair value of those debt instruments on that date would have been approximately $48.6 million less than the carrying value.

-38-

Item 4. Controls and Procedures

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

The Company carried out an evaluation under the supervision and with the participation of the Company’s management, including its Chairman and Chief Executive Officer, its Senior Vice President-Chief Financial Officer, and its Senior Vice President-Chief Accounting Officer and Treasurer of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of September 30, 2021. Based on the foregoing, the Company’s Chairman and Chief Executive Officer, its Senior Vice President-Chief Financial Officer and its Senior Vice President-Chief Accounting Officer and Treasurer concluded that the Company’s disclosure controls and procedures were effective at the reasonable assurance level as of September 30, 2021.

During the quarter ended September 30, 2021, 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.

-39-

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 2020 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, 2021, approximately 21% of base rent is generated from tenants in lines of trade that have been impacted by mandated temporary closures or other social-distancing guidelines issued by federal, state and local governments including:

•beauty services and dry cleaners (6%);

•apparel and footwear (4%);

•full-service and limited-service restaurants (4%);

•specialty retail (3%);

•health and fitness (3%); and

•other (1%).

-40-

A prolonged imposition of, or in some cases a return to, 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 and Chief Executive Officer, his spouse and entities affiliated with Mr. Saul II, through participation in the Company’s Dividend Reinvestment and Stock Purchase Plan for the July 31, 2021 dividend distribution acquired 56,528 shares of common stock at a price of $44.44 per share and 13,841 limited partnership units at a price of $44.92 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

10.	(a)	The Eighteenth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership (filed herewith).
31.		Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer and Chief Financial Officer (filed herewith).*
32.		Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer (filed herewith).*
99.	(a)	Schedule of Portfolio Properties (filed herewith).
101.		The following financial statements from the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2021, 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.

-41-

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 4, 2021	/s/ D. Todd Pearson
	D. Todd Pearson President and Chief Operating Officer
Date: November 4, 2021	/s/ Carlos L. Heard
	Carlos L. Heard Senior Vice President and Chief Financial Officer (principal financial officer)
Date: November 4, 2021	/s/ Joel A. Friedman
	Joel A. Friedman Senior Vice President, Chief Accounting Officer and Treasurer (principal accounting officer)

-42-

EX-10.A

Exhibit 10.(a) 1 EIGHTEENTH AMENDMENT TO THE FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF SAUL HOLDINGS LIMITED PARTNERSHIP THIS EIGHTEENTH AMENDMENT TO THE FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF SAUL HOLDINGS LIMITED PARTNERSHIP (this “Amendment”), dated as of October 18, 2021, is entered into by the undersigned parties. W I T N E S S E T H: WHEREAS, Saul Holdings Limited Partnership (the “Partnership”) was formed as a Maryland limited partnership pursuant to that certain Certificate of Limited Partnership dated June 16, 1993 and filed on June 16, 1993 among the partnership records of the Maryland State Department of Assessments and Taxation, and that certain Agreement of Limited Partnership dated June 16, 1993 (the “Original Agreement”); WHEREAS, the Original Agreement was amended and restated in its entirety by that certain First Amended and Restated Agreement of Limited Partnership of the Partnership dated August 26, 1993, which was further amended by that certain First Amendment dated August 26, 1993, by that certain Second Amendment dated March 31, 1994, by that certain Third Amendment dated July 21, 1994, by that certain Fourth Amendment dated December 1, 1996, by that certain Fifth Amendment dated July 6, 2000, by that certain Sixth Amendment dated November 5, 2003, by that certain Seventh Amendment dated November 26, 2003 , by that certain Eighth Amendment dated December 31, 2007, by that certain Ninth Amendment dated March 27, 2008, by that Tenth Amendment dated April 4, 2008, by that certain Eleventh Amendment dated September 23, 2011, by that certain Twelfth Amendment dated February 12, 2013, by that certain Thirteenth Amendment dated November 12, 2014, by that certain Fourteenth Amendment dated January 23, 2018, by that certain Fifteenth Amendment dated May 9, 2018, by that certain Sixteenth Amendment dated September 17, 2019, and by that certain Seventeenth Amendment dated June 29, 2021 (as amended, the “Agreement”); WHEREAS, pursuant to a Contribution Agreement, dated November 5, 2019, as amended by that certain First Amendment to the Contribution Agreement dated March 5, 2021 (as amended, the “Contribution Agreement”), among the Partnership and 1592 Rockville Pike LLC, an affiliate of the Partnership (the “Company”), the Company agreed to contribute certain fee and leasehold interests in certain land and the improvements located thereon known as Twinbrook Quarter to the Partnership in exchange (at a time and on the terms and conditions set forth in the Contribution Agreement) for Partnership Units; WHEREAS, the undersigned parties, constituting all of the Partners of the Partnership, desire to amend Exhibit A to the Agreement to reflect such additional Capital Contribution and to consent to the issuance of additional Partnership Units in accordance with the terms set forth in the Contribution Agreement.

Exhibit 10.(a) 2 NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the undersigned parties, intending legally to be bound, hereby agree as follows: 1. The Exhibit A attached to the Agreement is hereby deleted in its entirety and replaced as contemplated by the Exhibit A attached hereto. 2. Notwithstanding anything in the Agreement to the contrary, the General Partner and the Limited Partners party hereto, who hold in the aggregate more than fifty percent (50%) of the total Partnership Interests held by the Limited Partners, hereby consent to the issuance of additional Partnership Units to the Company in accordance with the terms set forth in the Contribution Agreement, which Partnership Units shall carry the Rights set forth in the Agreement. Immediately following the issuance of such Partnership Units to the Company, the Company shall be a Limited Partner for all purposes under the Agreement. 3. Except as the context may otherwise require, any terms used in this Amendment that are defined in the Agreement shall have the same meaning for purposes of this Amendment as in the Agreement. 4. Except as specifically amended hereby, the terms, covenants, provisions and conditions of the Agreement shall remain and continue in full force and effect and, except as amended hereby, all of the terms, covenants, provisions and conditions of the Agreement are hereby ratified and confirmed in all respects. 5. This Amendment may be executed in counterparts, all of which together shall constitute one agreement binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Amendment immediately upon affixing its signature hereto. [Signature Page Follows]

Exhibit 10.(a) 3 IN WITNESS WHEREOF, the undersigned parties have executed this Amendment as of the date first written above. GENERAL PARTNER SAUL CENTERS, INC., a Maryland corporation By: /s/ Carlos L. Heard Name: Carlos L. Heard Title: Senior Vice President and Chief Financial Officer LIMITED PARTNERS B. F. SAUL REAL ESTATE INVESTMENT TRUST, a Maryland unincorporated business trust By: /s/ B. Francis Saul II Name: B. Francis Saul II Title: Chairman and Chief Executive Officer WESTMINSTER INVESTING, LLC, a Maryland limited liability company By: /s/ B. Francis Saul II Name: B. Francis Saul II Title: President VAN NESS SQUARE CORPORATION, a Maryland corporation By: /s/ B. Francis Saul II Name: B. Francis Saul II Title: President

Exhibit 10.(a) 4 DEARBORN, L.L.C., a Delaware limited liability company By: /s/ B. Francis Saul II Name: B. Francis Saul II Title: Chief Executive Officer B.F. SAUL PROPERTY COMPANY, a Maryland corporation By: /s/ B. Francis Saul II Name: B. Francis Saul II Title: Chairman of the Board AVENEL EXECUTIVE PARK PHASE II, L.L.C., a Maryland limited liability company By: /s/ D. Todd Pearson Name: D. Todd Pearson Title: President 1592 ROCKVILLE PIKE LLC, a Delaware limited liability company By: /s/ B. Francis Saul II Name: B. Francis Saul II Title: Chief Executive Officer

Exhibit 10.(a) 5 Exhibit A

Exhibit 10.(a) 6

EX-31

    Exhibit 31

CERTIFICATIONS

I, B. Francis Saul II, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 4, 2021

/s/ B. Francis Saul II

B. Francis Saul II

Chairman and Chief Executive Officer

CERTIFICATIONS

I, Carlos L. Heard, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 4, 2021

/s/ Carlos L. Heard

Carlos L. Heard

Senior Vice President and

Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

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

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, B. Francis Saul II, the Chairman and Chief Executive Officer of Saul Centers, Inc. (the “Company”), has executed this certification in connection with the filing with the Securities and Exchange Commission of the Company’s Quarterly Report on Form 10-Q for the period ending September 30, 2021 (the “Report”). The undersigned hereby certifies that:

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

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

Date: November 4, 2021/s/ B. Francis Saul II

Name: B. Francis Saul II

Title: Chairman and Chief Executive Officer

CERTIFICATION OF CHIEF FINANCIAL OFFICER

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

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, Carlos L. Heard, the Chief Financial Officer of Saul Centers, Inc. (the “Company”), has executed this certification in connection with the filing with the Securities and Exchange Commission of the Company’s Quarterly Report on Form 10-Q for the period ending September 30, 2021 (the “Report”). The undersigned hereby certifies that:

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

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

Date: November 4, 2021/s/ Carlos L. Heard

Name: Carlos L. Heard

Title: Senior Vice President and

Chief Financial Officer

EX-99.A

																		Exhibit 99 (a)
Saul Centers, Inc.
Schedule of Current Portfolio Properties
September 30, 2021
					Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of September 30,										(1)
		Property	Location					2021		2020		2019		2018		2017		Anchor / Significant Tenants
Shopping Centers
	Ashbrook Marketplace		Ashburn, VA		85,819	2018 (2019)	13.7	100	%	100	%	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	%	96	%	97	%	99	%	93	%	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	93	%	99	%	99	%	96	%	95	%	Publix, Palm Beach Fitness, Anima Domus
	Boulevard		Fairfax, VA		49,140	1994 (1999/09)	5.0	96	%	97	%	100	%	100	%	100	%	Panera Bread, Party City, Petco, Capital One Bank
	Briggs Chaney MarketPlace		Silver Spring, MD		194,258	2004	18.2	95	%	97	%	97	%	92	%	98	%	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	92	%	93	%	99	%	77	%	76	%	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	%	100	%	99	%	100	%	100	%	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	93	%	95	%	97	%	95	%	94	%	Safeway, CVS Pharmacy, Starbucks, McDonald's, 7-Eleven
	Cranberry Square		Westminster, MD		141,450	2011	18.9	90	%	87	%	96	%	100	%	100	%	Giant Food, Giant Gas Station, Staples, Party City, Wendy's, Sola Salons
	Cruse MarketPlace		Cumming, GA		78,686	2004	10.6	94	%	92	%	94	%	89	%	89	%	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	76	%	97	%	96	%	96	%	97	%	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	%	98	%	96	%	98	%	Safeway, The All American Steakhouse, Panera Bread, Five Guys, Chipotle
	Great Falls Center		Great Falls, VA		91,666	2008	11.0	98	%	99	%	98	%	99	%	100	%	Safeway, CVS Pharmacy, Trustar Bank, Starbucks, Subway, Long & Foster
	Hampshire Langley		Takoma Park, MD		131,700	1972 (1979)	9.9	100	%	99	%	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	99	%	100	%	100	%	93	%	93	%	Publix, Pet Supermarket, Boost Mobile
	Jamestown Place		Altamonte Springs, FL		96,201	2005	10.9	100	%	100	%	100	%	93	%	95	%	Publix, Carrabas Italian Grill, Orlando Health
	Kentlands Square I		Gaithersburg, MD		116,494	2002	11.5	100	%	100	%	100	%	98	%	98	%	Lowe's Home Improvement Center, Chipotle, Starbucks
	Saul Centers, Inc.
	Schedule of Current Portfolio Properties
	September 30, 2021
					Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of September 30,										(1)
		Property	Location					2021		2020		2019		2018		2017		Anchor / Significant Tenants
	Shopping Centers (continued)
	Kentlands Square II and Kentlands Pad		Gaithersburg, MD		253,052	2011	23.4	96	%	97	%	96	%	98	%	99	%	Giant Food, At Home, Party City, Panera Bread, Not Your Average Joe's, Hallmark, Chick-Fil-A, Coal Fire Pizza, Cava Mezza Grill, Shake Shack
	Kentlands Place		Gaithersburg, MD		40,697	2005	3.4	88	%	75	%	93	%	93	%	93	%	Bonefish Grill, Privai Spa
	Lansdowne Town Center		Leesburg, VA		196,817	2006	23.4	90	%	90	%	92	%	91	%	96	%	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	%	93	%	85	%	99	%	95	%	CVS Pharmacy, Party Depot, FedEx Office, Capital One Bank, Five Guys
	Lumberton Plaza		Lumberton, NJ		192,718	1975 (1992/96)	23.3	67	%	68	%	68	%	86	%	84	%	Aldi, Rite Aid, Family Dollar, Retro Fitness, Big Lots, Burger King
	Metro Pike Center		Rockville, MD		67,488	2010	4.6	84	%	85	%	64	%	67	%	71	%	McDonald's, Dunkin Donuts, 7-Eleven, Palm Beach Tan, Mattress Warehouse, Salvation Army
	Shops at Monocacy		Frederick, MD		111,166	2004	13.0	98	%	97	%	95	%	99	%	100	%	Giant Food, Panera Bread, Five Guys, California Tortilla, Firehouse Subs, Comcast
	Northrock		Warrenton, VA		100,032	2009	15.4	94	%	94	%	100	%	99	%	99	%	Harris Teeter, Longhorn Steakhouse, Ledo's Pizza, Capital One Bank, Novant Health
	Olde Forte Village		Ft. Washington, MD		143,577	2003	16.0	96	%	92	%	96	%	98	%	99	%	Safeway, Advance Auto Parts, Dollar Tree, McDonald's, Wendy's, Ledo's Pizza, M&T Bank
	Olney		Olney, MD		53,765	1975 (1990)	3.7	91	%	92	%	93	%	96	%	94	%	Walgreens, Olney Grille, Ledo's Pizza, Popeye's, Sardi's Fusion
	Orchard Park		Dunwoody, GA		87,365	2007	10.5	99	%	99	%	99	%	100	%	100	%	Kroger, Subway, Jett Ferry Dental
	Palm Springs Center		Altamonte Springs, FL		126,446	2005	12.0	98	%	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	100	%	97	%	97	%	97	%	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	%	61	%	Dr. Boyd's Pet Resort, Metropolitan Emergency Animal Clinic
	1500/1580/1582 Rockville Pike		Rockville, MD		105,428	2012/2014	10.2	100	%	87	%	97	%	97	%	96	%	Party City, CVS Pharmacy, Danker Furniture Outlet
	Seabreeze Plaza		Palm Harbor, FL		146,673	2005	18.4	94	%	96	%	99	%	99	%	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	99	%	97	%	97	%	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, Five Below
	Severna Park Marketplace		Severna Park, MD		254,011	2011	20.6	89	%	89	%	100	%	100	%	100	%	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, 2021
					Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of September 30,										(1)
		Property	Location					2021		2020		2019		2018		2017		Anchor / Significant Tenants
	Shopping Centers (continued)
	Shops at Fairfax		Fairfax, VA		68,762	1975 (1993/99)	6.7	98	%	97	%	98	%	100	%	97	%	99 Ranch
	Smallwood Village Center		Waldorf, MD		173,341	2006	25.1	81	%	75	%	77	%	78	%	83	%	Safeway, CVS Pharmacy, Family Dollar
	Southdale		Glen Burnie, MD		485,628	1972 (1986)	39.8	94	%	98	%	97	%	99	%	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
	Southside Plaza		Richmond, VA		371,761	1972	32.8	98	%	97	%	92	%	92	%	91	%	Super Fresh, Citi Trends, City of Richmond, McDonald's, Burger King, Kool Smiles, Crafty Crab, Roses
	South Dekalb Plaza		Atlanta, GA		163,418	1976	14.6	94	%	87	%	87	%	91	%	89	%	Big Lots, Emory Clinic, Roses, Deal $, Humana Oak Street Health
	Thruway		Winston-Salem, NC		365,816	1972 (1997)	31.5	81	%	92	%	92	%	96	%	96	%	Harris Teeter, Trader Joe's, 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	95	%	88	%	98	%	98	%	98	%	Giant Food, Starbucks, McDonald's, Pet Supplies Plus, Bikram Yoga, Capital One Bank, Truist Bank
	Westview Village		Frederick, MD		101,058	2009	11.6	91	%	99	%	97	%	95	%	95	%	Silver Diner, Sleepy's, Music & Arts, Firehouse Subs, CiCi's Pizza, Café Rio, Five Guys, Regus, Krispy Kreme, Wendy's, State Employees Credit Union (SECU)
	White Oak		Silver Spring, MD		480,676	1972 (1993)	27.9	100	%	100	%	99	%	99	%	99	%	Giant Food, Sears, Walgreens, Sarku Japan
			Total Shopping Centers	(3)	7,872,002		766.8	93.6	%	94.5	%	95.2	%	95.8	%	95.7	%
Saul Centers, Inc.
Schedule of Current Portfolio Properties
September 30, 2021
					Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of September 30,										(1)
		Property	Location					2021		2020		2019		2018		2017		Anchor / Significant Tenants
Mixed-Use Properties
	Avenel Business Park		Gaithersburg, MD		390,683	1981-2000	37.1	93	%	94	%	90	%	84	%	86	%	General Services Administration, Gene Dx, Inc., American Type Culture Collection, Inc.
	Clarendon Center-North Block		Arlington, VA		108,386	2010	0.6	83	%	83	%	89	%	100	%	100	%	AT&T Mobility, Airlines Reporting Corporation
	Clarendon Center-South Block		Arlington, VA		104,894	2010	1.3	88	%	96	%	97	%	97	%	100	%	Trader Joe's, Circa, Burke & Herbert Bank, South Block Blends, 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		99	%	94	%	97	%	95	%	96	%
	Park Van Ness- Residential (271 units)		Washington, DC		214,600	2016	1.4	97	%	94	%	99	%	96	%	94	%
	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	78	%	94	%	94	%	98	%	100	%	National Gallery of Art, American Assn. of Health Plans, Southern Company, Regus, Capital Grille
	Washington Square		Alexandria, VA		236,376	1975 (2000)	2.0	77	%	81	%	91	%	91	%	93	%	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	98	%	52	%	N/A		N/A		N/A
	The Waycroft-Retail		Arlington, VA		60,100	2020		91	%	90	%	N/A		N/A		N/A		Target, Enterprise Rent-A-Car
			Total Mixed-Use Properties	(3)	1,944,917		46.2	85.0	%	90.3	%	91.9	%	91.7	%	93.4	%	(2)
			Total Portfolio	(3)	9,816,919		813.0	92.5	%	94.0	%	94.8	%	95.3	%	95.5	%	(2)
Land and Development Parcels
	Hampden House		Bethesda, MD			2018	0.6	Planned development of a mixed-use project with up to 366 apartment units and 10,100 square feet of retail space. Demolition of existing interior improvements is complete. A development timetable has not been determined. However, the Company anticipates that demolition of the existing vacant building will begin during the fourth quarter of 2021 to prepare the site for future development.
	Twinbrook Quarter		Rockville, MD			2021	8.2	Planned development of Phase I, which includes an 80,000 square foot Wegmans, adjacent small shop space, 450 apartments and a 230,000 square foot office building, was approved by the City of Rockville in 2020. Demolition of existing improvements has been completed and excavation is in process.
	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 square feet near I-70, east of Frederick, Maryland. A development timetable has not been determined.
			Total Development Properties				61.6
		(1)	Percentage leased is a percentage of rentable square feet leased for commercial space and a percentage of units leased for apartments. Includes only operating properties owned as of September 30, 2021. 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.

XML

Cover Page - shares shares in Millions	9 Months Ended
	Sep. 30, 2021	Oct. 31, 2021
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2021
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	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		23.7
Entity Central Index Key	0000907254
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2021
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
Trading Symbol	BFS
Security Exchange Name	NYSE
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
Trading Symbol	BFS/PRD
Security Exchange Name	NYSE
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
Trading Symbol	BFS/PRE
Security Exchange Name	NYSE

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Real estate investments
Land	$ 511,596	$ 511,482
Buildings and equipment	1,563,059	1,543,837
Construction in progress	191,707	69,477
Total purchase price	2,266,362	2,124,796
Accumulated depreciation	(639,241)	(607,706)
Real estate investments, net	1,627,121	1,517,090
Cash and cash equivalents	11,917	26,856
Accounts receivable and accrued income, net	61,855	64,917
Deferred leasing costs, net	24,638	26,872
Other assets	13,969	9,837
Total assets	1,739,500	1,645,572
Liabilities
Notes payable	794,586	827,603
Construction loan payable	147,112	144,607
Revolving credit facility payable	95,028	103,913
Term loan facility payable	99,209	74,791
Accounts payable, accrued expenses and other liabilities	27,199	24,384
Deferred income	26,216	23,293
Dividends and distributions payable	20,543	19,448
Total liabilities	1,209,893	1,218,039
Equity
Common stock, $0.01 par value, 40,000,000 shares authorized, 23,713,961 and 23,476,626 shares issued and outstanding, respectively	237	235
Additional paid-in capital	430,537	420,625
Partnership units in escrow	79,300	0
Distributions in excess of accumulated earnings	(252,309)	(241,535)
Total Saul Centers, Inc. equity	442,765	364,325
Noncontrolling interests	86,842	63,208
Total equity	529,607	427,533
Total liabilities and equity	1,739,500	1,645,572
Series D Cumulative Redeemable Preferred Stock
Equity
Preferred stock, 1,000,000 shares authorized: Series D Cumulative Redeemable, 30,000 shares issued and outstanding, Series E Cumulative Redeemable, 44,000 shares issued and outstanding	75,000	75,000
Series E Cumulative Redeemable Preferred Stock
Equity
Preferred stock, 1,000,000 shares authorized: Series D Cumulative Redeemable, 30,000 shares issued and outstanding, Series E Cumulative Redeemable, 44,000 shares issued and outstanding	$ 110,000	$ 110,000

XML

Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2021	Dec. 31, 2020
Preferred stock, shares authorized	1,000,000	1,000,000
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	23,713,961	23,476,626
Common stock, shares outstanding	23,713,961	23,476,626
Series D Cumulative Redeemable Preferred Stock
Cumulative redeemable preferred stock, shares issued	30,000	30,000
Cumulative redeemable preferred stock, shares outstanding	30,000	30,000
Series E Cumulative Redeemable Preferred Stock
Cumulative redeemable preferred stock, shares issued	44,000	44,000
Cumulative redeemable preferred stock, shares outstanding	44,000	44,000

XML

Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Revenue
Rental revenue	$ 59,058	$ 55,749	$ 175,634	$ 163,167
Other	1,198	1,011	3,351	3,756
Total revenue	60,256	56,760	178,985	166,923
Expenses
Property operating expenses	8,210	7,416	24,420	20,862
Real estate taxes	7,154	7,523	22,121	22,027
Interest expense, net and amortization of deferred debt costs	10,914	12,398	34,559	34,011
Depreciation and amortization of lease costs	12,467	13,713	37,852	37,593
General and administrative	4,626	4,107	14,234	13,790
Total expenses	43,371	45,157	133,186	128,283
Net Income	16,885	11,603	45,799	38,640
Noncontrolling interests
Income attributable to noncontrolling interests	(3,747)	(2,236)	(9,653)	(7,681)
Net income attributable to Saul Centers, Inc.	13,138	9,367	36,146	30,959
Preferred stock dividends	(2,798)	(2,798)	(8,395)	(8,394)
Net income available to common stockholders	10,340	6,569	27,751	22,565
Net income available to common stockholders	$ 10,340	$ 6,569	$ 27,751	$ 22,565
Per share net income available to common stockholders
Basic (in usd per share)	$ 0.44	$ 0.28	$ 1.17	$ 0.97
Diluted (in usd per share)	$ 0.44	$ 0.28	$ 1.17	$ 0.97

XML

Consolidated Statement of Equity (Unaudited) - USD ($) $ in Thousands	Total	Twinbrook Metro Station	Ashbrook Marketplace	Limited Partner	Limited Partner Twinbrook Metro Station	Series D Cumulative Redeemable Preferred Stock	Series E Cumulative Redeemable Preferred Stock	Total Saul Centers, Inc.	Total Saul Centers, Inc. Twinbrook Metro Station	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	Partnership Units in Escrow	Partnership Units in Escrow Twinbrook Metro Station	Distributions in Excess of Accumulated Earnings	Distributions in Excess of Accumulated Earnings Series D Cumulative Redeemable Preferred Stock	Distributions in Excess of Accumulated Earnings Series E Cumulative Redeemable Preferred Stock	Noncontrolling Interests	Noncontrolling Interests Ashbrook Marketplace	Noncontrolling Interests Limited Partner	Noncontrolling Interests Limited Partner Twinbrook Metro Station
Beginning Balance at Dec. 31, 2019	$ 443,356							$ 374,981				$ 185,000	$ 232	$ 410,926	$ 0		$ (221,177)			$ 68,375
Issuance of shares of common stock:
Issuance of shares pursuant to dividend reinvestment plan	4,081			$ 734				4,081					1	4,080								$ 734
Issuance of shares due to exercise of employee stock options and issuance of directors’ deferred shares	956							956						956
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	0		(223,075)			68,486
Beginning Balance at Dec. 31, 2019	443,356							374,981				185,000	232	410,926	0		(221,177)			68,375
Issuance of shares of common stock:
Net income	38,640
Ending Balance at Sep. 30, 2020	431,617							367,018				185,000	234	417,504	0		(235,720)			64,599
Beginning Balance at Mar. 31, 2020	446,606							378,120				185,000	233	415,962	0		(223,075)			68,486
Issuance of shares of common stock:
Issuance of shares pursuant to dividend reinvestment plan	407							407						407
Issuance of shares due to exercise of employee stock options and issuance of directors’ deferred shares	424							424						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	0		(229,918)			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
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	0		(235,720)			64,599
Beginning Balance at Dec. 31, 2020	427,533							364,325				185,000	235	420,625	0		(241,535)			63,208
Issuance of shares of common stock:
Issuance of shares pursuant to dividend reinvestment plan	2,840			575				2,840					1	2,839								575
Issuance of shares due to exercise of employee stock options and issuance of directors’ deferred shares	323							323						323
Stock issued during period, value, acquisitions		$ 79,300							$ 79,300							$ 79,300
Net income	12,795							10,262									10,262			2,533
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	(16,706)							(12,488)									(12,488)			(4,218)
Ending Balance at Mar. 31, 2021	503,862							441,764				185,000	236	423,787	79,300		(246,559)			62,098
Beginning Balance at Dec. 31, 2020	427,533							364,325				185,000	235	420,625	0		(241,535)			63,208
Issuance of shares of common stock:
Net income	45,799
Ending Balance at Sep. 30, 2021	529,607							442,765				185,000	237	430,537	79,300		(252,309)			86,842
Beginning Balance at Mar. 31, 2021	503,862							441,764				185,000	236	423,787	79,300		(246,559)			62,098
Issuance of shares of common stock:
Issuance of shares pursuant to dividend reinvestment plan	2,855			$ 585				2,855						2,855								$ 585
Issuance of shares due to exercise of employee stock options and issuance of directors’ deferred shares	705							705						705
Stock issued during period, value, acquisitions			$ 4,320		$ 21,500																$ 4,320		$ 21,500
Net income	16,119							12,746									12,746			3,373
Distributions payable preferred stock:
Preferred stock distributions						(1,149)	(1,650)			(1,149)	(1,650)							(1,149)	(1,650)
Distributions payable, common stock and partnership units	(17,694)							(13,000)									(13,000)			(4,694)
Ending Balance at Jun. 30, 2021	529,453							442,271				185,000	236	427,347	79,300		(249,612)			87,182
Issuance of shares of common stock:
Issuance of shares pursuant to dividend reinvestment plan	2,897							2,897					1	2,896
Issuance of shares due to exercise of employee stock options and issuance of directors’ deferred shares	294							294					0	294
Issuance of partnership units pursuant to dividend reinvestment plan	615																			615
Net income	16,885							13,138									13,138			3,747
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	(17,739)							(13,037)									(13,037)			(4,702)
Ending Balance at Sep. 30, 2021	$ 529,607							$ 442,765				$ 185,000	$ 237	$ 430,537	$ 79,300		$ (252,309)			$ 86,842

XML

Consolidated Statement of Equity (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020
Shares pursuant to dividend reinvestment plan	65,171,000	68,206,000	96,268	14,525,000	12,627,000	83,978
Shares due to exercise of employee stock options and issuance of directors' deferred stock	743,000	6,038,000	910	984,000	3,109,000	11,745
Issuance of partnership units pursuant to dividend reinvestment plan (in shares)	13,841,000			13,108,000
Limited Partner
Shares pursuant to dividend reinvestment plan		13,978,000	19,493			15,101
Twinbrook Metro Station
Number of partnership units issued in transaction (in shares)		469,740,000	1,416,071
Ashbrook Marketplace
Number of partnership units issued in transaction (in shares)		93,674,000
Dividend Distributions Payable
Distributions payable common stock, per share (in usd per share)	$ 0.55	$ 0.55	$ 0.53	$ 0.53	$ 0.53	$ 0.53
Distributions partnership units, per unit (in usd per share)	0.55	0.55	0.53	0.53	0.53	0.53
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 | Dividend Distributions Payable
Distributions payable on preferred stock, per share (in usd per share)	$ 37.50	$ 37.50	$ 37.50	$ 37.50	$ 37.50	$ 37.50

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($)		9 Months Ended
		Sep. 30, 2021	Sep. 30, 2020
Cash flows from operating activities:
Net income		$ 45,799,000	$ 38,640,000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of lease costs		37,852,000	37,593,000
Amortization of deferred debt costs		1,237,000	1,163,000
Compensation costs of stock and option grants		1,197,000	1,141,000
Credit losses on operating lease receivables		802,000	4,162,000
(Increase) decrease in accounts receivable and accrued income		2,260,000	(17,552,000)
Additions to deferred leasing costs		(1,316,000)	(7,383,000)
Increase in other assets		(4,124,000)	(2,286,000)
Increase in accounts payable, accrued expenses and other liabilities		2,432,000	3,871,000
Increase (decrease) in deferred income		2,923,000	(2,579,000)
Net cash provided by operating activities		89,062,000	56,770,000
Cash flows from investing activities:
Payments to Acquire Other Real Estate	[1],[2],[3]	(9,011,000)	0
Additions to real estate investments		(14,593,000)	(13,665,000)
Additions to development and redevelopment projects		(15,227,000)	(34,698,000)
Net cash used in investing activities		(38,831,000)	(48,363,000)
Cash flows from financing activities:
Proceeds from notes payable		0	52,100,000
Repayments on notes payable		(33,670,000)	(37,431,000)
Repayments on revolving credit facility		(42,500,000)	(53,000,000)
Proceeds from construction loan		2,430,000	32,928,000
Additions to deferred debt costs		(3,474,000)	(1,196,000)
Proceeds from the issuance of:
Common stock		8,717,000	5,440,000
Partnership units (1) (2) (3)	[1],[2],[3]	1,775,000	1,114,000
Distributions to:
Common stockholders		(37,926,000)	(37,012,000)
Noncontrolling interests		(13,127,000)	(12,556,000)
Net cash provided by (used in) financing activities		(65,170,000)	31,993,000
Net increase (decrease) in cash and cash equivalents		(14,939,000)	40,400,000
Cash and cash equivalents, beginning of period		26,856,000	13,905,000
Cash and cash equivalents, end of period		11,917,000	54,305,000
Supplemental disclosure of cash flow information:
Cash paid for interest		33,738,000	32,951,000
Increase (decrease) in accrued real estate investments and development costs		504,000	(11,196,000)
Secured Debt
Cash flows from financing activities:
Proceeds from revolving credit facility		25,000,000	0
Revolving Credit Facility
Cash flows from financing activities:
Proceeds from revolving credit facility		36,000,000	90,000,000
Twinbrook Quarter
Supplemental disclosure of cash flow information:
Limited partnership units issued		79,300
Twinbrook Metro Station Leasehold Interest
Supplemental disclosure of cash flow information:
Limited partnership units issued		21,500
Ashbrook Marketplace
Supplemental disclosure of cash flow information:
Limited partnership units issued		4,320
Series D Cumulative Redeemable Preferred Stock
Distributions to:
Preferred stockholders		(3,445,000)	(3,444,000)
Series E Cumulative Redeemable Preferred Stock
Distributions to:
Preferred stockholders		$ (4,950,000)	$ (4,950,000)

[1] The 2021 acquisition of real estate and proceeds from the issuance of partnership units each excludes $21,500 in connection with the contribution of the Twinbrook Quarter leasehold interest in exchange for limited partnership units. See Notes 3 and 4 to the Consolidated Financial Statements.

[2] The 2021 acquisition of real estate and proceeds from the issuance of partnership units each excludes $4,320 in connection with the issuance of additional limited partnership units to B. F. Saul Real Estate Investment Trust as additional consideration pursuant to the terms of the 2016 contribution agreement, as amended, related to Ashbrook Marketplace. See Note 7 to the Consolidated Financial Statements.

[3] The 2021 acquisition of real estate and proceeds from the issuance of partnership units each excludes $79,300 in connection with the contribution of Twinbrook Quarter by the B. F. Saul Real Estate Investment Trust in exchange for limited partnership units that are held in escrow. See Notes 3 and 4 to the Consolidated Financial Statements.

XML

Organization, Basis of Presentation

9 Months Ended

Sep. 30, 2021

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 and Chief Executive Officer 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, 2021, 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 four (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, 2021, 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 5.3% of the Company's total revenue for the nine months ended September 30, 2021. 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, 2021.

The accompanying consolidated financial statements of the Company include the accounts of Saul Centers and its subsidiaries, including the Partnerships, which are majority owned by Saul Centers. Substantially all assets and liabilities of the Company as of September 30, 2021 and December 31, 2020, are comprised of the assets and liabilities of the Operating Partnership. Debt arrangements 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 73.4% 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, 2020, 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.

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Our significant accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020 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 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 represents amounts due from tenants, whether current or deferred, in accordance with the terms of their respective leases and base rent recognized on a straight-line basis. 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. As of September 30, 2021, $4.6 million of rents previously deferred have come due. Of the amounts that have come due, $4.5 million has been paid.

At September 30, 2021 and December 31, 2020, accounts receivable was comprised of:

(In thousands)	September 30, 2021		December 31, 2020
Rents currently due	$	7,576	$	13,321
Deferred rents	5,388		8,205
Straight-line rent	46,429		44,863
Other receivables	5,974		3,751
Allowance for doubtful accounts	(3,512)		(5,223)
Total	$	61,855	$	64,917

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, 2021.

XML

Real Estate

9 Months Ended

Sep. 30, 2021

Real Estate [Abstract]

Real Estate

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, 2021, assets totaling $8.7 million were placed in service in conjunction with the substantial completion of The Waycroft. Construction in progress as of September 30, 2021 and December 31, 2020, is composed of the following:

(In thousands)	September 30, 2021		December 31, 2020
Twinbrook Quarter	$	127,348	$	—
Hampden House	53,619		50,723
The Waycroft	—		8,651
Ashbrook Marketplace	—		153
Other	10,740		9,950
Total	$	191,707	$	69,477

Leases

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.

An operating lease right of use asset and corresponding lease liability related to our headquarters lease are reflected 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 $321,900 and $334,500, respectively, at September 30, 2021.

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 Accounting Standards Update 2016-02, "Accounting for Leases"
("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 staff of the Financial Accounting Standards Board 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.

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 $24.6 million and $26.9 million, net of accumulated amortization of $47.7 million and $44.5 million, as of September 30, 2021 and December 31, 2020, respectively. Amortization expense, included in depreciation and amortization of

lease costs in the Consolidated Statements of Operations, totaled $3.6 million and $4.0 million for the nine months ended September 30, 2021 and 2020, respectively.

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 $34.2 million and $33.6 million for the nine months ended September 30, 2021 and 2020, respectively. Repairs and maintenance expense totaled $10.2 million and $8.0 million for the nine months ended September 30, 2021 and 2020, respectively, and is included in property operating expenses in the Consolidated Statements of Operations.

As of September 30, 2021, 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.

Acquisitions

On November 5, 2019, the Company entered into an agreement (the “Twinbrook Contribution Agreement”) to acquire from 1592 Rockville Pike LLC ("1592 Rockville Pike"), a wholly-owned subsidiary of the B. F. Saul Real Estate Investment Trust (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”). The Contributed Property is immediately adjacent to approximately 10.3 acres owned by the Company. In exchange for the Contributed Property, the Company will issue to 1592 Rockville Pike 1,416,071 limited partnership units in the Operating Partnership. Title to the Contributed Property and the units were placed in escrow until certain conditions of the Twinbrook Contribution Agreement were satisfied.

The units issued to 1592 Rockville Pike will remain in escrow until the conditions of the Twinbrook Contribution Agreement, as amended, are satisfied. Half of the units held in escrow were released on the October 18, 2021. The remaining units held in escrow are scheduled to be released on October 18, 2023.

On March 5, 2021, the Company entered into an amendment to the Twinbrook Contribution Agreement in which it and 1592 Rockville Pike agreed to release to the Company from escrow the deed and assignment of the leasehold interest of the Contributed Property, as of that date. The Company also reimbursed 1592 Rockville Pike for certain expenses pursuant to the Twinbrook Contribution Agreement totaling $7.4 million. Acquisition costs totaled $1.2 million. The Company recorded a finance lease right-of-use asset of $19.4 million and corresponding lease liability of $19.4 million related to the leasehold interest assumed in the transaction. The incremental borrowing rate used to calculate the lease liability was 5.63%.

On June 29, 2021, the third-party landlord under the ground lease contributed to the Company the fee simple interest in the land underlying the leasehold interest in exchange for 469,740 limited partnership units in the Operating Partnership, representing an aggregate value of $21.5 million. Acquisition costs were paid in cash and totaled $0.7 million. Accordingly, the finance lease right-of-use asset and finance lease liability were extinguished. Amortization expense and interest expense related to the lease totaled $104,000 and $362,800, respectively, for the nine months ended September 30, 2021.

XML

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

9 Months Ended

Sep. 30, 2021

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 PartnershipAs of September 30, 2021, 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”) held an aggregate 25.1% limited partnership interest in the Operating Partnership represented by approximately 8.1 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, 2021, approximately 1.0 million units could be converted into shares of Saul Centers common stock.

As of September 30, 2021, a third party investor holds a 1.5% limited partnership interest in the Operating Partnership represented by 469,740 convertible limited partnership units. At the option of the unit holder, these units are convertible into shares of Saul Centers’ common stock on a one-for-one basis; provided that, in lieu of the delivery of Saul Centers' common stock, Saul Centers may, in its sole discretion, deliver cash in an amount equal to the value of such Saul Centers' common stock.

The impact of the aggregate 26.6% limited partnership interest in the Operating Partnership held by parties other than Saul Centers is reflected as Noncontrolling Interests in the accompanying consolidated financial statements. Weighted average fully diluted partnership units and common stock outstanding for the three months ended September 30, 2021 and 2020, was approximately 33.7 million and 31.3 million, respectively, and for the nine months ended September 30, 2021 and 2020, was approximately 32.9 million and 31.2 million, respectively.

The 0.7 million limited partnership units remaining in escrow after October 18, 2021, in connection with the Twinbrook Contribution Agreement are not eligible to receive distributions from the Operating Partnership until such time as they are released from escrow.

XML

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

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

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

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

The principal amount of the Company’s outstanding debt totaled approximately $1.1 billion at September 30, 2021, of which approximately $949.5 million was fixed-rate debt and approximately $198.0 million was variable rate debt outstanding under the credit facility. The carrying value of the properties collateralizing the notes payable totaled approximately $1.1 billion as of September 30, 2021.

On August 31, 2021, the Company replaced its credit facility. The new credit facility, which can be used for working capital, property acquisitions, development projects or letters of credit, totals $525.0 million (the “New Facility”), of which $425.0 million is a revolving credit facility (the “Revolving Line”) and $100.0 million is a term loan (the “Term Loan”). The Revolving Line matures on August 29, 2025, which term may be extended by the Company for one additional year, subject to satisfaction of certain conditions. The Term Loan matures on February 26, 2027, and may not be extended. In general, loan availability under the New Facility is primarily determined by operating income from the Company’s existing unencumbered properties. Interest accrues at a rate of LIBOR plus a spread of 135 basis points to 195 basis points under the Revolving Line, and 130 basis points to 190 basis points under the Term Loan, each as determined by certain leverage tests. As of September 30, 2021, the applicable spread for borrowings is 140 basis points under the Revolving Line 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 New Facility. Letters of credit may be issued under the revolving credit facility. On September 30, 2021, based on the value of the Company’s unencumbered properties, approximately $228.2 million was available under the Revolving Line, $98.0 million was outstanding and approximately $185,000 was committed for letters of credit.

On January 5, 2021, the Company repaid in full the remaining principal balance of $6.1 million of the mortgage loan secured by Jamestown Place, which was scheduled to mature in February 2021.

On June 11, 2021, the Company repaid in full the remaining principal balance of $5.0 million of the mortgage loan secured by Hunt Club Corners, which was scheduled to mature in August 2021.

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 $3.3 million of the $65.1 million outstanding balance at September 30, 2021, which guarantee will be reduced to zero on October 1, 2021), (b) a portion of the Broadlands mortgage (approximately $3.7 million of the $29.9 million outstanding balance at September 30, 2021), (c) a portion of the Avenel Business Park mortgage (approximately $6.3 million of the $24.4 million outstanding balance at September 30, 2021), (d) a portion of The Waycroft mortgage (approximately $23.6 million of the $148.5 million outstanding balance at September 30, 2021), (e) the Ashbrook Marketplace mortgage (totaling $21.5 million at September 30, 2021), and (f) the mortgage secured by Kentlands Place, Kentlands Square I and Kentlands Pad (totaling $29.2 million at September 30, 2021). All other notes payable are non-recourse.

At December 31, 2020, the principal amount of the Company’s outstanding debt totaled approximately $1.2 billion, of which $980.8 million was fixed rate debt and $179.5 million was variable rate debt, including $104.5 million outstanding under an unsecured revolving credit facility. The carrying value of the properties collateralizing the notes payable totaled approximately $1.2 billion as of December 31, 2020.

At September 30, 2021, 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, 2021	$	—		$	7,679	$	7,679
2022	36,502			31,016		67,518
2023	9,225			31,479		40,704
2024	66,164			30,876		97,040
2025	118,363		(a)	27,860		146,223
2026	134,088			24,333		158,421
Thereafter	537,673			92,253		629,926
Principal amount	$	902,015		$	245,496	1,147,511
Unamortized deferred debt costs						11,576
Net						$	1,135,935

(a) Includes $98.0 million outstanding under the Revolving Line.

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 $11.6 million and $9.3 million, net of accumulated amortization of $7.2 million and $8.7 million, at September 30, 2021 and December 31, 2020, respectively, and are reflected as a reduction of the related debt in the Consolidated Balance Sheets.

Interest expense, net and amortization of deferred debt costs for the three and nine months ended September 30, 2021 and 2020, were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Interest incurred	$	12,481	$	12,933	$	38,062	$	38,788
Amortization of deferred debt costs	425		402		1,237		1,163
Capitalized interest	(1,991)		(909)		(4,734)		(5,813)
Interest expense	10,915		12,426		34,565		34,138
Less: Interest income	1		28		6		127
Interest expense, net and amortization of deferred debt costs	$	10,914	$	12,398	$	34,559	$	34,011

XML

Equity

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Equity

Equity

The consolidated statements of operations for the nine months ended September 30, 2021 and 2020, reflect noncontrolling interests of $9.7 million and $7.7 million, respectively, representing income attributable to limited partnership units not held by Saul Centers.

At September 30, 2021, 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, 2021, 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.

	Three months ended September 30,		Nine months ended September 30,
(In thousands)	2021	2020	2021	2020
Weighted average common stock outstanding-Basic	23,692	23,353	23,619	23,329
Effect of dilutive options	4	—	2	1
Weighted average common stock outstanding-Diluted	23,696	23,353	23,621	23,330
Non-dilutive options	1,350	1,516	1,474	1,418
Years non-dilutive options were issued	2014 through 2020	2011 through 2020	2011 and 2014 through 2020	2014 through 2020

XML

Related Party Transactions

9 Months Ended

Sep. 30, 2021

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

The Chairman and Chief Executive Officer, the President and Chief Operating Officer, the Executive Vice President-Chief Legal and Administrative Officer and the Senior Vice President-Chief Accounting Officer and Treasurer 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 and Treasurer 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 6% of the employee’s cash compensation, subject to certain limits, were $328,500 and $255,200 for the nine months ended September 30, 2021 and 2020, 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, 2021 and 2020, the Company credited to employee accounts $120,800 and $164,800, 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 $3.0 million and $2.9 million, at September 30, 2021 and December 31, 2020, respectively, and is included in accounts payable, accrued expenses and other liabilities in the Consolidated Balance Sheets.

The Company and the Saul Organization are parties to a shared services agreement (the “Agreement”) 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. Net billings by the Saul Organization for the Company’s share of these ancillary costs and expenses for the nine months ended September 30, 2021 and 2020, which included rental expense for the Company’s headquarters lease, totaled approximately $5.9 million and $6.0 million, 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, 2021 and December 31, 2020, accounts payable, accrued expenses and other liabilities included approximately $883,900 and $782,700, respectively, representing amounts due to the Saul Organization for the Company’s share of these ancillary costs and expenses.

On March 5, 2021, the Company acquired from 1592 Rockville Pike, 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. See Notes 3 and 4.

In August 2016, the Company entered into an agreement (the "Ashbrook Contribution 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. On June 30, 2021, the Company issued 93,674 additional limited partnership units as additional consideration to the Trust in accordance with the Ashbrook Contribution Agreement, as amended.

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 $611,200 and $609,200 for the nine months ended September 30, 2021 and 2020, 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 $280,700 and $320,300 for the nine months ended September 30, 2021 and 2020, respectively.

XML

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

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

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

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, 2021, 7,429 shares were credited to director's deferred fee accounts and 7,874 shares were issued. As of September 30, 2021, the director's deferred fee accounts comprise 118,183 shares.

Effective May 7, 2021, the Company granted 250,500 options to its directors and certain officers. The following table summarizes the assumptions used in the valuation of the 2021 and 2020 option grants. During the nine months ended September 30, 2021, stock option expense totaling $1.0 million was included in general and administrative expense in the Consolidated Statements of Operations. As of September 30, 2021, the estimated future expense related to unvested stock options was $2.0 million.

	Directors						Officers
Grant date	April 24, 2020			May 7, 2021			April 24, 2020			May 7, 2021
Exercise price	$	50.00		$	43.89		$	50.00		$	43.89
Volatility	0.258			0.297			0.240			0.275
Expected life (years)	5.0			5.0			7.0			7.0
Assumed yield	3.80		%	4.96		%	3.85		%	4.97		%
Risk-free rate	0.36		%	0.77		%	0.51		%	1.24		%

The table below summarizes the option activity for the nine months ended  September 30, 2021:

	Number of Shares	Weighted Average Exercise Price per share		Aggregate Intrinsic Value
Outstanding at January 1	1,502,670	$	52.86	$	—
Granted	250,500	43.89		—
Exercised	(3,000)	41.82		3,450
Expired/Forfeited	(87,000)	53.60		—
Outstanding at September 30	1,663,170	51.49		171,250
Exercisable at September 30	1,137,295	52.89		133,340

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 of stock options exercised during the nine months ended September 30, 2021 was calculated by using the transaction price on the date of exercise and totaled $3,450. The intrinsic value of stock options exercised during the nine months ended September 30, 2020 totaled $85,268. At September 30, 2021, the final trading day of the 2021 third quarter, the closing share price of $44.06 was lower than the exercise price of 1,397,625 outstanding options granted in 2013 through 2020. The weighted average remaining contractual life of the Company’s outstanding and exercisable options is 6.3 years and 5.3 years, respectively.

XML

Fair Value of Financial Instruments	9 Months Ended
	Sep. 30, 2021
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 3.60% and 3.40%, would be approximately $937.3 million and $981.0 million, respectively, compared to the principal balance of $949.5 million and $980.8 million at September 30, 2021 and December 31, 2020, respectively. A change in any of the significant inputs may lead to a change in the Company’s fair value measurement of its debt.

XML

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2021
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.

XML

Business Segments

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Business Segments

Business Segments

The Company has two reportable business segments: Shopping Centers and Mixed-Use Properties. The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2). The Company evaluates performance based upon income and cash flows from real estate of the combined properties in each segment. All of our properties within each segment generate similar types of revenues and expenses related to tenant rent, reimbursements and operating expenses. Although services are provided to a variety 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 2021 presentation.

(In thousands)	Shopping Centers		Mixed-Use Properties		Corporate and Other		Consolidated Totals
Three months ended September 30, 2021
Real estate rental operations:
Revenue	$	42,485	$	17,771	$	—	$	60,256
Expenses	(8,640)		(6,724)		—		(15,364)
Income from real estate	33,845		11,047		—		44,892
Interest expense, net and amortization of deferred debt costs	—		—		(10,914)		(10,914)
Depreciation and amortization of lease costs	(7,203)		(5,264)		—		(12,467)
General and administrative	—		—		(4,626)		(4,626)
Net income (loss)	$	26,642	$	5,783	$	(15,540)	$	16,885
Capital investment	$	2,629	$	8,722	$	—	$	11,351
Total assets	$	960,247	$	766,761	$	12,492	$	1,739,500
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 lease 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

(In thousands)	Shopping Centers		Mixed-Use Properties		Corporate and Other		Consolidated Totals
Nine Months Ended September 30, 2021
Real estate rental operations:
Revenue	$	126,935	$	52,050	$	—	$	178,985
Expenses	(27,087)		(19,454)		—		(46,541)
Income from real estate	99,848		32,596		—		132,444
Interest expense, net and amortization of deferred debt costs	—		—		(34,559)		(34,559)
Depreciation and amortization of deferred leasing costs	(21,639)		(16,213)		—		(37,852)
General and administrative	—		—		(14,234)		(14,234)
Net income (loss)	$	78,209	$	16,383	$	(48,793)	$	45,799
Capital investment	$	8,200	$	30,631	$	—	$	38,831
Total assets	$	960,247	$	766,761	$	12,492	$	1,739,500
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

XML

Impact of COVID-19

9 Months Ended

Sep. 30, 2021

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, resulted in many of our tenants announcing mandated or temporary closures of their operations and/or requesting adjustments to their lease terms. While most of our tenants have re-opened their businesses, there remains significant uncertainty around the long-term economic impact of the COVID-19 pandemic, which 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 store, pharmacy, bank and home improvement store tenants have generally remained fully open, many restaurants have operated with reduced hours and/or limited indoor seating, supplemented with delivery and curbside pick-up, and most health, beauty supply and services, fitness centers, and other non-essential businesses have
re-opened, some with limited customer capacity. The Company is generally not charging late fees or delinquent interest on past due rent payments and, in certain cases, rent deferral agreements have been negotiated to allow tenants temporary relief where needed. As of September 30, 2021, $4.6 million of rents previously deferred have come due. Of the amounts that have come due, $4.5 million has been paid.

XML

Subsequent Events	9 Months Ended
	Sep. 30, 2021
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsThe Company has reviewed operating activities for the period subsequent to September 30, 2021, and determined there are no subsequent events required to be disclosed.

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2021

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, 2021, 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 four (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 Partnerships, which are majority owned by Saul Centers. Substantially all assets and liabilities of the Company as of September 30, 2021 and December 31, 2020, are comprised of the assets and liabilities of the Operating Partnership. Debt arrangements 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 73.4% 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, 2020, 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 represents amounts due from tenants, whether current or deferred, in accordance with the terms of their respective leases and base rent recognized on a straight-line basis. 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.

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, 2021.

XML

Summary of Significant Accounting Policies - (Tables)

9 Months Ended

Sep. 30, 2021

Accounting Policies [Abstract]

Schedule of Accounts Receivable

At September 30, 2021 and December 31, 2020, accounts receivable was comprised of:

(In thousands)	September 30, 2021		December 31, 2020
Rents currently due	$	7,576	$	13,321
Deferred rents	5,388		8,205
Straight-line rent	46,429		44,863
Other receivables	5,974		3,751
Allowance for doubtful accounts	(3,512)		(5,223)
Total	$	61,855	$	64,917

XML

Real Estate - (Tables)

9 Months Ended

Sep. 30, 2021

Real Estate [Abstract]

Schedule of Construction in Progress

Construction in progress as of September 30, 2021 and December 31, 2020, is composed of the following:

(In thousands)	September 30, 2021		December 31, 2020
Twinbrook Quarter	$	127,348	$	—
Hampden House	53,619		50,723
The Waycroft	—		8,651
Ashbrook Marketplace	—		153
Other	10,740		9,950
Total	$	191,707	$	69,477

XML

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

9 Months Ended

Sep. 30, 2021

Debt Disclosure [Abstract]

Scheduled Maturities of Debt, Including Scheduled Principal Amortization

At September 30, 2021, 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, 2021	$	—		$	7,679	$	7,679
2022	36,502			31,016		67,518
2023	9,225			31,479		40,704
2024	66,164			30,876		97,040
2025	118,363		(a)	27,860		146,223
2026	134,088			24,333		158,421
Thereafter	537,673			92,253		629,926
Principal amount	$	902,015		$	245,496	1,147,511
Unamortized deferred debt costs						11,576
Net						$	1,135,935

(a) Includes $98.0 million outstanding under the Revolving Line.

Interest Expense and Amortization of Deferred Debt Costs

Interest expense, net and amortization of deferred debt costs for the three and nine months ended September 30, 2021 and 2020, were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2021		2020		2021		2020
Interest incurred	$	12,481	$	12,933	$	38,062	$	38,788
Amortization of deferred debt costs	425		402		1,237		1,163
Capitalized interest	(1,991)		(909)		(4,734)		(5,813)
Interest expense	10,915		12,426		34,565		34,138
Less: Interest income	1		28		6		127
Interest expense, net and amortization of deferred debt costs	$	10,914	$	12,398	$	34,559	$	34,011

XML

Equity (Tables)

9 Months Ended

Sep. 30, 2021

Equity [Abstract]

Schedule of Weighted Average Number of Shares

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.

	Three months ended September 30,		Nine months ended September 30,
(In thousands)	2021	2020	2021	2020
Weighted average common stock outstanding-Basic	23,692	23,353	23,619	23,329
Effect of dilutive options	4	—	2	1
Weighted average common stock outstanding-Diluted	23,696	23,353	23,621	23,330
Non-dilutive options	1,350	1,516	1,474	1,418
Years non-dilutive options were issued	2014 through 2020	2011 through 2020	2011 and 2014 through 2020	2014 through 2020

XML

Stock-based Employee Compensation, Stock Option Plans, and Deferred Compensation Plan for Directors (Tables)

9 Months Ended

Sep. 30, 2021

Share-based Payment Arrangement [Abstract]

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award

	Directors						Officers
Grant date	April 24, 2020			May 7, 2021			April 24, 2020			May 7, 2021
Exercise price	$	50.00		$	43.89		$	50.00		$	43.89
Volatility	0.258			0.297			0.240			0.275
Expected life (years)	5.0			5.0			7.0			7.0
Assumed yield	3.80		%	4.96		%	3.85		%	4.97		%
Risk-free rate	0.36		%	0.77		%	0.51		%	1.24		%

Summary of Option Activity

The table below summarizes the option activity for the nine months ended  September 30, 2021:

	Number of Shares	Weighted Average Exercise Price per share		Aggregate Intrinsic Value
Outstanding at January 1	1,502,670	$	52.86	$	—
Granted	250,500	43.89		—
Exercised	(3,000)	41.82		3,450
Expired/Forfeited	(87,000)	53.60		—
Outstanding at September 30	1,663,170	51.49		171,250
Exercisable at September 30	1,137,295	52.89		133,340

XML

Business Segments (Tables)

9 Months Ended

Sep. 30, 2021

Segment Reporting [Abstract]

Business Segments

(In thousands)	Shopping Centers		Mixed-Use Properties		Corporate and Other		Consolidated Totals
Three months ended September 30, 2021
Real estate rental operations:
Revenue	$	42,485	$	17,771	$	—	$	60,256
Expenses	(8,640)		(6,724)		—		(15,364)
Income from real estate	33,845		11,047		—		44,892
Interest expense, net and amortization of deferred debt costs	—		—		(10,914)		(10,914)
Depreciation and amortization of lease costs	(7,203)		(5,264)		—		(12,467)
General and administrative	—		—		(4,626)		(4,626)
Net income (loss)	$	26,642	$	5,783	$	(15,540)	$	16,885
Capital investment	$	2,629	$	8,722	$	—	$	11,351
Total assets	$	960,247	$	766,761	$	12,492	$	1,739,500
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 lease 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

(In thousands)	Shopping Centers		Mixed-Use Properties		Corporate and Other		Consolidated Totals
Nine Months Ended September 30, 2021
Real estate rental operations:
Revenue	$	126,935	$	52,050	$	—	$	178,985
Expenses	(27,087)		(19,454)		—		(46,541)
Income from real estate	99,848		32,596		—		132,444
Interest expense, net and amortization of deferred debt costs	—		—		(34,559)		(34,559)
Depreciation and amortization of deferred leasing costs	(21,639)		(16,213)		—		(37,852)
General and administrative	—		—		(14,234)		(14,234)
Net income (loss)	$	78,209	$	16,383	$	(48,793)	$	45,799
Capital investment	$	8,200	$	30,631	$	—	$	38,831
Total assets	$	960,247	$	766,761	$	12,492	$	1,739,500
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

XML

Organization, Formation and Structure (Details)	9 Months Ended
	Sep. 30, 2021 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	73.40%
Giant Food
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Number of shopping centers | store	11
Giant Food | Revenue | Customer Concentration Risk
Organization, Consolidation and Presentation of Financial Statements Disclosure [Line Items]
Percentage of total revenue	5.30%
No Individual Tenant | Revenue | Customer Concentration Risk
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	4

XML

Summary of Significant Accounting Policies - Narrative (Details) $ in Millions	Sep. 30, 2021 USD ($)
Accounting Policies [Abstract]
Accrued rent	$ 4.6
Deferred rent receivables, net	$ 4.5

XML

Summary of Significant Accounting Policies - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for doubtful accounts	$ (3,512)	$ (5,223)
Total	61,855	64,917
Rents currently due
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, before allowance for doubtful accounts	7,576	13,321
Deferred rents
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, before allowance for doubtful accounts	5,388	8,205
Straight-line rent
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, before allowance for doubtful accounts	46,429	44,863
Other receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, before allowance for doubtful accounts	$ 5,974	$ 3,751

XML

Real Estate Transactions - Narrative (Details)				9 Months Ended
	Sep. 30, 2021 USD ($) shares	Jun. 29, 2021 USD ($) shares	Nov. 05, 2019 a shares	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Mar. 05, 2021 USD ($) a	Dec. 31, 2020 USD ($)	Jan. 01, 2019 leaseExtensionOption
Real Estate [Line Items]
Assets placed in service	$ 2,266,362,000			$ 2,266,362,000			$ 2,124,796,000
Lease renewal term								5 years
Right-of-use asset	321,900			321,900
Operating lease liability	334,500			334,500
Deferred leasing costs, net	24,638,000			24,638,000			26,872,000
Accumulated amortization deferred leasing cost	$ 47,700,000			47,700,000			$ 44,500,000
Depreciation expense				34,200,000	$ 33,600,000
Repairs and maintenance expense				10,200,000	8,000,000
Impairment of real estate				$ 0
Business acquisition, expenses reimbursed						$ 7,400,000
Operating lease, incremental borrowing rate				5.63%
Finance lease, right-of-use asset, amortization				$ 104,000
Finance lease, interest expense				$ 362,800
Contribution Agreement
Real Estate [Line Items]
Right-of-use asset						19,400,000
Operating lease liability						19,400,000
Number of partnership units issued in transaction (in shares) | shares			1,416,071
Business acquisition, transaction costs						$ 1,200,000
Leasehold Interest Contributed In Contribution Agreement
Real Estate [Line Items]
Number of partnership units issued in transaction (in shares) | shares	469,740
Asset acquisition consideration transferred		$ 21,500,000
Payments to acquire businesses, gross		$ 700,000
Leasehold Interest Contributed In Contribution Agreement | Limited Partner
Real Estate [Line Items]
Number of partnership units issued in transaction (in shares) | shares		469,740
BF Saul Real Estate Investment Trust | Contribution Agreement
Real Estate [Line Items]
Area of land | a			10.3
Minimum
Real Estate [Line Items]
Operating lease term of contract	1 year			1 year
Maximum
Real Estate [Line Items]
Operating lease term of contract	15 years			15 years
Building | Minimum
Real Estate [Line Items]
Estimated useful life				35 years
Building | Maximum
Real Estate [Line Items]
Estimated useful life				50 years
Building Improvements | Maximum
Real Estate [Line Items]
Estimated useful life				20 years
Lease Acquisition Costs
Real Estate [Line Items]
Amortization of intangible assets				$ 3,600,000	$ 4,000,000
The Waycroft and Ashbrook Marketplace
Real Estate [Line Items]
Assets placed in service	$ 8,700,000			$ 8,700,000
Corporate Headquarters
Real Estate [Line Items]
Number of options to extend lease | leaseExtensionOption								1
Twinbrook Metro Station | BF Saul Real Estate Investment Trust | Contribution Agreement
Real Estate [Line Items]
Area of land | a			6.8			6.8
Twinbrook Metro Station Leasehold Interest | BF Saul Real Estate Investment Trust | Contribution Agreement
Real Estate [Line Items]
Area of land | a			1.3			1.3

XML

Real Estate - Schedule of Construction in Progress (Details) - USD ($) $ in Thousands	Sep. 30, 2021	Dec. 31, 2020
Real Estate [Line Items]
Construction in progress	$ 191,707	$ 69,477
Twinbrook Quarter
Real Estate [Line Items]
Construction in progress	127,348	0
Hampden House
Real Estate [Line Items]
Construction in progress	53,619	50,723
The Waycroft
Real Estate [Line Items]
Construction in progress	0	8,651
Ashbrook Marketplace
Real Estate [Line Items]
Construction in progress	0	153
Other
Real Estate [Line Items]
Construction in progress	$ 10,740	$ 9,950

XML

Noncontrolling Interests - Holders of Convertible Limited Partnership Units in the Operating Partnership (Details)		3 Months Ended		9 Months Ended
	Sep. 30, 2021 shares	Sep. 30, 2021 shares	Sep. 30, 2020 shares	Sep. 30, 2021 shares	Sep. 30, 2020 shares
Noncontrolling Interest [Line Items]
Limited partnership units (in shares)	8,100,000	8,100,000		8,100,000
Leasehold Interest Contributed In Contribution Agreement
Noncontrolling Interest [Line Items]
Number of partnership units issued in transaction (in shares)	469,740
Saul Holdings Limited Partnership
Noncontrolling Interest [Line Items]
Percentage of ownership interest of noncontrolling interest	25.10%	25.10%		25.10%
Third Party Investor
Noncontrolling Interest [Line Items]
Percentage of ownership interest of noncontrolling interest	1.50%	1.50%		1.50%
Noncontrolling Interests
Noncontrolling Interest [Line Items]
Limited partnership units, conversion ratio	1	1		1
Outstanding stock percent that should be acquired for rights to be exercised	39.90%	39.90%		39.90%
Limited partnership units convertible into shares of common stock, eligible for conversion	1,000,000	1,000,000		1,000,000
Fully converted partnership units and diluted weighted average shares outstanding		33,700,000	31,300,000	32,900,000	31,200,000
Partners capital account units placed In escrow				700,000
Noncontrolling Interests | Saul Holdings Limited Partnership
Noncontrolling Interest [Line Items]
Percentage of ownership interest of noncontrolling interest	26.60%	26.60%		26.60%
Limited partnership units, conversion ratio	1	1		1

XML

Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs - Narrative (Details) - USD ($)	Sep. 30, 2021	Aug. 31, 2021	Jun. 11, 2021	Jan. 05, 2021	Oct. 01, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Principal amount	$ 1,147,511,000					$ 1,200,000,000
Debt outstanding with fixed-rate	949,500,000					980,800,000
Debt outstanding with variable-rate	198,000,000					179,500,000
Carrying value of properties collateralizing mortgage notes	1,100,000,000					1,200,000,000
Outstanding line of credit	95,028,000					103,913,000
Notes payable	794,586,000					827,603,000
Principal amount	1,135,935,000
Unamortized deferred debt costs	11,576,000					9,300,000
Debt issuance costs amortization	$ 7,200,000					8,700,000
Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 525,000,000
Mortgages | Jamestown Place
Debt Instrument [Line Items]
Payment for debt extinguishment or debt prepayment cost				$ 6,100,000
Mortgages | Hunt Club Corners
Debt Instrument [Line Items]
Payment for debt extinguishment or debt prepayment cost			$ 5,000,000
Revolving Credit Facility | LIBOR
Debt Instrument [Line Items]
Interest rate spread on LIBOR	1.40%
Revolving Credit Facility | LIBOR | Minimum
Debt Instrument [Line Items]
Interest rate spread on LIBOR		1.35%
Revolving Credit Facility | LIBOR | Maximum
Debt Instrument [Line Items]
Interest rate spread on LIBOR		1.95%
Revolving Credit Facility | Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 425,000,000
Term Facility | LIBOR
Debt Instrument [Line Items]
Interest rate spread on LIBOR	1.35%
Term Facility | LIBOR | Minimum
Debt Instrument [Line Items]
Interest rate spread on LIBOR		1.30%
Term Facility | LIBOR | Maximum
Debt Instrument [Line Items]
Interest rate spread on LIBOR		1.90%
Term Facility | Line of Credit
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 100,000,000
Unsecured Revolving Credit Facility
Debt Instrument [Line Items]
Line of credit facility, remaining borrowing capacity	$ 228,200,000
Outstanding line of credit	98,000,000					$ 104,500,000
Letter of Credit
Debt Instrument [Line Items]
Outstanding line of credit	185,000
Park Van Ness Loan
Debt Instrument [Line Items]
Guarantor obligations, maximum exposure	3,300,000
Notes payable	65,100,000
Park Van Ness Loan | Subsequent Event
Debt Instrument [Line Items]
Guarantor obligations, maximum exposure					$ 0
Broadlands Village Mortgage
Debt Instrument [Line Items]
Guarantor obligations, maximum exposure	3,700,000
Principal amount	29,900,000
Avenel Business Park
Debt Instrument [Line Items]
Guarantor obligations, maximum exposure	6,300,000
Avenel Business Park | Mortgages
Debt Instrument [Line Items]
Principal amount	24,400,000
The Waycroft Mortgage
Debt Instrument [Line Items]
Guarantor obligations, maximum exposure	23,600,000
The Waycroft Mortgage | Mortgages
Debt Instrument [Line Items]
Principal amount	148,500,000
Ashbrook Marketplace Mortgage | Mortgages
Debt Instrument [Line Items]
Principal amount	21,500,000
Kentlands Place Mortgage | Mortgages
Debt Instrument [Line Items]
Principal amount	$ 29,200,000

XML

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, 2021	Dec. 31, 2020
Balloon Payments
October 1 through December 31, 2021	$ 0
2022	36,502
2023	9,225
2024	66,164
2025	118,363
2026	134,088
Thereafter	537,673
Principal amount	902,015
Scheduled Principal Amortization
October 1 through December 31, 2021	7,679
2022	31,016
2022	31,479
2023	30,876
2024	27,860
2025	24,333
Thereafter	92,253
Principal amount	245,496
Total
October 1 through December 31, 2021	7,679
2022	67,518
2023	40,704
2024	97,040
2025	146,223
2026	158,421
Thereafter	629,926
Principal amount	1,147,511	$ 1,200,000
Unamortized deferred debt costs	11,576	9,300
Net	1,135,935
Outstanding line of credit	95,028	103,913
Unsecured Revolving Credit Facility
Total
Outstanding line of credit	$ 98,000	$ 104,500

XML

Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs - Interest Expense and Amortization of Deferred Debt Costs (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Debt Disclosure [Abstract]
Interest incurred	$ 12,481	$ 12,933	$ 38,062	$ 38,788
Amortization of deferred debt costs	425	402	1,237	1,163
Capitalized interest	(1,991)	(909)	(4,734)	(5,813)
Interest expense	10,915	12,426	34,565	34,138
Less: Interest income	1	28	6	127
Interest expense, net and amortization of deferred debt costs	$ 10,914	$ 12,398	$ 34,559	$ 34,011

XML

Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Class of Stock [Line Items]
Income attributable to noncontrolling interests	$ (3,747)	$ (2,236)	$ (9,653)	$ (7,681)
Series D Cumulative Redeemable Preferred Stock
Class of Stock [Line Items]
Depositary shares outstanding	3.0		3.0
Depository shares to cumulative redeemable preferred stock ratio			1.00%
Percentage of redeemable preferred stock			6.125%
Cumulative redeemable preferred stock liquidation preference (in usd per share)	$ 25.00		$ 25.00
Annual dividend on depositary shares (in usd per share)			$ 1.53125
Series E Cumulative Redeemable Preferred Stock
Class of Stock [Line Items]
Depositary shares outstanding	4.4		4.4
Depository shares to cumulative redeemable preferred stock ratio			1.00%
Percentage of redeemable preferred stock			6.00%
Cumulative redeemable preferred stock liquidation preference (in usd per share)	$ 25.00		$ 25.00
Annual dividend on depositary shares (in usd per share)			$ 1.50

XML

Equity - Per Share Data (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020	Sep. 30, 2021	Sep. 30, 2020
Class of Stock [Line Items]
Weighted average common stock outstanding-Basic (in shares)	23,692	23,353	23,619	23,329
Effect of dilutive options (in shares)	4	0	2	1
Weighted average common stock outstanding-Diluted (in shares)	23,696	23,353	23,621	23,330
Non-dilutive options
Class of Stock [Line Items]
Non-dilutive options (in shares)	1,350	1,516	1,474	1,418

XML

Related Party Transactions (Details)			1 Months Ended	9 Months Ended
	Jun. 30, 2021 shares	May 09, 2018 shares	Aug. 31, 2016 a	Sep. 30, 2021 USD ($)	Sep. 30, 2020 USD ($)	Mar. 05, 2021 a	Dec. 31, 2020 USD ($)	Nov. 05, 2019 a
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				$ 328,500	$ 255,200
Deferred compensation, employee contribution				2.00%
Deferred compensation, company contribution				$ 120,800	$ 164,800
Deferred compensation, company contribution percentage				3	3
Deferred compensation, cumulative unfunded liability				$ 3,000,000			$ 2,900,000
Ancillary costs and expenses				5,900,000	$ 6,000,000
Liability due to The Saul Organization for the Company's share of these ancillary costs and expenses				$ 883,900			$ 782,700
Percentage of annual increase in base rent				3.00%
Rent expense				$ 611,200	609,200
Insurance commissions and fees expense				$ 280,700	$ 320,300
BF Saul Real Estate Investment Trust | Contribution Agreement
Related Party Transaction [Line Items]
Area of land | a								10.3
Twinbrook Metro Station | BF Saul Real Estate Investment Trust | Contribution Agreement
Related Party Transaction [Line Items]
Area of land | a						6.8		6.8
Twinbrook Metro Station Leasehold Interest | BF Saul Real Estate Investment Trust | Contribution Agreement
Related Party Transaction [Line Items]
Area of land | a						1.3		1.3
Ashbrook Marketplace | BF Saul Real Estate Investment Trust
Related Party Transaction [Line Items]
Area of real estate acquired | a			13.7
Limited partnership units issued for purchase (in shares) | shares	93,674	176,680

XML

Stock-based Employee Compensation, Stock Option Plans, and Deferred Compensation Plan for Directors - Narrative (Details) - USD ($)			3 Months Ended						9 Months Ended
	Jun. 30, 2021	May 07, 2021	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred compensation (in shares)	118,183								7,429
Shares due to exercise of employee stock options and issuance of directors' deferred stock			743,000	6,038,000	910	984,000	3,109,000	11,745
Granted (in shares)									250,500
Stock option expense									$ 1,000,000
Future expense			$ 2,000,000						2,000,000
Exercised									$ 3,450	$ 85,268
Closing share price (in usd per share)			$ 44.06						$ 44.06
Share-based compensation arrangement by share-based payment award, options, grants since inception			1,397,625						1,397,625
Weighted average remaining contractual life of the Company's outstanding options									6 years 3 months 18 days
Weighted average remaining contractual life of the Company's exercisable options									5 years 3 months 18 days
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									7,874
Directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in shares)		250,500
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

XML

Stock-based Employee Compensation, Stock Option Plans, and Deferred Compensation Plan for Directors - Stock Options Issued (Details)			9 Months Ended
	May 07, 2021 $ / shares	Apr. 24, 2020 $ / shares	Sep. 30, 2021 $ / shares
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Exercise price (in usd per share)			$ 41.82
Directors
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Exercise price (in usd per share)	$ 43.89	$ 50.00
Volatility	0.297	0.258
Expected life (years)	5 years	5 years
Assumed yield	4.96%	3.80%
Risk-free rate	0.77%	0.36%
Officers
Share Based Compensation Arrangements By Share Based Payment Award Options [Line Items]
Exercise price (in usd per share)	$ 43.89	$ 50.00
Volatility	0.275	0.240
Expected life (years)	7 years	7 years
Assumed yield	4.97%	3.85%
Risk-free rate	1.24%	0.51%

XML

Stock-based Employee Compensation, Stock Option Plans, and Deferred Compensation Plan for Directors - Summary of Option Activity (Details) - USD ($)	9 Months Ended
	Sep. 30, 2021	Sep. 30, 2020
Number of Shares
Outstanding at beginning of period (in shares)	1,502,670
Granted (in shares)	250,500
Exercised (in shares)	(3,000)
Expired/Forfeited (in shares)	(87,000)
Outstanding at end of period (in shares)	1,663,170
Exercisable at end of period (in shares)	1,137,295
Weighted Average Exercise Price per share
Outstanding at beginning of period (in usd per share)	$ 52.86
Granted (in usd per share)	43.89
Exercised (in usd per share)	41.82
Expired/Forfeited (in usd per share)	53.60
Outstanding at end of period (in usd per share)	51.49
Exercisable at end of period (in usd per share)	$ 52.89
Aggregate Intrinsic Value
Outstanding at beginning of period	$ 0
Granted	0
Exercised	3,450	$ 85,268
Expired/Forfeited	0
Outstanding at end of period	171,250
Exercisable at end of period	$ 133,340

XML

Fair Value of Financial Instruments - Narrative (Details) - USD ($) $ in Millions	Sep. 30, 2021	Dec. 31, 2020
Fair Value Disclosures [Abstract]
Notes payable, fixed interest rate	3.60%	3.40%
Notes payable, aggregate fair value	$ 937.3	$ 981.0
Notes payable, principal balance	$ 949.5	$ 980.8

XML

Business Segments - Narrative (Details)	9 Months Ended
	Sep. 30, 2021 segment
Segment Reporting [Abstract]
Number of reportable business segments	2

XML

Business Segments - Schedule of Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Sep. 30, 2021	Sep. 30, 2020	Dec. 31, 2020
Real estate rental operations:
Revenue	$ 60,256			$ 56,760			$ 178,985	$ 166,923
Expenses	(15,364)			(14,939)			(46,541)	(42,889)
Income from real estate	44,892			41,821			132,444	124,034
Interest expense, net and amortization of deferred debt costs	(10,914)			(12,398)			(34,559)	(34,011)
Depreciation and amortization of lease costs	(12,467)			(13,713)			(37,852)	(37,593)
General and administrative	(4,626)			(4,107)			(14,234)	(13,790)
Net Income	16,885	$ 16,119	$ 12,795	11,603	$ 10,208	$ 16,829	45,799	38,640
Capital investment	11,351			9,436			38,831	48,363
Total assets	1,739,500			1,681,374			1,739,500	1,681,374	$ 1,645,572
Operating Segments | Shopping Centers
Real estate rental operations:
Revenue	42,485			40,336			126,935	120,236
Expenses	(8,640)			(8,755)			(27,087)	(26,041)
Income from real estate	33,845			31,581			99,848	94,195
Interest expense, net and amortization of deferred debt costs	0			0			0	0
Depreciation and amortization of lease costs	(7,203)			(8,169)			(21,639)	(22,812)
General and administrative	0			0			0	0
Net Income	26,642			23,412			78,209	71,383
Capital investment	2,629			2,733			8,200	11,622
Total assets	960,247			982,381			960,247	982,381
Operating Segments | Mixed-Use Properties
Real estate rental operations:
Revenue	17,771			16,424			52,050	46,687
Expenses	(6,724)			(6,184)			(19,454)	(16,848)
Income from real estate	11,047			10,240			32,596	29,839
Interest expense, net and amortization of deferred debt costs	0			0			0	0
Depreciation and amortization of lease costs	(5,264)			(5,544)			(16,213)	(14,781)
General and administrative	0			0			0	0
Net Income	5,783			4,696			16,383	15,058
Capital investment	8,722			6,703			30,631	36,741
Total assets	766,761			643,395			766,761	643,395
Corporate and Other
Real estate rental operations:
Revenue	0			0			0	0
Expenses	0			0			0	0
Income from real estate	0			0			0	0
Interest expense, net and amortization of deferred debt costs	(10,914)			(12,398)			(34,559)	(34,011)
Depreciation and amortization of lease costs	0			0			0	0
General and administrative	(4,626)			(4,107)			(14,234)	(13,790)
Net Income	(15,540)			(16,505)			(48,793)	(47,801)
Capital investment	0			0			0	0
Total assets	$ 12,492			$ 55,598			$ 12,492	$ 55,598

XML

Impact of COVID-19 - Narrative (Details) $ in Millions	Sep. 30, 2021 USD ($)
Unusual or Infrequent Items, or Both [Abstract]
Accrued rent	$ 4.6
Deferred rent receivables, net	$ 4.5