#United States #Bethesda #Saul Centers #BFS #Twinbrook

Saul Centers, Inc. Financial Report for Q3 2025

On November 6, 2025, Saul Centers, Inc. (NYSE: BFS), a self-managed equity REIT, announced its financial results for the quarter ending September 30, 2025. The results show a mix of positive revenue growth but decreased net income compared to the previous year, primarily influenced by various operational factors.

Revenue Growth

In the third quarter of 2025, Saul Centers reported total revenue of $72.0 million, an increase from $67.3 million during the same quarter in 2024. This 10.7% rise in revenue reflects ongoing efforts to enhance leasing activities and improve occupancy rates at several properties, notably at the Twinbrook Quarter Phase I development. As of early November 2025, 95.4% of the residential units, which totals 431 out of 452, had been successfully leased.

Net Income Decline

Despite the growth in revenue, net income for the third quarter of 2025 was reported at $14.0 million, a substantial drop from $19.6 million in 2024. Key contributing factors to this decline include:

• - An increase in operational expenses associated with the Twinbrook Quarter Phase I project, which began incurring costs for interests, real estate taxes, and depreciation since its opening in October 2024.
• - A reduction in capitalized interest amounting to $4.6 million, further impacting the net income negatively. Without considering Twinbrook Quarter Phase I, net income decreased only slightly due to increased administrative costs and lower lease termination fees.

Net income available to common stockholders fell to $7.7 million, or $0.32 per share, compared to $11.7 million, or $0.48 per share, for the third quarter of 2024. The operational performance reflected a $2.4 million decrease attributed to the impactful costs from the new residential project.

Insights into Operational Trends

While same-property revenue showed a minor decrease of 0.3%, the net operating income for same properties dropped by 2.0%, reflecting a broader trend of increased expenses and tighter profit margins. Shopping center net operating income for the quarter fell due to reduced lease termination fees, part of the changing retail landscape.

Additionally, the overall occupancy rate for the commercial portfolio fell slightly to 94.5% from 95.7% year-over-year. Residential occupancy numbers remained strong at 98.5%, with a slight decline from the previous year's figures.

Year-to-Date Performance

For the nine months ending September 30, 2025, total revenue reached $214.7 million, a rise from $200.9 million across the same period in 2024. However, net income also decreased substantially, from $57.3 million in 2024 to $41.0 million in 2025 due largely to operational beginnings at the Twinbrook Quarter Phase I.

The funds from operations (FFO), significant for REIT performance measurement, fell to $25.3 million, or $0.72 per share, compared to $28.9 million, or $0.84 per share, in the previous year’s quarter. The interim challenges faced primarily stemmed from elevated administrative and operating expenses as the company adapts to market needs.

Closing Thoughts

Saul Centers, Inc. continues to navigate fluctuating market conditions while expanding its property portfolio and enhancing leasing efficiency. The management remains focused on long-term strategies, emphasizing community engagement through property development. As economic uncertainties persist in the retail sector, the organization's ability to adapt will be critical for sustaining growth in revenues and profitability moving forward.

For additional insights and future updates from Saul Centers, investors and stakeholders are encouraged to monitor forthcoming reports and announcements.