SAUL CENTERS, INC.
For the period ended Sep 30, 2025. Filed Nov 6, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 6, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
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Item 2. Results of Operations:
Three months ended September 30, 2025 (the "2025 Quarter") compared to the three months ended September 30, 2024 (the "2024 Quarter")
Net income for the 2025 Quarter decreased to $14.0 million from $19.6 million for the 2024 Quarter. The primary reason for the decline in net income was the $4.7 million adverse impact of the initial operations of Twinbrook Quarter Phase I. Significant changes in revenue and expenses are discussed below.
Revenue
| Three Months Ended September 30, · 2024 to 2025 Change | ||||
|---|---|---|---|---|
| (In thousands) | 2025 | 2024 | Amount | Percent |
| Base rent | $59,250 | $54,332 | $4,918 | 9.1% |
| Expense recoveries | 10,920 | 10,332 | 588 | 5.7% |
| Percentage rent | 302 | 381 | (79) | (20.7)% |
| Other property revenue | 614 | 521 | 93 | 17.9% |
| Credit losses on operating lease receivables, net | (407) | (16) | (391) | NM |
| Rental revenue | 70,679 | 65,550 | 5,129 | 7.8% |
| Other revenue | 1,325 | 1,738 | (413) | (23.8)% |
| Total revenue | $72,004 | $67,288 | $4,716 | 7.0% |
| NM = Not meaningful | ||||
Total revenue increased 7.0% in the 2025 Quarter compared to the 2024 Quarter, primarily due to the initial operations of Twinbrook Quarter Phase I of $3.9 million.
Base rent. Base rent includes $1.9 million and $0.4 million for the 2025 Quarter and 2024 Quarter, respectively, to recognize base rent on a straight-line basis. In addition, base rent includes $0.1 million and $0.2 million for the 2025 Quarter and 2024 Quarter, respectively, to recognize income from the accretion of discounts related to in-place leases acquired in connection with purchased real estate investment properties. The $4.9 million increase in base rent in the 2025 Quarter compared to the 2024 Quarter is primarily attributable to (a) higher base rent related to Twinbrook Quarter Phase I of $3.5 million, (b) higher commercial base rent, exclusive of Twinbrook Quarter Phase I, of $1.1 million, and (c) higher residential base rent, exclusive of Twinbrook Quarter Phase I, of $0.3 million.
Expense Recoveries. The $0.6 million increase in expense recoveries in the 2025 Quarter compared to the 2024 Quarter is primarily attributable to an increase in recoverable property operating expenses.
Credit losses on operating lease receivables, net. The $0.4 million increase in credit losses on operating lease receivables in the 2025 Quarter compared to the 2024 Quarter is primarily attributable to higher reserves across the portfolio.
Other revenue. The $0.4 million decrease in other revenue in the 2025 Quarter compared to the 2024 Quarter is primarily attributable to lower lease termination fees.
Expenses
| Three Months Ended September 30, · 2024 to 2025 Change | ||||
|---|---|---|---|---|
| (In thousands) | 2025 | 2024 | Amount | Percent |
| Property operating expenses | $12,024 | $10,111 | $1,913 | 18.9% |
| Real estate taxes | 8,154 | 7,620 | 534 | 7.0% |
| Interest expense, net and amortization of deferred debt costs | 17,066 | 12,213 | 4,853 | 39.7% |
| Depreciation and amortization of deferred leasing costs | 14,106 | 12,072 | 2,034 | 16.8% |
| General and administrative | 6,658 | 5,680 | 978 | 17.2% |
| Total expenses | $58,008 | $47,696 | $10,312 | 21.6% |
Total expenses increased 21.6% in the 2025 Quarter compared to the 2024 Quarter, as described below. The increase in total expenses is primarily attributable to the initial operations of Twinbrook Quarter Phase I, which generated $8.6 million of expenses during the 2025 Quarter.
Property operating expenses. The $1.9 million increase in property operating expenses in the 2025 Quarter compared to the 2024 Quarter is primarily attributable to (a) the operations of Twinbrook Quarter Phase I of $1.4 million and (b) higher utility costs across the portfolio, exclusive of Twinbrook Quarter Phase I, of $0.3 million.
Real estate taxes. The $0.5 million increase in real estate taxes in the 2025 Quarter compared to the 2024 Quarter is primarily attributable to the initial operations of Twinbrook Quarter Phase I of $0.3 million.
Interest expense, net and amortization of deferred debt costs. Interest expense, net and amortization of deferred debt costs increased 39.7% in the 2025 Quarter compared to the 2024 Quarter primarily due to (a) the initial operations of Twinbrook Quarter Phase I of $4.8 million and (b) $1.1 million of higher interest incurred as a result of higher average outstanding debt, partially offset by (c) $0.6 million of lower interest incurred as a result of lower average interest rates and (d) higher capitalized interest, exclusive of Twinbrook Quarter Phase I, primarily related to Hampden House of $0.6 million.
Depreciation and amortization of deferred leasing costs: Depreciation and amortization of deferred leasing costs increased 16.8% in the 2025 Quarter compared to the 2024 Quarter primarily due to $2.2 million of depreciation expense related to Twinbrook Quarter Phase I, which was not in service in the 2024 Quarter.
General and administrative. General and administrative costs increased 17.2% in the 2025 Quarter compared to the 2024 Quarter primarily due to (a) higher employment costs of $0.6 million and (b) costs related to the New Credit Facility of $0.2 million.
Nine months ended September 30, 2025 (the "2025 Period") compared to the nine months ended September 30, 2024 (the "2024 Period")
Net income for the 2025 Period decreased to $41.0 million from $57.3 million for the 2024 Period. The primary reason for the decline in net income was the $16.4 million adverse impact of the initial operations of Twinbrook Quarter Phase I. Significant changes in revenue and expenses are discussed below.
Revenue
| Nine Months Ended September 30, · 2024 to 2025 Change | ||||
|---|---|---|---|---|
| (In thousands) | 2025 | 2024 | Amount | Percent |
| Base rent | $175,294 | $160,641 | $14,653 | 9.1% |
| Expense recoveries | 32,872 | 30,663 | 2,209 | 7.2% |
| Percentage rent | 1,644 | 1,624 | 20 | 1.2% |
| Other property revenue | 1,855 | 2,146 | (291) | (13.6)% |
| Credit losses on operating lease receivables, net | (1,013) | (530) | (483) | 91.1% |
| Rental revenue | 210,652 | 194,544 | 16,108 | 8.3% |
| Other revenue | 4,042 | 6,379 | (2,337) | (36.6)% |
| Total revenue | $214,694 | $200,923 | $13,771 | 6.9% |
Total revenue increased 6.9% in the 2025 Period compared to the 2024 Period, primarily due to the initial operations of Twinbrook Quarter Phase I of $8.9 million.
Base Rent. Base rent includes $6.7 million and $(0.4) million for the 2025 Period and 2024 Period, respectively, to recognize base rent on a straight-line basis. In addition, base rent includes $0.5 million and $0.7 million for the 2025 Period and 2024 Period, respectively, to recognize income from the accretion of discounts related to in-place leases acquired in connection with purchased real estate investment properties. The $14.7 million increase in base rent in the 2025 Period compared to the 2024 Period is primarily attributable to (a) higher base rent related to Twinbrook Quarter Phase I of $8.3 million, (b) higher commercial base rent, exclusive of Twinbrook Quarter Phase I, of $5.4 million and (c) higher residential base rent, exclusive of Twinbrook Quarter Phase I, of $1.0 million.
Expense recoveries. The $2.2 million increase in expense recoveries in the 2025 Period compared to the 2024 Period is primarily attributable to an increase in recoverable property operating expenses.
Credit losses on operating lease receivables, net. The $0.5 million increase in credit losses on operating lease receivables, net in the 2025 Period compared to the 2024 Period is primarily attributable to higher reserves across the portfolio.
Other revenue. The $2.3 million decrease in other property revenue in the 2025 Period compared to the 2024 Period is primarily attributable to lower lease termination fees.
Expenses
| Nine Months Ended September 30, · 2024 to 2025 Change | ||||
|---|---|---|---|---|
| (In thousands) | 2025 | 2024 | Amount | Percent |
| Property operating expenses | $37,190 | $30,312 | $6,878 | 22.7% |
| Real estate taxes | 24,154 | 22,852 | 1,302 | 5.7% |
| Interest expense, net and amortization of deferred debt costs | 50,633 | 36,928 | 13,705 | 37.1% |
| Depreciation and amortization of deferred leasing costs | 42,727 | 36,102 | 6,625 | 18.4% |
| General and administrative | 19,085 | 17,565 | 1,520 | 8.7% |
| Total expenses | $173,789 | $143,759 | $30,030 | 20.9% |
Total expenses increased 20.9% in the 2025 Period compared to the 2024 Period, as described below. The increase in total expenses is primarily due to the initial operations of Twinbrook Quarter Phase I, which generated $25.3 million of expenses during the 2025 Period.
Property operating expenses. Property operating expenses increased 22.7% in the 2025 Period compared to the 2024 Period primarily due to (a) the initial operations of Twinbrook Quarter Phase I of $3.6 million, (b) higher repairs and maintenance expenses, exclusive of Twinbrook Quarter Phase I, of $2.5 million, of which approximately $1.7 million is an increase in snow removal costs, and (c) higher utility costs across the portfolio, exclusive of Twinbrook Quarter Phase I, of $0.5 million.
Real estate tax expense. Real estate tax expense increased 5.7% in the 2025 Period compared to the 2024 Period primarily due to the initial operations of Twinbrook Quarter Phase I of $1.2 million.
Interest expense, net and amortization of deferred debt costs. Interest expense, net and amortization of deferred debt costs increased 37.1% in the 2025 Period compared to the 2024 Period primarily due to (a) the initial operations of Twinbrook Quarter Phase I of $14.4 million and (b) $3.6 million of higher interest incurred as a result of higher average outstanding debt, partially offset by (c) $2.4 million of lower interest incurred as a result of lower average interest rates and (d) higher capitalized interest, exclusive of Twinbrook Quarter Phase I, primarily related to Hampden House of $2.2 million.
Depreciation and amortization of deferred leasing costs: Depreciation and amortization of deferred leasing costs increased 18.4% in the 2025 Period compared to the 2024 Period primarily due to $6.6 million of depreciation expense related to Twinbrook Quarter Phase I, which was not in service in the 2024 Period.
General and administrative. General and administrative expense increased 8.7% in the 2025 Period compared to the 2024 Period primarily due to (a) higher employment costs of $1.3 million and (b) higher costs related to the New Credit Facility of $0.2 million.
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