Toggle SGML Header (+)


Section 1: 10-Q (10-Q)

Document
330.010.011137422004115101false--12-31Q2202000009072540.530.530.530.530.010.014000000040000000232312402334269923231240233426990.01350.01400.530.530.530.53P1Y42.9738.2842.9738.2838.2837.5038.2837.50100000010000003000044000300004400030000440003000044000120347998048397812627485487721174511745 0000907254 2020-01-01 2020-06-30 0000907254 2020-07-31 0000907254 us-gaap:CommonStockMember 2020-01-01 2020-06-30 0000907254 us-gaap:SeriesDPreferredStockMember 2020-01-01 2020-06-30 0000907254 us-gaap:SeriesEPreferredStockMember 2020-01-01 2020-06-30 0000907254 2019-12-31 0000907254 2020-06-30 0000907254 bfs:SeriesECumulativeRedeemablePreferredStockMember 2020-06-30 0000907254 bfs:SeriesECumulativeRedeemablePreferredStockMember 2019-12-31 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember 2020-06-30 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember 2019-12-31 0000907254 2019-01-01 2019-06-30 0000907254 2020-04-01 2020-06-30 0000907254 2019-04-01 2019-06-30 0000907254 us-gaap:ParentMember 2020-01-01 2020-03-31 0000907254 2020-01-01 2020-03-31 0000907254 us-gaap:AdditionalPaidInCapitalMember 2020-04-01 2020-06-30 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember us-gaap:ParentMember 2020-01-01 2020-03-31 0000907254 us-gaap:RetainedEarningsMember 2019-12-31 0000907254 bfs:SeriesECumulativeRedeemablePreferredStockMember 2020-01-01 2020-03-31 0000907254 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0000907254 bfs:SeriesECumulativeRedeemablePreferredStockMember us-gaap:ParentMember 2020-04-01 2020-06-30 0000907254 us-gaap:ParentMember 2019-12-31 0000907254 us-gaap:PreferredStockMember 2019-12-31 0000907254 us-gaap:RetainedEarningsMember 2020-06-30 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0000907254 us-gaap:PreferredStockMember 2020-03-31 0000907254 us-gaap:ParentMember 2020-03-31 0000907254 bfs:SeriesECumulativeRedeemablePreferredStockMember us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0000907254 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0000907254 bfs:SeriesECumulativeRedeemablePreferredStockMember us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0000907254 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0000907254 us-gaap:CommonStockMember 2020-03-31 0000907254 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-03-31 0000907254 us-gaap:ParentMember 2020-04-01 2020-06-30 0000907254 us-gaap:CommonStockMember 2019-12-31 0000907254 bfs:SeriesECumulativeRedeemablePreferredStockMember us-gaap:ParentMember 2020-01-01 2020-03-31 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember 2020-04-01 2020-06-30 0000907254 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0000907254 us-gaap:RetainedEarningsMember 2020-04-01 2020-06-30 0000907254 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember 2020-01-01 2020-03-31 0000907254 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0000907254 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0000907254 bfs:SeriesECumulativeRedeemablePreferredStockMember 2020-04-01 2020-06-30 0000907254 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-06-30 0000907254 us-gaap:ParentMember 2020-06-30 0000907254 us-gaap:NoncontrollingInterestMember 2020-06-30 0000907254 us-gaap:PreferredStockMember 2020-06-30 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember us-gaap:ParentMember 2020-04-01 2020-06-30 0000907254 us-gaap:CommonStockMember 2020-04-01 2020-06-30 0000907254 us-gaap:CommonStockMember 2020-06-30 0000907254 us-gaap:NoncontrollingInterestMember 2019-12-31 0000907254 us-gaap:AdditionalPaidInCapitalMember 2020-06-30 0000907254 us-gaap:NoncontrollingInterestMember 2020-03-31 0000907254 us-gaap:NoncontrollingInterestMember 2020-04-01 2020-06-30 0000907254 us-gaap:RetainedEarningsMember 2020-03-31 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0000907254 2020-03-31 0000907254 us-gaap:ParentMember 2019-01-01 2019-03-31 0000907254 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0000907254 2018-12-31 0000907254 us-gaap:CommonStockMember 2018-12-31 0000907254 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0000907254 us-gaap:RetainedEarningsMember 2019-03-31 0000907254 2019-01-01 2019-03-31 0000907254 us-gaap:CommonStockMember 2019-03-31 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember 2019-01-01 2019-03-31 0000907254 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-31 0000907254 2019-03-31 0000907254 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0000907254 us-gaap:ParentMember 2019-04-01 2019-06-30 0000907254 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000907254 us-gaap:RetainedEarningsMember 2019-06-30 0000907254 bfs:SeriesCCumulativePreferredStockMember 2019-01-01 2019-03-31 0000907254 us-gaap:NoncontrollingInterestMember 2019-03-31 0000907254 us-gaap:NoncontrollingInterestMember 2019-06-30 0000907254 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0000907254 bfs:SeriesCCumulativePreferredStockMember us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0000907254 2019-06-30 0000907254 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0000907254 us-gaap:CommonStockMember 2019-06-30 0000907254 bfs:SeriesCCumulativePreferredStockMember us-gaap:ParentMember 2019-01-01 2019-03-31 0000907254 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0000907254 us-gaap:RetainedEarningsMember 2018-12-31 0000907254 us-gaap:PreferredStockMember 2018-12-31 0000907254 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0000907254 bfs:SeriesCCumulativePreferredStockMember 2019-04-01 2019-06-30 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0000907254 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0000907254 us-gaap:NoncontrollingInterestMember 2019-04-01 2019-06-30 0000907254 bfs:SeriesCCumulativePreferredStockMember us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0000907254 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember 2019-04-01 2019-06-30 0000907254 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000907254 bfs:SeriesCCumulativePreferredStockMember us-gaap:ParentMember 2019-04-01 2019-06-30 0000907254 us-gaap:PreferredStockMember 2019-03-31 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember us-gaap:ParentMember 2019-01-01 2019-03-31 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember us-gaap:ParentMember 2019-04-01 2019-06-30 0000907254 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0000907254 us-gaap:NoncontrollingInterestMember 2018-12-31 0000907254 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0000907254 us-gaap:ParentMember 2019-06-30 0000907254 us-gaap:PreferredStockMember 2019-06-30 0000907254 us-gaap:ParentMember 2019-03-31 0000907254 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0000907254 us-gaap:ParentMember 2018-12-31 0000907254 us-gaap:DividendDeclaredMember bfs:SeriesCCumulativePreferredStockMember 2019-04-01 2019-06-30 0000907254 us-gaap:DividendDeclaredMember 2019-04-01 2019-06-30 0000907254 us-gaap:DividendDeclaredMember 2020-04-01 2020-06-30 0000907254 us-gaap:DividendDeclaredMember 2019-01-01 2019-03-31 0000907254 us-gaap:DividendDeclaredMember bfs:SeriesDCumulativeRedeemablePreferredStockMember 2020-01-01 2020-03-31 0000907254 us-gaap:DividendDeclaredMember 2020-01-01 2020-03-31 0000907254 us-gaap:DividendDeclaredMember bfs:SeriesDCumulativeRedeemablePreferredStockMember 2019-04-01 2019-06-30 0000907254 us-gaap:DividendDeclaredMember bfs:SeriesDCumulativeRedeemablePreferredStockMember 2020-04-01 2020-06-30 0000907254 us-gaap:DividendDeclaredMember bfs:SeriesDCumulativeRedeemablePreferredStockMember 2019-01-01 2019-03-31 0000907254 us-gaap:DividendDeclaredMember bfs:SeriesECumulativeRedeemablePreferredStockMember 2020-04-01 2020-06-30 0000907254 us-gaap:DividendDeclaredMember bfs:SeriesECumulativeRedeemablePreferredStockMember 2020-01-01 2020-03-31 0000907254 us-gaap:DividendDeclaredMember bfs:SeriesCCumulativePreferredStockMember 2019-01-01 2019-03-31 0000907254 bfs:SeriesECumulativeRedeemablePreferredStockMember 2020-01-01 2020-06-30 0000907254 bfs:SeriesCCumulativePreferredStockMember 2020-01-01 2020-06-30 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember 2020-01-01 2020-06-30 0000907254 bfs:SeriesDCumulativeRedeemablePreferredStockMember 2019-01-01 2019-06-30 0000907254 bfs:SeriesCCumulativePreferredStockMember 2019-01-01 2019-06-30 0000907254 bfs:SeriesECumulativeRedeemablePreferredStockMember 2019-01-01 2019-06-30 0000907254 bfs:ShoppingCentersMember 2020-06-30 0000907254 bfs:GiantFoodMember us-gaap:SalesRevenueNetMember 2020-01-01 2020-06-30 0000907254 bfs:SaulHoldingsLimitedPartnershipMember 2020-01-01 2020-06-30 0000907254 bfs:NoIndividualTenantMember us-gaap:SalesRevenueNetMember 2020-01-01 2020-06-30 0000907254 bfs:GiantFoodMember 2020-06-30 0000907254 bfs:MixedUsePropertiesMember 2020-06-30 0000907254 bfs:NonoperatingDevelopmentPropertiesMember 2020-06-30 0000907254 srt:MaximumMember 2020-06-30 0000907254 bfs:CorporateHeadquartersMember 2019-01-01 0000907254 bfs:DeferredRentReceivableMember 2020-06-30 0000907254 bfs:OtherReceivableMember 2019-12-31 0000907254 bfs:OtherReceivableMember 2020-06-30 0000907254 bfs:DeferredRentReceivableMember 2019-12-31 0000907254 bfs:AccountsReceivableCurrentMember 2019-12-31 0000907254 bfs:StraightLineRentReceivableMember 2019-12-31 0000907254 bfs:StraightLineRentReceivableMember 2020-06-30 0000907254 bfs:AccountsReceivableCurrentMember 2020-06-30 0000907254 srt:MinimumMember 2020-06-30 0000907254 bfs:A7316WisconsinAvenueMember 2019-12-31 0000907254 bfs:A7316WisconsinAvenueMember 2020-06-30 0000907254 bfs:AshbrookMarketplaceMember 2020-06-30 0000907254 bfs:TheWaycroftMember 2020-06-30 0000907254 srt:OtherPropertyMember 2019-12-31 0000907254 bfs:AshbrookMarketplaceMember 2019-12-31 0000907254 srt:OtherPropertyMember 2020-06-30 0000907254 bfs:TheWaycroftMember 2019-12-31 0000907254 srt:MaximumMember us-gaap:BuildingMember 2020-01-01 2020-06-30 0000907254 bfs:TheWaycroftAndAshbrookMarketplaceMember 2020-06-30 0000907254 srt:MinimumMember us-gaap:BuildingMember 2020-01-01 2020-06-30 0000907254 srt:MaximumMember us-gaap:BuildingImprovementsMember 2020-01-01 2020-06-30 0000907254 bfs:LeaseAcquisitionCostsMember 2019-01-01 2019-06-30 0000907254 bfs:LeaseAcquisitionCostsMember 2020-01-01 2020-06-30 0000907254 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-06-30 0000907254 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-06-30 0000907254 bfs:SaulHoldingsLimitedPartnershipMember us-gaap:NoncontrollingInterestMember 2020-06-30 0000907254 us-gaap:RevolvingCreditFacilityMember bfs:NewFacilityMember us-gaap:LineOfCreditMember 2020-01-01 2020-06-30 0000907254 bfs:NewFacilityMember us-gaap:LineOfCreditMember 2020-06-30 0000907254 bfs:ParkVanNessLoanMember 2020-06-30 0000907254 bfs:TheWaycroftMortgageMember 2020-06-30 0000907254 bfs:AvenelBusinessParkMember 2020-06-30 0000907254 us-gaap:RevolvingCreditFacilityMember bfs:NewFacilityMember us-gaap:LineOfCreditMember 2020-06-30 0000907254 bfs:UnsecuredRevolvingCreditFacilityMember 2020-06-30 0000907254 srt:ScenarioForecastMember bfs:ParkVanNessLoanMember 2021-10-01 0000907254 bfs:PalmSpringsCenterLoanMember 2020-03-03 2020-03-03 0000907254 bfs:TheWaycroftMortgageMember bfs:FixedRateMortgageNotesPayableMember 2020-06-30 0000907254 us-gaap:LetterOfCreditMember 2020-06-30 0000907254 bfs:BroadlandsVillageMortgageMember 2020-06-30 0000907254 bfs:BocaValleyPlazaLoanMember 2020-02-10 2020-02-10 0000907254 bfs:AvenelBusinessParkMember bfs:FixedRateMortgageNotesPayableMember 2020-06-30 0000907254 srt:ScenarioForecastMember bfs:ParkVanNessLoanMember 2020-10-01 0000907254 bfs:TermFacilityMember bfs:NewFacilityMember us-gaap:LineOfCreditMember 2020-06-30 0000907254 bfs:UnsecuredRevolvingCreditFacilityMember 2019-12-31 0000907254 us-gaap:RevolvingCreditFacilityMember bfs:NewFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2020-01-01 2020-06-30 0000907254 bfs:TermFacilityMember bfs:NewFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2020-01-01 2020-06-30 0000907254 us-gaap:StockOptionMember 2020-04-01 2020-06-30 0000907254 us-gaap:StockOptionMember 2019-01-01 2019-06-30 0000907254 us-gaap:StockOptionMember 2019-04-01 2019-06-30 0000907254 us-gaap:StockOptionMember 2020-01-01 2020-06-30 0000907254 bfs:ContributionAgreementMember 2019-11-05 2019-11-05 0000907254 bfs:AshbrookMarketplaceMember bfs:BFSaulRealEstateInvestmentTrustMember 2018-05-09 2018-05-09 0000907254 srt:MaximumMember bfs:AshbrookMarketplaceMember srt:ScenarioForecastMember bfs:BFSaulRealEstateInvestmentTrustMember us-gaap:SubsequentEventMember 2021-04-01 2021-06-30 0000907254 bfs:LeaseholdInterestContributedInContributionAgreementMember bfs:BFSaulRealEstateInvestmentTrustMember 2019-11-05 0000907254 bfs:LandContributedInContributionAgreementMember bfs:BFSaulRealEstateInvestmentTrustMember 2019-11-05 0000907254 srt:MinimumMember bfs:AshbrookMarketplaceMember srt:ScenarioForecastMember bfs:BFSaulRealEstateInvestmentTrustMember us-gaap:SubsequentEventMember 2021-04-01 2021-06-30 0000907254 bfs:AshbrookMarketplaceMember bfs:BFSaulRealEstateInvestmentTrustMember 2016-08-01 2016-08-31 0000907254 bfs:April242020Member srt:OfficerMember 2020-01-01 2020-06-30 0000907254 bfs:May32019Member srt:OfficerMember 2020-01-01 2020-06-30 0000907254 bfs:April242020Member srt:DirectorMember 2020-01-01 2020-06-30 0000907254 bfs:May32019Member srt:DirectorMember 2020-01-01 2020-06-30 0000907254 us-gaap:EmployeeStockOptionMember 2020-01-01 2020-06-30 0000907254 srt:DirectorMember bfs:AdditionalCompensationPlanMember 2020-04-24 0000907254 2019-09-30 2019-09-30 0000907254 bfs:DirectorsAndCertainOfficersMember 2020-04-24 2020-04-24 0000907254 srt:OfficerMember us-gaap:EmployeeStockOptionMember 2020-01-01 2020-06-30 0000907254 us-gaap:OperatingSegmentsMember bfs:ShoppingCentersMember 2019-04-01 2019-06-30 0000907254 us-gaap:CorporateNonSegmentMember 2020-01-01 2020-06-30 0000907254 us-gaap:OperatingSegmentsMember bfs:ShoppingCentersMember 2020-01-01 2020-06-30 0000907254 us-gaap:CorporateNonSegmentMember 2019-01-01 2019-06-30 0000907254 us-gaap:OperatingSegmentsMember bfs:ShoppingCentersMember 2020-04-01 2020-06-30 0000907254 us-gaap:RealEstateMember 2019-04-01 2019-06-30 0000907254 us-gaap:CorporateNonSegmentMember us-gaap:RealEstateMember 2020-01-01 2020-06-30 0000907254 us-gaap:OperatingSegmentsMember bfs:MixedUsePropertiesMember 2019-06-30 0000907254 us-gaap:OperatingSegmentsMember bfs:MixedUsePropertiesMember 2019-01-01 2019-06-30 0000907254 us-gaap:CorporateNonSegmentMember 2020-06-30 0000907254 us-gaap:CorporateNonSegmentMember us-gaap:RealEstateMember 2019-01-01 2019-06-30 0000907254 us-gaap:OperatingSegmentsMember us-gaap:RealEstateMember bfs:ShoppingCentersMember 2019-04-01 2019-06-30 0000907254 us-gaap:OperatingSegmentsMember bfs:MixedUsePropertiesMember 2020-01-01 2020-06-30 0000907254 us-gaap:OperatingSegmentsMember us-gaap:RealEstateMember bfs:MixedUsePropertiesMember 2019-04-01 2019-06-30 0000907254 us-gaap:RealEstateMember 2020-01-01 2020-06-30 0000907254 us-gaap:OperatingSegmentsMember bfs:ShoppingCentersMember 2019-01-01 2019-06-30 0000907254 us-gaap:CorporateNonSegmentMember us-gaap:RealEstateMember 2020-04-01 2020-06-30 0000907254 us-gaap:OperatingSegmentsMember bfs:MixedUsePropertiesMember 2020-06-30 0000907254 us-gaap:OperatingSegmentsMember bfs:MixedUsePropertiesMember 2019-04-01 2019-06-30 0000907254 us-gaap:OperatingSegmentsMember bfs:ShoppingCentersMember 2019-06-30 0000907254 us-gaap:CorporateNonSegmentMember 2019-04-01 2019-06-30 0000907254 us-gaap:OperatingSegmentsMember bfs:ShoppingCentersMember 2020-06-30 0000907254 us-gaap:CorporateNonSegmentMember 2020-04-01 2020-06-30 0000907254 us-gaap:OperatingSegmentsMember us-gaap:RealEstateMember bfs:ShoppingCentersMember 2020-04-01 2020-06-30 0000907254 us-gaap:OperatingSegmentsMember bfs:MixedUsePropertiesMember 2020-04-01 2020-06-30 0000907254 us-gaap:OperatingSegmentsMember us-gaap:RealEstateMember bfs:ShoppingCentersMember 2019-01-01 2019-06-30 0000907254 us-gaap:RealEstateMember 2020-04-01 2020-06-30 0000907254 us-gaap:RealEstateMember 2019-01-01 2019-06-30 0000907254 us-gaap:OperatingSegmentsMember us-gaap:RealEstateMember bfs:MixedUsePropertiesMember 2020-04-01 2020-06-30 0000907254 us-gaap:OperatingSegmentsMember us-gaap:RealEstateMember bfs:MixedUsePropertiesMember 2020-01-01 2020-06-30 0000907254 us-gaap:OperatingSegmentsMember us-gaap:RealEstateMember bfs:MixedUsePropertiesMember 2019-01-01 2019-06-30 0000907254 us-gaap:OperatingSegmentsMember us-gaap:RealEstateMember bfs:ShoppingCentersMember 2020-01-01 2020-06-30 0000907254 us-gaap:CorporateNonSegmentMember us-gaap:RealEstateMember 2019-04-01 2019-06-30 0000907254 us-gaap:CorporateNonSegmentMember 2019-06-30 0000907254 us-gaap:SalesRevenueNetMember bfs:ContractualBaseRentOperatingExpenseAndRealEstateRecoveriesCollectedMember us-gaap:SubsequentEventMember 2020-08-05 2020-08-05 0000907254 bfs:OfficeRealEstateMember us-gaap:SalesRevenueNetMember bfs:ContractualBaseRentOperatingExpenseAndRealEstateRecoveriesCollectedMember us-gaap:SubsequentEventMember 2020-08-05 2020-08-05 0000907254 bfs:June2020Member us-gaap:SalesRevenueNetMember bfs:ContractualBaseRentOperatingExpenseAndRealEstateRecoveriesCollectedMember us-gaap:SubsequentEventMember 2020-08-05 2020-08-05 0000907254 bfs:OperatingLeaseIncomeSubjectToDeferralAgreementsMember us-gaap:SalesRevenueNetMember bfs:AprilMayJune2020UnpaidBalanceAsPercentOfTotalUnpaidBalanceMember us-gaap:SubsequentEventMember 2020-08-05 2020-08-05 0000907254 bfs:OperatingLeaseIncomeSubjectToDeferralAgreementsMember us-gaap:SalesRevenueNetMember bfs:OutstandingBillingsMember us-gaap:SubsequentEventMember 2020-08-05 2020-08-05 0000907254 us-gaap:SubsequentEventMember 2020-08-05 2020-08-05 0000907254 bfs:OperatingLeaseIncomeSubjectToDeferralAgreementsAnchorOrNationalTenantsMember us-gaap:SalesRevenueNetMember bfs:OutstandingBillingsMember us-gaap:SubsequentEventMember 2020-08-05 2020-08-05 0000907254 us-gaap:ResidentialRealEstateMember us-gaap:SalesRevenueNetMember bfs:ContractualBaseRentOperatingExpenseAndRealEstateRecoveriesCollectedMember us-gaap:SubsequentEventMember 2020-08-05 2020-08-05 0000907254 bfs:April2020Member us-gaap:SalesRevenueNetMember bfs:ContractualBaseRentOperatingExpenseAndRealEstateRecoveriesCollectedMember us-gaap:SubsequentEventMember 2020-08-05 2020-08-05 0000907254 bfs:May2020Member us-gaap:SalesRevenueNetMember bfs:ContractualBaseRentOperatingExpenseAndRealEstateRecoveriesCollectedMember us-gaap:SubsequentEventMember 2020-08-05 2020-08-05 0000907254 us-gaap:SalesRevenueNetMember bfs:ContractualBaseRentOperatingExpenseAndRealEstateTaxRecoveriesNotCollectedDuetoCOVID19Member us-gaap:SubsequentEventMember 2020-08-05 2020-08-05 0000907254 bfs:OperatingLeaseIncomeSubjectToDeferralAgreementsMember us-gaap:SubsequentEventMember bfs:COVID19Member 2020-08-05 2020-08-05 0000907254 bfs:RetailRealEstateMember us-gaap:SalesRevenueNetMember bfs:ContractualBaseRentOperatingExpenseAndRealEstateRecoveriesCollectedMember us-gaap:SubsequentEventMember 2020-08-05 2020-08-05 iso4217:USD xbrli:shares xbrli:pure xbrli:shares utreg:acre bfs:lease_option bfs:store bfs:property iso4217:USD bfs:segment
Table of Contents

 
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 June 30, 2020
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:
Name of exchange on which registered:
Trading symbol:
Common Stock, Par Value $0.01 Per Share
New York Stock Exchange
BFS
Depositary Shares each representing 1/100th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share
New York Stock Exchange
BFS/PRD
Depositary Shares each representing 1/100th of a share of 6.000% Series E Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share
New York Stock Exchange
BFS/PRE

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days.    Yes       No  
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes       No  
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.

-1-

Table of Contents

 
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 July 31, 2020: 23.2 million.
 

-2-

Table of Contents

SAUL CENTERS, INC.
Table of Contents
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

-3-

Table of Contents

PART I. FINANCIAL INFORMATION
Item 1.    Financial Statements


CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
(Dollars in thousands, except per share amounts)
June 30,
2020
 
December 31,
2019
Assets
 
 
 
Real estate investments
 
 
 
Land
$
503,802

 
$
453,322

Buildings and equipment
1,505,909

 
1,292,631

Construction in progress
101,359

 
335,644

 
2,111,070

 
2,081,597

Accumulated depreciation
(584,002
)
 
(563,474
)
 
1,527,068

 
1,518,123

Cash and cash equivalents
66,457

 
13,905

Accounts receivable and accrued income, net
57,926

 
52,311

Deferred leasing costs, net
27,057

 
24,083

Prepaid expenses, net
1,579

 
5,363

Other assets
6,549

 
4,555

Total assets
$
1,686,636

 
$
1,618,340

Liabilities
 
 
 
Notes payable
$
791,534

 
$
821,503

Term loan facility payable
74,741

 
74,691

Revolving credit facility payable
173,642

 
86,371

Construction loan payable
134,650

 
108,623

Dividends and distributions payable
19,358

 
19,291

Accounts payable, accrued expenses and other liabilities
30,311

 
35,199

Deferred income
24,114

 
29,306

Total liabilities
1,248,350

 
1,174,984

Equity
 
 
 
Preferred stock, 1,000,000 shares authorized:
 
 
 
Series D Cumulative Redeemable, 30,000 shares issued and outstanding
75,000

 
75,000

Series E Cumulative Redeemable, 44,000 shares issued and outstanding
110,000

 
110,000

Common stock, $0.01 par value, 40,000,000 shares authorized, 23,342,699 and 23,231,240 shares issued and outstanding, respectively
233

 
232

Additional paid-in capital
416,793

 
410,926

Distributions in excess of accumulated earnings
(229,918
)
 
(221,177
)
Total Saul Centers, Inc. equity
372,108

 
374,981

Noncontrolling interests
66,178

 
68,375

Total equity
438,286

 
443,356

Total liabilities and equity
$
1,686,636

 
$
1,618,340

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

-4-

Table of Contents
Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
(Dollars in thousands, except per share amounts)
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2020
 
2019
 
2020
 
2019
Revenue
 
 
 
 
 
 
 
Rental revenue
$
52,002

 
$
55,953

 
$
107,418

 
$
112,756

Other
1,218

 
2,188

 
2,745

 
5,135

Total revenue
53,220

 
58,141

 
110,163

 
117,891

Expenses
 
 
 
 
 
 
 
Property operating expenses
6,410

 
7,115

 
13,446

 
15,116

Real estate taxes
7,351

 
6,819

 
14,504

 
13,967

Interest expense, net and amortization of deferred debt costs
12,019

 
10,793

 
21,613

 
21,860

Depreciation and amortization of deferred leasing costs
12,600

 
11,524

 
23,881

 
23,167

General and administrative
4,632

 
5,140

 
9,682

 
9,954

Total expenses
43,012

 
41,391

 
83,126

 
84,064

Net Income
10,208

 
16,750

 
27,037

 
33,827

Noncontrolling interests
 
 
 
 
 
 
 
Income attributable to noncontrolling interests
(1,880
)
 
(3,518
)
 
(5,445
)
 
(7,148
)
Net income attributable to Saul Centers, Inc.
8,328

 
13,232

 
21,592

 
26,679

Preferred stock dividends
(2,798
)
 
(2,953
)
 
(5,596
)
 
(5,906
)
Net income available to common stockholders
$
5,530

 
$
10,279

 
$
15,996

 
$
20,773

Per share net income available to common stockholders
 
 
 
 
 
 
 
Basic and diluted
$
0.24

 
$
0.45

 
$
0.69

 
$
0.91

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

-5-

Table of Contents
Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(Dollars in thousands)
2020
 
2019
 
2020
 
2019
Net income
$
10,208

 
$
16,750

 
$
27,037

 
$
33,827

Other comprehensive income
 
 
 
 
 
 
 
Change in unrealized loss on cash flow hedge

 
(127
)
 

 
(173
)
Total comprehensive income
10,208

 
16,623

 
27,037

 
33,654

Comprehensive income attributable to noncontrolling interests
(1,880
)
 
(3,473
)
 
(5,445
)
 
(7,103
)
Total comprehensive income attributable to Saul Centers, Inc.
8,328

 
13,150

 
21,592

 
26,551

Preferred stock dividends
(2,798
)
 
(2,953
)
 
(5,596
)
 
(5,906
)
Total comprehensive income available to common stockholders
$
5,530

 
$
10,197

 
$
15,996

 
$
20,645

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

-6-

Table of Contents
Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited) 
(Dollars in thousands, except per share amounts)
Preferred
Stock
 
Common
Stock
 
Additional Paid-in
Capital
 
Distributions in Excess of Accumulated Earnings
 
Accumulated
Other Comprehensive
(Loss)
 
Total Saul
Centers, Inc.
 
Noncontrolling
Interests
 
Total
Balance at January 1, 2020
$
185,000

 
$
232

 
$
410,926

 
$
(221,177
)
 
$

 
$
374,981

 
$
68,375

 
$
443,356

Issuance of shares of common stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
83,978 shares pursuant to dividend reinvestment plan

 
1

 
4,080

 

 

 
4,081

 

 
4,081

11,745 shares due to exercise of stock options and issuance of directors’ deferred stock

 

 
956

 

 

 
956

 

 
956

Issuance of 15,101 partnership units pursuant to dividend reinvestment plan

 

 

 

 

 

 
734

 
734

Net income

 

 

 
13,264

 

 
13,264

 
3,565

 
16,829

Distributions payable preferred stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Series D, $38.28 per share

 

 

 
(1,148
)
 

 
(1,148
)
 

 
(1,148
)
Series E, $37.50 per share

 

 

 
(1,650
)
 

 
(1,650
)
 

 
(1,650
)
Distributions payable common stock ($0.53/share) and distributions payable partnership units ($0.53/unit)

 

 

 
(12,364
)
 

 
(12,364
)
 
(4,188
)
 
(16,552
)
Balance, March 31, 2020
185,000

 
233

 
415,962

 
(223,075
)
 

 
378,120

 
68,486

 
446,606

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of shares of common stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12,627 shares pursuant to dividend reinvestment plan

 

 
407

 

 

 
407

 

 
407

3,109 shares due to exercise of stock options and issuance of directors’ deferred stock

 

 
424

 

 

 
424

 

 
424

Net income

 

 

 
8,328

 

 
8,328

 
1,880

 
10,208

Distributions payable preferred stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Series D, $38.28 per share

 

 

 
(1,148
)
 

 
(1,148
)
 

 
(1,148
)
Series E, $37.50 per share

 

 

 
(1,650
)
 

 
(1,650
)
 

 
(1,650
)
Distributions payable common stock ($0.53/share) and distributions payable partnership units ($0.53/unit)

 

 

 
(12,373
)
 

 
(12,373
)
 
(4,188
)
 
(16,561
)
Balance, June 30, 2020
$
185,000

 
$
233

 
$
416,793

 
$
(229,918
)
 
$

 
372,108

 
$
66,178

 
$
438,286

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




-7-

Table of Contents
Saul Centers, Inc.

(Dollars in thousands, except per share amounts)
Preferred
Stock
 
Common
Stock
 
Additional Paid-in
Capital
 
Distributions in Excess of Accumulated Earnings
 
Accumulated
Other Comprehensive
(Loss)
 
Total Saul
Centers, Inc.
 
Noncontrolling
Interests
 
Total
Balance at January 1, 2019
$
180,000

 
$
227

 
$
384,533

 
$
(208,593
)
 
$
(255
)
 
$
355,912

 
$
69,308

 
$
425,220

Issuance of shares of common stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
120,347 shares pursuant to dividend reinvestment plan

 
1

 
6,170

 

 

 
6,171

 

 
6,171

485 shares due to exercise of stock options and issuance of directors’ deferred stock

 
1

 
419

 

 

 
420

 

 
420

Issuance of 13,742 partnership units pursuant to dividend reinvestment plan

 

 

 

 

 

 
705

 
705

Net income

 

 

 
13,447

 

 
13,447

 
3,630

 
17,077

Change in unrealized loss on cash flow hedge

 

 

 

 
(34
)
 
(34
)
 
(12
)
 
(46
)
Distributions payable preferred stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Series C, $42.97 per share

 

 

 
(1,805
)
 

 
(1,805
)
 

 
(1,805
)
Series D, $38.28 per share

 

 

 
(1,148
)
 

 
(1,148
)
 

 
(1,148
)
Distributions payable common stock ($0.53/share) and distributions payable partnership units ($0.53/unit)

 

 

 
(12,108
)
 

 
(12,108
)
 
(4,155
)
 
(16,263
)
Balance, March 31, 2019
180,000

 
229

 
391,122

 
(210,207
)
 
(289
)
 
360,855

 
69,476

 
430,331

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuance of shares of common stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
99,804 shares pursuant to dividend reinvestment plan

 
1

 
5,127

 

 

 
5,128

 

 
5,128

48,772 shares due to exercise of stock options and issuance of directors’ deferred stock

 

 
2,798

 

 

 
2,798

 

 
2,798

Issuance of 20,041 partnership units pursuant to dividend reinvestment plan

 

 

 

 

 

 
1,029

 
1,029

Net income

 

 

 
13,232

 

 
13,232

 
3,518

 
16,750

Change in unrealized loss on cash flow hedge

 

 

 

 
(95
)
 
(95
)
 
(32
)
 
(127
)
Distributions payable preferred stock:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Series C, $42.97 per share

 

 

 
(1,805
)
 

 
(1,805
)
 

 
(1,805
)
Series D, $38.28 per share

 

 

 
(1,148
)
 

 
(1,148
)
 

 
(1,148
)
Distributions payable common stock ($0.53/share) and distributions payable partnership units ($0.53/unit)

 

 

 
(12,181
)
 

 
(12,181
)
 
(4,166
)
 
(16,347
)
Balance, June 30, 2019
$
180,000

 
$
230

 
$
399,047

 
$
(212,109
)
 
$
(384
)
 
366,784

 
$
69,825

 
$
436,609

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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

-8-

Table of Contents
Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
Six months ended June 30,
(Dollars in thousands)
2020
 
2019
Cash flows from operating activities:
 
 
 
Net income
$
27,037

 
$
33,827

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization of deferred leasing costs
23,881

 
23,167

Amortization of deferred debt costs
760

 
760

Compensation costs of stock grants and options
851

 
1,142

Credit losses on operating lease receivables
2,300

 
556

(Increase) decrease in accounts receivable and accrued income
(7,915
)
 
1,718

Additions to deferred leasing costs
(5,644
)
 
(581
)
Decrease in prepaid expenses
3,784

 
3,369

Increase in other assets
(1,994
)
 
(3,590
)
Increase in accounts payable, accrued expenses and other liabilities
3,881

 
6,666

Decrease in deferred income
(5,192
)
 
(3,202
)
Net cash provided by operating activities
41,749

 
63,832

Cash flows from investing activities:
 
 
 
Acquisitions of real estate investments

 
(24
)
Additions to real estate investments
(10,763
)
 
(7,857
)
Additions to development and redevelopment projects
(28,164
)
 
(60,718
)
Net cash used in investing activities
(38,927
)
 
(68,599
)
Cash flows from financing activities:
 
 
 
Proceeds from notes payable

 
22,100

Repayments on notes payable
(30,293
)
 
(48,715
)
Proceeds from revolving credit facility
90,000

 
36,000

Repayments on revolving credit facility
(3,000
)
 
(35,000
)
Proceeds from construction loan
25,977

 
48,731

Additions to deferred debt costs
(101
)
 
(420
)
Proceeds from the issuance of:
 
 
 
Common stock
5,016

 
13,375

Partnership units
734

 
1,734

Distributions to:
 
 
 
Series C preferred stockholders

 
(3,610
)
Series D preferred stockholders
(2,296
)
 
(2,296
)
Series E preferred stockholders
(3,300
)
 

Common stockholders
(24,639
)
 
(24,145
)
Noncontrolling interests
(8,368
)
 
(8,303
)
Net cash provided by (used in) financing activities
49,730

 
(549
)
Net increase (decrease) in cash and cash equivalents
52,552

 
(5,316
)
Cash and cash equivalents, beginning of period
13,905

 
14,578

Cash and cash equivalents, end of period
$
66,457

 
$
9,262

Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest
$
21,015

 
$
21,186

Increase (decrease) in accrued real estate investments and development costs
$
(8,769
)
 
$
3,029







-9-

Table of Contents
Notes to Consolidated Financial Statements (Unaudited)


 
1.
Organization, Basis of Presentation
Saul Centers, Inc. (“Saul Centers”) was incorporated under the Maryland General Corporation Law on June 10, 1993, and operates as a real estate investment trust (a “REIT”) under the Internal Revenue Code of 1986, as amended (the “Code”). The Company is required to annually distribute at least 90% of its REIT taxable income (excluding net capital gains) to its stockholders and meet certain organizational and other requirements. Saul Centers has made and intends to continue to make regular quarterly distributions to its stockholders. Saul Centers, together with its wholly-owned subsidiaries and the limited partnerships of which Saul Centers or one of its subsidiaries is the sole general partner, are referred to collectively as the “Company.” B. Francis Saul II serves as Chairman of the Board of Directors, Chief Executive Officer and President of Saul Centers.
The Company, which conducts all of its activities through its subsidiaries, Saul Holdings Limited Partnership, a Maryland limited partnership (the “Operating Partnership”) and two subsidiary limited partnerships (the “Subsidiary Partnerships,” and, collectively with the Operating Partnership, the “Partnerships”), engages in the ownership, operation, management, leasing, acquisition, renovation, expansion, development and financing of community and neighborhood shopping centers and mixed-use properties, primarily in the Washington, DC/Baltimore metropolitan area.
As of June 30, 2020, the Company’s properties (the “Current Portfolio Properties”) consisted of 50 shopping center properties (the “Shopping Centers”), seven mixed-use properties, which are comprised of office, retail and multi-family residential uses (the “Mixed-Use Properties”) and three (non-operating) development properties.
Because the properties are located primarily in the Washington, DC/Baltimore metropolitan area, the Company is subject to a concentration of credit risk related to these properties. A majority of the Shopping Centers are anchored by one or more major tenants. As of June 30, 2020, 33 of the Shopping Centers were anchored by a grocery store and offer primarily day-to-day necessities and services. Giant Food, a tenant at 11 Shopping Centers, individually accounted for 5.3% of the Company's total revenue for the six months ended June 30, 2020. No other tenant individually accounted for 2.5% or more of the Company’s total revenue, excluding lease termination fees, for the six months ended June 30, 2020.
The accompanying consolidated financial statements of the Company include the accounts of Saul Centers and its subsidiaries, including the Operating Partnership and Subsidiary Partnerships, which are majority owned by Saul Centers. Substantially all assets and liabilities of the Company as of June 30, 2020 and December 31, 2019, are comprised of the assets and liabilities of the Operating Partnership. The debt arrangements which are subject to recourse are described in Note 5. All significant intercompany balances and transactions have been eliminated in consolidation.
The Operating Partnership is a variable interest entity ("VIE") because the limited partners do not have substantive kick-out or participating rights. The Company is the primary beneficiary of the Operating Partnership because it has the power to direct its activities and the rights to absorb 74.6% of its net income. Because the Operating Partnership is consolidated into the financial statements of the Company, classification of it as a VIE has no impact on the consolidated financial statements of the Company.
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments necessary for the fair presentation of the financial position and results of operations of the Company for the interim periods have been included. All such adjustments are of a normal recurring nature. These consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements of the Company for the year ended December 31, 2019, which are included in its Annual Report on Form 10-K. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been omitted pursuant to those instructions. The results of operations for interim periods are not necessarily indicative of results to be expected for the year.

2.
Summary of Significant Accounting Policies
Our significant accounting policies disclosed in our Annual Report on Form 10-K for the year ended December 31, 2019 have not changed significantly in amount or composition.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the

-10-

Table of Contents
Notes to Consolidated Financial Statements (Unaudited)


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 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 reduced by recording an allowance for the uncollectible portion, which is reflected as an adjustment to rental revenue. Revenue from leases where collection is not probable is recorded on a cash basis until collectability is determined to be probable. Further, we assess whether operating lease receivables, at the portfolio level, are appropriately valued based upon an analysis of balances outstanding, historical bad debt levels and current economic trends.
At June 30, 2020 and December 31, 2019, accounts receivable was comprised of:
(In thousands)
June 30, 2020
December 31, 2019
Rents currently due
$
11,727

$
7,235

Deferred rents
3,229

474

Straight-line rent
42,917

42,088

Other receivables
3,478

2,967

Allowance for doubtful accounts
(3,425
)
(453
)
Total
$
57,926

$
52,311



Recently Issued Accounting Standards
In February 2016, the Financial Accounting Standards Board (‘‘FASB’’) issued Accounting Standards Update (‘‘ASU’’) 2016-02, ‘‘Leases’’ (“ASU 2016-02”). ASU 2016-02 amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, interim periods within those years, and requires a modified retrospective transition approach for all leases existing at the date of initial application, with an option to use certain practical expedients for those existing leases. Upon adoption of ASU 2016-02 effective January 1, 2019, we elected the practical expedient for all leases with respect to lease identification, lease classification, and initial direct costs. We made a policy election not to separate lease and nonlease components and have accounted for each lease component and the related nonlease components together as a single component. There were no significant changes to our lessor accounting for operating leases as a result of ASU 2016-02.
We lease Shopping Centers and Mixed-Use Properties to lessees in exchange for monthly payments that cover rent, and where applicable, reimbursement for property taxes, insurance, and certain property operating expenses. Our leases were 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 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 payment of a termination fee. Termination fees are recognized as revenue over the modified lease term. Extension options are subject to terms and conditions stated in the lease.
On January 1, 2019, a right of use asset and corresponding lease liability related to our headquarters lease were recorded in other assets and other liabilities, respectively. The lease expires on February 28, 2022, with one option to renew for an additional five years. The right of use asset and corresponding lease liability totaled $1.3 million and $1.3 million, respectively, at June 30, 2020.
Due to the business disruptions and challenges severely affecting the global economy caused by the novel strain of coronavirus (“COVID-19”) pandemic, many lessees have requested rent relief, including rent deferrals and other lease concessions. The lease modification guidance in ASU 2016-02 does not contemplate the rapid execution of concessions for multiple tenants in response to sudden liquidity constraints of lessees. In April 2020, the FASB staff issued a question and answer document that provided guidance allowing the Company to elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. The Company has elected to apply such relief, which, in the case of rent deferrals, results in the accrual of rent due from tenants and defers the payment of that rent to a future date and will monitor the collectability of rent receivables.

-11-

Table of Contents
Notes to Consolidated Financial Statements (Unaudited)


In June 2016, the FASB issued ASU 2016-13, "Financial Instruments-Credit Losses" ("ASU 2016-13"). ASU 2016-13 replaces the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of information to support credit loss estimates. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, including interim periods within those years. The adoption of ASU 2016-13 effective January 1, 2020 did not have a material impact on our consolidated financial statements and related disclosures because the vast majority of the Company's receivables relate to operating leases which are accounted for under ASC 842, "Leases."
Reclassifications
Certain reclassifications have been made to the prior year financial statements to conform to the presentation used for the six months ended June 30, 2020.

3.
Real Estate
Construction In Progress
Construction in progress includes land, preconstruction and development costs of active projects. Preconstruction costs include legal, zoning and permitting costs and other project carrying costs incurred prior to the commencement of construction. Development costs include direct construction costs and indirect costs incurred subsequent to the start of construction such as architectural, engineering, construction management and carrying costs consisting of interest, real estate taxes and insurance. During the six months ended June 30, 2020, assets totaling $253.7 million were placed in service in conjunction with the substantial completion of The Waycroft and Ashbrook Marketplace. Construction in progress as of June 30, 2020 and December 31, 2019, is composed of the following:
(in thousands)
 
June 30, 2020
 
December 31, 2019
The Waycroft
 
$
32,298

 
$
255,443

7316 Wisconsin Avenue
 
48,442

 
44,638

Ashbrook Marketplace
 
8,669

 
19,128

Other
 
11,950

 
16,435

Total
 
$
101,359

 
$
335,644


Deferred Leasing Costs
Deferred leasing costs consist of commissions paid to third-party and internal leasing agents, internal costs such as payroll-related fringe benefits which are direct and incremental to successful commercial leases, amounts attributed to in-place leases associated with acquired properties and lease inducement costs. Effective with the adoption of ASU 2016-02 on January 1, 2019, all costs incurred prior to the execution of a lease are charged to expense and not capitalized. Unamortized deferred leasing costs are charged to expense if the applicable lease is terminated prior to expiration of the initial lease term. Deferred leasing costs are amortized over the term of the lease or remaining term of acquired leases. Collectively, deferred leasing costs totaled $27.1 million and $24.1 million, net of accumulated amortization of $43.4 million and $41.6 million, as of June 30, 2020 and December 31, 2019, respectively. Amortization expense, included in depreciation and amortization of deferred leasing costs in the Consolidated Statements of Operations, totaled $2.7 million and $3.2 million for the six months ended June 30, 2020 and 2019, respectively.

-12-

Table of Contents
Notes to Consolidated Financial Statements (Unaudited)


Real Estate Investment Properties
Depreciation is calculated using the straight-line method and estimated useful lives of generally between 35 and 50 years for base buildings, or a shorter period if management determines that the building has a shorter useful life, and up to 20 years for certain other improvements that extend the useful lives. Leasehold improvement expenditures are capitalized when certain criteria are met, including when the Company supervises construction and will own the improvements. Tenant improvements are amortized, over the shorter of the lives of the related leases or the useful life of the improvements, using the straight-line method. Depreciation expense in the Consolidated Statements of Operations totaled $21.2 million and $20.0 million for the six months ended June 30, 2020 and 2019, respectively. Repairs and maintenance expense totaled $5.2 million and $6.6 million for the six months ended June 30, 2020 and 2019, respectively, and is included in property operating expenses in the Consolidated Statements of Operations.
As of June 30, 2020, we have not identified any impairment triggering events, including the impact of COVID-19 and corresponding tenant requests for rent relief. Therefore, under applicable GAAP guidance, no impairment charges were recorded.

4.
Noncontrolling Interests - Holders of Convertible Limited Partnership Units in the Operating Partnership
As of June 30, 2020, the B. F. Saul Company and certain other affiliated entities, each of which is controlled by B. Francis Saul II and his family members (collectively, the “Saul Organization”) holds a 25.4% limited partnership interest in the Operating Partnership represented by approximately 7.9 million convertible limited partnership units. These units are convertible into shares of Saul Centers’ common stock, at the option of the unit holder, on a one-for-one basis provided that, in accordance with the Company's Articles of Incorporation, the rights may not be exercised at any time that the Saul Organization beneficially owns, 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 June 30, 2020, approximately 1.8 million units were convertible into shares of Saul Centers common stock.
The impact of the Saul Organization’s approximately 25.4% limited partnership interest in the Operating Partnership is reflected as Noncontrolling Interests in the accompanying consolidated financial statements. Fully converted partnership units and diluted weighted average common stock outstanding for the three months ended June 30, 2020 and 2019, were approximately 31.2 million and 30.8 million, respectively, and for the six months ended June 30, 2020 and 2019, were approximately 31.2 million and 30.8 million, respectively.

5.
Notes Payable, Revolving Credit Facility, Interest and Amortization of Deferred Debt Costs
The principal amount of the Company’s outstanding debt totaled approximately $1.2 billion at June 30, 2020, of which approximately $934.1 million was fixed-rate debt and approximately $249.5 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 June 30, 2020.
At June 30, 2020, the Company had a $400.0 million credit facility comprised of a $325.0 million revolving facility and a $75.0 million term loan. As of June 30, 2020, the applicable spread for borrowings was 140 basis points under the revolving credit facility and 135 basis points under the term loan. Letters of credit may be issued under the revolving credit facility. As of June 30, 2020, based on the value of the Company’s unencumbered properties, approximately $150.3 million was available under the revolving credit facility, $174.5 million was outstanding and approximately $185,000 was committed for letters of credit.
On February 10, 2020, the Company repaid in full the remaining principal balance of $9.2 million of the mortgage loan secured by Boca Valley Plaza, which was scheduled to mature on May 10, 2020.
On March 3, 2020, the Company repaid in full the remaining principal balance of $7.1 million of the mortgage loan secured by Palm Springs Center, which was scheduled to mature on June 1, 2020.
During the six months ended June 30, 2020, the Company borrowed $71.0 million under its revolving credit facility to provide additional liquidity and flexibility as the effects of the COVID-19 pandemic continue to evolve.

Saul Centers and certain consolidated subsidiaries of the Operating Partnership have guaranteed the payment obligations of the Operating Partnership under the credit facility. The Operating Partnership is the guarantor of (a) a portion of the Park Van Ness mortgage (approximately $6.7 million of the $67.3 million outstanding balance at June 30, 2020, which guarantee will be reduced to (i) $3.3 million on October 1, 2020 and (ii) zero on October 1, 2021), (b) a portion of the Broadlands

-13-

Table of Contents
Notes to Consolidated Financial Statements (Unaudited)


mortgage (approximately $3.9 million of the $30.8 million outstanding balance at June 30, 2020), (c) a portion of the Avenel Business Park mortgage (approximately $6.3 million of the $25.8 million outstanding balance at June 30, 2020) and (d) a portion of The Waycroft mortgage (approximately $23.6 million of the $136.2 million outstanding balance at June 30, 2020). All other notes payable are non-recourse. The guarantee on the Kentlands Square II mortgage loan was released on February 5, 2020.
At December 31, 2019, the principal amount of the Company’s outstanding debt totaled approximately $1.1 billion, of which $938.4 million was fixed rate debt and $162.5 million was variable rate debt, including $87.5 million outstanding under an unsecured revolving credit facility. The carrying value of the properties collateralizing the notes payable totaled approximately $1.1 billion as of December 31, 2019.
At June 30, 2020, the scheduled maturities of debt, including scheduled principal amortization, for years ending December 31, were as follows:
(In thousands)
Balloon
Payments
 
Scheduled
Principal
Amortization
 
Total
July 1 through December 31, 2020
$

 
$
14,167

 
$
14,167

2021
11,012

 
28,996

 
40,008

2022
211,002

(a)
29,609

 
240,611

2023
84,225

 
30,021

 
114,246

2024
66,164

 
29,326

 
95,490

2025
20,363

 
26,291

 
46,654

Thereafter
532,910

 
99,518

 
632,428

Principal amount
$
925,676

 
$
257,928

 
1,183,604

Unamortized deferred debt costs
 
 
 
 
9,037

Net
 
 
 
 
$
1,174,567



(a) Includes $174.5 million outstanding under the revolving credit facility.

Deferred debt costs consist of fees and costs incurred to obtain long-term financing, construction financing and the credit facility. These fees and costs are being amortized on a straight-line basis over the terms of the respective loans or agreements, which approximates the effective interest method. Deferred debt costs totaled $9.0 million and $9.7 million, net of accumulated amortization of $7.9 million and $7.5 million, at June 30, 2020 and December 31, 2019, 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 six months ended June 30, 2020 and 2019, were as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
(In thousands)
2020
 
2019
 
2020
 
2019
Interest incurred
$
12,837

 
$
12,988

 
$
25,856

 
$
25,868

Amortization of deferred debt costs
387

 
375

 
760

 
760

Capitalized interest
(1,137
)
 
(2,522
)
 
(4,905
)
 
(4,668
)
Interest expense
12,087

 
10,841

 
21,711

 
21,960

Less: Interest income
68

 
48

 
98

 
100

Interest expense, net and amortization of deferred debt costs
$
12,019

 
$
10,793

 
$
21,613

 
$
21,860


 

-14-

Table of Contents
Notes to Consolidated Financial Statements (Unaudited)


6.
Equity
The consolidated statements of operations for the six months ended June 30, 2020 and 2019, reflect noncontrolling interests of $5.4 million and $7.1 million, respectively, representing income attributable to the Saul Organization for each period.
At June 30, 2020, the Company had outstanding 3.0 million depositary shares, each representing 1/100th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock (the "Series D Stock"). The depositary shares may be redeemed at the Company’s option, in whole or in part, on or after January 23, 2023, at the $25.00 liquidation preference, plus accrued but unpaid dividends to but not including the redemption date. The depositary shares pay an annual dividend of $1.53125 per share, equivalent to 6.125% of the $25.00 liquidation preference. The Series D Stock has no stated maturity, is not subject to any sinking fund or mandatory redemption and is not convertible into any other securities of the Company except in connection with certain changes in control or delisting events. Investors in the depositary shares generally have no voting rights, but will have limited voting rights if the Company fails to pay dividends for six or more quarters (whether or not declared or consecutive) and in certain other events.
At June 30, 2020, the Company had outstanding 4.4 million depositary shares, each representing 1/100th of a share of 6.000% Series E Cumulative Redeemable Preferred Stock (the “Series E Stock”). The depositary shares may be redeemed at the Company’s option, in whole or in part, on or after September 17, 2024, at the $25.00 liquidation preference, plus accrued but unpaid dividends to but not including the redemption date. The depositary shares pay an annual dividend of $1.50 per share, equivalent to 6.000% of the $25.00 liquidation preference. The Series E Stock has no stated maturity, is not subject to any sinking fund or mandatory redemption and is not convertible into any other securities of the Company except in connection with certain changes in control or delisting events. Investors in the depositary shares generally have no voting rights, but will have limited voting rights if the Company fails to pay dividends for six or more quarters (whether or not declared or consecutive) and in certain other events.
Per Share Data
Per share data for net income (basic and diluted) is computed using weighted average shares of common stock. Convertible limited partnership units and employee stock options are the Company’s potentially dilutive securities. For all periods presented, the convertible limited partnership units are non-dilutive. The following table sets forth, for the indicated periods, weighted averages of the number of common shares outstanding, basic and dilutive, the effect of dilutive options and the number of options which are not dilutive because the average price of the Company's common stock was less than the exercise prices. The treasury stock method was used to measure the effect of the dilution.
 
Three months ended June 30,
 
Six months ended June 30,
(In thousands)
2020
 
2019
 
2020
 
2019
Weighted average common stock outstanding-Basic
23,338

 
22,939

 
23,317

 
22,879

Effect of dilutive options

 
55

 
2

 
50

Weighted average common stock outstanding-Diluted
23,338

 
22,994

 
23,319

 
22,929

Non-dilutive options
1,516

 
698

 
1,370

 
568

Years non-dilutive options were issued
2011 through 2020
 
2016, 2017 and 2019
 
2014 through 2020
 
2016, 2017 and 2019


7.
Related Party Transactions
The Chairman, Chief Executive Officer and President, the Executive Vice President-Real Estate, the Executive Vice President-Chief Legal and Administrative Officer and the Senior Vice President-Chief Accounting Officer of the Company are also officers of various members of the Saul Organization and their management time is shared with the Saul Organization. Their annual compensation is fixed by the Compensation Committee of the Board of Directors, with the exception of the Senior Vice President-Chief Accounting Officer whose share of annual compensation allocated to the Company is determined by the shared services agreement (described below).
The Company participates in a multiemployer 401K plan with entities in the Saul Organization which covers those full-time employees who meet the requirements as specified in the plan. Company contributions, which are included in general and administrative expense or property operating expenses in the Consolidated Statements of Operations, at the discretionary amount of up to six percent of the employee’s cash compensation, subject to certain limits, were $200,900 and $180,100 for the

-15-

Table of Contents
Notes to Consolidated Financial Statements (Unaudited)


six months ended June 30, 2020 and 2019, respectively. All amounts contributed by employees and the Company are fully vested.
The Company also participates in a multiemployer nonqualified deferred compensation plan with entities in the Saul Organization which covers those full-time employees who meet the requirements as specified in the plan. According to the plan, which can be modified or discontinued at any time, participating employees defer 2% of their compensation in excess of a specified amount. For the six months ended June 30, 2020 and 2019, the Company credited to employee accounts $109,400 and $113,200, 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 $3.3 million and $3.1 million, at June 30, 2020 and December 31, 2019, respectively, and is included in accounts payable, accrued expenses and other liabilities in the Consolidated Balance Sheets.
The Company has entered into a shared services agreement (the “Agreement”) with the Saul Organization that provides for the sharing of certain personnel and ancillary functions such as computer hardware, software, and support services and certain direct and indirect administrative personnel. The method for determining the cost of the shared services is provided for in the Agreement and is based upon head count, estimates of usage or estimates of time incurred, as applicable. The terms of the Agreement and the payments made thereunder are deemed reasonable by management and are reviewed annually by the Audit Committee of the Board of Directors, which consists entirely of independent directors. Billings by the Saul Organization for the Company’s share of these ancillary costs and expenses for the six months ended June 30, 2020 and 2019, which included rental expense for the Company’s headquarters lease, totaled approximately $4.2 million and $4.4 million, net, respectively. The amounts are generally expensed as incurred and are primarily reported as general and administrative expenses in the Consolidated Statements of Operations. As of June 30, 2020 and December 31, 2019, accounts payable, accrued expenses and other liabilities included approximately $740,300 and $918,700, respectively, representing amounts due to the Saul Organization for the Company’s share of these ancillary costs and expenses.
The Company has entered into a shared third-party predevelopment cost agreement (the “Predevelopment Agreement”) with the B. F. Saul Real Estate Investment Trust (the “Trust”). The Predevelopment Agreement relates to the sharing of third-party predevelopment costs incurred in connection with the planning of the future redevelopment of certain adjacent real estate assets in the Twinbrook area of Rockville, Maryland. The costs will be shared on a pro rata basis based on the acreage owned by each entity and neither party is obligated to advance funds to the other.
On November 5, 2019, the Company entered into an agreement (the "Contribution Agreement") to acquire from the Trust, approximately 6.8 acres of land and its leasehold interest in approximately 1.3 acres of contiguous land, together in each case with the improvements located thereon, located at the Twinbrook Metro Station in Rockville, Maryland (the “Contributed Property”). In exchange for the Contributed Property, the Company will issue to the Saul Trust 1,416,071 limited partnership units at an agreed upon value of $56.00 per unit, representing an aggregate value of $79.3 million for the Contributed Property. Deed to the Contributed Property and the units were placed in escrow until certain conditions of the Contribution Agreement are satisfied.
In August 2016, the Company entered into an agreement to acquire from the Trust approximately 13.7 acres of land located at the intersection of Ashburn Village Boulevard and Russell Branch Parkway in Ashburn, Virginia. The transaction closed on May 9, 2018, and the Company issued 176,680 limited partnership units to the Trust. The Company constructed a shopping center, Ashbrook Marketplace, and may be obligated to issue additional limited partnership units to the Trust in the second quarter of 2021. As of June 30, 2020, the Company estimates this obligation to range in value from $3.5 million to $4.0 million, based on projected net operating income of Ashbrook Marketplace for the 12 months ending May 31, 2021.
The Company subleases its corporate headquarters space from a member of the Saul Organization. The lease commenced in March 2002, expires in 2022, and provides for base rent increases of 3% per year, with payment of a pro-rata share of operating expenses over a base year amount. The Agreement requires each party to pay an allocation of total rental payments based on a percentage proportionate to the number of employees employed by each party. The Company’s rent expense for its headquarters location was $407,600 and $386,100 for the six months ended June 30, 2020 and 2019, respectively, and is included in general and administrative expense.
The B. F. Saul Insurance Agency, Inc., a subsidiary of the B. F. Saul Company and a member of the Saul Organization, is a general insurance agency that receives commissions and fees in connection with the Company’s insurance program. Such commissions and fees amounted to $224,400 and $172,800 for the six months ended June 30, 2020 and 2019, respectively.



-16-

Table of Contents
Notes to Consolidated Financial Statements (Unaudited)


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 were 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 each award 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 is 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 rates, 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 six months ended June 30, 2020, 4,920 shares were credited to director's deferred fee accounts and 6,837 shares were issued. As of June 30, 2020, the director's deferred fee accounts comprise 112,491 shares.
Effective April 24, 2020, the Company granted 238,000 options to its directors and certain officers. The following table summarizes the assumptions used in the valuation of the 2020 and 2019 option grants. During the six months ended June 30, 2020, stock option expense totaling $700,700 was included in general and administrative expense in the Consolidated Statements of Operations. As of June 30, 2020, the estimated future expense related to unvested stock options was $2.2 million.
  
Directors
 
Officers
Grant date
May 3, 2019
April 24, 2020
 
May 3, 2019
April 24, 2020
Exercise price
$
55.71

$
50.00

 
$
55.71

$
50.00

Volatility
0.236

0.258

 
0.206

0.240

Expected life (years)
5.0

5.0

 
7.0

7.0

Assumed yield
3.75
%
3.80
%
 
3.80
%
3.85
%
Risk-free rate
2.33
%
0.36
%
 
2.43
%
0.51
%


The table below summarizes the option activity for the six months ended  June 30, 2020:
 
 
Number of
Shares
 
Weighted
Average
Exercise Price
per share
 
Aggregate
Intrinsic Value