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 2024 Quarter, net income for the 2025 Quarter was adversely impacted by $5.1 million, of which $2.8 million was a reduction in capitalized interest, due to the initial operations of Hampden House. Net income for Twinbrook Quarter Phase I increased $2.0 million from the 2024 Quarter to the 2025 Quarter. Exclusive of Twinbrook Quarter Phase I and Hampden House, net income increased by $0.9 million primarily due to (a) higher commercial base rent of $2.3 million and (b) higher residential base rent of $0.3 million partially offset by (c) lower property operating expense recoveries, net of expenses, of $1.1 million, (d) higher credit losses on operating lease receivables, net, of $0.3 million and (e) higher general and administrative cost of $0.3 million. Net income available to common stockholders decreased to $3.7 million, or $0.15 per basic and diluted share, for the 2025 Quarter from $5.3 million, or $0.22 per basic and diluted share, for the 2024 Quarter. Compared to the 2024 Quarter, net income available to common stockholders for the 2025 Quarter was adversely impacted by $2.6 million, or $0.10 per basic and diluted share, due to the initial operations of Hampden House.
Same property revenue decreased $3.6 million, or 4.7%, and same property net operating income decreased $6.3 million, or 11.2%, for the 2025 Quarter compared to the 2024 Quarter. Same property revenue decreased primarily due to (a) the receipt in the 2024 Quarter of a non-recurring rental payment of $8.7 million, which was recognized within same property revenue in the 2024 Quarter partially offset by (b) higher residential base rent of $2.8 million, (c) higher operating expense recoveries of $1.3 million and (d) higher commercial base rent of $0.8 million, exclusive of the non-recurring rental payment. Exclusive of the non-recurring rental payment, for the 2025 Quarter same property revenue increased $5.1 million, or 6.8%, and same property net operating income increased $2.4 million, or 4.2%, compared to the 2024 Quarter. Shopping Center same property net operating income for the 2025 Quarter totaled $35.8 million, a 1.3% increase compared to the 2024 Quarter. Shopping Center same property net operating income increased primarily due to (a) higher commercial base rent of $1.3 million partially offset by (b) lower property operating expense recoveries, net of expenses, of $0.7 million. Mixed-Use same property net operating income for the 2025 Quarter totaled $14.2 million, a 32.2% decrease compared to the 2024 Quarter. Mixed-Use same property net operating income decreased primarily due to (a) the receipt in the 2024 Quarter of a non-recurring rental payment of $8.7 million, which was recognized within same property net operating income in the 2024 Quarter, (b) lower property operating expense recoveries, net of expenses, of $0.8 million, partially offset by (c) higher residential base rent of $2.8 million. Exclusive of the non-recurring rental payment, Mixed-Use same property net operating income for the 2025 Quarter totaled $22.9 million, an increase of 9.2% compared to the 2024 Quarter. One property, Hampden House, was excluded from same property results. Reconciliations and definitions 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, and 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 $21.5 million, or $0.61 per basic and diluted share, in the 2025 Quarter compared to $22.0 million, or $0.63 per basic and diluted share, in the 2024 Quarter. FFO is a non-GAAP supplemental earnings measure that the Company considers meaningful in measuring its operating performance. A reconciliation and definition of net income to FFO is attached to this press release. FFO available to common stockholders and noncontrolling interests was adversely impacted by $3.6 million, or $0.10 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 $3.2 million primarily due to (a) higher commercial base rent of $2.3 million, exclusive of Twinbrook Quarter Phase I, (b) the initial operations of Twinbrook Quarter Phase I of $2.2 million, (c) higher residential base rent, exclusive of Twinbrook Quarter Phase I, of $0.3 million, partially offset by (d) lower property operating expense recoveries, net of expenses, exclusive of Twinbrook Quarter Phase I, of $1.1 million, (e) higher credit losses on operating lease receivables, net, exclusive of Twinbrook Quarter Phase I, of $0.3 million and (f) higher general and administrative cost, exclusive of Twinbrook Quarter Phase I, of $0.3 million.
As of December 31, 2025, 94.6% of the commercial portfolio was leased compared to 95.2% as of December 31, 2024. As of December 31, 2025, excluding the apartments at Hampden House, the residential portfolio was 97.7% leased compared to 82.8% as of December 31, 2024.
For the year ended December 31, 2025 ("2025 Period"), total revenue increased to $289.8 million from $268.8 million for the year ended December 31, 2024 ("2024 Period"). Net income decreased to $49.2 million for the 2025 Period from $67.7 million for the 2024 Period. The decrease in net income was primarily due to the initial operations of Twinbrook Quarter Phase I, which adversely impacted net income by $14.3 million, of which $14.0 million was a reduction of capitalized interest, and the initial operations of Hampden House, which adversely impacted net income by $5.1 million, of which $2.8 million was a reduction of capitalized interest. Exclusive of Twinbrook Quarter Phase I and Hampden House, net income increased $1.0 million primarily due to (a) higher commercial base rent of $7.7 million, (b) higher residential base rent of $1.4 million, partially offset by (c) lower lease termination fees of $2.6 million, (d) lower property operating expense recoveries, net of expenses, of $2.5 million, (e) higher general and administrative expenses of $1.5 million, (f) higher credit losses on operating lease receivables, net, of $0.8 million and (g) lower other property revenue of $0.5 million. Net income available to common stockholders decreased to $26.3 million, or $1.09 per basic and diluted share, for the 2025 Period compared to $39.5 million, or $1.64 and $1.63 per basic and diluted share, respectively, for the 2024 Period. Compared to the 2024 Period, net income available to common stockholders for the 2025 Period was adversely impacted by $11.6 million, or $0.48 per basic and diluted share, due to the initial operations of Twinbrook Quarter Phase I and Hampden House.
Same property revenue increased $1.7 million, or 0.6%, and same property net operating income decreased $3.9 million, or 2.0%, for the 2025 Period compared to the 2024 Period. Shopping Center same property net operating income decreased $2.6 million, or 1.8%, and Mixed-Use same property net operating income decreased $1.3 million, or 2.6%. Shopping Center same property net operating income decreased primarily due to (a) lower lease termination fees of $2.7 million, (b) lower property operating expense recoveries, net of expenses, of $1.3 million, (c) higher credit losses on operating lease receivables, net, of $0.8 million and (d) lower other property revenue, primarily attributable to insurance proceeds in the 2024 Period relating to lost rents because of a tenant that temporarily closed its operations, of $0.6 million, partially offset by (e) higher commercial base rent of $2.8 million. Mixed-Use same property net operating income decreased primarily due to (a) lower commercial base rent of $1.5 million and (b) lower property operating expense recoveries, net of expenses, of $1.2 million, partially offset by (c) higher residential base rent of $1.3 million. Two properties, Twinbrook Quarter Phase I and Hampden House, were excluded from same property results.
FFO available to common stockholders and noncontrolling interests, after deducting preferred stock dividends, decreased to $96.7 million, or $2.76 per basic and diluted share, in the 2025 Period from $106.8 million, or $3.10 and $3.09 per basic and diluted share, respectively, in the 2024 Period. FFO available to common stockholders and noncontrolling interests was adversely impacted by $11.2 million, or $0.32 per basic and diluted share, due to the initial operations of Twinbrook Quarter Phase I and Hampden House. Exclusive of Twinbrook Quarter Phase I and Hampden House, FFO available to common stockholders and noncontrolling interest increased by $1.2 million primarily due to (a) higher commercial base rent of $7.7 million and (b) higher residential base rent of $1.4 million partially offset by (c) lower lease termination fees of $2.6 million, (d) lower property operating expense recoveries, net of expenses, of $2.5 million, (e) higher general and administrative expenses of $1.5 million, (f) higher credit losses on operating lease receivables, net, of $0.8 million and (g) lower other property revenue of $0.5 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.
Safe Harbor Statement
Certain matters discussed within this press release may be deemed to be forward-looking statements within the meaning of the federal securities laws. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Although the Company believes the expectations reflected in the forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. These factors include, but are not limited to, the risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2025 and other periodic or current reports filed with the SEC and include the following: (i) macroeconomic conditions, including due to geopolitical instability and global trade disruptions, which may lead to reduced or disrupted access to capital, rising inflation and could negatively impact the business operations of some of our tenants (ii) the ability of our tenants to pay rent, (iii) our reliance on shopping center "anchor" tenants and other significant tenants, (iv) our substantial relationships with members of the B. F. Saul Company and certain other affiliated entities, each of which is controlled by B. Francis Saul II and his family members, (v) 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, (vi) our access to additional capital, (vii) our ability to successfully complete acquisitions, developments or redevelopments, or if they are consummated, whether such acquisitions, developments or redevelopments perform as expected, (viii) adverse trends in the retail, office and residential real estate sectors, (ix) risks relating to cybersecurity and potential future uses of artificial intelligence ("AI"), including disruption to our business and operations, reputational risk, regulatory risk, and exposure to liabilities from tenants, employees, capital providers, and other third parties, (x) 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, and (xi) 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. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements that we make, including those in this press release. Except as may be required by law, we make no promise to update any of the forward-looking statements as a result of new information, future events or otherwise. You should carefully review the risks and risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2025 and other periodic or current reports filed with the SEC.
Saul Centers, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
December 31,
2025
December 31,
2024
Assets
Real estate investments
Land
$ 595,514
$ 562,047
Buildings and equipment
2,162,135
1,903,907
Construction in progress
109,950
326,193
2,867,599
2,792,147
Accumulated depreciation
(812,035)
(767,842)
Total real estate investments, net
2,055,564
2,024,305
Cash and cash equivalents
8,741
10,299
Accounts receivable and accrued income, net
60,799
50,949
Deferred leasing costs, net
25,847
25,907
Other assets
11,727
14,944
Total assets
$ 2,162,678
$ 2,126,404
Liabilities
Mortgage notes payable, net
$ 1,063,530
$ 1,047,832
Revolving credit facility payable, net
144,678
186,489
Term loan facility payable, net
138,870
99,679
Construction loans payable, net
254,724
198,616
Accounts payable, accrued expenses and other liabilities
36,617
46,162
Deferred income
22,840
23,033
Dividends and distributions payable
24,162
23,469
Total liabilities
1,685,421
1,625,280
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,
24,551,168 and 24,302,576 shares issued and outstanding, respectively
245
243
Additional paid-in capital
459,222
454,086
