Saul Centers(US:BFS)2025-11-06 21:29Financial Performance - Net income for the three months ended September 30, 2025, decreased to $14.0 million from $19.6 million for the same period in 2024, primarily due to a $4.7 million adverse impact from the initial operations of Twinbrook Quarter Phase I[130]. - Total revenue for the three months ended September 30, 2025, was $72.004 million, an increase of 7.0% compared to $67.288 million for the same period in 2024[131]. - Net income for the 2025 Period decreased to $41.0 million from $57.3 million for the 2024 Period, primarily due to a $16.4 million adverse impact from Twinbrook Quarter Phase I[143]. - Total revenue for the 2025 Period increased by 6.9% compared to the 2024 Period, primarily due to the initial operations of Twinbrook Quarter Phase I contributing $8.9 million[144]. - Funds From Operations (FFO) available to common stockholders for the 2025 Quarter totaled $25.3 million, a decrease of 12.3% compared to the 2024 Quarter[189]. - FFO available to common stockholders for the 2025 Period totaled $75.2 million, a decrease of 11.4% compared to the 2024 Period[189]. Revenue and Rent Growth - Base rent increased by 9.1% to $59.250 million in the 2025 Quarter from $54.332 million in the 2024 Quarter[131]. - Total revenue increased by 7.0% in the 2025 Quarter compared to the 2024 Quarter, primarily due to the initial operations of Twinbrook Quarter Phase I generating $3.9 million[133]. - Base rent increased by $4.9 million in the 2025 Quarter compared to the 2024 Quarter, driven by higher base rent related to Twinbrook Quarter Phase I of $3.5 million[134]. - Average annualized base rent per square foot for commercial properties increased by 5.5% to $22.33 for the nine months ended September 30, 2025[198]. - Average annualized effective rent per square foot for commercial properties increased by 5.7% to $20.68 for the nine months ended September 30, 2025[198]. - The average base rent per square foot for new leases in shopping centers was $22.76 for the three months ended September 30, 2025, compared to $20.92 for the same period in 2024[202]. Expenses and Financial Obligations - Total expenses increased by 21.6% in the 2025 Quarter compared to the 2024 Quarter, primarily due to the initial operations of Twinbrook Quarter Phase I, which generated $8.6 million of expenses[137]. - Property operating expenses increased by 22.7% in the 2025 Period compared to the 2024 Period, primarily due to the initial operations of Twinbrook Quarter Phase I of $3.6 million[149]. - Interest expense, net and amortization of deferred debt costs increased by 37.1% in the 2025 Period compared to the 2024 Period, primarily due to the initial operations of Twinbrook Quarter Phase I of $14.4 million[151]. - General and administrative expenses increased by 8.7% in the 2025 Period compared to the 2024 Period, primarily due to higher employment costs of $1.3 million[153]. - Total expenses increased by 20.9% to $173.8 million in the 2025 Period, primarily due to the initial operations of Twinbrook Quarter Phase I, which generated $25.3 million of expenses[148]. Leasing and Occupancy - The commercial leasing percentage decreased to 94.4% at September 30, 2025, down from 95.7% at September 30, 2024[120]. - As of November 3, 2025, 431 of the 452 (95.4%) residential units at Twinbrook Quarter Phase I were leased and occupied[122]. - The Residential portfolio was 98.5% leased as of September 30, 2025, compared to 98.8% at September 30, 2024[213]. - The Mixed-Use Commercial leasing percentage for office properties decreased to 88.5% as of September 30, 2025, from 88.9% as of September 30, 2024[200]. - As of September 30, 2025, 94.5% of the Commercial portfolio was leased, down from 95.7% as of September 30, 2024[199]. Development Projects - The Company has a pipeline for the development of up to 2,800 apartment units and 860,000 square feet of retail and office space, primarily located near Metro stations in Montgomery County, Maryland[117]. - The company is developing Twinbrook Quarter Phase I, which includes 452 apartment units and a Wegmans supermarket, with a remaining investment not expected to exceed $10.1 million[174]. - The company is also developing Hampden House, which will include up to 366 apartment units, with 70 units leased as of November 3, 2025, representing 19.1% occupancy[175]. - The Company has a $145.0 million construction-to-permanent loan related to the Twinbrook Quarter development project, with a balance of $136.6 million as of September 30, 2025[186]. Debt and Liquidity - The Company maintains a total debt to total estimated asset market value ratio of under 50%, allowing for additional secured borrowings if necessary[121]. - The outstanding debt totaled approximately $1.61 billion with a weighted average remaining term of 8.6 years as of September 30, 2025[121]. - The Company had a $600.0 million New Credit Facility, which includes a $460.0 million New Revolving Credit Facility and a $140.0 million New Term Loan[182]. - The New Credit Facility requires the Company to maintain compliance with certain financial covenants, which it was in compliance with as of September 30, 2025[183]. - Approximately $101.1 million was available and undrawn under the New Credit Facility as of September 30, 2025[182]. Cash Flow and Reserves - Cash and cash equivalents increased to $11.8 million as of September 30, 2025, compared to $7.2 million in 2024[168]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $77.6 million, down from $92.4 million in 2024[169]. - The increase in credit losses on operating lease receivables, net, was 91.1% in the 2025 Period compared to the 2024 Period, primarily due to higher reserves across the portfolio[146]. Shareholder Returns - The Company issued 49,880 shares under the Dividend Reinvestment Plan (DRIP) at a weighted average discounted price of $32.57 per share during the nine months ended September 30, 2025[179].