Saul Centers, Inc. Reports Second Quarter 2026 Earnings

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

Concurrent with the opening of Hampden House on October 1, 2025, interest, real estate taxes, depreciation and all other costs associated with the residential portion and the majority of the retail portion of the property began to be charged to expense, while revenue continues to grow as occupancy increases. As a result, compared to the 2025 Quarter, net income for the 2026 Quarter was adversely impacted by $4.0 million due to the initial operations of Hampden House, of which $2.9 million is related to interest expense, net and amortization of deferred debt costs. Exclusive of Hampden House, net income increased by $1.3 million primarily due to (a) higher residential base rent of $1.4 million and (b) higher commercial base rent of $1.2 million partially offset by (c) higher general and administrative costs of $0.4 million, (d) higher interest expense, net and amortization of deferred debt costs of $0.3 million and (e) higher depreciation and amortization of deferred leasing costs of $0.3 million. Net income available to common stockholders decreased to $6.0 million, or $0.24 per basic and diluted share, for the 2026 Quarter from $7.9 million, or $0.33 per basic and diluted share, for the 2025 Quarter. Compared to the 2025 Quarter, net income available to common stockholders for the 2026 Quarter was adversely impacted by $1.9 million, or $0.08 per basic and diluted share, due to the initial operations of Hampden House.

Same property revenue increased $4.7 million, or 6.9%, and same property net operating income increased $3.4 million, or 6.9%, for the 2026 Quarter compared to the 2025 Quarter. Same property revenue was favorably impacted by $2.7 million due to the lease up of Twinbrook Quarter Phase I. Exclusive of Twinbrook Quarter Phase I, same property revenue increased $2.0 million primarily due to (a) higher commercial base rent of $1.3 million and (b) higher expense recoveries of $0.9 million. Same property net operating income was favorably impacted by $2.5 million due to the lease up of Twinbrook Quarter Phase I. Exclusive of Twinbrook Quarter Phase I, same property net operating income increased $0.9 million, primarily due to (a) higher commercial base rent of $1.3 million partially offset by (b) lower expense recoveries, net of expenses, of $0.4 million. Shopping Center same property net operating income for the 2026 Quarter totaled $36.6 million, a 3.6% increase compared to the 2025 Quarter. Shopping Center same property net operating income increased primarily due to higher base rent of $1.2 million. Mixed-Use same property net operating income for the 2026 Quarter totaled $15.5 million, a 15.7% increase compared to the 2025 Quarter. Mixed-Use same property net operating income increased primarily due to the lease up of Twinbrook Quarter Phase I of $2.5 million. Exclusive of Twinbrook Quarter Phase I, Mixed-Use same property net operating income decreased by $0.4 million primarily due to lower expense recoveries, net of expenses, of $0.3 million. One property, Hampden House, which commenced operations on October 1, 2025, was excluded from same property results. Reconciliations of (a) total revenue to same property revenue and (b) net income to same property net operating income are attached to this press release.

Same property revenue and same property net operating income are non-GAAP financial measures of performance that management believes improve the comparability of reporting periods by excluding the results of properties that were not in operation for the entirety of the comparable reporting periods. We define same property revenue as total revenue less straight-line base rent and amortization of above/below market premiums and discounts related to leases acquired in connection with purchased real estate investment properties minus the revenue of properties not in operation for the entirety of the comparable reporting periods. We define same property net operating income as net income plus (a) interest expense, net and amortization of deferred debt costs, (b) depreciation and amortization of deferred leasing costs, (c) general and administrative expenses, (d) change in fair value of derivatives and (e) loss on the early extinguishment of debt minus (f) gains on property dispositions, (g) straight-line base rent, (h) amortization of above/below market premiums and discounts related to leases acquired in connection with purchased real estate investment properties and (i) the net operating income of properties that were not in operation for the entirety of the comparable periods.

Funds from operations ("FFO") available to common stockholders and noncontrolling interests (after deducting preferred stock dividends) decreased to $24.8 million, or $0.69 per basic and diluted share, in the 2026 Quarter compared to $25.4 million, or $0.73 per basic and diluted share, in the 2025 Quarter. FFO is a non-GAAP supplemental earnings measure that management considers meaningful in measuring operating performance. A definition of FFO and reconciliation of net income to FFO is attached to this press release as page 9. FFO available to common stockholders and noncontrolling interests was adversely impacted by $2.4 million, or $0.07 per basic and diluted share, due to the initial operations of Hampden House. Exclusive of Hampden House, FFO available to common stockholders and noncontrolling interests increased by $1.8 million primarily due to (a) higher residential base rent of $1.4 million and (b) higher commercial base rent of $1.2 million partially offset by (c) higher general and administrative costs of $0.4 million and (d) higher interest expense, net and amortization of deferred debt costs of $0.3 million.

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

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

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

FFO available to common stockholders and noncontrolling interests, after deducting preferred stock dividends, totaled $49.9 million, or $1.40 per basic and diluted share, for the 2026 Period compared to $49.9 million, or $1.44 per basic and diluted share, for the 2025 Period. FFO available to common stockholders and noncontrolling interests was adversely impacted by $5.6 million, or $0.16 per basic and diluted share, due to the initial operations of Hampden House. Exclusive of Hampden House, FFO available to common stockholders and noncontrolling interests increased by $5.6 million primarily due to (a) higher residential base rent of $3.5 million and (b) higher commercial base rent of $2.8 million partially offset by (c) higher general and administrative costs of $0.8 million.

Saul Centers, Inc. is a self-managed, self-administered equity REIT headquartered in Bethesda, Maryland, which currently operates and manages a real estate portfolio of 62 properties, which includes (a) 50 community and neighborhood shopping centers and nine mixed-use properties with approximately 10.6 million square feet of leasable area and (b) three non-operating land and development properties. Over 85% of the Saul Centers' property net operating income is generated by properties in the Washington, D.C./Baltimore metropolitan area.

Saul Centers, Inc. Consolidated Balance Sheets (Unaudited)

(Dollars in thousands, except per share amounts)

June 30, 2026

December 31, 2025

Assets

Real estate investments

Land

$ 595,514

$ 595,514

Buildings and equipment

2,174,092

2,162,135

Construction in progress

116,416

109,950

2,886,022

2,867,599

Accumulated depreciation

(841,335)

(812,035)

Total real estate investments, net

2,044,687

2,055,564

Cash and cash equivalents

5,877

8,741

Accounts receivable and accrued income, net

62,792

60,799

Deferred leasing costs, net

25,863

25,847

Other assets

20,251

11,727

Total assets

$ 2,159,470

$ 2,162,678

Liabilities

Mortgage notes payable, net

$ 1,107,956

$ 1,063,530

Revolving credit facility payable, net

85,281

144,678

Term loan facility payable, net

139,089

138,870

Construction loans payable, net

271,816

254,724

Accounts payable, accrued expenses and other liabilities

42,352

36,617

Deferred income

18,831

22,840

Dividends and distributions payable

24,589

24,162

Total liabilities

1,689,914

1,685,421

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, 50,000,000 shares authorized, 24,777,583 and 24,551,168 shares issued and outstanding, respectively

248

245

Additional paid-in capital

463,289

459,222

Distributions in excess of accumulated earnings

(354,452)

(337,708)

Accumulated other comprehensive income

1,824

1,061

Total Saul Centers, Inc. equity

295,909

307,820

Noncontrolling interests

173,647

169,437

Total equity

469,556

477,257

Total liabilities and equity

$ 2,159,470

$ 2,162,678

Saul Centers, Inc. Consolidated Statements of Operations (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands, except per share amounts)

2026

2025

2026

2025

Revenues

Rental revenue

$ 75,378

$ 69,426

$ 152,200

$ 139,973

Other

1,413

1,408

2,850

2,717

Total revenue

76,791

70,834

155,050

142,690

Expenses

Property operating expenses

13,552

11,424

29,291

25,166

Real estate taxes

8,811

8,016

17,275

16,000

Interest expense, net and amortization of deferred debt costs

20,034

16,820

39,684

33,567

Depreciation and amortization of deferred leasing costs

16,038

14,098

31,954

28,621

General and administrative

6,810

6,415

13,257

12,427

Total expenses

65,245

56,773

131,461

115,781

Gain on disposition of property

—

120

—

120

Net income

11,546

14,181

23,589

27,029

Noncontrolling interests

Income attributable to noncontrolling interests

(2,793)

(3,461)

(5,718)

(6,510)

Net income attributable to Saul Centers, Inc.

8,753

10,720

17,871

20,519

Preferred stock dividends

(2,799)

(2,799)

(5,597)

(5,597)

Net income available to common stockholders

$ 5,954

$ 7,921

$ 12,274

$ 14,922

Per share net income available to common stockholders

Basic and diluted

$ 0.24

$ 0.33

$ 0.50

$ 0.62

Reconciliation of net income to FFO available to common stockholders and noncontrolling interests (1)

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands, except per share amounts)

2026

2025

2026

2025

Net income

$ 11,546

$ 14,181

$ 23,589

$ 27,029

Subtract:

Gain on disposition of property

—

(120)

—

(120)

Add:

Real estate depreciation and amortization

16,038

14,098

31,954

28,621

FFO

27,584

28,159

55,543

55,530

Subtract:

Preferred stock dividends

(2,799)

(2,799)

(5,597)

(5,597)

FFO available to common stockholders and noncontrolling interests

$ 24,785

$ 25,360

$ 49,946

$ 49,933

Weighted average shares and units:

Basic

35,762

34,845

35,644

34,765

Diluted

35,816

34,866

35,691

34,786

Basic and diluted FFO per share available to common stockholders and noncontrolling interests

$ 0.69

$ 0.73

$ 1.40

$ 1.44

(1)

The National Association of Real Estate Investment Trusts ("Nareit") developed FFO as a relative non-GAAP financial measure of performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO is defined by Nareit as net income, computed in accordance with GAAP, plus real estate depreciation and amortization, and excluding impairment charges on depreciable real estate assets and gains or losses from property dispositions. FFO does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs, which is disclosed in the Company's Consolidated Statements of Cash Flows for the applicable periods. FFO should not be considered as an alternative to net income, its most directly comparable GAAP measure, as an indicator of the Company's operating performance, or as an alternative to cash flows as a measure of liquidity. Management considers FFO a meaningful supplemental measure of operating performance because it primarily excludes the assumption that the value of the real estate assets diminishes predictably over time (i.e. depreciation), which is contrary to what the Company believes occurs with its assets, and because industry analysts have accepted it as a performance measure. FFO may not be comparable to similarly titled measures employed by other REITs.

Reconciliation of revenue to same property revenue (2)

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

2026

2025

2026

2025

Total revenue

$ 76,791

$ 70,834

$ 155,050

$ 142,690

Revenue adjustments (1)

(2,435)

(2,739)

(4,842)

(5,095)

Acquisitions, dispositions and development properties

(1,554)

—

(2,770)

—

Total same property revenue

$ 72,802

$ 68,095

$ 147,438

$ 137,595

Shopping Centers

$ 47,798

$ 45,578

$ 97,596

$ 93,576

Mixed-Use properties

25,004

22,517

49,842

44,019

Total same property revenue

$ 72,802

$ 68,095

$ 147,438

$ 137,595

Total Shopping Center revenue

$ 47,798

$ 45,578

$ 97,596

$ 93,576

Shopping Center acquisitions, dispositions and development properties

—

—

—

—

Total Shopping Center same property revenue

$ 47,798

$ 45,578

$ 97,596

$ 93,576

Total Mixed-Use property revenue

$ 26,558

$ 22,517

$ 52,612

$ 44,019

Mixed-Use acquisitions, dispositions and development properties

(1,554)

—

(2,770)

—

Total Mixed-Use same property revenue

$ 25,004

$ 22,517

$ 49,842

$ 44,019

(1)

Revenue adjustments are straight-line base rent and amortization of premiums and discounts related to above/below market leases.

(2)

Same property revenue is a non-GAAP financial measure of performance that management believes improves the comparability of reporting periods by excluding the results of properties that were not in operation for the entirety of the comparable reporting periods. We define same property revenue as total revenue less straight-line base rent and amortization of above/below market premiums and discounts related to leases acquired in connection with purchased real estate investment properties minus the revenue of properties not in operation for the entirety of the comparable reporting periods. Same property revenue is a measure of the operating performance of the Company's properties but does not measure the Company's performance as a whole. Same property revenue should not be considered as an alternative to total revenue, its most directly comparable GAAP measure, as an indicator of the Company's operating performance. Management considers same property revenue a meaningful supplemental measure of operating performance because it is not affected by the cost of the Company's 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 the Company's properties. Management believes the exclusion of these items from same property revenue is useful because the resulting measure captures the actual revenue generated by operating the Company's properties. Other REITs may use different methodologies for calculating same property revenue. Accordingly, the Company's same property revenue may not be comparable to those of other REITs.

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

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

2026

2025

2026

2025

Residential Mixed-Use properties (residential activity) (1)

$ 13,263

$ 11,529

$ 26,456

$ 22,125

Office Mixed-Use properties (2)

9,586

9,797

19,215

19,578

Residential Mixed-Use properties (retail activity) (3)

2,155

1,191

4,171

2,316

Total Mixed-Use same property revenue

$ 25,004

$ 22,517

$ 49,842

$ 44,019

(1)

Includes Clarendon South Block, The Waycroft, Park Van Ness and The Milton at Twinbrook Quarter.

(2)

Includes Avenel Business Park, Clarendon Center – North and South Blocks, 601 Pennsylvania Avenue and Washington Square.

(3)

Includes The Waycroft, Park Van Ness and Twinbrook Quarter Phase I.

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

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

2026

2025

2026

2025

Net income

$ 11,546

$ 14,181

$ 23,589

$ 27,029

Interest expense, net and amortization of deferred debt costs

20,034

16,820

39,684

33,567

Depreciation and amortization of deferred leasing costs

16,038

14,098

31,954

28,621

General and administrative

6,810

6,415

13,257

12,427

Gain on disposition of property

—

(120)

—

(120)

Revenue adjustments (1)

(2,435)

(2,739)

(4,842)

(5,095)

Total property net operating income

51,993

48,655

103,642

96,429

Acquisitions, dispositions, and development properties

14

—

453

—

Total same property net operating income

$ 52,007

$ 48,655

$ 104,095

$ 96,429

Shopping Centers

$ 36,555

$ 35,296

$ 73,033

$ 70,569

Mixed-Use properties

15,452

13,359

31,062

25,860

Total same property net operating income

$ 52,007

$ 48,655

$ 104,095

$ 96,429

Shopping Center property net operating income

$ 36,555

$ 35,296

$ 73,033

$ 70,569

Shopping Center acquisitions, dispositions and development properties

—

—

—

—

Total Shopping Center same property net operating income

$ 36,555

$ 35,296

$ 73,033

$ 70,569

Mixed-Use property net operating income

$ 15,438

$ 13,359

$ 30,609

$ 25,860

Mixed-Use acquisitions, dispositions and development properties

14

—

453

—

Total Mixed-Use same property net operating income

$ 15,452

$ 13,359

$ 31,062

$ 25,860

(1)

Revenue adjustments are straight-line base rent and amortization of premiums and discounts related to above/below market leases.

(2)

Same property net operating income is a non-GAAP financial measure of performance that management believes improves the comparability of reporting periods by excluding the results of properties that were not in operation for the entirety of the comparable reporting periods. We define same property net operating income as net income plus (a) interest expense, net and amortization of deferred debt costs, (b) depreciation and amortization of deferred leasing costs, (c) general and administrative expenses, (d) change in fair value of derivatives, and (e) loss on the early extinguishment of debt minus (f) gains on property dispositions, (g) straight-line base rent, (h) amortization of above/below market premiums and discounts related to leases acquired in connection with purchased real estate investment properties and (i) the net operating income of properties that were not in operation for the entirety of the comparable periods. Same property net operating income is a measure of the operating performance of the Company's properties but does not measure the Company's performance as a whole. Same property net operating income 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. Management considers same property net operating income a meaningful supplemental measure of operating performance because it is not affected by the cost of the Company's 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 the Company's properties. Management believes the exclusion of these items from property net operating income is useful because the resulting measure captures the actual revenue generated and actual expenses incurred by operating the Company's properties. Other REITs may use different methodologies for calculating same property net operating income. Accordingly, same property net operating income may not be comparable to those of other REITs.

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

Three Months Ended June 30,

Six Months Ended June 30,

(In thousands)

2026

2025

2026

2025

Residential Mixed-Use properties (residential activity) (1)

$ 8,086

$ 6,500

$ 16,104

$ 12,232

Office Mixed-Use properties (2)

5,963

6,208

12,103

12,326

Residential Mixed-Use properties (retail activity) (3)

1,403

651

2,855

1,302

Total Mixed-Use same property net operating income

$ 15,452

$ 13,359

$ 31,062

$ 25,860

(1)

Includes Clarendon South Block, The Waycroft, Park Van Ness and The Milton at Twinbrook Quarter.

(2)

Includes Avenel Business Park, Clarendon Center – North and South Blocks, 601 Pennsylvania Avenue and Washington Square.

(3)

Includes The Waycroft, Park Van Ness and Twinbrook Quarter Phase I.