Table of ~~the Saul Organization whose interests could conflict with the interests of other stockholders.~~Contents

~~Influence of Officers, Directors and Significant Stockholders.~~

Three of our executive officers, Mr. B. F. Saul II, our President and Chief Operating Officer, J. Page Lansdale, and our Executive Vice President-Chief Legal and Administrative Officer, Christine Nicolaides Kearns, are members of the Saul Organization, and persons associated with the Saul Organization constitute four of the

ten members of our Board of Directors. In addition, as of December 31, 2018, Mr. B. F. Saul II had the potential to exercise control over 9,880,694 shares of our common stock representing 43.7% of our issued and outstanding shares of common stock. Mr. B. F. Saul II also beneficially owned, as of December 31, 2018, 7,825,980 units of the Operating Partnership. In general, these units are convertible into shares of our common stock on a one-for-one basis. The ownership limitation set forth in our articles of incorporation is 39.9% in value of our issued and outstanding equity securities (which includes both common and preferred stock). As of December 31, 2018,

Mr. B. F. Saul II and members of the Saul Organization owned common stock representing approximately 37.8% in value of all our issued and outstanding equity securities. Members of the Saul Organization are permitted under our articles of incorporation to convert Operating Partnership units into shares of common stock or acquire additional shares of common stock until the Saul Organization’s actual ownership of common stock reaches 39.9% in value of our equity securities. As of December 31, 2018, approximately 920,000 of the 7,825,980 units of the Operating Partnership would have been permitted to convert into additional shares of common stock, and would have resulted in Mr. B. F. Saul II and members of the Saul Organization owning common stock representing approximately 39.9% in value of all our issued and outstanding equity securities.

As a result of these relationships, members of the Saul Organization will be in a position to exercise significant influence over our affairs, which influence might not be consistent with the interests of some, or a majority, of our stockholders. Except as discussed below, we do not have any written policies or procedures for the review, approval or ratification of transactions with related persons.

~~Management Time.~~

Our Chief Executive Officer, President and Chief Operating Officer, Executive Vice President-Chief Legal and Administrative Officer and Senior Vice President-Chief Accounting Officer are also officers of various entities of the Saul Organization. Although we believe that these officers spend sufficient management time to meet their responsibilities as our officers, the amount of management time devoted to us will depend on our specific circumstances at any given point in time. As a result, in a given period, these officers may spend less than a majority of their management time on our matters. Over extended periods of time, we believe that our Chief Executive Officer will spend less than a majority of his management time on Company matters, while our President and Chief Operating Officer, Executive Vice President-Chief Legal and Administrative Officer and Senior Vice President-Chief Accounting Officer may or may not spend less than a majority of their time on our matters.

~~Exclusivity and Right of First Refusal Agreements.~~

We will acquire, develop, own and manage shopping center properties and will own and manage other commercial properties, and, subject to certain exclusivity agreements and rights of first refusal to which we are a party, the Saul Organization will continue to develop, acquire, own and manage commercial properties and own land suitable for development as, among other things, shopping centers and other commercial properties. Therefore, conflicts could develop in the allocation of acquisition and development opportunities with respect to commercial properties other than shopping centers and with respect to development sites, as well as potential tenants and other matters, between us and the Saul Organization. The agreement relating to exclusivity and the right of first refusal between us and the Saul Organization generally requires the Saul Organization to conduct its shopping center business exclusively through us and to grant us a right of first refusal to purchase commercial properties and development sites in certain market areas that become available to the Saul Organization. The Saul Organization has granted the right of first refusal to us, acting through our independent directors, in order to minimize potential conflicts with respect to commercial properties and development sites. We and the Saul Organization have entered into this agreement in order to minimize conflicts with respect to shopping centers and certain of our commercial properties.

We own real estate assets in the Twinbrook area of Rockville, Maryland, which are adjacent to real estate assets owned by the Saul Trust, a member of the Saul Organization. We have entered into an agreement with the Saul Trust, which originally expired on December 31, 2015, and which was extended to December 31, 2016, to share, on a pro rata basis, third-party predevelopment costs related to the planning of the future development of the adjacent sites. On December 8, 2016, we entered into a replacement agreement with the Saul Trust which extended the expiration date to December 31, 2017 and provides for automatic twelve month renewals unless either party provides notice of termination. Conflicts with respect to payments and allocations of costs may arise under the agreement.

~~Shared Services.~~

We share with the Saul Organization certain ancillary functions, such as computer and payroll services, benefits administration and in-house legal services. The terms of all sharing arrangements, including payments related thereto, are reviewed periodically by our Audit Committee, which is comprised solely of independent directors. Included in our general and administrative expenses or capitalized to specific development projects, for the year ended December 31, 2018, are charges totaling $8.4 million, related to such shared services, which included rental payments for the Company’s headquarters lease, which were billed by the Saul Organization. Although we believe that the amounts allocated to us for such shared services represent a fair allocation between us and the Saul Organization, we have not obtained a third party appraisal of the value of these services.

The B. F. Saul Insurance Agency of Maryland, 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 counter-signature fees in connection with our insurance program. Such commissions and fees amounted to approximately $407,900 for the year ended December 31, 2018.

~~Related Party Rents.~~

We sublease space for our corporate headquarters from a member of the Saul Organization, the building of which is owned by another member of the Saul Organization. The lease commenced in March 2002 and expires in February 2022. The Company and the Saul Organization entered into a Shared Services Agreement whereby each party pays a portion of the total rental payments based on a percentage proportionate to the number of employees employed by each party. The Company’s rent expense for the year ended December 31, 2018 was $779,800. Although the Company believes that this lease has terms comparable to what would have been obtained from a third party landlord, it did not seek bid proposals from any independent third parties when entering into its new corporate headquarters lease.

~~Conflicts Based on Individual Tax Considerations.~~

The tax basis of members of the Saul Organization in our portfolio properties which were contributed to certain partnerships at the time of our initial public offering in 1993 was substantially less than the fair market value thereof at the time of their contribution. In the event of our disposition of such properties, a disproportionately large share of the gain for federal income tax purposes would be allocated to members of the Saul Organization. In addition, future reductions of the level of our debt, or future releases of the guarantees or indemnities with respect thereto by members of the Saul Organization, would cause members of the Saul Organization to be considered, for federal income tax purposes, to have received constructive distributions. Depending on the overall level of debt and other factors, these distributions could be in excess of the Saul Organization’s bases in their Partnership units, in which case such excess constructive distributions would be taxable.

Consequently, it is in the interests of the Saul Organization that we continue to hold the contributed portfolio properties, that a portion of our debt remains outstanding or is refinanced and that the Saul Organization guarantees and indemnities remain in place, in order to defer the taxable gain to members of the Saul Organization. Therefore, the Saul Organization may seek to cause us to retain the contributed portfolio properties, and to refrain from reducing our debt or releasing the Saul Organization guarantees and indemnities, even when such action may not be in the interests of some, or a majority, of our stockholders. In order to minimize these conflicts, decisions as to sales of the portfolio properties, or any refinancing, repayment or release of guarantees and indemnities with respect to our debt, will be made by the independent directors.

~~Ability to Block Certain Actions.~~

Under applicable law and the limited partnership agreement of the Operating Partnership, consent of the limited partners is required to permit certain actions, including the sale of all or substantially all of the Operating Partnership’s assets. Therefore, members of the Saul Organization, through their status as limited partners in the Operating Partnership, could prevent the taking of any such actions, even if they were in the interests of some, or a majority, of our stockholders.

~~The amount of debt we have and the restrictions imposed by that debt could adversely affect our business and financial condition.~~

As of December 31, 2018, we had approximately $1.0 billion of debt outstanding, $910.2 million of which was long-term fixed-rate debt secured by 36 of our properties and $122.0 million of which was variable-rate debt due under our credit facility.

We currently have a general policy of limiting our borrowings to 50 percent of asset value, i.e., the value of our portfolio, as determined by our Board of Directors by reference to the aggregate annualized cash flow from our portfolio. Our organizational documents contain no limitation on the amount or percentage of indebtedness which we may incur. Therefore, the Board of Directors could alter or eliminate the current limitation on borrowing at any time. If our debt capitalization policy were changed, we could increase our leverage, resulting in an increase in debt service that could adversely affect our operating cash flow and our ability to make expected distributions to stockholders, and in an increased risk of default on our obligations.

We have established our debt capitalization policy relative to asset value, which is computed by reference to the aggregate annualized cash flow from the properties in our portfolio rather than relative to book value. We have used a measure tied to cash flow because we believe that the book value of our portfolio properties, which is the depreciated historical cost of the properties, does not accurately reflect our ability to borrow. Asset value, however, is somewhat more variable than book value, and may not at all times reflect the fair market value of the underlying properties.

~~The amount of our debt outstanding from time to time could have important consequences to our stockholders. For example, it could:~~

require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, property acquisitions and other appropriate business opportunities that may arise in the future;

limit our ability to obtain any additional financing we may need in the future for working capital, debt refinancing, capital expenditures, acquisitions, development or other general corporate purposes;

~~make it difficult to satisfy our debt service requirements;~~

~~limit our ability to make distributions on our outstanding common and preferred stock;~~

~~require us to dedicate increased amounts of our cash flow from operations to payments on our variable rate, unhedged debt if interest rates rise;~~

limit our flexibility in planning for, or reacting to, changes in our business and the factors that affect the profitability of our business, which may place us at a disadvantage compared to competitors with less debt or debt with less restrictive terms; and

Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance, our indebtedness will depend primarily on our future performance, which to a certain extent is subject to economic, financial, competitive and other factors described in this section. If we are unable to generate sufficient cash flow from our business in the future to service our debt or meet our other cash needs, we may be required to refinance all or a portion of our existing debt, sell assets or obtain additional financing to meet our debt obligations and other cash needs. Our ability to refinance, sell assets or obtain additional financing may not be possible on terms that we would find acceptable.

We are obligated to comply with financial and other covenants in our debt that could restrict our operating activities, and the failure to comply could result in defaults that accelerate the payment under our debt.

~~Our secured debt generally contains customary covenants, including, among others, provisions:~~

~~relating to the maintenance of the property securing the debt;~~

~~restricting our ability to assign or further encumber the properties securing the debt; and~~

~~restricting our ability to enter into certain new leases or to amend or modify certain existing leases without obtaining consent of the lenders.~~

~~Our unsecured debt generally contains various restrictive covenants. The covenants in our unsecured debt include, among others, provisions restricting our ability to:~~

~~incur additional unsecured debt;~~

~~guarantee additional debt;~~

~~make certain distributions, investments and other restricted payments, including distribution payments on our outstanding stock;~~

~~create certain liens;~~

~~increase our overall secured and unsecured borrowing beyond certain levels; and~~

~~consolidate, merge or sell all or substantially all of our assets.~~

Our ability to meet some of the covenants in our debt, including covenants related to the condition of the property or payment of real estate taxes, may be dependent on the performance by our tenants under their leases.

~~In addition, our credit facility requires us and our subsidiaries to satisfy financial covenants. The material financial covenants require us, on a consolidated basis, to:~~

~~limit the amount of debt as a percentage of gross asset value, as defined in the loan agreement, to less than 60% (leverage ratio);~~

~~limit the amount of debt so that interest coverage will exceed 2.0x on a trailing four-quarter basis (interest expense coverage); and~~

~~limit the amount of debt so that interest, scheduled principal amortization and preferred dividend coverage exceeds 1.4x on a trailing four-quarter basis (fixed charge coverage).~~

As of December 31, 2018, we were in compliance with all such covenants. If we were to breach any of our debt covenants and did not cure the breach within any applicable cure period, our lenders could require us to repay the debt immediately, and, if the debt is secured, could immediately begin proceedings to take possession of the property securing the loan. Some of our debt arrangements are cross-defaulted, which means that the lenders under those debt arrangements can put us in default and require immediate repayment of their debt if we breach and fail to cure a covenant under certain of our other debt obligations. As a result, any default under our debt covenants could have an adverse effect on our financial condition, our results of operations, our ability to meet our obligations and the market value of our shares.

Our development activities are inherently risky.

The ground-up development of improvements on real property, which is different from the renovation and redevelopment of existing improvements, presents substantial risks. In addition to the risks associated with real estate investment in general as described elsewhere, the risks associated with our remaining development activities include:

•significant time lag between commencement and completion subjects us to greater risks due to fluctuation in the general economy;

•failure or inability to obtain construction or permanent financing on favorable terms;

•expenditure of money and time on projects that may never be completed;

•inability to achieve projected rental rates or anticipated pace of lease-up;

•higher-than-estimated construction costs, including labor and material costs; and

•possible delay in completion of the project because of a number of factors, including weather, labor disruptions, supply-chain related delays, construction delays or delays in receipt of zoning or other regulatory approvals, or acts of God (such as fires, earthquakes or floods).

~~Redevelopments~~Developments, redevelopments and acquisitions may fail to perform as expected.

Our investment strategy includes the redevelopment and acquisition of community and neighborhood shopping centers that are anchored by supermarkets, drugstores or high volume, value-oriented retailers that provide consumer necessities. The redevelopment and acquisition of properties entails risks that include the following, any of which could adversely affect our results of operations and our ability to meet our obligations:

•our estimate of the costs to improve, reposition or redevelop a property may prove to be too low, and, as a result, the property may fail to achieve the returns we have projected, either temporarily or for a longer time;

•we may not be able to identify suitable properties to acquire or may be unable to complete the acquisition of the properties we identify;

•we may not be able to integrate new developments or acquisitions into our existing operations successfully;

•properties we redevelop or acquire may fail to achieve the occupancy or rental rates we project at the time we make the decision to invest, which may result in the properties’ failure to achieve the returns we projected;

•our pre-acquisition evaluation of the physical condition of each new investment may not detect certain defects or identify necessary repairs until after the property is acquired, which could significantly increase our total acquisition costs; and

•our investigation of a property or building prior to our acquisition, and any representations we may receive from the seller, may fail to reveal various liabilities, which could reduce the cash flow from the property or increase our acquisition cost.

~~Our ability to grow will be limited if we cannot obtain additional capital.~~

Our growth strategy includes the redevelopment of properties we already own and the acquisition of additional properties. Because we are required to distribute to our stockholders at least 90% of our taxable income each year to continue to qualify as a real estate investment trust, or REIT, for federal income tax purposes, in addition to our undistributed operating cash flow, we rely upon the availability of debt or equity capital to fund our growth, which financing may or may not be available on favorable terms or at all. The debt could include mortgage loans from third parties or the sale of debt securities. Equity capital could include our common stock or preferred stock. Additional financing, refinancing or other capital may not be available in the amounts we desire or on favorable terms. Our access to debt or equity capital depends on a number of factors, including the general state of the capital markets, the market’s perception of our growth potential, our ability to pay dividends, and our current and potential future earnings. Depending on the outcome of these factors, we could experience delay or difficulty in implementing our growth strategy on satisfactory terms, or be unable to implement this strategy.

Our performance and value are subject to general risks associated with the real estate industry.

Our economic performance and the value of our real estate assets, and, consequently, the value of our investments, are subject to the risk that if our properties do not generate revenue sufficient to meet our operating expenses, including debt service and capital expenditures, our cash flow and ability to pay distributions to our stockholders will be adversely affected. As a real estate company, we are susceptible to the following real estate industry risks:

•economic downturns in the areas where our properties are located;

•adverse changes in local real estate market conditions, such as oversupply or reduction in demand;

•changes in tenant preferences that reduce the attractiveness of our properties to tenants;

•zoning or regulatory restrictions;

•decreases in market rental rates;

•weather conditions that may increase energy costs and other operating expenses;

•costs associated with the need to periodically repair, renovate and re-lease space; and

•increases in the cost of adequate maintenance, insurance and other operating costs, including real estate taxes, associated with one or more properties, which may occur even when circumstances such as market factors and competition cause a reduction in revenue from one or more properties, although real estate taxes typically do not increase upon a reduction in such revenue.

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Geographic concentration of our portfolio may make us particularly susceptible to adverse economic developments in the real estate markets of those areas.

~~Over~~Approximately 85% of our property operating income is generated by properties in the metropolitan Washington, DC/Baltimore area. As a result, our financial condition, operating results and ability to make distributions could be materially and adversely impacted by significant adverse economic changes affecting the real estate markets in that

area. In turn, our common stock is subject to greater risk vis-a-vis other enterprises whose portfolio contains greater geographic diversity.

~~Adverse~~Our results of operations may be negatively affected by adverse trends in the retail and office real estate sectors.

Tenants at our retail properties face continual competition in attracting customers from ~~Internet shopping,~~online merchants, retailers at other shopping centers, catalogue companies, ~~online merchants,~~ television shopping networks, warehouse stores, large discounters, outlet malls, wholesale clubs, direct mail and telemarketers. Such competition could have a material adverse effect on our ability to lease space in our retail properties and on the rents we can charge or the concessions we ~~can~~ grant. This in turn could materially and adversely affect our results of operations and cash flows, and could affect the realizable value of our assets upon sale. Further, as new technologies emerge, the relationships among customers, retailers, and shopping centers are evolving rapidly and it is critical we adapt to such new technologies and relationships on a timely basis. We may be unable to adapt quickly and effectively, which could adversely impact our financial performance.

Some businesses are rapidly evolving to make employee telecommuting, flexible work schedules, open workplaces and teleconferencing increasingly common. These practices enable businesses to reduce their space requirements. A continuation of the movement towards these practices could over time erode the overall demand for office space and, in turn, place downward pressure on occupancy, rental rates and property valuations, each of which could have an adverse effect on our financial position, results of operations, cash flows and ability to make distributions to our stockholders.

Many real estate costs are fixed, even if income from our properties decreases.

Our financial results depend primarily on leasing space in our properties to tenants on terms favorable to us. Costs associated with real estate investment, such as real estate taxes and maintenance costs, generally are not reduced even when a property is not fully occupied, rental rates decrease, or other circumstances cause a reduction in income from the investment. As a result, cash flow from the operations of our properties may be reduced if a tenant does not pay its rent or we are unable to rent our properties on favorable terms. Under those circumstances, we might not be able to enforce our rights as landlord without delays, and may incur substantial legal costs. Additionally, new properties that we may acquire or develop may not produce any significant revenue immediately, and the cash flow from existing operations may be insufficient to pay the operating expenses and debt service associated with that property until the property is fully leased.

Competition may limit our ability to purchase new properties and generate sufficient income from tenants.

Numerous commercial developers and real estate companies compete with us in seeking tenants for properties and properties for acquisition. This competition may:

•reduce properties available for acquisition;

•increase the cost of properties available for acquisition;

•reduce rents payable to us;

•interfere with our ability to attract and retain tenants;

•lead to increased vacancy rates at our properties; and

•adversely affect our ability to minimize expenses of operation.

Retailers at our shopping center properties also face increasing competition from outlet stores, discount shopping clubs, and other forms of marketing of goods, such as direct mail, internet marketing and telemarketing. This competition may reduce percentage rents payable to us and may contribute to lease defaults and insolvency of tenants. If we are unable to continue to attract appropriate retail tenants to our properties, or to purchase new properties in our geographic markets, it could materially affect our ability to generate net income, service our debt and make distributions to our stockholders.

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We may be unable to sell properties when appropriate because real estate investments are illiquid.

Real estate investments generally cannot be sold quickly. In addition, there are some limitations under federal income tax laws applicable to real estate and in particular to REITs ~~in particular~~ that may limit our ability to sell our assets. We may not be able to alter our portfolio promptly in response to changes in economic or other conditions. Our inability to respond quickly to adverse changes in the performance of our investments could have an adverse effect on our ability to meet our obligations and make distributions to our stockholders.

Risk Factors Related to our Funding Strategies and Capital Structure

We have substantial relationships with members of the Saul Organization whose interests could conflict with the interests of other stockholders.

Influence of Officers, Directors and Significant Stockholders.

Mr. B. F. Saul II, our Chief Executive Officer and Chairman of the Board, D. Todd Pearson, our President and Chief Operating Officer, and Christine Nicolaides Kearns, our Executive Vice President-Chief Legal and Administrative Officer, are members of the Saul Organization, and persons associated with the Saul Organization constitute five of the eleven members of our Board of Directors. In addition, as of December 31, 2021, Mr. B. F. Saul II had the potential to exercise control over 10,623,302 shares of our common stock representing 44.8% of our issued and outstanding shares of common stock. Mr. B. F. Saul II also beneficially owned, as of December 31, 2021, 8,801,214 units of the Operating Partnership. In general, these units are convertible into shares of our common stock on a one-for-one basis. The ownership limitation set forth in our articles of incorporation is 39.9% in value of our issued and outstanding equity securities (which includes both common and preferred stock). As of December 31, 2021, Mr. B. F. Saul II and members of the Saul Organization owned common stock representing approximately 38.7% in value of all our issued and outstanding equity securities. Members of the Saul Organization are permitted under our articles of incorporation to convert Operating Partnership units into shares of common stock or acquire additional shares of common stock until the Saul Organization’s actual ownership of common stock reaches 39.9% in value of our equity securities. As of December 31, 2021, approximately 540,000 of the 8,801,214 units of the Operating Partnership would have been permitted to convert into additional shares of common stock, and would have resulted in Mr. B. F. Saul II and members of the Saul Organization owning common stock representing approximately 39.9% in value of all our issued and outstanding equity securities.

Management Time.

Our ~~insurance coverage~~Chief Executive Officer, President and Chief Operating Officer, Executive Vice President-Chief Legal and Administrative Officer and Senior Vice President-Chief Accounting Officer and Treasurer are also officers of various entities of the Saul Organization. Although we believe that these officers spend sufficient management time to meet their responsibilities as our officers, the amount of management time devoted to us will depend on our ~~properties~~specific circumstances at any given point in time. As a result, in a given period, these officers may ~~be inadequate.~~spend less than a majority of their management time on our matters. Over extended periods of time, we believe that our Chief Executive Officer will spend less than a majority of his management time on Company matters, while our President and Chief Operating Officer, Executive Vice President-Chief Legal and Administrative Officer and Senior Vice President-Chief Accounting Officer and Treasurer may or may not spend less than a majority of their time on our matters.

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Exclusivity and Right of First Refusal Agreements.

We ~~carry comprehensive~~will acquire, develop, own and manage shopping center properties and will own and manage other commercial properties, and, subject to certain exclusivity agreements and rights of first refusal to which we are a party, the Saul Organization will continue to develop, acquire, own and manage commercial properties and own land suitable for development as, among other things, shopping centers and other commercial properties. Therefore, conflicts could develop in the allocation of acquisition and development opportunities with respect to commercial properties other than shopping centers and with respect to development sites, as well as potential tenants and other matters, between us and the Saul Organization. The agreement relating to exclusivity and the right of first refusal between us and the Saul Organization generally requires the Saul Organization to conduct its shopping center business exclusively through us and to grant us a right of first refusal to purchase commercial properties and development sites in certain market areas that become available to the Saul Organization. The Saul Organization has granted the right of first refusal to us, acting through our independent directors, in order to minimize potential conflicts with respect to commercial properties and development sites. We and the Saul Organization have entered into this agreement in order to minimize conflicts with respect to shopping centers and certain of our commercial properties.

On November 5, 2019, the Company entered into the Twinbrook Contribution Agreement to acquire from 1592 Rockville Pike, a wholly-owned subsidiary of the Saul 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 in exchange for 1,416,071 limited partnership units in the Operating Partnership. The Contributed Property is immediately adjacent to approximately 10.3 acres owned by the Company. Title to the Contributed Property and the units were placed in escrow until certain conditions of the Twinbrook Contribution Agreement were satisfied.

On March 5, 2021, the Company entered into an amendment to the Twinbrook Contribution Agreement in which it and 1592 Rockville Pike agreed to release to the Company from escrow the deed and assignment of the leasehold interest of the Contributed Property, as of that date, and reimburse 1592 Rockville Pike for certain expenses pursuant to the Twinbrook Contribution Agreement. The units continued to remain in escrow pending satisfaction of the conditions of the Twinbrook Contribution Agreement, as amended.

The Company acquired title to the Contributed Property earlier than originally contemplated in order to control the final aspects of predevelopment, project bidding, contractor selection and lender discussions in support of Phase I. This control will also assure the preservation of the Wegmans lease and its value to this site and, as importantly, to the Company’s adjacent holdings.

The remaining conditions of the Twinbrook Contribution Agreement were satisfied during the third quarter of 2021, and, effective October 18, 2021, 708,036 units were released from escrow to 1592 Rockville Pike. The remaining 708,035 units continue to be held in escrow and will be released to 1592 Rockville Pike on October 18, 2023.

On June 29, 2021, the third-party landlord under the ground lease contributed the fee simple interest in the land underlying the leasehold interest to the Company in exchange for 469,740 limited partnership units in the Operating Partnership, representing an aggregate value of $21.5 million. Acquisition costs were paid in cash and totaled $0.7 million.

Shared Services.

We share with the Saul Organization certain ancillary functions, such as computer and payroll services, benefits administration and in-house legal services. The terms of all sharing arrangements, including payments related thereto, are reviewed periodically by our Audit Committee, which is comprised solely of independent directors. Included in our general and administrative expenses or capitalized to specific development projects, for the year ended December 31, 2021, are charges totaling $8.0 million, net, related to such shared services, which included rental payments for the Company’s headquarters lease, which were billed by the Saul Organization. Although we believe that the amounts allocated to us for such shared services represent a fair allocation between us and the Saul Organization, we have not obtained a third party appraisal of the value of these services.

Related Party Rents.

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February 2022. Negotiations are ongoing for a renewal of the Company’s office space at the same location. The Company and the Saul Organization entered into a shared services agreement whereby each party pays a portion of the total rental payments based on a percentage proportionate to the number of employees employed by each party. The Company’s rent expense for the year ended December 31, 2021 was $799,500. Although the Company believes that this lease has terms comparable to what would have been obtained from a third-party landlord, it did not seek bid proposals from any independent third parties when entering into its new corporate headquarters lease.

Conflicts Based on Individual Tax Considerations.

The tax basis of members of the Saul Organization in our portfolio properties which were contributed to certain partnerships at the time of our initial public offering in 1993 was substantially less than the fair market value thereof at the time of their contribution. In the event of our disposition of such properties, a disproportionately large share of the gain for federal income tax purposes would be allocated to members of the Saul Organization. In addition, future reductions of the level of our debt, or future releases of the guarantees or indemnities with respect thereto by members of the Saul Organization, would cause members of the Saul Organization to be considered, for federal income tax purposes, to have received constructive distributions. Depending on the overall level of debt and other factors, these distributions could be in excess of the Saul Organization’s basis in their Partnership units, in which case such excess constructive distributions would be taxable.

Ability to Block Certain Actions.

The amount of debt we have and the restrictions imposed by that debt could adversely affect our business and financial condition.

As of December 31, 2021, we had approximately $1.2 billion of debt outstanding, $949.0 million of which was long-term fixed-rate debt secured by 34 of our properties ~~including insurance for liability, earthquake, fire, flood, terrorism~~ and ~~rental loss. These policies~~$206.0 million of which was variable-rate debt due under our credit facility.

We currently have a general policy of limiting our borrowings to 50% of asset value, i.e., the value of our portfolio, as determined by our Board of Directors by reference to the aggregate annualized cash flow from our portfolio. Our organizational documents contain ~~coverage limitations.~~ no limitation on the amount or percentage of indebtedness which we may incur. Therefore, the Board of Directors could alter or eliminate the current limitation on borrowing at any time. If our debt capitalization policy were changed, we could increase our leverage, resulting in an increase in debt service that could adversely affect our operating cash flow and our ability to make expected distributions to stockholders, and in an increased risk of default on our obligations.

We have established our debt capitalization policy relative to asset value, which is computed by reference to the aggregate annualized cash flow from the properties in our portfolio rather than relative to book value. We have used a measure tied to cash flow because we believe ~~this coverage~~that the book value of our portfolio properties, which is the depreciated historical cost of the ~~type~~properties, does not accurately reflect our ability to borrow. Asset value, however, is somewhat more variable than book value, and may not at all times reflect the fair market value of the underlying properties.

The amount ~~customarily obtained~~of our debt outstanding from time to time could have important consequences to our stockholders. For example, it could:

•require us to dedicate a substantial portion of our cash flow from operations to payments on our debt, thereby reducing funds available for operations, property acquisitions and other appropriate business opportunities that may arise in the future;

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•limit our ability to obtain any additional financing we may need in the future for working capital, debt refinancing, capital expenditures, acquisitions, development or other general corporate purposes;

•make it difficult to satisfy our debt service requirements;

•limit our ability to make distributions on our outstanding common and preferred stock;

•require us to dedicate increased amounts of our cash flow from operations to payments on our variable rate, unhedged debt if interest rates rise;

•limit our flexibility in planning for, or ~~by an owner~~reacting to, changes in our business and the factors that affect the profitability of ~~real property assets. We intend~~our business, which may place us at a disadvantage compared to competitors with less debt or debt with less restrictive terms; and

•limit our ability to obtain ~~similar insurance coverage on subsequently acquired properties.~~any additional financing we may need in the future for working capital, debt refinancing, capital expenditures, acquisitions, development or other general corporate purposes.

~~As a consequence~~Our ability to make scheduled payments of the ~~September 11, 2001 terrorist attacks~~principal of, to pay interest on, or to refinance, our indebtedness will depend primarily on our future performance, which to a certain extent is subject to economic, financial, competitive and other ~~significant losses incurred by~~factors described in this section. If we are unable to generate sufficient cash flow from our business in the ~~insurance industry, the availability of insurance coverage has decreased and the prices for insurance have increased. As a result,~~future to service our debt or meet our other cash needs, we may be ~~unable~~required to renew or duplicate our current insurance coverage in adequate amounts or at reasonable prices. In addition, insurance companies may no longer offer coverage against certain types of losses, such as losses due to terrorist acts and toxic mold, or, if offered, the expense of obtaining these types of insurance may not be justified. We therefore may cease to have insurance coverage against certain types of losses and/or there may be decreases in the limits of insurance available. If an uninsured loss or a loss in excess of our insured limits occurs, we could loserefinance all or a portion of our existing debt, sell assets or obtain additional financing to meet our debt obligations and other cash needs. Our ability to refinance, sell assets or obtain additional financing may not be possible on terms that we would find acceptable.

We are obligated to comply with financial and other covenants in our debt that could restrict our operating activities, and the ~~capital we have invested~~failure to comply could result in ~~a property, as well as~~defaults that accelerate the ~~anticipated future revenue from~~payment under our debt.

Our secured debt generally contains customary covenants, including, among others, provisions:

•relating to the maintenance of the property ~~but still remain obligated for any mortgage~~securing the debt;

•restricting our ability to assign or further encumber the properties securing the debt; and

•restricting our ability to enter into certain new leases or to amend or modify certain existing leases without obtaining consent of the lenders.

Our unsecured debt generally contains various restrictive covenants. The covenants in our unsecured debt include, among others, provisions restricting our ability to:

•incur additional unsecured debt;

•guarantee additional debt;

•make certain distributions, investments and other restricted payments, including distribution payments on our outstanding stock;

•create certain liens;

•increase our overall secured and unsecured borrowing beyond certain levels; and

•consolidate, merge or ~~other financial obligations~~sell all or substantially all of our assets.

Our ability to meet some of the covenants in our debt, including covenants related to the ~~property. Material losses in excess~~condition of ~~insurance proceeds~~the property or payment of real estate taxes, may ~~occur~~be dependent on the performance by our tenants under their leases.

In addition, our credit facility requires us and our subsidiaries to satisfy financial covenants. The material financial covenants require us, on a consolidated basis, to:

•limit the amount of debt as a percentage of gross asset value, as defined in the ~~future. Also, due~~loan agreement, to ~~inflation, changes~~less than 60% (leverage ratio);

•limit the amount of debt so that interest coverage will exceed 2.0x on a trailing four-quarter basis (interest expense coverage); and

•limit the amount of debt so that interest, scheduled principal amortization and preferred dividend coverage exceeds 1.4x on a trailing four-quarter basis (fixed charge coverage).

As of December 31, 2021, we were in ~~codes~~compliance with all such covenants. If we were to breach any of our debt covenants and ~~ordinances, environmental considerations~~did not cure the breach within any applicable cure period, our lenders could require us to repay the debt immediately, and, if the debt is secured, could immediately begin proceedings to take possession of the property securing the loan. Some of our debt arrangements are cross-defaulted, which means that the lenders under those debt

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arrangements can put us in default and require immediate repayment of their debt if we breach and fail to cure a covenant under certain of our other ~~factors, it may not be feasible to use insurance proceeds to replace~~debt obligations. As a ~~building after it has been damaged or destroyed. Events such as these~~result, any default under our debt covenants could ~~adversely affect~~have an adverse effect on our financial condition, our results of operations, ~~and~~ our ability to meet our obligations ~~including distributions~~and the market value of our shares.

The market value of our debt and equity securities is subject to various factors that may cause significant fluctuations or volatility.

As with other publicly traded securities, the market price of our debt and equity securities depends on various factors, which may change from time to time and/or may be unrelated to our ~~stockholders.~~financial condition, operating performance or prospects that may cause significant fluctuations or volatility in such prices. These factors include, among others:

•general economic and financial market conditions;

•level and trend of interest rates;

•our ability to access the capital markets to raise additional capital;

•the issuance of additional equity or debt securities;

•changes in our funds from operations (“FFO”) or earnings estimates;

•changes in our credit or analyst ratings;

•our financial condition and performance;

•market perception of our business compared to other REITs; and

•market perception of REITs, in general, compared to other investment alternatives.

The phase-out of LIBOR could affect interest rates under our variable rate debt and interest rate swap arrangements.

LIBOR is used as a reference rate for our credit facility. On July 27, 2017, the United Kingdom's Financial Conduct Authority announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. On November 30, 2020, the ICE Benchmark Administration announced its plan to extend the date that most U.S. LIBOR values would cease being computed and published from December 31, 2021 to June 30, 2023. The Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee, which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to U.S. dollar LIBOR in derivatives and other financial contracts. However, SOFR and LIBOR differ in certain important respects. SOFR is a secured overnight rate, while LIBOR is an unsecured rate that represents interbank funding over different maturities. In addition, because SOFR is a transaction-based rate, it is backward-looking, whereas LIBOR is forward-looking. Because of these and other differences, there can be no assurance that SOFR will perform in the same way as LIBOR would have done at any time, and there is no guarantee that it is a comparable substitute for LIBOR. At this time, we cannot predict the effect of any discontinuance, modification or other reforms to LIBOR or whether SOFR or another alternative reference rate will attain market traction as a LIBOR replacement. As LIBOR is phased out, we will need to agree upon a benchmark replacement index with our creditors, and as such the interest rate on our credit facility and certain mortgage payables may change. The new rate, including SOFR, may not be as favorable as those in effect prior to any LIBOR phase-out. Furthermore, the transition process may result in delays in funding, higher interest expense, additional expenses, and increased volatility in markets for instruments that currently rely on LIBOR, all of which could negatively impact our cash flow.

Our ability to grow will be limited if we cannot obtain additional capital.

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Risk Factors Related to our REIT Status and Other Laws and Regulations

Environmental laws and regulations could reduce the value or profitability of our properties.

All real property and the operations conducted on real property are subject to federal, state and local laws, ordinances and regulations relating to hazardous materials, environmental protection and human health and safety. Under various federal, state and local laws, ordinances and regulations, we and our tenants may be required to investigate and clean up certain hazardous or toxic substances released on or in properties we own or operate, and also may be required to pay other costs relating to hazardous or toxic substances. This liability may be imposed without regard to whether we or our tenants knew about the release of these types of substances or were responsible for their release. The presence of contamination or the failure to properly remediate contamination at any of our properties may adversely affect our ability to sell or lease those properties or to borrow using those properties as collateral. The costs or liabilities could exceed the value of the affected real estate. We are not aware of any environmental condition with respect to any of our properties that management believes would have a material adverse effect on our business, assets or results of operations taken as a whole. The uses of any of our properties prior to our acquisition of the property and the building materials used at the property are among the property-specific factors that will affect how the environmental laws are applied to our properties. If we are subject to any material environmental liabilities, the liabilities could adversely affect our results of operations and our ability to meet our obligations.

We cannot predict what other environmental legislation or regulations will be enacted in the future, how existing or future laws or regulations will be administered or interpreted or what environmental conditions may be found to exist on the properties in the future. Compliance with existing and new laws and regulations may require us or our tenants to spend funds to remedy environmental problems. Our tenants, like many of their competitors, have incurred, and will continue to incur, capital and operating expenditures and other costs associated with complying with these laws and regulations, which will adversely affect their potential profitability. Generally, our tenants must comply with environmental laws and meet remediation requirements. Our leases typically impose obligations on our tenants to indemnify us from any compliance costs we may incur as a result of the environmental conditions on the property caused by the tenant. If a tenant fails to or cannot comply, we could be forced to pay these costs. If not

addressed, environmental conditions could impair our ability to sell or re-lease the affected properties in the future or result in lower sales prices or rent payments.

The Americans with Disabilities Act of 1990 (the “ADA”) could require us to take remedial steps with respect to newly acquired properties.

The properties, as commercial facilities, are required to comply with Title III of the ADA. Investigation of a property may reveal non-compliance with the ADA. The requirements of the ADA, or of other federal, state or local laws, also may change in the future and restrict further renovations of our properties with respect to access for disabled persons. Future compliance with the ADA may require expensive changes to the properties.

The revenue generated by our tenants could be negatively affected by various federal, state and local laws to which they are subject.

We and our tenants are subject to a wide range of federal, state and local laws and regulations, such as local licensing requirements, consumer protection laws and state and local fire, life-safety and similar requirements that affect the use of the properties. The leases typically require that each tenant comply with all regulations. Failure to comply could result in fines by governmental authorities, awards of damages to private litigants, or restrictions on the ability to conduct business on such properties. Non-compliance of this sort could reduce our revenue from a tenant, could require us to pay penalties or fines relating to any non-compliance, and could adversely affect our ability to sell or lease a property.

Failure to qualify as a REIT for federal income tax purposes would cause us to be taxed as a corporation, which would substantially reduce funds available for payment of distributions.

We believe that we are organized and qualified as a REIT, and currently intend to operate in a manner that will allow us to continue to qualify as a REIT for federal income tax purposes under the Code. However, the IRS could successfully assert that we are not qualified as such. In addition, we may not remain qualified as a REIT in the future. Qualification as a REIT involves the application of highly technical and complex Code provisions. The complexity of these provisions and of the applicable income tax regulations that have been issued under the Code by the United States Department of Treasury is greater in the case of a REIT that holds its assets in partnership form. Certain facts and circumstances not entirely within our control may affect our ability to qualify as a REIT. For example, in order to qualify as a REIT, at least 95% of our gross income in any year must be derived from qualifying rents and other income.

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Satisfying this requirement could be difficult, for example, if defaults by tenants were to reduce the amount of income from qualifying rents. Also, we must make annual distributions to stockholders of at least 90% of our net taxable income (excluding capital gains). In addition, new legislation, new regulations, new administrative interpretations or new court decisions may significantly change the tax laws with respect to qualification as a REIT or the federal income tax consequences of such qualification. If we fail to qualify as a REIT:

•we would not be allowed a deduction for dividend distributions to stockholders in computing taxable income;

•we would be subject to federal income tax at regular corporate rates;

•unless we are entitled to relief under specific statutory provisions, we could not elect to be taxed as a REIT for four taxable years following the year during which we were disqualified;

•we could be required to pay significant income taxes, which would substantially reduce the funds available for investment and for distribution to our stockholders for each year in which we failed to qualify; and

•we would no longer be required by law to make any distributions to our stockholders.

We believe that the Operating Partnership is treated as a partnership, and not as a corporation, for federal income tax purposes. If the IRS were to challenge successfully the status of the Operating Partnership as a partnership for federal income tax purposes:

•the Operating Partnership would be taxed as a corporation;

•we would cease to qualify as a REIT for federal income tax purposes; and

•the amount of cash available for distribution to our stockholders would be substantially reduced.

We may be required to incur additional debt to qualify as a REIT.

As a REIT, we must make annual distributions to stockholders of at least 90% of our REIT taxable income. We are subject to income tax on amounts of undistributed REIT taxable income and net capital gain. In addition, we would be subject to a 4% excise tax if we fail to distribute sufficient income to meet a minimum distribution test based on our ordinary income, capital gain and aggregate undistributed income from prior years. We intend to make distributions to stockholders to comply with the Code’s distribution provisions and to avoid federal income and excise tax. We may need to borrow funds to meet our distribution requirements because:

•our income may not be matched by our related expenses at the time the income is considered received for purposes of determining taxable income; and

•non-deductible capital expenditures or debt service requirements may reduce available cash but not taxable income.

In these circumstances, we might have to borrow funds on unfavorable terms and even if our management believes the market conditions make borrowing financially unattractive.

Legislative, administrative, regulatory or other actions affecting REITs, including positions taken by the IRS, could have a material adverse effect on us and our investors.

The rules dealing with U.S. federal ~~tax reform legislation now and~~income taxation are constantly under review by persons involved in the ~~future~~legislative process, and by the Internal Revenue Service (“IRS”) and the U.S. Department of the Treasury (“Treasury”). Changes to the tax laws or interpretations thereof by the IRS and the Treasury, with or without retroactive application, could materially and adversely affect ~~REITs, both positively~~us and ~~negatively,~~our investors. In particular, additional technical corrections legislation and implementing regulations may be enacted or promulgated in ~~ways that are difficult~~response to ~~anticipate.~~

~~The~~the Tax Cuts and Jobs Act of 2017 (the ~~“2017 Tax Act”~~“Act”), ~~signed into law on December 22, 2017, represents sweeping tax reform legislation that makes significant~~and substantive legislative changes to ~~corporate and individual tax rates and~~ the ~~calculation of taxes. While we currently do not expect the 2017 Tax~~ Act will have a significant direct impact on us, it may impact us indirectly as our tenants and the jurisdictions in which we do business, as well as the overall investment thesis for REITs, may be impacted both positively and negatively in ways that are difficult to predict. Additionally, the overall impact of the 2017 Tax Act depends on future interpretations and regulations that may be issued by federal tax authorities, as well as changes in state and local taxation inalso possible. In response to the ~~2017 Tax~~COVID-19 pandemic, multiple pieces of legislation have already been enacted, including the 2020 CARES Act, and ~~it is possible that such future interpretations, regulations~~there have also been significant issuances of regulatory and other ~~changes~~guidance, and further legislative enactments and other IRS or Treasury action is possible. No prediction can be made as to the likelihood of passage of new tax legislation or other provisions, or the direct or indirect effect on us and our shareholders. Accordingly, such new legislation, Treasury regulations, administrative interpretations or court decisions could ~~adversely impact us.~~significantly and negatively affect our ability to qualify to be taxed as a REIT and/or the U.S. federal income tax consequences to us and our investors of such qualification.

To maintain our status as a REIT, we limit the amount of shares any one stockholder can own.

The Code imposes certain limitations on the ownership of the stock of a REIT. For example, not more than 50% in value of our outstanding shares of capital stock may be owned, actually or constructively, by five or fewer

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individuals (as defined in the Code). To protect our REIT status, our articles of incorporation restrict beneficial and constructive ownership (defined by reference to various Code provisions) to no more than 2.5% in value of our issued and outstanding equity securities by any single stockholder with the exception of members of the Saul Organization, who are restricted to beneficial and constructive ownership of no more than 39.9% in value of our issued and outstanding equity securities.

The constructive ownership rules are complex. Shares of our capital stock owned, actually or constructively, by a group of related individuals and/or entities may be treated as constructively owned by one of those individuals or entities. As a result, ~~the acquisition of~~a single entity or individual could own less than 2.5% or 39.9% in value of our issued and outstanding equity securities ~~by an individual~~ and such ownership could potentially cause a group of related individuals and/or ~~entity could cause that individual or entity (or another)~~entities to own constructively more than 2.5% or 39.9% in value of the outstanding stock. If that happened, either the transfer or ownership would be void or the shares would be transferred to a charitable trust and then sold to someone who can own those shares without violating the respective ownership limit.

As of December 31, ~~2018,~~2021, Mr. B. F. Saul II and members of the Saul Organization owned common stock representing approximately ~~37.8%~~38.7% in value of all our issued and outstanding equity securities. In addition, members of the Saul Organization beneficially owned Operating Partnership units that are, in general, convertible into our common stock on a one-for-one basis. Members of the Saul Organization are permitted under our articles of incorporation to convert Operating Partnership units into shares of common stock or acquire additional shares of common stock until the Saul Organization’s actual ownership of common stock reaches 39.9% in value of our equity securities.

The Board of Directors may waive these restrictions on a case-by-case basis. The Board has authorized the Company to grant waivers to look-through entities, such as mutual funds, in which shares of equity stock owned by the entity are treated as owned proportionally by individuals who are the beneficial owners of the entity. Even though these entities may own stock in excess of the 2.5% ownership limit, no individual beneficially or constructively would own more than 2.5%. The Board of Directors has agreed to waive the ownership limit with respect to certain mutual funds and similar investors. In addition, the Board of Directors has agreed to waive the ownership limit with respect to certain bank pledgees of shares of our common stock and units issued by the Operating Partnership and held by members of the Saul Organization.

The ownership restrictions may delay, defer or prevent a transaction or a change of our control that might involve a premium price for our equity stock or otherwise be in the stockholders’ best interest.

General Risk Factors

Financial and economic conditions may have an adverse impact on us, our tenants’ businesses and our results of operations.

Our business may be affected by market and economic challenges experienced by the U.S. economy or real estate industry as a whole, by the local economic conditions in the markets in which our properties are located, including the impact of high unemployment, volatility in the public equity and debt markets, and international economic conditions. A prolonged deterioration of economic and other market conditions, could adversely affect our business, financial condition, results of operations or real estate values, as well as the financial condition of our tenants and lenders, which may expose us to increased risks of default by these parties.

Potential consequences of a prolonged deterioration of economic and other market conditions include:

•the financial condition of our tenants, many of which operate in the retail industry, may be adversely affected, which may result in tenant defaults under their leases due to bankruptcy, lack of liquidity, operational failures or for other reasons;

•the ability to borrow on terms and conditions that we find acceptable, or at all, may be limited, which could reduce our ability to pursue acquisition and development opportunities and refinance existing debt, reduce our returns from acquisition and development activities and increase our future interest expense;

•reduced values of our properties may limit our ability to dispose of assets at attractive prices and may reduce the ability to refinance loans; and

•one or more lenders under our credit facility could fail and we may not be able to replace the financing commitment of any such lenders on favorable terms, or at all.

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Loss of our key management could adversely affect performance and the value of our common shares.

We are dependent on the efforts of our key management. Although we believe qualified replacements could be found for any departures of key executives, the loss of their services could adversely affect our performance and the value of our common stock.

Our insurance coverage on our properties may be inadequate.

We carry comprehensive insurance on all of our properties, including insurance for liability, earthquake, fire, flood, terrorism and rental loss. These policies contain coverage limitations. We believe this coverage is of the type and amount customarily obtained for or by an owner of real property assets. We intend to obtain similar insurance coverage on subsequently acquired properties.

As a consequence of various terrorist attacks and other significant losses incurred by the insurance industry, the availability of insurance coverage has decreased and the prices for insurance have increased. As a result, we may be unable to renew or duplicate our current insurance coverage in adequate amounts or at reasonable prices. In addition, insurance companies may no longer offer coverage against certain types of losses, such as losses due to terrorist acts and toxic mold, or, if offered, the expense of obtaining these types of insurance may not be justified. We therefore may cease to have insurance coverage against certain types of losses and/or there may be decreases in the limits of insurance available. If an uninsured loss or a loss in excess of our insured limits occurs, we could lose all or a portion of the capital we have invested in a property, as well as the anticipated future revenue from the property, but still remain obligated for any mortgage debt or other financial obligations related to the property. Material losses in excess of insurance proceeds may occur in the future. Also, due to inflation, changes in codes and ordinances, environmental considerations and other factors, it may not be feasible to use insurance proceeds to replace a building after it has been damaged or destroyed. Events such as these could adversely affect our results of operations and our ability to meet our obligations, including distributions to our stockholders.

Natural disasters and climate change could have an adverse impact on our cash flow and operating results.

Climate change may add to the unpredictability and frequency of natural disasters and severe weather conditions and create additional uncertainty as to future trends and exposures. Certain of our operations are located in areas that are subject to natural disasters and severe weather conditions such as hurricanes, droughts, snow storms, floods and fires. The impact of climate change or the occurrence of natural disasters can delay new development projects, increase investment costs to repair or replace damaged properties, increase operating costs, create additional investment costs to make improvements to existing properties to comply with climate change regulations, increase future property insurance costs, and negatively impact the tenant demand for space. If insurance is unavailable to us or is unavailable on acceptable terms, or if our insurance is not adequate to cover business interruption or losses from these events, our earnings, liquidity or capital resources could be adversely affected.

We cannot assure you we will continue to pay dividends at historical rates.

Our ability to continue to pay dividends on our common stock at historical rates or to increase our common stock dividend rate will depend on a number of factors, including, among others, the following:

•our financial condition and results of future operations;

•the performance of lease terms by tenants;

•the terms of our loan covenants; and

•our ability to acquire, finance, develop or redevelop and lease additional properties at attractive rates.

If we do not maintain or increase the dividend rate on our common stock, it could have an adverse effect on the market price of our common stock and other securities. Payment of dividends on our common stock may be subject to payment in full of the dividends on any preferred stock or depositary shares and payment of interest on any debt securities we may offer.

Certain tax and anti-takeover provisions of our articles of incorporation and bylaws may inhibit a change of our control.

Certain provisions contained in our articles of incorporation and bylaws and the Maryland General Corporation Law may discourage a third party from making a tender offer or acquisition proposal to us. If this were to happen, it could delay, deter or prevent a change in control or the removal of existing management. These provisions also

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may delay or prevent the stockholders from receiving a premium for their stock over then-prevailing market prices. These provisions include:

•the REIT ownership limit described above;

•authorization of the issuance of our preferred stock with powers, preferences or rights to be determined by the Board of Directors;

•a staggered, fixed-size Board of Directors consisting of three classes of directors;

•special meetings of our stockholders may be called only by the Chairman of the Board, the president, by a majority of the directors or by stockholders possessing no less than 25% of all the votes entitled to be cast at the meeting;

•the Board of Directors, without a stockholder vote, can classify or reclassify unissued shares of preferred stock;

•a member of the Board of Directors may be removed only for cause upon the affirmative vote of 75% of the Board of Directors or 75% of the then-outstanding capital stock;

•advance notice requirements for proposals to be presented at stockholder meetings; and

•the terms of our articles of incorporation regarding business combinations and control share acquisitions.

Cybersecurity risks and cyber incidents could adversely affect our business, disrupt operations and expose us to liabilities to tenants, employees, capital providers and other third parties.

We use information technology and other computer resources to carry out important operational activities and to maintain our business records. As part of our normal business activities, we collect and store certain personal identifying and confidential information relating to our tenants, employees, vendors and suppliers, and maintain operational and financial information related to our business. We have implemented systems and processes intended to address ongoing and evolving cybersecurity risks, secure our information technology, applications and computer systems, and prevent unauthorized access to or loss of sensitive, confidential and personal data. Although we and our service providers employ what we believe are adequate security, disaster recovery and other preventative and corrective measures, our security measures, taken as a whole, may not be sufficient for all possible situations and may be vulnerable to, among other things, hacking, ransomware, employee error, system error, and faulty password management. Additionally, information technology security breaches may go undetected and persist as a latent threat to our security measures.

Our ability to conduct our business may be impaired if our information technology resources, including our websites or e-mail systems, are compromised, degraded, damaged or fail, whether due to a virus or other harmful circumstance, intentional penetration or disruption of our information technology resources by a third party, natural disaster, hardware or software corruption or failure or error or poor product or vendor/developer selection (including a failure of security controls incorporated into or applied to such hardware or software), telecommunications system failure, service provider error or failure, intentional or unintentional personnel actions, or lost connectivity to our networked resources. A significant and extended disruption could damage our reputation and cause us to lose tenants and revenues; result in the unintended and/or unauthorized public disclosure or the misappropriation of proprietary, personal identifying and confidential information; and require us to incur significant expenses to address and remediate or otherwise resolve these kinds of issues. The release of confidential information may also lead to litigation or other proceedings against us by affected individuals, business partners and/or regulators, and the outcome of such proceedings, which could include losses, penalties, fines, injunctions, expenses and charges recorded against our earnings and cause us reputational harm, could have a material and adverse effect on our business and consolidated financial statements. In addition, the costs of maintaining adequate protection against data security threats, based on considerations of their evolution, increasing sophistication, pervasiveness and frequency and/or government-mandated standards or obligations regarding protective efforts, could be material to our consolidated financial statements in a particular period or over various periods.

We may amend or revise our business policies without your approval.

Our Board of Directors may amend or revise our operating policies without stockholder approval. Our investment, financing and borrowing policies and policies with respect to all other activities, such as growth, debt, capitalization and operations, are determined by the Board of Directors or those committees or officers to whom the Board of Directors has delegated that authority. The Board of Directors may amend or revise these policies at any time and from time to time at its discretion. A change in these policies could adversely affect our financial condition and results of operations, and the market price of our securities.

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Item 1B. Unresolved Staff Comments

We have received no written comments from the Securities and Exchange Commission staff regarding our periodic or current reports in the 180 days preceding December 31, ~~2018~~2021 that remain unresolved.

Item 2. Properties

Overview

As of December 31, ~~2018,~~2021, the Company is the owner, developer and operator of a real estate portfolio composed of 5657 operating properties, totaling approximately ~~9.3~~9.8 million square feet of gross leasable area (“GLA”), and four development ~~parcels.~~properties. The properties are located primarily in the Washington, D.C./Baltimore, Maryland metropolitan area. The operating property portfolio is composed of 4950 neighborhood and community Shopping Centers, and seven predominantly Mixed-Use Properties totaling approximately ~~7.8~~7.9 million and ~~1.5~~1.9 million square feet of ~~commercial~~ GLA, respectively. No single property accounted for more than ~~6.5%~~6% of the total gross leasable area. A majority of the Shopping Centers are anchored by several major ~~tenants. Thirty-two of the Shopping Centers~~

~~were anchored by a grocery store~~tenants and offer primarily day-to-day necessities and services. ~~Two retail tenants,~~Thirty-three of the Shopping Centers were anchored by a grocery store. One tenant, Giant Food ~~(4.7%~~(5.3%), a tenant at ~~ten~~11 Shopping Centers, ~~and Capital One Bank (2.7%), a tenant at 17 properties,~~ individually accounted for 2.5% or more of the Company’s total revenue for the year ended December 31, ~~2018.~~

The following table sets forth average annualized base rent per square foot and average annualized effective rent per square foot for the Company's Commercial properties (all properties except for the Clarendon Center and Park Van Ness apartments). For purposes of this table, annualized effective rent is annualized base rent minus amortized tenant improvements and amortized leasing commissions.

Year ended December 31,
2018 2017 2016 2015 2014
Base rent $ 20.13
$ 19.49
$ 18.73
$ 18.52
$ 18.07
Effective rent $ 18.20
$ 17.67
$ 16.95
$ 16.81
$ 16.45

2021.

The Company expects to hold its properties as long-term investments and it has no maximum period for retention of any investment. It plans to selectively acquire additional income-producing properties and to expand, renovate, and improve its properties when circumstances warrant. See “Item 1. Business—Operating Strategies” and “Business—Capital Policies.”

The Shopping Centers

Community and neighborhood shopping centers typically are anchored by one or more grocery stores, discount department stores or drug stores. These anchors offer day-to-day necessities rather than apparel and luxury goods and, therefore, generate consistent local traffic. By contrast, regional malls generally are larger and typically are anchored by one or more full-service department stores.

In general, the Shopping Centers are seasoned community and neighborhood shopping centers located in well established, highly developed, densely populated, middle and upper income areas. The ~~2018~~2021 average estimated population within a one- and three-mile radius of the Shopping Centers is approximately ~~15,100~~15,200 and ~~93,800,~~95,900, respectively. The ~~2018~~2021 average household income within ~~the~~a one- and three-mile radius of the Shopping Centers is approximately ~~$115,900~~$130,300 and ~~$119,500,~~$134,300, respectively, compared to a national average of ~~$83,700.~~$92,400. Because the Shopping Centers generally are located in highly developed areas, management believes that there is little likelihood that significant numbers of competing centers will be developed in the future.

The Shopping Center properties range in size from approximately 19,000 to 573,500 square feet of GLA, with six in excess of 300,000 square feet, and average approximately ~~158,200~~157,500 square feet. A majority of the Shopping Centers are anchored by several major tenants and other tenants offering primarily day-to-day necessities and services. Thirty-two of the Shopping Centers are anchored by a grocery store.

Lease Expirations of Shopping Center Properties

The following table sets forth, by year of expiration, the aggregate amount of base rent and leasable area for leases in place at the Shopping Centers that the Company owned as of December 31, ~~2018,~~2021, for each of the next ten years beginning with ~~2019,~~2022, assuming that none of the tenants exercise renewal options and excluding an aggregate of ~~312,521~~517,815 square feet of unleased space, which represented ~~4.0%~~6.6% of the GLA of the Shopping Centers as of December 31, ~~2018.~~2021.

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Lease Expirations of Shopping Center Properties


Year of Lease Expiration	Leasable Area Represented by Expiring Leases		Percentage of Leasable Area Represented by Expiring Leases		Annual Base Rent Under Expiring Leases (1)		Percentage of Annual Base Rent Under Expiring Leases		Annual Base Rent per Square Foot		Year of Lease Expiration	Leasable Area Represented by Expiring Leases		Percentage of Leasable Area Represented by Expiring Leases		Annual Base Rent Under Expiring Leases (1)		Percentage of Annual Base Rent Under Expiring Leases		Annual Base Rent per Square Foot
2019	907,990	sf	11.7	%	$	16,438,484	12.6	%	$	18.10
2020	999,815		12.9	%	18,665,941		14.3	%	18.67
2021	1,001,163		12.9	%	17,466,971		13.4	%	17.45
2022	1,001,360		12.9	%	18,706,479		14.3	%	18.68		2022	773,498	sf	9.8	%	$	16,195,600	11.9	%	$	20.94
2023	1,106,356		14.3	%	20,043,966		15.3	%	18.12		2023	1,152,254		14.6	%	21,485,431		15.8	%	18.65
2024	578,145		7.5	%	10,552,704		8.1	%	18.25		2024	988,658		12.6	%	20,178,450		14.8	%	20.41
2025	273,995		3.5	%	5,604,990		4.3	%	20.46		2025	1,072,400		13.6	%	20,858,693		15.3	%	19.45
2026	264,720		3.4	%	5,031,965		3.9	%	19.01		2026	857,498		10.9	%	15,856,282		11.7	%	18.49
2027	159,489		2.1	%	4,359,926		3.3	%	27.34		2027	472,108		6.0	%	9,425,826		6.9	%	19.97
2028	466,035		6.0	%	3,402,090		2.6	%	7.30		2028	484,012		6.1	%	4,370,924		3.2	%	9.03
2029											2029	581,265		7.4	%	9,101,401		6.7	%	15.66
2030											2030	71,798		0.9	%	2,487,642		1.8	%	34.65
2031											2031	289,848		3.7	%	5,222,597		3.8	%	18.02
Thereafter	678,682		8.8	%	10,332,432		7.9	%	15.22		Thereafter	612,976		7.8	%	10,946,393		8.1	%	17.86
Total	7,437,750	sf	96.0	%	$	130,605,948	100.0	%	17.56		Total	7,356,315	sf	93.4	%	$	136,129,239	100.0	%	18.51

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Item 6. Selected Financial Data

The selected financial data of the Company contained herein has been derived from the consolidated financial statements of the Company. The data should be read in conjunction with “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Consolidated Financial Statements included elsewhere in this report.None.

SELECTED FINANCIAL DATA
Years Ended December 31,
(In thousands, except per share data) 2018 2017 2016 2015 2014
Operating Data:
Total property revenue $ 227,904
$ 227,205
$ 217,019
$ 209,026
$ 207,017
Total property expenses 56,263
55,592
53,701
51,143
49,513
Property operating income 171,641
171,613
163,318
157,883
157,504
Other revenue 272
80
51
51
75
Total other expenses (109,360 ) (111,095 ) (107,656 ) (105,004 ) (105,650 )
Operating income 62,553
60,598
55,713
52,930
51,929
Non-operating income:
Change in fair value of derivatives (3 ) 70
(6 ) (10 ) (10 )
Gains on sales of properties 509
—
1,013
11
6,069
Net income 63,059
60,668
56,720
52,931
57,988
Income attributable to noncontrolling interests (12,505 ) (12,411 ) (11,441 ) (10,463 ) (11,045 )
Net income attributable to Saul Centers, Inc. 50,554
48,257
45,279
42,468
46,943
Preferred stock redemption (2,328 ) —
—
—
(1,480 )
Preferred dividends (12,262 ) (12,375 ) (12,375 ) (12,375 ) (13,361 )
Net income available to common stockholders $ 35,964
$ 35,882
$ 32,904
$ 30,093
$ 32,102
Per Share Data (diluted):
Net income available to common stockholders $ 1.60
$ 1.63
$ 1.52
$ 1.42
$ 1.54
Basic and Diluted Shares Outstanding:
Weighted average common shares - basic 22,383
21,901
21,505
21,127
20,772
Effect of dilutive options 42
107
110
69
49
Weighted average common shares - diluted 22,425
22,008
21,615
21,196
20,821
Weighted average convertible limited partnership units 7,731
7,503
7,375
7,253
7,156
Weighted average common shares and fully converted limited partnership units - diluted 30,156
29,511
28,990
28,449
27,977
Dividends Paid:
Cash dividends to common stockholders (1) $ 46,306
$ 44,576
$ 39,472
$ 35,645
$ 32,346
Cash dividends per share $ 2.08
$ 2.04
$ 1.84
$ 1.69
$ 1.56
Balance Sheet Data:
Real estate investments (net of accumulated depreciation) $ 1,422,647
$ 1,315,034
$ 1,242,534
$ 1,197,340
$ 1,163,542
Total assets 1,527,489
1,422,452
1,343,025
1,295,408
1,257,113
Total debt, including accrued interest 1,026,932
962,162
903,709
869,652
850,727
Preferred stock 180,000
180,000
180,000
180,000
180,000
Total equity 425,220
393,103
373,249
353,727
339,257

SELECTED FINANCIAL DATA
Years Ended December 31,
(In thousands, except per share data) 2018 2017 2016 2015 2014
Other Data
Cash flow provided by (used in):
Operating activities $ 110,339
$ 103,450
$ 89,090
$ 88,896
$ 86,568
Investing activities $ (128,650 ) $ (113,306 ) $ (86,274 ) $ (69,587 ) $ (83,589 )
Financing activities $ 21,981
$ 12,442
$ (4,497 ) $ (21,434 ) $ (8,148 )
Funds from operations (2):
Net income $ 63,059
$ 60,668
$ 56,720
$ 52,931
$ 57,988
Real property depreciation and amortization 45,861
45,694
44,417
43,270
41,203
Gain on property dispositions and casualty settlements (509 ) —
(1,013 ) (11 ) (6,069 )
Funds from operations 108,411
106,362
100,124
96,190
93,122
Extinguishment of issuance costs upon redemption of preferred shares
(2,328 ) —
—
—
(1,480 )
Preferred dividends (12,262 ) (12,375 ) (12,375 ) (12,375 ) (13,361 )
Funds from operations available to common stockholders and noncontrolling interests $ 93,821
$ 93,987

$ 87,749

$ 83,815
$ 78,281


1)	~~During 2018, 2017, 2016, 2015, and 2014, shareholders reinvested $28.8 million, $15.8 million,~~

~~$10.3 million, $10.6 million and $9.3 million, respectively, in newly issued common stock through the Company’s dividend reinvestment plan.~~


2)	Funds from operations (FFO) is a non-GAAP financial measure and is defined in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Funds From Operations.”

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) begins with the Company’s primary business strategy to give the reader an overview of the goals of the Company’s business. This is followed by a discussion of the critical accounting policies that the Company believes are important to understanding the assumptions and judgments incorporated in the Company’s reported financial results. The next section ~~beginning on page 44,~~ discusses the Company’s results of operations for the past two years. Beginning on page ~~49,~~45, the Company provides an analysis of its liquidity and capital resources, including discussions of its cash flows, debt arrangements, sources of capital and financial commitments. ~~Finally, on~~On page ~~59,~~49, the Company discusses funds from operations, or FFO, which is a non-GAAP financial measure of performance of an equity REIT used by the REIT industry.

The ~~MD&A~~following discussion and analysis should be read in conjunction with the ~~other sections of~~Consolidated Financial Statements and related footnotes included elsewhere in this Annual Report on Form ~~10-K,~~10-K. We make statements in this section that are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this report entitled "Forward-Looking Statements." Certain risks may cause our actual results, performance or achievements to differ materially from those expressed or implied by the following discussion. For a discussion of such risk factors, see "Item 1A. Risk Factors."

Impact of COVID-19

On March 11, 2020, the World Health Organization declared a novel strain of coronavirus ("COVID-19") a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. As a result, the COVID-19 pandemic is negatively affecting almost every industry directly or indirectly.

The actions taken by federal, state and local governments to mitigate the spread of COVID-19 by ordering closure of nonessential businesses and ordering residents to generally stay at home, and subsequent phased re-openings, have resulted in many of our tenants announcing mandated or temporary closures of their operations and/or requesting adjustments to their lease terms. While most of our tenants have re-opened their businesses, there remains significant uncertainty around the long-term economic impact of the COVID-19 pandemic, which could have a material and adverse effect on or cause disruption to our business or financial condition, results from operations, cash flows and the market value and trading price of our securities.

If the effects of COVID-19 result in continued deterioration of economic and market conditions, or if the Company’s expected holding period for assets changes, subsequent tests for impairment could result in impairment charges in the future. The Company can provide no assurance that material impairment charges with respect to the Company’s investment properties will not occur in 2022 or future periods. As of December 31, 2021, we have not identified any impairment triggering events, including the ~~consolidated financial statements~~impact of COVID-19 and ~~notes thereto appearing~~corresponding tenant requests for rent relief. Therefore, under applicable GAAP guidance, no impairment charges have been recorded. However, we have yet to see the long-term effects of COVID-19 and the extent to which it may impact our tenants in ~~Item 8~~the future. Indications of ~~this report. Historical results set forth~~a tenant’s inability to continue as a going concern, changes in ~~Selected Financial Information,~~our view or strategy relative to a tenant’s business or industry as a result of COVID-19, or changes in our long-term hold strategies, could be indicative of an impairment triggering event. Accordingly, the ~~Consolidated Financial Statements~~Company will continue to monitor circumstances and ~~Supplemental Data included~~events in ~~Item 6~~future periods to determine whether impairment charges are warranted.

While the Company’s grocery store, pharmacy, bank and ~~Item 8~~home improvement store tenants generally remained fully open, many restaurants have operated with reduced hours and/or limited indoor seating, supplemented with delivery and ~~this section should~~curbside pick-up, and most health, beauty supply and services, fitness centers, and other non-essential businesses are open with limited or full customer capacity depending on location. As of February 18, 2022, payments by tenants of contractual base rent and operating expense and real estate tax recoveries totaled approximately 99% and 97% for the fourth quarter of 2021 and January 2022, respectively. During 2021, the

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Company generally did not charge late fees or delinquent interest on past due payments and, in many cases, rent deferral agreements have been negotiated to allow tenants temporary relief where needed. The deferral agreements, generally, permit tenants to defer 30 to 90 days of rent, operating expense and real estate tax recovery payments until a later time in their lease term with repayment typically occurring over a 12-month period generally commencing in 2021. We expect that our rent collections will continue to be below our tenants’ contractual rent obligations for so long as governmental orders require non-essential businesses to remain at limited capacity or closed and residents to stay at home. We will continue to accrue rental revenue during the deferral period. However, we anticipate that some tenants eventually will not be ~~taken~~able to pay amounts due and we will incur losses against our rent receivables. The extent and timing of the recognition of such losses will depend on future developments, which are highly uncertain and cannot be predicted. Management considers reserves established as of December 31, 2021, against such potential losses to be reasonable and adequate. Rent collections during the fourth quarter of 2021 and rent relief requests to-date may not be indicative of collections or requests in any future period.

The following is a summary of the Company's executed rent deferral agreements and repayment dates as of February 18, 2022, with the exception of amounts due, which are as of January 31, 2022.


(In thousands)
Original Rent Due By Quarter	Original Rent Amount		Repayment Year	Repayment Amount		Amount Due		Amount Collected		Collection Percentage
	(prior to deferral)			(after deferral)						(based on payments currently due)
2020 First Quarter	$	67	2020	331		$	331	$	331	100	%
2020 Second Quarter	6,282		2021	5,703		5,703		5,531		97	%
2020 Third Quarter	1,487		2022	2,033		219		189		86	%
2020 Fourth Quarter	368		2023	645
2021 First Quarter	249		2024	234
2021 Second Quarter	266		2025	48
2021 Third Quarter	273		2026	19
2021 Fourth Quarter	74		Thereafter	53
January 2022	—
Total	$	9,066	Total	$	9,066	$	6,253	$	6,051	97	%

When taking into account the amount of time elapsed since the due date of the payment, we continue to experience sequential improvement in our collection rates. The following table summarizes the Company's consolidated total collections of the first quarter, second quarter, third quarter, fourth quarter and January 2022 rent billings as of February 18, 2022:


	Retail		Office		Residential		Total
2021 First Quarter	99	%	100	%	99	%	99	%
2021 Second Quarter	99	%	100	%	99	%	99	%
2021 Third Quarter	99	%	100	%	99	%	99	%
2021 Fourth Quarter	98	%	100	%	99	%	99	%
January 2022	97	%	99	%	99	%	97	%

Although the Company is and will continue to be actively engaged in rent collection efforts related to uncollected rent, and the Company will continue to work with certain tenants who have requested rent deferrals, the Company can provide no assurance that such efforts or our efforts in future periods will be successful, particularly in the event that the COVID-19 pandemic and restrictions intended to prevent its spread continue for a prolonged period. The Company strongly encouraged, and continues to encourage, small business tenants to apply for Paycheck Protection Program loans, as available, under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, and all subsequent support programs available from federal, state and local governments. The

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Company has information that many tenants applied for these loans and several tenants have communicated that loan proceeds are being received and have subsequently remitted rental payments.

As of January 31, 2022, the Company had $12.8 million of cash and cash equivalents and borrowing availability of approximately $208.8 million under its unsecured revolving credit facility.

The extent of the effects of COVID-19 on the Company’s business, results of operations, cash flows, and growth prospects is highly uncertain and will ultimately depend on future ~~operations.~~developments, none of which can be predicted with any certainty. See Item 1A. Risk Factors. However, we believe the actions we have taken and are continuing to take will help minimize interruptions to operations and will put the Company in the best position to participate in the recovery when the time comes. Management and the Board of Directors will continue to actively monitor the effects of the COVID-19 pandemic, including governmental directives in the jurisdictions in which we operate and the recommendations of public health authorities, and will, as needed, take further measures to adapt the Company’s business in the best interests of our stockholders and personnel. The extent to which COVID-19 impacts our operations and those of our tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the outbreak, the actions taken to contain the outbreak or mitigate its impact, and the direct and indirect economic effects of the outbreak and containment measures, among others.

In accordance with guidance issued by state and local health authorities and with safety protocols in place as recommended by the Centers for Disease Control and Prevention, on June 1, 2021, the Company began transitioning employees from a remote working environment to working in the office. On November 1, 2021, the Company formally reopened, without occupancy restrictions, its corporate office in Bethesda, Maryland. Due to the most recent COVID-19 variant and the surge in cases, the Company is currently allowing employees the option to work remotely. The Company does not anticipate any adverse impact on its ability to continue to operate its business during the transition back to the office.

Overview

The Company’s principal business activity is the ownership, management and development of income-producing properties. The Company’s long-term objectives are to increase cash flow from operations and to maximize capital appreciation of its real estate investments.

~~The Company’s~~ primary ~~operating~~ strategy is to continue to focus on diversification of its ~~community and neighborhood Shopping Center business and its transit-centric, primarily~~assets through development of transit-oriented, residential mixed-use ~~properties to achieve both cash flow growth and capital appreciation. Management believes there is potential for long term growth in cash flow as existing leases for space~~projects in the Washington, D.C. metropolitan area. The Company’s operating strategy also includes improvement of the operating performance of its assets, internal growth of its Shopping ~~Center~~Centers through the addition of pad sites, and ~~Mixed-Use Properties expire~~supplementing its development pipeline with selective redevelopment and renovations of its core Shopping Centers. The Company has a pipeline of entitled sites in its portfolio, some of which are ~~renewed, or newly available or vacant space is leased.~~ currently shopping center operating properties, for development of up to 3,700 apartment units and 975,000 square feet of retail and office space. All such sites are located adjacent to red line Metro stations in Montgomery County, Maryland.

The Company intends to ~~renegotiate leases where possible~~selectively add free-standing pad site buildings within its Shopping Center portfolio, and ~~seek new tenants for~~

available space in order to optimize the mix of uses to improve foot traffic through the Shopping Centers. As leases expire, management expects to revise rental rates, lease terms and conditions, relocate existing tenants, reconfigure tenant spaces and introduce newreplace underperforming tenants with the goals of increasing occupancy, improving overall retail sales, and ultimately increasing cash flow as economic conditions improve. In those circumstances in which leases are not otherwise expiring, management selectively attempts to increase cash flow through a variety of means, or in connection with renovations or relocations, recapturing leases with below market rents and re-leasing at market rates, as well as replacing financially troubled tenants. When possible, management also will seek to include scheduled increases in base rent, as well as percentage rental provisions, in its leases.

~~The Company’s redevelopment and renovation objective is to selectively and opportunistically redevelop and renovate its properties, by replacing below-market-rent leases with~~tenants that generate strong ~~traffic-generating~~traffic, including anchor stores such as supermarkets and drug stores, as well as other desirable local, regional and national tenants. The Company’s strategy remains focused on continuing the operating performance and internal growth of its existing Shopping Centers, while enhancing this growth with selective acquisitions, redevelopments and renovations.

In 2016, the Company completed development of Park Van Ness, a 271-unit residential project with approximately 9,000 square feet of street-level retail, below street-level structured parking, and amenities including a community room, landscaped courtyards, a fitness room, a wi-fi lounge/business center, and a rooftop pool and deck. The structure comprises 11 levels, five of which on the east side are below street level. Because of the change in grade from the street eastward to Rock Creek Park, apartments on all 11 levels have park or city views. The street level retail space is 100% leased to a grocery/gourmet food market and an upscale Italian restaurant. As of December 31, 2018, 263 apartments (97.0%) were leased. The total cost of the project, excluding predevelopment expense and land, which the Company has owned, was approximately $93.0 million, a portion of which was financed with a $71.6 million construction-to-permanent loan.

In 2014, in separate transactions, the Company purchased three properties, with approximately 57,400 square feet of retail space, for an aggregate $25.2 million. The three properties are adjacent to an existing property on the east side of Rockville Pike near the Twinbrook Metro station. Combined, the four properties total 10.3 acres and are zoned for up to 1.2 million square feet of rentable mixed-use space. The Company is actively engaged in a plan for redevelopment but has not committed to any timetable for commencement of construction.

The Company owns properties on the east and west sides of Rockville Pike near the White Flint Metro station which combined total 7.6 acres which are zoned for a development potential of up to 1.6 million square feet of mixed-use space. The Company is actively engaged in a plan for redevelopment but has not committed to any timetable for commencement of construction.

In January 2016, the Company terminated a 16,500 square foot lease at 11503 Rockville Pike and received a $3.0 million lease termination fee which was recognized as revenue in the first quarter. The space was previously occupied by an office supply store that had vacated in mid 2014 and the lease was scheduled to expire in 2019. The termination fee revenue was partially offset by the loss of approximately $1.1 million in rental revenue over the remainder of 2016. The Company executed leases with two replacement tenants, whose occupancy and rent commencement occurred in 2017. While the Company continues to plan for a mixed-use development at this site and its neighboring Metro Pike Center, the initial phases of this development are expected to be on the west side of Rockville Pike at Metro Pike Center.stores. The Company has ~~not committed to any timetable~~executed leases or leases are under negotiation for ~~commencement of construction.~~

From 2014 through 2016, in separate transactions, the Company purchased four adjacent properties on North Glebe Road in Arlington, Virginia, for an aggregate $54.0 million. The Company is developing approximately 490 residential units and 60,000 square feet of retail space, on 2.8 acres of land. Concrete work is substantially complete and pre-cast facade panels, masonry and windows are being installed. Interior framing, electrical. plumbing and HVAC work have commenced. The development is scheduled for substantial completion in early 2020. The total cost of the project, including acquisition of land, is expected to be approximately $275.0 million, a portion of which is being financed by a $157.0 million construction-to-permanent loan. Leases have been executed for a 41,500 square foot Target and 9,000 square feet of retail shop space, resulting in approximately 84% of the retail space being leased.

Albertson's/Safeway, currently a tenant at seven of the Company's shopping centers (two stores of which are operated by subtenants), closed two Safeway stores located at the Company's properties during the June 2016 quarter. The stores that closed were located in Broadlands Village, Loudoun County, Virginia and Briggs Chaney Plaza, Montgomery County, Maryland. The lease at Briggs Chaney remains in full force and effect and Albertson’s/Safeway has executed a sublease with a replacement grocer, Global Food, for that space, which commenced operations in March 2017. The Company terminated the lease with Albertson's/Safeway at Broadlands and executed a lease with Aldi Food Market for 20,000 square feet of this space, which opened in November 2017, and has executed a lease with LA Fitness for substantially all of the remaining space. The fitness center is projected to open for business during the fourth quarter of 2019. In August 2018, Safeway closed its store at Palm Springs Center in Florida. The lease was purchased by Publix, and the store re-opened in November 2018.ten more pad sites.

In January 2017, the Company purchased for $76.4 million, including acquisition costs, Burtonsville Town Square, a 121,000 square foot shopping center located in Burtonsville, Maryland. Burtonsville Town Square is 100% leased and anchored by Giant Food and CVS Pharmacy. The purchase was funded with a new $40.0 million mortgage loan and through the Company's credit line facility. The Company has substantially completed construction of the shell of a 16,000 square foot small shop expansion and construction of interior improvements is underway. Delivery of the first leased tenant spaces occurred in late 2018, with initial tenant openings scheduled for the first quarter of 2019. The total development cost is expected to be approximately $5.7 million. Leases have been executed for approximately 55% of the space and the Company has prospects for an additional 3,900 square feet. In addition, a leaserecent years, there has been ~~executed with Taco Bell who will construct~~ a ~~free-standing building on a pad site within the property.~~

During the three months ended June 30, 2017, the Company executed a termination agreement with Kmart at Kentlands Square II. Kmart closed its 104,000 square foot store at Kentlands in September 2017, and the Company gained possession on October 31, 2017. As a result of the termination, the mortgage loan agreement requires that Saul Centers guarantee approximately $9.2 million of that loan effective October 31, 2017 (the termination date), which will be reduced upon satisfaction of conditions stated in the loan documents. Annual revenue to the Company under the Kmart lease totaled approximately $1.3 million. In September 2018, the Company executed a lease with At Home for all of the space, which opened for business in January 2019.

In May 2018, the Company acquired from the Saul Trust, in exchange for 176,680 limited partnership units, approximately 13.7 acres of land located at the intersection of Ashburn Village Boulevard and Russell Branch Parkway in Ashburn, Virginia. The Company has received site plan approval and building permits for an approximately 88,000 square foot neighborhood shopping center. A 29,000 square foot anchor grocery store lease has been executed with Lidl and, including an executed gas station pad lease and shop space leases, overall pre-leasing totals approximately 44% of the planned space. In addition, lease negotiations are in progress for approximately 12,000 square feet of the planned pad building and small shop space. Site work commenced in November 2018, the grocer is scheduled to begin construction in the second quarter of 2019, and the shopping center is scheduled to open in early 2020. After construction of the shopping center and upon stabilization, the Company may be obligated to issue additional limited partnership units to the Saul Trust.

In September 2018, the Company purchased for $35.5 million, plus $0.7 million of acquisition costs, an office building and the underlying ground located at 7316 Wisconsin Avenue in Bethesda, Maryland. This site has mixed-use development potential of up to 325 apartment units and approximately 10,000 square feet of street level retail pursuant to the approved Bethesda Downtown Plan. In December 2018, the Company purchased for $4.5 million, including acquisition costs, an interest in an adjacent parcel of land and retail building. The Company is evaluating concept plans for the combined property in order to increase the mixed-use development potential by up to 40 additional apartment units. The purchase price was funded through the Company's credit facility.

In March 2019, the Company plans to commence development of a pad site expansion on land owned at its Lansdowne Town Center property in Ashburn, Virginia. Total development costs are expected to be approximately $4.0 million. A ground lease with Chick-fil-A has been executed for one pad with the building to be constructed by the tenant. A lease with Starbucks has been executed for another pad and the Company will construct the building shell. Both buildings are projected to be completed and occupied by early 2020.

~~In light of the~~ limited amount of quality properties for sale and ~~the escalated~~ pricing of those properties ~~that the Company~~ has ~~been presented with or has inquired about over the past year,~~escalated. Accordingly, management believes acquisition opportunities for investment in existing and new ~~Shopping Center~~shopping center and ~~Mixed-Use Properties~~mixed-use properties in the near future is uncertain. ~~Because~~Nevertheless, because of ~~its~~the Company’s conservative capital structure, including its cash and capacity under its revolving credit facility, management believes that the Company is positioned to take advantage of additional investment opportunities as attractive properties are identified and market conditions improve. (See “Item 1. Business - Capital Policies”.). It is management’s view that several of the sub-markets in which the Company operates have, or are expected to have in the future, attractive supply/demand characteristics. The Company will continue to evaluate acquisition, development and redevelopment as integral parts of its overall business plan.

~~The recent period of economic expansion has now run in excess of five years. While~~Prior to the COVID-19 pandemic, economic conditions within the local Washington, DC metropolitan area ~~have~~had remained relatively ~~stable, issues~~stable. Issues facing the Federal government relating to taxation, spending and interest

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rate policy will likely continue to impact the office, retail and residential real estate markets over the coming years. Because the majority of the Company’s property operating income is produced by our ~~shopping centers,~~Shopping Centers, we continually monitor the implications of government policy changes, as well as shifts in consumer demand between on-line and in-store shopping, on future shopping center construction and retailer store expansion plans. Based on our observations, we continue to adapt our marketing and merchandising strategies in ~~a way~~ways to maximize our future performance. The Company's commercial leasing percentage, on a ~~comparable~~same property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, ~~increased~~decreased to ~~95.7%~~92.0% at December 31, ~~2018,~~2021, from ~~94.3%~~92.5% at December 31, ~~2017.~~2020.

The Company maintains a ratio of total debt to total asset value of under 50%, which allows the Company to obtain additional secured borrowings if necessary. As of December 31, ~~2018,~~2021, amortizing fixed-rate mortgage debt with staggered maturities from ~~2019~~2022 to 2035 represented approximately ~~88.2%~~82.2% of the Company’s notes payable, thus minimizing refinancing risk. The Company’s variable-rate debt consists of ~~$122.0~~$206.0 million outstanding under the credit facility. As of December 31, ~~2018,~~2021, the Company has ~~loan~~ availability of approximately ~~$190.7~~$219.8 million under its ~~$325.0~~$425.0 million unsecured revolving credit ~~facility.~~

~~On January 4, 2019, the Company repaid in full the remaining balance of the mortgage loan secured by Countryside Marketplace, which was scheduled to mature in July 2019.~~

~~On January 10, 2019, the Company closed on a~~ 15~~-year, non-recourse~~ ~~$22.1 million~~ ~~mortgage loan secured by Olde Forte Village. The loan matures in 2034, bears interest at a fixed-rate of~~ ~~4.65%, requires monthly principal and interest payments of~~ ~~$124,700~~ ~~based on a~~ 25~~-year amortization schedule and requires a final payment of~~ ~~$12.1 million. Proceeds were partially used to repay in full the existing mortgage secured by Olde Forte Village, which was scheduled to mature in May 2019.~~

The Operating Partnership entered into a Credit Agreement dated January 26, 2018, by and among the Operating Partnership, as Borrower, Wells Fargo Bank, National Association, as Administrative Agent, Capital One, National Association, as Syndication Agent, Wells Fargo Securities, LLC and Capital One, National Association, as Joint Lead Arrangers, Wells Fargo Securities, LLC, as Sole Bookrunner and Wells Fargo Bank, National Association, Capital One, N.A., U.S. Bank National Association, TD Bank, N.A., Regions Bank and Associated Bank, National Association, as Lenders (the “New Credit Agreement”).

The New Credit Agreement consists of a $400.0 million credit facility, of which $325.0 million is a revolving credit facility and $75.0 million is a term loan. The revolving credit facility matures on January 26, 2022, and may be extended by the Company for one additional year, subject to satisfaction of certain conditions. The term loan matures on January 26, 2023, and may not be extended.

In general, loan availability under the New Facility is primarily determined by operating income from the Company’s existing unencumbered properties. Interest accrues at a rate of LIBOR plus a spread of 135 basis points to 195 basis points under the revolving credit facility, and 130 basis points to 190 basis points under the term loan, each as determined by certain leverage tests. As of December 31, 2018, the applicable spread for borrowings is 135 basis points under the revolving credit facility and 130 basis points under the term loan.

~~The Company and certain subsidiaries of the Operating Partnership and the Company have guaranteed the payment obligations of the Partnership under the new~~ facility.

Although it is management’s present intention to concentrate future acquisition and development activities on ~~community and neighborhood shopping centers and office~~transit-centric, primarily residential mixed-use properties in the Washington, D.C./Baltimore metropolitan area, the Company may, in the future, also acquire other types of real estate in other areas of the country as opportunities present themselves. ~~While the~~The Company ~~may~~plans to continue to diversify in terms of property types, locations, size and market, ~~the Company~~and it does not set any limit on the amount or percentage of ~~Company~~ assets that may be invested in any one property or any one geographic area.

The following table sets forth average annualized base rent per square foot and average annualized effective rent per square foot for the Company's commercial properties (all properties except for the apartments within The Waycroft, Clarendon Center and Park Van Ness properties). For purposes of this table, annualized effective rent is annualized base rent minus amortized tenant improvements and amortized leasing commissions. The $0.66 per square foot increase in base rent in the 2021 Period compared to the 2020 Period is primarily attributable to a rate increase in commercial leases relating to completed development projects.


	Commercial Rents
	Year ended December 31,
	2021		2020		2019
Base rent	$	20.63	$	19.97	$	19.91
Effective rent	$	18.91	$	18.25	$	18.08

Critical Accounting Policies

The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), which requires management to make certain estimates and assumptions that affect the reporting of financial position and results of operations. See Note 2 to the Consolidated Financial Statements in this report. The Company has identified the following policies that, due to estimates and assumptions inherent in those policies, involve a relatively high degree of judgment and complexity.

Real Estate Investments

Real estate investment properties are stated at historic cost less depreciation. Although the Company intends to own its real estate investment properties over a long term, from time to time it will evaluate its market position, market conditions, and other factors and may elect to sell properties that do not conform to the Company’s investment profile. Management believes that the Company’s real estate assets have generally appreciated in value since their acquisition or development and, accordingly, the aggregate current value exceeds their aggregate net book value and also exceeds the value of the Company’s liabilities as reported in the financial statements. Because the financial statements are prepared in conformity with GAAP, they do not report the current value of the Company’s real estate investment properties.

The Company purchases real estate investment properties from time to time and records assets acquired and liabilities assumed, including land, buildings, and intangibles related to in-place leases and customer relationships based on their relative fair values. The fair value

Table of buildings generally is determined as if the buildings were vacant upon acquisition and subsequently leased at market rental rates and considers the present value of all cash flows expected to be generated by the property including an initial lease up period. The Company determines the fair value of above and below market intangibles associated with in-place leases by assessing the net effective rent and remaining term of the in-place lease relative to market terms for similar leases at acquisition taking into consideration the remaining contractual lease period, renewal periods, and the likelihood of the tenant exercising its renewal options. The fair value of a below market lease component is recorded as deferred income and accreted as additional lease revenue over the remaining contractual lease period. If the fair value of the below market lease intangible includes fair value associated with a renewal option, such amounts are not accreted until the renewal option is exercised. If the renewal option is not exercised the value is recognized at that time. The fair value of above market lease intangibles is recorded as a deferred asset and is amortized as a reduction of lease revenue over the remaining contractual lease term. The Company determines the fair value of at-market in-place leases considering the cost of acquiring similar leases, the foregone rents associated with the lease-up period and carrying costs associated with the lease-up period. Intangible assets associated with at-market in-place leases are amortized as additional expense over the remaining contractual lease term. To the extent customer relationship intangibles are present in an acquisition, the fair value of the intangibles are amortized over the life of the customer relationship. From time to time the Company may purchase a property for future development purposes. The property may be improved with an existing structure that would be demolished as part of the development. In such cases, the fair value of the building may be determined based only on existing leases and not include estimated cash flows related to future leases. Acquisition-related transaction costs are either (a) expensed as incurred when related to business combinations or (b) capitalized to land and/or building when related to asset acquisitions.Contents

If there is an event or change in circumstance that indicates a potential impairment in the value of a real estate investment property, the Company prepares an analysis to determine whether the carrying value of the real estate investment property exceeds its estimated fair value. The Company considers both quantitative and

qualitative factors in identifying impairment indicators including recurring operating losses, significant decreases in occupancy, and significant adverse changes in market conditions, legal factors and business climate. If impairment indicators are present, the Company compares the projected cash flows of the property over its remaining useful life, on an undiscounted basis, to the carrying value of that property. The Company assesses its undiscounted projected cash flows based upon estimated capitalization rates, historic operating results and market conditions that may affect the property. If the carrying value is greater than the undiscounted projected cash flows, the Company would recognize an impairment loss equivalent to an amount required to adjust the carrying amount to its then estimated fair value. The fair value of any property is sensitive to the actual results of any of the aforementioned estimated factors, either individually or taken as a whole. Should the actual results differ from management’s projections, the valuation could be negatively or positively affected.

~~When incurred,~~Accounts Receivable, Accrued Income, and Allowance for Doubtful Accounts

Accounts receivable primarily represent amounts currently due from tenants in accordance with the ~~Company capitalizes~~terms of their respective leases. Individual leases are assessed for collectability and, upon the ~~cost~~determination that the collection of ~~improvements that extend~~rents is not probable, accrued rent and accounts receivable are charged off, and the ~~useful life~~charge off 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. We also assess whether operating lease receivables, at the portfolio level, are appropriately valued based upon an analysis of ~~property~~balances outstanding, effects of tenant bankruptcies, historical levels of bad debt and equipment. All repair and maintenance expenditures are expensed when incurred. Leasehold improvements expenditures are capitalized when certain criteria are met, including when we supervise construction and will own the improvement. Tenant improvements we own are depreciated over the lifecurrent economic trends. Additionally, because of the ~~respective lease or~~uncertainties related to the ~~estimated useful life~~impact of the ~~improvements, whichever~~COVID-19 pandemic, our assessment also takes into consideration the types of business conducted by tenants and current discussions with the tenants, as well as recent rent collection experience. Evaluating and estimating uncollectable lease payments and related receivables requires a significant amount of judgment by management and is ~~shorter.~~

~~Interest, real estate taxes, development-related salary costs and other carrying costs are capitalized~~based on ~~projects under construction. Upon substantial completion~~the best information available to management at the time of construction, the assets are placed in service, rental income, direct operating expenses, and depreciation associated with such properties are included in current operations. Commercial development projects are substantially complete and available for occupancy upon completion of tenant improvements, but no later than one yearevaluation. Actual results could differ from the cessation of major construction activity. Residential development projects are considered substantially complete and available for occupancy upon receipt of the certificate of occupancy from the appropriate licensing authority. Substantially completed portions of a project are accounted for as separate projects. 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.these estimates.

Legal Contingencies

The Company is subject to various legal proceedings and claims that arise in the ordinary course of business, which are generally covered by insurance. While the resolution of these matters cannot be predicted with certainty, the Company believes the final outcome of current matters will not have a material adverse effect on its financial position or the results of operations. Upon determination that a loss is probable to occur, the estimated amount of the loss is recorded in the financial statements. Both the amount of the loss and the point at which its occurrence is considered probable can be difficult to determine.

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Results of Operations

The following is a discussion of the components of revenue and expense for the entire Company. This section generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020. Discussions of 2019 items and year-to-year comparisons between 2020 and 2019 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed on February 25, 2021.


Revenue	Revenue										Revenue
(Dollars in thousands)	Year ended December 31,						Percentage Change				(Dollars in thousands)	Year ended December 31,						Percentage Change
	2018		2017		2016		2018 from 2017		2017 from 2016			2021		2020		2019		2021 from 2020		2020 from 2019
Base rent	$	184,684	$	181,141	$	172,381	2.0	%	5.1	%	Base rent	$	197,930	$	188,636	$	185,724	4.9	%	1.6	%
Expense recoveries	35,537		35,347		34,269		0.5	%	3.1	%	Expense recoveries	34,500		34,678		36,521		(0.5)	%	(5.0)	%
Percentage rent	994		1,458		1,379		(31.8	)%	5.7	%	Percentage rent	1,504		927		910		62.2	%	1.9	%
Other property revenue	6,689		9,259		8,990		(27.8	)%	3.0	%	Other property revenue	1,393		1,252		1,423		11.3	%	(12.0)	%
Credit losses on operating lease receivables											Credit losses on operating lease receivables	(812)		(5,212)		(1,226)		(84.4)	%	325.1	%
Rental revenue											Rental revenue	234,515		220,281		223,352		6.5	%	(1.4)	%
Other revenue	272		80		51		240.0	%	56.9	%	Other revenue	4,710		4,926		8,173		(4.4)	%	(39.7)	%
Total revenue	$	228,176	$	227,285	$	217,070	0.4	%	4.7	%	Total revenue	$	239,225	$	225,207	$	231,525	6.2	%	(2.7)	%

Table of ~~a retail pad site adjacent to the Company's existing Thruway Shopping Center.~~Contents

~~Gain on Sales of Properties~~

Gain on sale of property in 2018 resulted from the recognition of the gain deferred in connection with the September 2017 sale of Great Eastern. Gain on sale of property in 2016 resulted from the December 2016 sale of Crosstown Business Center.

Same property revenue and same property operating income

Same property revenue and same property operating income are non-GAAP financial measures of performance and improve the comparability of these measures by excluding the results of properties which were not in operation for the entirety of the comparable reporting periods.

We define same property revenue as ~~property~~total revenue minus the revenue of properties not in operation for the entirety of the comparable reporting periods, and we define same property 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, and (d) change in fair value of derivatives, minus (e) gains on sale of property and (f) the operating income ~~minus the results~~ of properties which were not in operation for the entirety of the comparable periods.

Other REITs may use different methodologies for calculating same property revenue and same property operating income. Accordingly, our same property revenue and same property operating income may not be comparable to those of other REITs.

Same property revenue and same property operating income are used by management to evaluate and compare the operating performance of our properties, and to determine trends in earnings, because these measures are not affected by the cost of our funding, the impact of depreciation and amortization expenses, gains or losses from the acquisition and sale of operating real estate assets, general and administrative expenses or other gains and losses that relate to ownership of our properties. We believe the exclusion of these items from revenue and operating income is useful because the resulting measures capture the actual revenue generated and actual expenses incurred by operating our properties.

Same property revenue and same property operating income are measures of the operating performance of our properties but do not measure our performance as a whole. Such measures are therefore not substitutes for total revenue, net income or operating income as computed in accordance with GAAP.

The tables below provide reconciliations of property revenue and property operating income under GAAP to same property revenue and same property operating income for the indicated periods. The same property results include 4850 Shopping Centers and six Mixed-Use properties for each period.

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Same property revenue


(in thousands)	Year ended December 31,
	2021		2020
Total revenue	$	239,225	$	225,207
Less: Acquisitions, dispositions and development properties	(15,596)		(4,790)
Total same property revenue	$	223,629	$	220,417

Shopping centers	$	169,681	$	161,854
Mixed-Use properties	53,948		58,563
Total same property revenue	$	223,629	$	220,417

Total Shopping Center revenue	$	169,681	$	161,854
Less: Shopping Center acquisitions, dispositions and development properties	—		—
Total same Shopping Center revenue	$	169,681	$	161,854

Total Mixed-Use property revenue	$	69,544	$	63,353
Less: Mixed-Use acquisitions, dispositions and development properties	(15,596)		(4,790)
Total same Mixed-Use revenue	$	53,948	$	58,563

(in thousands) Year ended December 31,
2018 2017
Total property revenue $ 227,904
$ 227,205
Less: Acquisitions, dispositions and development properties (5,839 ) (5,460 )
Total same property revenue $ 222,065
$ 221,745

Shopping centers $ 159,806
$ 160,393
Mixed-Use properties 62,259
61,352
Total same property revenue $ 222,065
$ 221,745

Total Shopping Center revenue $ 164,671
$ 165,853
Less: Shopping Center acquisitions, dispositions and development properties (4,865 ) (5,460 )
Total same Shopping Center revenue $ 159,806
$ 160,393

Total Mixed-Use property revenue $ 63,233
$ 61,352
Less: Mixed-Use acquisitions, dispositions and development properties (974 ) —
Total same Mixed-Use revenue $ 62,259
$ 61,352

The ~~$0.3~~$3.2 million increase in same property revenue ~~for 2018~~in 2021 compared to ~~2017~~2020 was ~~primarily~~ due to (a) ~~a $0.48 per square foot increase in~~lower credit losses on operating lease receivables and corresponding reserves (collectively, $6.3 million) and (b) higher base rent at Ashbrook Marketplace ($~~4.0~~1.1 million), ~~exclusive~~partially offset by (c) lower base rent in the Mixed-Used portfolio ($4.3 million).

Table of ~~the net impact of 2017~~Contents

Same property operating income


	Year Ended December 31,
(In thousands)	2021		2020












Net income	$	61,649	$	50,316
Add: Interest expense, net and amortization of deferred debt costs	45,424		46,519
Add: Depreciation and amortization of deferred leasing costs	50,272		51,126
Add: General and administrative	20,252		19,107

Less: Gain on sale of property	—		(278)
Property operating income	177,597		166,790
Less: Acquisitions, dispositions and development properties	(9,312)		(1,271)
Total same property operating income	$	168,285	$	165,519

Shopping Centers	$	133,897	$	126,656
Mixed-Use properties	34,388		38,863
Total same property operating income	$	168,285	$	165,519

Shopping Center operating income	$	133,897	$	126,656
Less: Shopping Center acquisitions, dispositions and development properties	—		—
Total same Shopping Center operating income	$	133,897	$	126,656

Mixed-Use property operating income	$	43,700	$	40,134
Less: Mixed-Use acquisitions, dispositions and development properties	(9,312)		(1,271)
Total same Mixed-Use property operating income	$	34,388	$	38,863

Same property operating income increased $2.8 million in 2021 compared to 2020 due primarily to

(a) lower credit losses on operating lease ~~terminations at Broadlands~~receivables and ~~Kentlands Square II,~~corresponding reserves (collectively, $6.3 million), (b) higher ~~other property revenue~~base rent at Ashbrook Marketplace ($~~0.6~~1.1 million), ~~exclusive of the termination fee at Broadlands~~ and (c) ~~increased expense recovery income~~higher percentage rent ($~~0.3~~0.6 million), partially offset by (d) lower base rent in the ~~net impact of 2017 lease terminations at Broadlands and Kentlands Square II~~Mixed-Used portfolio ($~~3.5~~4.3 million), and (e) ~~a 67,786 square foot decrease in leased space ($1.3 million), exclusive of the net impact of 2017 lease terminations at Broadlands and Kentlands Square II.~~

~~Same property operating income~~

Year Ended December 31,
(In thousands) 2018 2017
Property operating income $ 171,641
$ 171,613
Less: Acquisitions, dispositions and development properties (4,787 ) (4,083 )
Total same property operating income $ 166,854
$ 167,530

Shopping Centers $ 125,641
$ 127,095
Mixed-Use properties 41,213
40,435
Total same property operating income $ 166,854
$ 167,530

Shopping Center operating income $ 129,701
$ 131,178
Less: Shopping Center acquisitions, dispositions and development properties (4,060 ) (4,083 )
Total same Shopping Center operating income $ 125,641
$ 127,095

Mixed-Use property operating income $ 41,940
$ 40,435
Less: Mixed-Use acquisitions, dispositions and development properties (727 ) —
Total same Mixed-Use property operating income $ 41,213
$ 40,435

~~Same property operating income decreased $0.7 million for 2018 compared to 2017 due primarily to~~

~~(a) the net impact of 2017 lease terminations at Broadlands and Kentlands Square II ($3.5 million), (b) a 67,786 square foot decrease in leased space ($1.3 million), (c)~~ lower ~~percentage rent ($0.5 million) and (d) higher commercial property operating expenses net of~~ expense recoveries, ~~($0.5 million), partially offset by (e) a $0.48 per square foot increase in base rent ($4.0 million), exclusive of the~~ net ~~impact of 2017 lease terminations at Broadlands and Kentlands Square II, (f) higher residential operating income~~ ($~~0.8~~0.9 million) ~~and (g) higher other property revenue ($0.6 million), exclusive of the termination fee at Broadlands.~~.

Impact of Inflation

~~Inflation has remained relatively low during 2018 and 2017.~~ The impact of rising operating expenses due to inflation on the operating performance of the Company’s portfolio ~~would have been~~is partially mitigated by terms in substantially all of the Company’s leases, which contain provisions designed to increase revenues to offset the adverse impact of inflation on the Company’s results of operations. These provisions include upward periodic adjustments in base rent due from tenants, usually based on a stipulated increase, and, to a lesser extent, on ~~a factor of~~ the change in the consumer price index, commonly referred to as the CPI.

In addition, substantially all of the Company’s properties are leased to tenants under long-term leases, which provide for reimbursement of operating expenses by tenants. These leases tend to reduce the Company’s exposure to rising property expenses due to inflation. Inflation and increased costs may have an adverse impact on the Company’s tenants if increases in their operating expenses exceed increases in their revenue.

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Liquidity and Capital Resources

Cash and cash equivalents were $14.6 million and ~~$10.9~~$26.9 million at December 31, ~~2018~~2021 and ~~2017,~~2020, respectively. The changes in cash and cash equivalents during the years ended December 31, ~~2018~~2021 and ~~2017~~2020 were attributable to operating, investing and financing activities, as described below.


(in thousands)	Year Ended December 31,
	2021		2020
Net cash provided by operating activities	$	118,381	$	78,383
Net cash used in investing activities	(55,872)		(56,168)
Net cash used in financing activities	(74,771)		(9,264)
Increase (decrease) in cash and cash equivalents	$	(12,262)	$	12,951

(in thousands) Year Ended December 31,
2018 2017
Net cash provided by operating activities $ 110,339
$ 103,450
Net cash used in investing activities (128,650 ) (113,306 )
Net cash provided by financing activities 21,981
12,442
Increase in cash and cash equivalents $ 3,670
$ 2,586

Operating Activities

Net cash provided by operating activities ~~increased $6.8 million to $110.3 million for the year ended December 31, 2018 compared to $103.5 million for the year ended December 31, 2017. Net cash provided by operating activities~~ represents ~~in each year,~~ cash received primarily from rental ~~income,~~revenue, plus other ~~income,~~revenue, less property operating expenses, leasing costs, normal recurring general and administrative expenses and interest payments on ~~debt outstanding.~~outstanding debt.

Investing Activities

Net cash used in investing activities ~~increased $15.4 million to $128.7 million for the year ended December 31, 2018 from $113.3 million for the year ended December 31, 2017. Investing activities in 2018 primarily reflect~~includes property acquisitions, developments, redevelopments, tenant improvements and other property capital ~~expenditures ($12.9 million), the Company's development activities ($76.3 million) and the acquisition of various retail real estate assets ($40.8 million). Net~~expenditures. The $0.3 million decrease in cash used in investing activities ~~increased $27.0 million~~is primarily due to ~~$113.3 million~~ ~~for the year ended December 31, 2017 from~~ ~~$86.3 million~~ ~~for the year ended December 31, 2016. Investing activities in 2017 primarily reflect~~ (a) ~~tenant improvements and capital~~lower development expenditures ($~~17.7 million), (b) the Company's development activities ($22.8~~8.8 million) and ~~(c) the acquisition of various retail~~(b) lower additions to real estate ~~assets~~investments throughout the portfolio ($~~79.5~~0.8 million), partially offset by (c) higher acquisitions of real estate investments ($9.0 million).

Financing Activities

Net cash provided by (used in) financing activities ~~was $22.0 million and $12.4 million for the years ended December 31, 2018 and 2017, respectively. Net~~represents (a) cash ~~used in financing activities in 2018 primarily reflects:~~

~~proceeds of $54.9 million from mortgage notes payable;~~

~~proceeds of $75.0 million from the term loan facility;~~

~~net proceeds of $72.4 million from the issuance of Series D preferred stock;~~

~~proceeds of $102.0 million~~ received from ~~revolving credit facility draws;~~

loan proceeds ~~of $5.4 million from the issuance of limited partnership units in the Operating Partnership under the dividend reinvestment program;~~

~~proceeds of $30.5 million from the~~and issuance of common stock, ~~under the dividend reinvestment program, directors deferred plan and from the exercise of stock options; and~~

~~proceeds of $23.3 million received from construction loan draws.~~

~~which was partially offset by:~~

~~the partial redemption of Series C~~ preferred stock ~~totaling $75.0 million;~~

~~the repayment of mortgage notes payable totaling $72.6 million;~~

~~the repayment of amounts borrowed under the revolving credit facility totaling $116.0 million;~~

~~distributions~~and limited partnership units minus (b) cash used to ~~common stockholders totaling $46.3 million;~~

repay and curtail loans, redeem preferred stock and pay dividends and distributions to holders of ~~convertible~~common stock, preferred stock and limited partnership ~~units in~~units. See note 5 to the ~~Operating Partnership totaling $16.0 million;~~

~~distributions made to preferred stockholders totaling $12.4 million; and~~

~~payments~~Consolidated Financial Statements for a discussion of ~~$3.2 million for~~ financing ~~costs of mortgage notes payable;~~

~~Net cash provided by financing activities for the year ended December 31, 2017 primarily reflects:~~

~~proceeds of $100.0 million from mortgage notes payable;~~

~~proceeds of $63.0 million received from revolving credit facility;~~

~~proceeds of $6.7 million from the issuance of limited partnership units in the Operating Partnership under the dividend reinvestment program;~~

~~proceeds of $22.8 million received from the issuance of common stock under the dividend reinvestment program and from the exercise of stock options; and~~

~~proceeds of $1.4 million from construction loan draws.~~

~~which was partially offset by:~~

~~repayments of $51.0 million on the revolving credit facility;~~

~~the repayment of mortgage notes payable totaling $55.7 million;~~

~~distributions to common stockholders totaling $44.6 million;~~

~~distributions to holders of convertible limited partnership units in the Operating Partnership totaling~~ ~~$15.3 million~~;

~~distributions made to preferred stockholders totaling $12.4 million; and~~

~~payments of $2.6 million for financing costs of new mortgage loans;~~activity.

Liquidity Requirements

Short-term liquidity requirements consist primarily of normal recurring operating expenses and capital expenditures, debt service requirements (including debt service relating to additional and replacement debt), distributions to common and preferred stockholders, distributions to unit holders and amounts required for expansion and renovation of the Current Portfolio Properties and selective acquisition and development of additional properties. In order to qualify as a REIT for federal income tax purposes, the Company must distribute to its stockholders at least 90% of its “real estate investment trust taxable income,” as defined in the Code. The Company expects to meet these short-term liquidity requirements (other than amounts required for additional property acquisitions and developments) through cash provided from operations, available cash and its existing line of credit.

Long-term liquidity requirements consist primarily of obligations under our long-term debt and dividends paid to our preferred shareholders. ~~We anticipate~~The Company anticipates that long-term liquidity requirements will also include amounts required for property acquisitions and developments. The Company is currently developing Phase I of Twinbrook Quarter, a ~~primarily~~project that includes an 80,000 square foot Wegmans, and approximately 25,000 square feet of small shop space, and 450 apartments, which are currently under construction. Located in Rockville, Maryland, Phase I also includes a planned 230,000 square foot office building that is not under construction at this time. In November 2021, the Company closed on a $145.0 million construction-to-permanent loan, the proceeds of which will be used to partially finance the residential ~~project~~and retail portions of Phase I. The Company has completed development plans for Hampden House, for the development of up to 366 apartment units and 10,100 square feet of

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retail space, and is in the process of demolishing the existing structure to prepare the site for future development. On February 23, 2022, the Company closed on a $133.0 million construction-to-permanent loan, the proceeds of which will be used to partially finance the project. Demolition began in the fourth quarter of 2021 to prepare the site for future development. The Company has entered into a contract with ~~street-level retail at 750 N. Glebe Road in Arlington, Virginia. The total cost of the project, including acquisition of land,~~a general contractor and construction is expected to be ~~approximately $275.0 million. The Company had invested $162.2 million as of December 31, 2018, and expects to invest approximately $73.4 million~~completed during ~~2019. The 2019 cost and the remaining cost will be funded by a $157.0 million construction-to-permanent loan.~~2025. The Company may also redevelop certain of the Current Portfolio Properties and may develop additional freestanding outparcels or expansions within certain of the Shopping Centers.

Acquisition and development of properties are undertaken only after careful analysis and review, and management’s determination that such properties are expected to provide long-term earnings and cash flow growth. During the coming year, developments, expansions or acquisitions (if any) are expected to be funded with available cash, bank borrowings from the Company’s credit line, construction and permanent financing, proceeds from the operation of the Company’s dividend reinvestment plan or other external debt or equity capital resources available to the Company. Any future borrowings may be at the Saul Centers, Operating Partnership or Subsidiary Partnership level, and securities offerings may include (subject to certain limitations) the issuance of additional limited partnership interests in the Operating Partnership which can be converted into shares of Saul Centers common stock. The availability and terms of any such financing will depend upon market and other conditions.

Management believes that the Company’s capital resources, which at December 31, 2021 included cash balances of approximately $14.6 million and borrowing availability of approximately $219.8 million under its unsecured revolving credit facility, provide sufficient liquidity and flexibility to meet the needs of the Company's operations as the effects of the COVID-19 pandemic continue to evolve.

Contractual Payment Obligations

As of December 31, ~~2018,~~2021, the Company had unfunded contractual payment obligations of approximately ~~$209.7~~$193.8 million, excluding operating obligations, due within the next 12 months. The table below shows the total contractual payment obligations as of December 31, ~~2018.~~2021.


	Payments Due By Period
(Dollars in thousands)	One Year or Less		More Than One Year		Total
Notes Payable:
Interest	$	45,138	$	279,299	$	324,437
Scheduled Principal	31,033		206,377		237,410
Balloon Payments	36,502		881,116		917,618
Subtotal	112,673		1,366,792		1,479,465

Corporate Headquarters Lease (1)	146		—		146
Development and Predevelopment Obligations	66,735		159,728		226,463
Tenant Improvements	14,236		2,842		17,078
Total Contractual Obligations	$	193,790	$	1,529,362	$	1,723,152

Payments Due By Period
(Dollars in thousands)
One Year or
Less
More Than 1 and up to 3 Years More Than 3 and up to 5 Years
After 5
Years
Total
Notes Payable:
Interest $ 45,632
$ 78,901
$ 67,200
$ 131,888
$ 323,621
Scheduled Principal 2,257
55,857
57,125
136,122
251,361
Balloon Payments 60,794
72,175
167,727
480,132
780,828
Subtotal 108,683
206,933
292,052
748,142
1,355,810
Corporate Headquarters Lease (1) 787
1,646
140
—
2,573
Development Obligations 80,908
13,449
—
—
94,357
Tenant Improvements 19,352
931
—
—
20,283
Total Contractual Obligations $ 209,730
$ 222,959
$ 292,192
$ 748,142
$ 1,473,023


~~(1)~~	(1)See Note 7 to Consolidated Financial Statements. Corporate Headquarters Lease amounts represent an allocation to the Company based upon employees’ time dedicated to ~~the Company’s business as specified in the Shared Services Agreement. Future amounts are subject to change as the number of employees employed by each of the parties to the lease fluctuates.~~

~~Management believes that~~ the Company’s ~~cash flow from operations and its capital resources, which at December 31, 2018, included cash balances~~business as specified in the Shared Services Agreement. Future amounts are subject to change as the number of ~~$14.6 million and borrowing availability of approximately $190.7 million under its revolving credit facility, will be sufficient to meet its contractual obligations for the foreseeable future.~~

~~Preferred Stock Issues~~

~~On January 23, 2018, Saul Centers sold, in an underwritten public offering, 3.0 million depositary shares,~~employees employed by each representing 1/100th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock, providing net cash proceeds of approximately $72.6 million. 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 accumulated 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 preferred stock has no stated maturity, is not subject~~parties to ~~any sinking fund or mandatory redemption and is not convertible into any other securities~~the lease fluctuates.

Table 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. On February 22, 2018, the proceeds from the offering, together with cash on hand, were used to redeem 3.0 million depositary shares, each representing 1/100th of a share of the Company’s 6.875% Series C Cumulative Redeemable Preferred Stock.Contents

At December 31, 2018, the Company had outstanding, 4.2 million depositary shares, each representing 1/100th of a share of 6.875% Series C Cumulative Redeemable Preferred Stock ("Series C Stock"). The depositary shares are redeemable at the Company’s option, in whole or in part, at the $25.00 liquidation preference plus accrued but unpaid dividends. The depositary shares pay an annual dividend of $1.71875 per share, equivalent to 6.875% of the $25.00 liquidation preference. The Series C 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 of 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.~~

Dividend Reinvestments

In December 1995, the Company established a Dividend Reinvestment Plan (the “Plan”) to allow its common stockholders and holders of limited partnership interests an opportunity to buy additional shares of common stock by reinvesting all or a portion of their dividends or distributions. The Plan provides for investing in newly issued shares of common stock at a 3% discount from market price without payment of any brokerage commissions, service charges or other expenses. All expenses of the Plan are paid by the Company. The Company issued ~~566,435~~287,239 and ~~258,759~~220,863 shares under the Plan at a weighted average discounted price of ~~$50.31~~$39.17 and ~~$59.20~~$33.94 per share during the years ended December 31, ~~2018~~2021 and ~~2017,~~2020, respectively. The Company issued ~~107,433~~61,009 and ~~111,351~~51,579 limited partnership units under the Plan at a weighted average price of ~~$50.56~~$39.74 and ~~$60.48~~$32.99 per unit during the years ended December 31, ~~2018~~2021 and ~~2017,~~2020, respectively. The Company also credited ~~6,493~~6,376 and ~~7,252~~7,635 shares to directors pursuant to the reinvestment of dividends specified by the Directors’ Deferred Compensation Plan at a weighted average discounted price of ~~$50.28~~$39.31 and ~~$59.70~~$31.18 per share, during the years ended December 31, ~~2018~~2021 and ~~2017,~~2020, respectively.

Capital Strategy and Financing Activity

As a general policy, the Company intends to maintain a ratio of its total debt to total asset value of 50% or less and to actively manage the Company’s leverage and debt expense on an ongoing basis in order to maintain prudent coverage of fixed charges. Asset value is the aggregate fair market value of the Current Portfolio Properties and any subsequently acquired properties as reasonably determined by management by reference to the properties’ aggregate cash flow. Given the Company’s current debt level, it is management’s belief that the ratio of the Company’s debt to total asset value was below 50% as of December 31, ~~2018.~~2021.

The organizational documents of the Company do not limit the absolute amount or percentage of indebtedness that it may incur. The Board of Directors may, from time to time, reevaluate the Company’s debt capitalization policy in light of current economic conditions, relative costs of capital, market values of the Company property portfolio, opportunities for acquisition, development or expansion, and such other factors as the Board of Directors then deems relevant. The Board of Directors may modify the Company’s debt capitalization policy based on such a reevaluation without shareholder approval and ~~consequently,~~ may increase or decrease the Company’s debt to total asset ratio above or below 50% or may waive the policy for certain periods of time. The Company ~~selectively~~ continues to refinance or renegotiate the terms of its outstanding debt in order to ~~achieve longer~~extend maturities and obtain generally more favorable loan terms, whenever management determines the financing environment is favorable.

The Company's financing activity is described within note 5 to the Consolidated Financial Statements. The following is a summary of notes payable as of December 31, ~~2018~~2021 and ~~2017.~~

2020.

Table of Contents


Notes Payable	Year Ended December 31,					Interest		Scheduled	Notes Payable	Year Ended December 31,		Interest		Scheduled
(Dollars in thousands)	2018			2017		Rate*		Maturity*	(Dollars in thousands)	2021		2020				Rate*	Maturity*
Fixed rate mortgages:	$	—	(a)	$	30,201	5.88	%	Jan-2019	Fixed rate mortgages:
	9,159		(b)	9,783		5.76	%	May-2019
	12,676		(c)	13,529		5.62	%	Jul-2019
	12,714		(d)	13,543		5.79	%	Sep-2019
	11,295		(e)	12,029		5.22	%	Jan-2020
	9,601		(f)	9,948		5.60	%	May-2020
	7,766		(g)	8,244		5.30	%	Jun-2020
	36,711		(h)	37,998		5.83	%	Jul-2020
	6,943		(i)	7,325		5.81	%	Feb-2021
	5,480		(j)	5,649		6.01	%	Aug-2021
	31,723		(k)	32,673		5.62	%	Jun-2022
	9,728		(l)	9,999		6.08	%	Sep-2022
	10,609		(m)	10,877		6.43	%	Apr-2023
	11,702		(n)	12,577		6.28	%	Feb-2024
	14,952		(o)	15,452		7.35	%	Jun-2024
	13,013		(p)	13,438		7.60	%	Jun-2024
	23,198		(q)	23,873		7.02	%	Jul-2024
	27,222		(r)	28,115		7.45	%	Jul-2024
	27,168		(s)	28,025		7.30	%	Jan-2025
	14,086		(t)	14,537		6.18	%	Jan-2026
	102,310		(u)	105,817		5.31	%	Apr-2026
	30,888		(v)	32,016		4.30	%	Oct-2026
	35,258		(w)	36,507		4.53	%	Nov-2026
	16,515		(x)	17,086		4.70	%	Dec-2026
	62,630		(y)	64,472		5.84	%	May-2027
	15,345		(z)	15,859		4.04	%	Apr-2028
	38,120		(aa)	39,968		3.51	%	Jun-2028
	15,547		(bb)	16,055		3.99	%	Sep-2028
	27,060		(cc)	27,884		3.69	%	Mar-2030
	14,526		(dd)	14,950		3.99	%	Apr-2030
	38,076		(ee)	39,140		3.39	%	Feb-2032
	69,691		(ff)	71,211		4.88	%	Sep-2032
	58,523		(gg)	60,000		3.75	%	Dec-2032
	31,941		(hh)	—		4.41	%	Nov-2033
	22,900		(ii)	—		4.69	%	Jan-2034
	11,781		(jj)	11,613		8.00	%	Apr-2034
	23,332		(kk)	—		4.67	%	Sep-2035
Jamestown Place									Jamestown Place	$	—	$	6,110	5.81	%		Feb-2021
Hunt Club Corners									Hunt Club Corners	—		5,109		6.01	%		Aug-2021
Lansdowne Town Center									Lansdowne Town Center	28,533		29,657		5.62	%		Jun-2022
Orchard Park									Orchard Park	8,812		9,136		6.08	%		Sep-2022
BJ's Wholesale Club									BJ's Wholesale Club	9,692		10,018		6.43	%		Apr-2023
Great Falls Center									Great Falls Center	8,651		9,788		6.61	%		Feb-2024
Leesburg Pike Center									Leesburg Pike Center	13,213		13,836		7.35	%		Jun-2024
Village Center									Village Center	11,528		12,061		7.60	%		Jun-2024
White Oak									White Oak	20,874		21,704		6.89	%		Jul-2024
Avenel Business Park									Avenel Business Park	24,108		25,224		7.45	%		Jul-2024
Ashburn Village									Ashburn Village	24,186		25,253		7.30	%		Jan-2025
Ravenwood									Ravenwood	12,553		13,095		6.18	%		Jan-2026
Clarendon Center									Clarendon Center	90,600		94,712		5.31	%		Apr-2026
Severna Park Marketplace									Severna Park Marketplace	27,197		28,480		4.30	%		Oct-2026
Kentlands Square II									Kentlands Square II	31,155		32,585		4.53	%		Nov-2026
Cranberry Square									Cranberry Square	14,634		15,290		4.70	%		Dec-2026
Seven Corners									Seven Corners	56,413		58,607		5.84	%		May-2027
Hampshire-Langley									Hampshire-Langley	12,868		13,480		4.04	%		Apr-2028
Beacon Center									Beacon Center	32,170		34,223		3.51	%		Jun-2028
Seabreeze Plaza									Seabreeze Plaza	13,897		14,469		3.99	%		Sep-2028
Shops at Fairfax / Boulevard									Shops at Fairfax / Boulevard	24,398		25,318		3.69	%		Mar-2030
Northrock									Northrock	13,108		13,626		3.99	%		Apr-2030
Burtonsville Town Square									Burtonsville Town Square	34,558		35,836		3.39	%		Feb-2032
Park Van Ness									Park Van Ness	64,661		66,420		4.88	%		Sep-2032
Washington Square									Washington Square	53,745		55,398		3.75	%		Dec-2032
Broadlands Village									Broadlands Village	29,613		30,467		4.41	%		Nov-2033
The Glen									The Glen	21,393		21,933		4.69	%		Jan-2034
Olde Forte Village									Olde Forte Village	20,682		21,204		4.65	%		Feb-2034
Olney									Olney	12,299		12,125		8.00	%		Apr-2034
Shops at Monocacy									Shops at Monocacy	27,143		27,836		4.14	%		Dec-2034
Ashbrook Marketplace									Ashbrook Marketplace	21,329		21,922		3.80	%		Aug-2035
Kentlands									Kentlands	28,899		29,746		3.43	%		Aug-2035
The Waycroft									The Waycroft	156,116		146,083		4.67	%		Sep-2035
Total fixed rate	910,189			890,393		5.18	%	8.5 Years	Total fixed rate	949,028		980,751		4.93	%		8.30 years
Variable rate loans:									Variable rate loans:
	47,000		(ll)	61,000		LIBOR + 1.35	%	Jan-2022
	75,000		(mm)	—		LIBOR + 1.30	%	Jan-2023
	—		(nn)	14,135		LIBOR + 1.65	%	Feb-2018
Revolving credit facility									Revolving credit facility	106,000		104,500		LIBOR + 1.35	%		Aug-2025
Term loan facility									Term loan facility	100,000		75,000		LIBOR + 1.30	%		Feb-2027
Total variable rate	122,000			75,135		3.84	%	3.7 Years	Total variable rate	206,000		179,500		1.43	%		4.39 years
Total notes payable	$	1,032,189		$	965,528	5.02	%	8.0 Years	Total notes payable	$	1,155,028	$	1,160,251	4.30	%		7.60 years


*	* Interest rate and scheduled maturity data presented ~~as of December 31, 2018. Totals computed using weighted averages.~~


~~(a)~~	The loan was collateralized by three shopping centers, Broadlands Village, The Glen and Kentlands Square I, and required equal monthly principal and interest payments of $306,000 based upon a 25-year amortization schedule and a final payment of $28.4 million at loan maturity. The loan was repaid in full in 2018 and replaced with two new loans. See (hh) and (ii) below.


~~(b)~~	The loan is collateralized by Olde Forte Village and requires equal monthly principal and interest payments of $98,000 based upon a 25-year amortization schedule and a final payment of $9.0 million at loan maturity. Principal of $624,100 was amortized during 2018.


~~(c)~~	The loan is collateralized by Countryside and requires equal monthly principal and interest payments of $133,000 based upon a 25-year amortization schedule and a final payment of $12.3 million at loan maturity. Principal of $853,100 was amortized during 2018.


~~(d)~~	The loan is collateralized by Briggs Chaney MarketPlace and requires equal monthly principal and interest payments of $133,000 based upon a 25-year amortization schedule and a final payment of $12.2 million at loan maturity. Principal of $829,100 was amortized during 2018.


~~(e)~~	The loan is collateralized by Shops at Monocacy and requires equal monthly principal and interest payments of $112,000 based upon a 25-year amortization schedule and a final payment of $10.6 million at loan maturity. Principal of $733,800 was amortized during 2018.


~~(f)~~	The loan is collateralized by Boca Valley Plaza and requires equal monthly principal and interest payments of $75,000 based upon a 30-year amortization schedule and a final payment of $9.1 million at loan maturity. Principal of $347,300 was amortized during 2018.


~~(g)~~	The loan is collateralized by Palm Springs Center and requires equal monthly principal and interest payments of $75,000 based upon a 25-year amortization schedule and a final payment of $7.1 million at loan maturity. Principal of $477,900 was amortized during 2018.


~~(h)~~	The loan and a corresponding interest-rate swap closed on June 29, 2010 and are collateralized by Thruway. On a combined basis, the loan and the interest-rate swap require equal monthly principal and interest payments of $289,000 based upon a 25-year amortization schedule and a final payment of $34.8 million at loan maturity. Principal of $1.3 million was amortized during 2018.


~~(i)~~	The loan is collateralized by Jamestown Place and requires equal monthly principal and interest payments of $66,000 based upon a 25-year amortization schedule and a final payment of $6.1 million at loan maturity. Principal of $381,700 was amortized during 2018.


~~(j)~~	The loan is collateralized by Hunt Club Corners and requires equal monthly principal and interest payments of $42,000 based upon a 30-year amortization schedule and a final payment of $5.0 million, at loan maturity. Principal of $169,300 was amortized during 2018.


~~(k)~~	The loan is collateralized by Lansdowne Town Center and requires monthly principal and interest payments of $230,000 based on a 30-year amortization schedule and a final payment of $28.2 million at loan maturity. Principal of $949,600 was amortized during 2018.


~~(l)~~	The loan is collateralized by Orchard Park and requires equal monthly principal and interest payments of $73,000 based upon a 30-year amortization schedule and a final payment of $8.6 million at loan maturity. Principal of $270,300 was amortized during 2018.


~~(m)~~	The loan is collateralized by BJ’s Wholesale and requires equal monthly principal and interest payments of $80,000 based upon a 30-year amortization schedule and a final payment of $9.3 million at loan maturity. Principal of $268,400 was amortized during 2018.


~~(n)~~	The loan is collateralized by Great Falls shopping center. The loan consists of three notes which require equal monthly principal and interest payments of $138,000 based upon a weighted average 26-year amortization schedule and a final payment of $6.3 million at maturity. Principal of $874,800 was amortized during 2018.


~~(o)~~	The loan is collateralized by Leesburg Pike and requires equal monthly principal and interest payments of $135,000 based upon a 25-year amortization schedule and a final payment of $11.5 million at loan maturity. Principal of $499,800 was amortized during 2018.


~~(p)~~	The loan is collateralized by Village Center and requires equal monthly principal and interest payments of $119,000 based upon a 25-year amortization schedule and a final payment of $10.1 million at loan maturity. Principal of $424,700 was amortized during 2018.

~~(q)~~

The loan is collateralized by White Oak and requires equal monthly principal and interest payments of $193,000 based upon a 24.4 year weighted amortization schedule and a final payment of $18.5 million at loan maturity. The loan was previously collateralized by Van Ness Square. During 2012, the Company substituted White Oak as the collateral and borrowed an additional ~~$10.5 million. Principal of $675,200 was amortized during 2018.~~


~~(r)~~	The loan is collateralized by Avenel Business Park and requires equal monthly principal and interest payments of $246,000 based upon a 25-year amortization schedule and a final payment of $20.9 million at loan maturity. Principal of $893,200 was amortized during 2018.


~~(s)~~	The loan is collateralized by Ashburn Village and requires equal monthly principal and interest payments of $240,000 based upon a 25-year amortization schedule and a final payment of $20.5 million at loan maturity. Principal of $857,000 was amortized during 2018.


~~(t)~~	The loan is collateralized by Ravenwood and requires equal monthly principal and interest payments of $111,000 based upon a 25-year amortization schedule and a final payment of $10.1 million at loan maturity. Principal of $451,200 was amortized during 2018.


~~(u)~~	The loan is collateralized by Clarendon Center and requires equal monthly principal and interest payments of $753,000 based upon a 25-year amortization schedule and a final payment of $70.5 million at loan maturity. Principal of $3.5 million was amortized during 2018.


~~(v)~~	The loan is collateralized by Severna Park MarketPlace and requires equal monthly principal and interest payments of $207,000 based upon a 25-year amortization schedule and a final payment of $20.3 million at loan maturity. Principal of $1.1 million was amortized during 2018.


~~(w)~~	The loan is collateralized by Kentlands Square II and requires equal monthly principal and interest payments of $240,000 based upon a 25-year amortization schedule and a final payment of $23.1 million at loan maturity. Principal of $1.2 million was amortized during 2018.


~~(x)~~	The loan is collateralized by Cranberry Square and requires equal monthly principal and interest payments of $113,000 based upon a 25-year amortization schedule and a final payment of $10.9 million at loan maturity. Principal of $570,500 was amortized during 2018.


~~(y)~~	~~The loan in the original amount of~~ ~~$73.0 million~~ closed in May 2012, is collateralized by Seven Corners and requires equal monthly principal and interest payments of $463,200 based upon a 25-year amortization schedule and a final payment of $42.3 million at loan maturity. Principal of $1.8 million was amortized during 2018.


~~(z)~~	The loan is collateralized by Hampshire Langley and requires equal monthly principal and interest payments of $95,400 based upon a 25-year amortization schedule and a final payment of $9.5 million at loan maturity. Principal of $513,700 was amortized in 2018.


~~(aa)~~	The loan is collateralized by Beacon Center and requires equal monthly principal and interest payments of $268,500 based upon a 20-year amortization schedule and a final payment of $17.1 million at loan maturity. Principal of $1.8 million was amortized in 2018.


~~(bb)~~	The loan is collateralized by Seabreeze Plaza and requires equal monthly principal and interest payments of $94,900 based upon a 25-year amortization schedule and a final payment of $9.5 million at loan maturity. Principal of $507,600 was amortized in 2018.


~~(cc)~~	The loan is collateralized by Shops at Fairfax and Boulevard shopping centers and requires equal monthly principal and interest payments totaling $153,300 based upon a 25-year amortization schedule and a final payment of $15.5 million at maturity. Principal of $824,000 was amortized in 2018.

(dd) The loan is collateralized by Northrock and requires equal monthly principal and interest payments totaling $84,400 based upon a 25-year amortization schedule and a final payment of $8.4 million at maturity. Principal of $423,600 was amortized in 2018.

(ee) The loan is collateralized by Burtonsville Town Square and requires equal monthly principal and interest payments of $197,900 based on a 25-year amortization schedule and a final payment of $20.3 million at loan maturity. Principal of $1.1 million was amortized in 2018.

~~(ff)~~

The loan is a $71.6 million construction-to-permanent facility that is collateralized by and financed a portion of the construction costs of Park Van Ness. During the construction period, interest was funded by the loan. Effective September 1, 2017, the loan converted to permanent financing and requires monthly principal and interest payments totaling $413,500 based upon a 25-year amortization schedule. A final payment of $39.6 million will be due at maturity. Principal of $1.5 million was amortized in 2018.


~~(gg)~~	The loan is collateralized by Washington Square and requires equal monthly principal and interest payments of $308,500 based upon a 25-year amortization schedule and a final payment of $31.1 million at loan maturity. Principal of $1.5 million was amortized in 2018.


~~(hh)~~	The loan is collateralized by Broadlands Village and requires equal monthly principal and interest payments of $176,200 based on a 25-year amortization schedule and a final payment of $17.3 million at loan maturity. Principal of $58,600 was amortized in 2018.


~~(ii)~~	The loan is collateralized by The Glen and requires equal monthly principal and interest payments of $129,800 based on a 25-year amortization schedule and a final payment of $12.5 million at loan maturity.

~~(jj)~~

The Company entered into a sale-leaseback transaction with its Olney property and is accounting for that transaction as a secured financing. The arrangement requires monthly payments of $60,400 which increase by 1.5% on May 1, 2015, and every May 1 thereafter. The arrangement provides for a final payment of $14.7 million and has an implicit interest rate of 8.0%. Negative amortization in 2018 totaled $168,600.


~~(kk)~~	The loan is a $157.0 million construction-to-permanent facility that is collateralized by and will finance a portion of the construction costs of Glebe Road. During the construction period, interest will be funded by the loan. After conversion to a permanent loan, monthly principal and interest payments totaling $887,900 will be required based upon a 25-year amortization schedule.

~~(ll)~~

The loan is a $325.0 million unsecured revolving credit facility. Interest accrues at a rate equal to the sum of one-month LIBOR plus a spread of 135 basis points. The line may be extended at the Company’s option for one year with payment of a fee of ~~0.15%. Monthly payments, if required, are interest only and vary depending upon the amount outstanding and the applicable interest rate for any given month.~~


~~(mm)~~	~~The loan is a $75.0 million unsecured term facility. Interest accrues at a rate equal to the sum of one-month LIBOR plus a spread of 130 basis points. Monthly payments are interest only.~~


~~(nn)~~	The loan was collateralized by Metro Pike Center and required monthly principal and interest payments of approximately $48,000 and a final payment of $14.2 million at loan maturity. The loan was repaid in full during 2018.

~~The carrying value of properties collateralizing the mortgage notes payable totaled $1.1 billion and $1.0 billion~~ as of December 31, ~~2018 and 2017, respectively. The Company’s credit facility requires the Company and its subsidiaries to maintain certain financial covenants, which are summarized below. As~~2021. Totals computed using weighted averages.

Table of ~~December 31, 2018, the Company was in compliance with all such covenants:~~Contents

~~limit the amount of debt as a percentage of gross asset value, as defined in the loan agreement, to less than 60% (leverage ratio);~~

~~limit the amount of debt so that interest coverage will exceed 2.0x on a trailing four-quarter basis (interest expense coverage); and~~

~~limit the amount of debt so that interest, scheduled principal amortization and preferred dividend coverage exceeds 1.4x on a trailing four-quarter basis (fixed charge coverage).~~

~~2019 Financing Activity~~

On January ~~4, 2019,~~5, 2021, the Company repaid in full the remaining principal balance of $6.1 million of the mortgage loan secured by ~~Countryside Marketplace,~~Jamestown Place, which was scheduled to mature in ~~July 2019.~~February 2021.

On ~~January 10, 2019,~~June 11, 2021, the Company ~~closed on a 15-year, non-recourse $22.1~~repaid in full the remaining principal balance of $5.0 million of the mortgage loan secured by Olde Forte Village. The loan matures in 2034, bears interest at a fixed-rate of 4.65%, requires monthly principal and interest payments of $124,700 based on a 25-year amortization schedule and requires a final payment of $12.1 million. Proceeds were partially used to repay in full the existing mortgage secured by Olde Forte Village,Hunt Club Corners, which was scheduled to mature in ~~May 2019.~~

~~2018 Financing Activity~~August 2021.

On ~~January 26, 2018,~~August 31, 2021, the Company replaced its credit facility. The new credit facility, which can be used for working capital, property acquisitions, development projects or letters of credit, totals ~~$400.0~~$525.0 million (the “New Facility”), of which ~~$325.0~~$425.0 million is a revolving credit facility (the “Revolving Line”) and ~~$75.0~~$100.0 million is a term ~~loan. The revolving credit facility matures on January 26, 2022, and may be extended by the Company for one additional year, subject to satisfaction of certain conditions. The term~~ loan matures on January 26, 2023, and may not be extended. In general, loan availability under the facility is primarily determined by operating income from the Company’s existing unencumbered properties. Interest accrues at a rate of LIBOR plus a spread of 135 basis points to 195 basis points under the revolving credit facility, and 130 basis points to 190 basis points under the term loan, each as determined by certain leverage tests.(the “Term Loan”). As of December 31, ~~2018,~~2021, the applicable spread for borrowings iswas 135 basis points under the ~~revolving credit facility~~Revolving Line and 130 basis points under the ~~term loan.~~Term Loan. Saul Centers and certain consolidated subsidiaries of the Operating Partnership have guaranteed the payment obligations of the Operating Partnership under the New Facility. Letters of credit may be issued under the revolving credit facility. As of December 31, 2021, based on the value of the Company’s unencumbered properties, approximately $219.8 million was available under the Revolving Line, $106.0 million was outstanding and approximately $185,000 was committed for letters of credit.

The facility requires the Company and its subsidiaries to maintain compliance with certain financial covenants. The material covenants require the Company, on a consolidated basis, to:

•limit the amount of debt as a percentage of gross asset value, as defined in the loan agreement, to less than 60% (leverage ratio);

•limit the amount of debt so that interest coverage will exceed 2.0x on a trailing four-quarter basis (interest expense coverage); and

•limit the amount of debt so that interest, scheduled principal amortization and preferred dividend coverage exceeds 1.4x on a trailing four-quarter basis (fixed charge coverage).

As of December 31, 2021, the Company was in compliance with all such covenants.

On ~~October 3, 2018,~~November 19, 2021, the Company closed on a 15-year , non-recourse $32.0 million mortgage loan secured by Broadlands Village. The loan matures in 2033, bears interest at a fixed-rate of 4.41%, requires monthly principal and interest payments of $176,200 based on a 25-year amortization schedule and requires a final payment of $17.3 million at maturity.

On December 18, 2018, the Company closed on a 15-year, non-recourse $22.9 million mortgage loan secured by The Glen. The loan matures in 2034, bears interest at a fixed-rate of 4.69%, requires monthly principal and interest payments of $129,800 based on a 25-year amortization schedule and requires a final payment of $12.5 million at maturity.

~~2017 Financing Activity~~

On January 18, 2017, the Company closed on a 15-year, non-recourse $40.0 million mortgage loan secured by Burtonsville Town Square. The loan matures in 2032, bears interest at a fixed rate of 3.39%, requires monthly principal and interest payments of ~~$197,900 based on a 25-year amortization schedule and requires a final payment of $20.3 million million at maturity.~~

~~On August 14, 2017, the Company closed on a $157.0~~$145.0 million construction-to-permanent loan, the proceeds of which will be used to partially fund Phase I of the ~~Glebe Road~~Twinbrook Quarter development project. The loan matures in ~~2035,~~2041, bears interest at a fixed rate of ~~4.67%~~3.83%, and requires interest only payments, which will be funded by the loan, until conversion to permanent. The conversion is expected in the fourth quarter of ~~2021,~~2026, and thereafter, monthly principal and interest payments ~~of $887,900~~ based on a 25-year amortization schedule will be required.

~~Effective September 1, 2017,~~On February 23, 2022, the ~~Company's $71.6~~Company closed on a $133.0 million construction-to-permanent loan, the proceeds of which ~~is fully drawn and secured by Park Van Ness, converted~~will be used to ~~permanent financing.~~partially fund Hampden House. The loan matures in ~~2032,~~2040, bears interest at a fixed rate of ~~4.88%~~3.90%, and requires interest only payments, which will be funded by the loan, until conversion to permanent. The conversion is expected in the first quarter of 2026, and thereafter, monthly principal and interest payments ~~of $413,500~~ based on a 25-year amortization schedule ~~and requires a final payment~~will be required.

Table of ~~$39.6 million at maturity.~~Contents

On November 20, 2017, the Company closed on a 15-year, non-recourse $60.0 million mortgage loan secured by Washington Square. The loan matures in 2032, bears interest at a fixed rate of 3.75%, requires monthly principal and interest payments of $308,500 based on a 25-year amortization schedule and requires a final payment of $31.1 million. Proceeds were used to repay the remaining balance of approximately $28.1 million on the existing mortgage and reduce the outstanding balance of the revolving credit facility.

~~2016 Financing Activity~~

In November 2016, the existing loan secured by Beacon Center was increased by $11.25 million. The interest rate, amortization period and maturity date did not change; the required monthly payment was increased to $268,500. Proceeds were used to partially fund the purchase of the ground which underlies Beacon Center.

~~Off-Balance Sheet Arrangements~~

The Company has no off-balance sheet arrangements that are reasonably likely to have a current or future material effect on the Company’s financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Funds From Operations

In ~~2018,~~2021, the Company reported Funds From Operations ("FFO")¹ available to common stockholders and noncontrolling interests of ~~$93.8~~$100.7 million, a ~~0.2% decrease~~12.0% increase from ~~2017~~2020 FFO available to common stockholders and noncontrolling interests of ~~$94.0~~$90.0 million. The following table presents a reconciliation from net income to FFO available to common stockholders and noncontrolling interests for the periods indicated:


	Year ended December 31,
(Dollars in thousands)	2021		2020		2019
Net income	$	61,649	$	50,316	$	64,196
Subtract:
Gain on sale of property	—		(278)		—

Add:
Real estate depreciation and amortization	50,272		51,126		46,333
FFO	111,921		101,164		110,529
Subtract:
Preferred stock dividends	(11,194)		(11,194)		(12,235)
Extinguishment of issuance costs upon redemption of preferred shares	—		—		(3,235)
FFO available to common stockholders and noncontrolling interests	$	100,727	$	89,970	$	95,059
Weighted average shares and units:
Basic	32,029		31,266		30,869
Diluted (2)	33,098		31,267		30,913
Basic FFO per share available to common stockholders and noncontrolling interests	$	3.14	$	2.88	$	3.08
Diluted FFO per share available to common stockholders and noncontrolling interests.	$	3.04	$	2.88	$	3.08

Year ended December 31,
(Dollars in thousands) 2018 2017 2016 2015 2014
Net income $ 63,059
$ 60,668
$ 56,720
$ 52,931
$ 57,988
Subtract:
Gains on sales of properties (509 ) —
(1,013 ) (11 ) (6,069 )
Add:
Real estate depreciation and amortization 45,861
45,694
44,417
43,270
41,203
FFO 108,411
106,362
100,124
96,190
93,122
Subtract:
Preferred dividends (12,262 ) (12,375 ) (12,375 ) (12,375 ) (13,361 )
Preferred stock redemption (2,328 ) —
—
—
(1,480 )
FFO available to common stockholders and noncontrolling interests $ 93,821
$ 93,987
$ 87,749
$ 83,815
$ 78,281
Average shares and units used to compute FFO per share 30,156
29,511
28,990
28,449
27,977
FFO per share $ 3.11
$ 3.18
$ 3.03
$ 2.95
$ 2.80

¹ The National Association of Real Estate Investment Trusts (NAREIT) developed FFO as a relative non-GAAP financial measure of performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO is defined by NAREIT as net income, computed in accordance with GAAP, plus real estate depreciation and amortization, and excluding impairment charges on depreciable real estate assets and gains or losses from property dispositions. FFO does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of cash available to fund cash needs, which is disclosed in the Company’s Consolidated Statements of Cash Flows for the applicable periods. There are no material legal or functional restrictions on the use of FFO. FFO should not be considered as an alternative to net income, its most directly comparable GAAP measure, as an indicator of the Company’s operating performance, or as an alternative to cash flows as a measure of liquidity. Management considers FFO a meaningful supplemental measure of operating performance because it primarily excludes the assumption that the value of the real estate assets diminishes predictably over time (i.e. depreciation), which is contrary to what we believe occurs with our assets, and because industry analysts have accepted it as a performance measure. FFO may not be comparable to similarly titled measures employed by other REITs.

2 Beginning March 5, 2021, fully diluted shares and units includes 1,416,071 limited partnership units held in escrow related to the contribution of Twinbrook Quarter by 1592 Rockville Pike. Half of the units held in escrow were released on October 18, 2021. The remaining units held in escrow are scheduled to be released on October 18, 2023.

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Acquisitions ~~Redevelopments~~ and ~~Renovations~~Redevelopments

Management anticipates that during the coming year, the Company ~~will continue activities related to~~may redevelop certain of the ~~redevelopment of 750 N. Glebe Road~~Current Portfolio Properties and may develop additional freestanding outparcels or ~~expansions within certain of the Shopping Centers. Although not currently planned, it is possible that the Company may redevelop~~

~~additional Current Portfolio Properties and may develop~~ expansions within certain of the Shopping Centers. Acquisition and development of properties are undertaken only after careful analysis and review, and management’s determination that such properties are expected to provide long-term earnings and cash flow growth. During the coming year, any developments, expansions or acquisitions are expected to be funded with bank borrowings from the Company’s credit line, construction financing, proceeds from the operation of the Company’s dividend reinvestment plan or other external capital resources available to the Company.

The Company has been selectively involved in acquisition, development, redevelopment and renovation activities. It continues to evaluate the acquisition of land parcels for retail and ~~office~~mixed-use development and acquisitions of operating properties for opportunities to enhance operating income and cash flow growth. The ~~following describes significant acquisitions, developments, redevelopments~~Company also continues to analyze redevelopment, renovation and ~~renovations which affected the Company’s financial position and results of operations in 2018, 2017, and 2016.~~

~~700, 726, 730, 750 N. Glebe Road~~

From 2014 through 2016, the Company purchased four adjacent properties on North Glebe Road in Arlington, Virginia, for an aggregate $54.0 million. The Company is developing approximately 490 residential units and 60,000 square feet of retail space on 2.8 acres of land. Concrete work is substantially complete and pre-cast facade panels, masonry and windows are being installed. Interior framing, electrical, plumbing and HVAC work have commenced. The development is scheduled for substantial completion in early 2020. The total cost of the project, including acquisition of land, is expected to be approximately $275.0 million, a portion of which is being financed by a $157.0 million construction-to-permanent loan. The Company has executed a 41,500 square foot anchor-lease with Target and leases for an aggregate of 9,000 square feet of retail shop space, resulting in approximately 84% of the retail space being leased.

~~Park Van Ness~~

~~Thruway Pad~~

In August 2016, the Company purchased for $3.1 million, a retail pad site with an occupied 4,200 square foot bank building in Winston Salem, North Carolina, and incurred acquisition costs of $60,400. The property is contiguous with and an expansion ~~of the Company's Thruway Shopping Center.~~

~~Ashbrook Marketplace~~

~~Beacon Center~~

In the fourth quarter of 2016, the Company purchased for $22.7 million, including acquisition costs, the land underlying Beacon Center. The land was previously leased by the Company with an annual rent of approximately $60,000. The purchase price was funded in part by an $11.25 million increase to the existing mortgage collateralized by Beacon Center and in part by the Company’s revolving credit facility.

~~Southdale~~

In the fourth quarter of 2016, the Company purchased for $15.3 million, including acquisition costs, the land underlying Southdale. The land was previously leased by the Company with an annual rent of approximately $60,000. The purchase price was funded by the Company’s revolving credit facility.

~~Burtonsville Town Square~~

In January 2017, the Company purchased for $76.4 million, including acquisition costs, Burtonsville Town Square, a 121,000 square foot shopping center located in Burtonsville, Maryland. Burtonsville Town Square is 100% leased and anchored by Giant Food and CVS Pharmacy. The purchase was funded with a new $40.0 million mortgage loan and through the Company's credit line facility. The mortgage bears interest at 3.39%, requires monthly principal and interest payments of $197,900 based upon a 25-year amortization schedule, and has a 15-year maturity. The Company has substantially completed construction of the shell of a 16,000 square foot small shop expansion and construction of interior improvements is underway. Delivery of the first leased tenant spaces occurred in late 2018, with initial tenant openings scheduled for the first quarter of 2019. The total development cost is expected to be approximately $5.7 million. Leases have been executed for approximately 55% of the space and the Company has prospects for an additional 3,900 square feet. In addition, a lease has been executed with Taco Bell who will construct a free-standing building on a pad siteopportunities within the ~~property.~~portfolio.

~~Olney Shopping Center~~

In March 2017, the Company purchased for $3.1 million, including acquisition costs, the land underlying Olney Shopping Center. The land was previously leased by the Company with an annual rent of approximately $56,000. The purchase price was funded by the revolving credit facility.

~~7316 Wisconsin Avenue~~

~~Lansdowne Town Center~~

~~Property Sales~~

~~Crosstown Business Center~~

~~In December 2016, the Company sold for $5.4 million the 197,100 square foot Crosstown Business Center located in Tulsa, Oklahoma and recognized a $1.0 million gain.~~

~~Great Eastern Shopping Center~~

In September 2017, the Company sold for $8.5 million the 255,400 square foot Great Eastern Shopping Center located in District Heights, Maryland. The Company provided $1.28 million second trust financing to the buyer, which bore interest at a fixed rate of 6%. In May 2018, the buyer repaid the loan in full and the Company recognized a $0.5 million gain that was previously deferred.

Portfolio Leasing Status

The following chart sets forth certain information regarding commercial leases at our properties for the periods indicated.

Total Properties Total Square Footage Percentage Leased
As of December 31,
Shopping
Centers
Mixed-Use
Shopping
Centers
Mixed-Use
Shopping
Centers
Mixed-Use
2018 49
7
7,750,271
1,146,438
96.0 % 92.3 %
2017 49
6
7,750,098
1,076,838
94.3 % 94.5 %
2016 49
6
7,882,054
1,076,208
96.0 % 91.0 %

~~The residential components~~ This section generally discusses 2021 and 2020 items and year-to-year comparisons between 2021 and 2020. Discussions of ~~Clarendon Center~~2019 items and ~~Park Van Ness were 99.6%~~year-to-year comparisons between 2020 and ~~97.0% leased, respectively, at~~2019 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2018.~~ 2020 filed on February 25, 2021.


	Total Properties		Total Square Footage		Percentage Leased
As of December 31,	Shopping Centers	Mixed-Use	Shopping Centers	Mixed-Use	Shopping Centers		Mixed-Use
2021	50	7	7,874,130	1,136,937	93.4	%	82.3	%
2020	50	7	7,876,692	1,136,937	93.0	%	88.4	%

On a same property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, the Shopping Center leasing percentage increased to ~~96.0%~~93.4% from ~~94.3%~~93.1% and the Mixed-Use leasing percentage decreased to ~~93.6%~~82.3% from ~~94.5%. The overall portfolio leasing percentage, on a comparative same property basis, increased to 95.7% at December 31, 2018 from 94.3% at December 31, 2017.~~

The residential components of Clarendon Center and Park Van Ness were 96.7% and 95.9% leased, respectively, at December 31, 2017. On a same property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, the Shopping Center leasing percentage decreased to 94.2% from 96.1% and the Mixed-Use leasing percentage increased to 94.5% from 91.0%.88.3% The overall portfolio leasing percentage, on a comparative same property basis, decreased to ~~94.2%~~92.0% at December 31, ~~2017~~2021 from ~~95.5%~~92.5% at December 31, ~~2016.~~2020.

The 2016 Mixed-Use leasing percentage includes the recently-developed Park Van Ness commercial space and excludes Crosstown Business Center. The residential components of Clarendon Center and Park Van Ness wereResidential portfolio was 97.1% ~~and 72.7%~~ leased at December 31, ~~2016. On a same property basis, which excludes the impact of properties not in operation for the entirety of the comparable periods, the Shopping Center leasing percentage increased~~2021, compared to ~~96.0% from 95.4% and the Mixed-Use leasing percentage decreased to 90.9% from 92.2%. The overall portfolio leasing percentage, on a comparative same property basis, increased to 95.4%~~85.5% at December 31, ~~2016 from 95.0% at December 31, 2015.~~2020. The increase in Residential portfolio occupancy is primarily due to completion in 2021 of the initial lease up of The Waycroft, which opened in April 2020.

The following table shows selected data for leases executed in the indicated periods. The information is based on executed leases without adjustment for the timing of occupancy, tenant defaults, or landlord concessions. The base rent for an expiring lease is the annualized contractual base rent, on a cash basis, as of the expiration date of the lease. The base rent for a new or renewed lease is the annualized contractual base rent, on a cash basis, as of the expected rent commencement date. Because tenants that execute leases may not ultimately take possession of their space or pay all of their contractual rent, the changes presented in the table provide information only about trends in market rental rates. The actual changes in rental income received by the Company may be different.


Commercial Property Leasing Activity			Base Rent per Square Foot
Year ended December 31,	Square Feet	Number of Leases	New/Renewed Leases		Expiring Leases
2021	1,353,543	285	$	21.07	$	21.59
2020	1,371,377	247	24.70		25.15

Base Rent per Square Foot
Year ended December 31, Square Feet
Number
of Leases

New/Renewed
Leases

Expiring
Leases
2018 1,555,620
281
$ 19.52
$ 19.26
2017 1,315,192
280
19.60
19.45
2016 1,292,483
244
17.24
17.05

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Additional information about commercial leasing activity during the three months ended December 31, ~~2018,~~2021, is set forth below. The below information includes leases for space which had not been previously leased during the period of the Company's ownership, either as a result of acquisition or development.


								Commercial Property Leasing Activity
	New Leases			Renewed Leases				New Leases		First Generation/Development Leases		Renewed Leases
Number of leases	26			40			Number of leases	20		—		54
Square feet	113,458			142,837			Square feet	106,450		—		249,335
Per square foot average annualized:							Per square foot average annualized:
Base rent	$	24.28		$	18.31		Base rent	$	18.73	$	—	$	22.16
Tenant improvements	(6.76		)	(0.47		)	Tenant improvements	(1.95)		—		(2.10)
Leasing costs	(0.70		)	(0.07		)	Leasing costs	(0.62)		—		(1.66)
Rent concessions	(0.48		)	(0.05		)	Rent concessions	(0.44)		—		(0.04)
Effective rents	$	16.34		$	17.72		Effective rents	$	15.72	$	—	$	18.36

During ~~2018,~~2021, the Company entered into ~~465~~694 new or renewed apartment leases. The monthly rent per square foot for these leases ~~was unchanged at $3.44.~~decreased to $3.22 from $3.28. During ~~2017,~~2020, excluding The Waycroft residential property, the Company entered into 475 new or renewed apartment leases, excluding new leases at Park Van Ness. The monthly rent per square foot for the 395 leases for units that were previously occupied decreased to $3.51 from $3.54. During 2016, the Company entered into 216392 new or renewed apartment leases. The monthly rent per square foot for these leases ~~increased~~decreased to ~~$3.57~~$3.30 from ~~$3.45.~~$3.51.

As of December 31, ~~2018, 994,236~~2021, 843,842 square feet of Commercial space was subject to leases scheduled to expire in ~~2019.~~2022. Below is information about existing and estimated market base rents per square foot for that space.


Expiring Commercial Property Leases:	Total
Square feet	843,842
Average base rent per square foot	$	22.34
Estimated market base rent per square foot	$	22.97

Expiring Leases: Total
Square feet 994,236
Average base rent per square foot $ 19.98
Estimated market base rent per square foot $ 20.18

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to certain financial market risks, the most predominant being fluctuations in interest rates. Interest rate fluctuations are monitored by management as an integral part of the Company’s overall risk management program, which recognizes the unpredictability of financial markets and seeks to reduce the potentially adverse effect on the Company’s results of operations.

The Company may, where appropriate, employ derivative instruments, such as interest rate swaps, to mitigate the risk of interest rate fluctuations. The Company does not enter into derivatives or other financial instruments for trading or speculative purposes. On June 29, 2010, the Company entered into an interest rate swap agreement with a $45.6 million notional amount to manage the interest rate risk associated with $45.6 million of variable-rate mortgage debt. The swap agreement was effective July 1, 2010, terminates on July 1, 2020 and

effectively fixes the interest rate on the mortgage debt at 5.83%. The aggregate fair value of the swap at December 31, 2018 was approximately $0.4 million and is reflected in accounts payable, accrued expenses and other liabilities in the consolidated balance sheet.

~~The Company~~ is exposed to interest rate fluctuations which will affect the amount of interest expense of its variable rate debt and the fair value of its fixed rate debt. As of December 31, ~~2018,~~2021, the Company had variable rate indebtedness totaling ~~$122.0~~$206.0 million. If the interest rates on the Company’s variable rate debt instruments outstanding at December 31, ~~2018~~2021 had been one percent higher, our annual interest expense relating to these debt instruments would have increased by ~~$1.2~~$2.1 million, based on those balances. As of December 31, ~~2018,~~2021, the Company had fixed-rate indebtedness totaling ~~$910.2~~$949.0 million with a weighted average interest rate of ~~5.18%~~4.93%. If interest rates on the Company’s fixed-rate debt instruments at December 31, ~~2018~~2021 had been one percent higher, the fair value of those debt instruments on that date would have decreased by approximately $47.7 million.

The Company may, where appropriate, employ derivative financial instruments, such as interest rate swaps to mitigate the risk of interest rate fluctuations. At December 31, 2021, the Company had no such derivative financial instruments.

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Item 8. Financial Statements and Supplementary Data

The financial statements of the Company and its consolidated subsidiaries are included in this report on the pages indicated, and are incorporated herein by reference:



Page
~~Page~~
F-~~F-1~~1		(a) Reports of Independent Registered Public Accounting Firm – Deloitte & Touche ~~LLP.~~LLP
~~F-3~~	~~(b) Report of Previous Independent Registered Public Accounting Firm – Ernst & Young LLP.~~ (PCAOB ID Number 34).
F-~~F-4~~4		~~(c)~~(b) Consolidated Balance Sheets - December 31, ~~2018~~202 1 and ~~2017.~~20 20 .
F-~~F-5~~5		~~(d)~~(c) Consolidated Statements of Operations - Years ended December 31, ~~2018, 2017,~~202 1 , 20 20 , and ~~2016.~~201 9 .
F-~~F-6~~6		~~(e)~~(d) Consolidated Statements of Comprehensive Income – Years ended December 31, ~~2018, 2017,~~202 1 , 20 20 , and ~~2016.~~201 9 .
F-~~F-7~~7		~~(f)~~(e) Consolidated Statements of Equity - Years ended December 31, ~~2018, 2017,~~202 1 , 20 20 , and ~~2016.~~201 9 .
F-~~F-8~~8		~~(g)~~(f) Consolidated Statements of Cash Flows - Years ended December 31, ~~2018, 2017,~~202 1 , 20 20 , and ~~2016.~~201 9 .
F-~~F-9~~9		~~(h)~~(g) Notes to Consolidated Financial Statements.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Quarterly Assessment.

The Company carried out an assessment as of December 31, ~~2018~~2021 of the effectiveness of the design and operation of its disclosure controls and procedures and its internal control over financial reporting. This assessment was done under the supervision and with the participation of management, including the Company’s Chairman and Chief Executive Officer, its Senior Vice President-Chief Financial Officer, ~~Secretary and Treasurer,~~ and its Senior Vice President-Chief Accounting Officer and Treasurer as appropriate. Rules adopted by the SEC require that the Company present the conclusions of the Company’s Chairman and Chief Executive Officer, and its Senior Vice President-Chief Financial Officer ~~Secretary and Treasurer~~ about the effectiveness of the Company’s disclosure controls and procedures and the conclusions of the Company’s management about the effectiveness of its internal control over financial reporting as of the end of the period covered by this Annual Report on Form 10-K.

CEO and CFO Certifications.

Included as Exhibits 31 to this Annual Report on Form 10-K are forms of “Certification” of the Company’s Chairman and Chief Executive Officer, and its Senior Vice President-Chief Financial ~~Officer, Secretary and Treasurer.~~Officer. The forms of Certification are required in accordance with Section 302 of the Sarbanes-Oxley Act of 2002. This section of the Annual Report on Form 10-K that you are currently reading is the information concerning

the assessment referred to in the Section 302 certifications and this information should be read in conjunction with the Section 302 certifications for a more complete understanding of the topics presented.

Disclosure Controls and Procedures and Internal Control over Financial Reporting.

Management is responsible for establishing and maintaining adequate disclosure controls and procedures and internal control over financial reporting. Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act, such as this Annual Report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed to provide reasonable assurance that such information is accumulated and communicated to the Company’s management, including the Company’s Chairman and Chief Executive Officer, its Senior Vice President-Chief Financial Officer, ~~Secretary and Treasurer,~~

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and its Senior Vice President-Chief Accounting Officer and Treasurer, as appropriate to allow timely decisions regarding required disclosure.

Internal control over financial reporting is a process designed by, or under the supervision of the Company’s Chairman and Chief Executive Officer, its Senior Vice President-Chief Financial Officer, ~~Secretary and Treasurer,~~ and its Senior Vice President-Chief Accounting Officer and Treasurer, and effected by the Company’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U. S. GAAP and includes those policies and procedures that:

•pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the Company’s assets;

•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U. S. GAAP, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of management or the Company’s Board of Directors; and

•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material adverse effect on the Company’s financial statements.

Limitations on the Effectiveness of Controls.

Management, including the Company’s Chairman and Chief Executive Officer, its Senior Vice President-Chief Financial Officer, ~~Secretary and Treasurer,~~ and its Senior Vice President-Chief Accounting Officer and Treasurer, does not expect that the Company’s disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no assessment of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management’s override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Scope of the Assessments.

The assessment by the Company’s Chairman and Chief Executive Officer, its Senior Vice President-Chief Financial Officer, ~~Secretary and Treasurer,~~ and its Senior Vice President-Chief Accounting Officer and Treasurer of the Company’s disclosure controls and procedures and the assessment by the Company’s management of the Company’s

internal control over financial reporting included a review of procedures and discussions with the Company’s Disclosure Committee and others in the Company. In the course of the assessments, management sought to identify data errors, control problems or acts of fraud and to confirm that appropriate corrective action, including process improvements, were being undertaken. Management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013 Framework) to assess the effectiveness of the Company’s internal control over financial reporting. The evaluation of the Company’s disclosure controls and procedures and internal control over financial reporting is done on a quarterly basis so that the conclusions concerning the effectiveness of disclosure controls can be reported in the Company’s Quarterly Reports on Form 10-Q and Annual Report on Form 10-K.

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The Company’s internal control over financial reporting is also evaluated on an ongoing basis by management, other personnel in the Company’s accounting department and the Company’s internal audit function. The effectiveness of the Company’s internal control over financial reporting is audited by the Company’s independent registered public accounting firm. We consider the results of these various assessment activities as we monitor the Company’s disclosure controls and procedures and internal control over financial reporting and when deciding to make modifications as necessary. Management’s intent in this regard is that the disclosure controls and procedures and the internal control over financial reporting will be maintained and updated (including improvements and corrections) as conditions warrant.

Assessment of Effectiveness of Disclosure Controls and Procedures

Based upon the assessments, the Company’s Chairman and Chief Executive Officer, its Senior Vice President-Chief Financial Officer, ~~Secretary and Treasurer,~~ and its Senior Vice President-Chief Accounting Officer and Treasurer have concluded that, as of December 31, ~~2018,~~2021, the Company’s disclosure controls and procedures were effective.

Assessment of Effectiveness of Internal Control Over Financial Reporting.

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control - Integrated Framework (2013 Framework) to assess the effectiveness of the Company’s internal control over financial reporting. Based upon the assessments, the Company’s management has concluded that, as of December 31, ~~2018,~~2021, the Company’s internal control over financial reporting was effective. The Company’s independent registered public accounting firm has issued a report on the effectiveness of the Company’s internal control over financial reporting, which appears on page F-2 of this Annual Report on Form 10‑K.

Changes in Internal Control Over Financial Reporting.

During the three months ended December 31, ~~2018,~~2021, there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information this Item requires is incorporated by reference to the information under the captions “The Board of Directors,” “Corporate Governance – Ethical Conduct Policy and Senior Financial Officer Code of Ethics,” ~~“Section~~“Delinquent Section 16(a) ~~Beneficial Ownership Reporting Compliance,~~Reports,” “Corporate Governance – Nominating and Corporate Governance Committee – Selection of Director Nominees,” and “Corporate Governance – Audit

Committee” of the Company’s Proxy Statement to be filed with the SEC for its annual stockholders’ meeting to be held on May ~~3, 2019~~13, 2022 (the “Proxy Statement”).

Item 11. Executive Compensation

The information this Item requires is incorporated by reference to the information under the captions “Corporate Governance – Compensation of Directors,” “Report of the Compensation Committee,” and “Executive Compensation” of the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

The information this Item requires is incorporated by reference to the information under the captions “Equity Compensation Plan Information” and “Security Ownership of Certain Beneficial Owners and Management” of the Proxy Statement.

Item 13. Certain Relationships and Related Transactions and Director Independence

The information this Item requires is incorporated by reference to the information under the captions “Certain Relationships and Transactions” and “Corporate Governance – Board of Directors” of the Proxy Statement.

Item 14. Principal Accountant Fees and Services

The information this Item requires is incorporated by reference to the information contained in the Proxy Statement under the caption “Audit Committee Report – ~~2018~~2021 and ~~2017~~2020 Independent Registered Public Accounting Firm Fee Summary” of the Proxy Statement.

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PART IV

Item 15. Exhibits and Financial Statement Schedules



(a)			The following documents are filed as part of this report:

1.1				Financial Statements

				The following financial statements of the Company and their consolidated subsidiaries are incorporated by reference in Part II, Item 8.

			(a)	Reports of Independent Registered Public Accounting Firm – Deloitte & Touche LLP — PCAOB ID Number	34

			(b)	~~Report of Previous Independent Registered Public Account Firm - Ernst & Young LLP~~

	~~(c)~~	Consolidated Balance Sheets - December 31, ~~2018~~2021 and ~~2017~~2020

			~~(d)~~(c)	Consolidated Statements of Operations - Years ended December 31, ~~2018, 2017,~~2021, 2020, and ~~2016.~~2019.

			~~(e)~~(d)	Consolidated Statements of Comprehensive Income – Years ended December 31, ~~2018, 2017,~~2021, 2020, and ~~2016.~~2019.

			~~(f)~~(e)	Consolidated Statements of Equity - Years ended December 31, ~~2018, 2017,~~2021, 2020, and ~~2016.~~2019.

			~~(g)~~(f)	Consolidated Statements of Cash Flows - Years ended December 31, ~~2018, 2017,~~2021, 2020, and ~~2016.~~2019.

			~~(h)~~(g)	Notes to Consolidated Financial Statements

2.				Financial Statement Schedule and Supplementary Data

			(a)	Selected Quarterly Financial Data for the Company are incorporated by reference in Part II, Item 8

			(b)	Schedule of the Company:

				Schedule III - Real Estate and Accumulated Depreciation

All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted.

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		~~Exhibits~~
				Exhibits
3.
3.			(a)	First Amended and Restated Articles of Incorporation of Saul Centers, Inc. filed with the Maryland Department of Assessments and Taxation on August 23, 1994 and filed as Exhibit 3.(a) of the 1993 Annual Report of the Company on Form 10-K are hereby incorporated by reference. Articles of Amendment to the First Amended and Restated Articles of Incorporation of Saul Centers, Inc., filed with the Maryland Department of Assessments and Taxation on May 28, 2004 and filed as Exhibit 3.(a) of the June 30, 2004 Quarterly Report of the Company is hereby incorporated by reference.Articles of Amendment to the First Amended and Restated Articles of Incorporation of Saul Centers, Inc., filed with the Maryland Department of Assessments and Taxation on May 26, 2006 and filed as Exhibit 3.(a) of the Company’s Current Report on Form 8-K filed May 30, 2006 is hereby incorporated by reference.Articles of Amendment to the First Amended and Restated Articles of Incorporation of Saul Centers, Inc., filed with the Maryland State Department of Assessments and Taxation on May 14, 2013 and filed as Exhibit 3.(a) of the Company's Current Report on Form 8-K filed May 14, 2013, is hereby incorporated by reference.

			(b)	Second Amended and Restated Bylaws of Saul Centers, Inc. as in effect at and after ~~August 24, 1993 and as of August 26, 1993~~June 22, 2017 and filed as Exhibit 3.(b) ~~of the 1993 Annual Report of the Company on Form 10-K are hereby incorporated by reference.~~ ~~Amendment No. 1 to Amended and Restated Bylaws of Saul Centers, Inc. adopted November 29, 2007 and filed as Exhibit 3(b)~~ of the Company’s Current Report on Form 8-K filed ~~December 3, 2007~~June 28, 2017 is hereby incorporated by reference.

			(c)	Articles Supplementary to First Amended and Restated Articles of Incorporation of the Company, dated October 30, 2003, filed as Exhibit 2 to the Company’s Current Report on Form 8-A dated October 31, 2003, is hereby incorporated by reference.

	~~(d)~~	Articles Supplementary to First Amended and Restated Articles of Incorporation of the Company, as amended, dated March 26, 2008, filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed March 27, 2008, is hereby incorporated by reference.

	~~(e)~~	Articles Supplementary to First Amended and Restated Articles of Incorporation of the Company, dated February 6, 2013, filed as Exhibit 3.2 to Saul Centers’ Registration Statement on Form 8-A, filed February 7, 2013, is hereby incorporated by reference.

	~~(f)~~	Articles Supplementary to First Amended and Restated Articles of Incorporation of the Company, dated November 10, 2014, filed as Exhibit 3.2 of the Company's Current Report on Form 8-K, dated November 12, 2014, is hereby incorporated by reference.

	~~(g)~~	Articles Supplementary to First Amended and Restated Articles of Incorporation of the Company, dated January 19, 2018, filed as Exhibit 3.3 of the Company’s Registration Statement on Form 8-A filed January 23, 2018 is hereby incorporated by reference.

4.			~~(a)~~(d)	~~Deposit Agreement, dated February 6, 2013, among~~Articles Supplementary to First Amended and Restated Articles of Incorporation of the Company, Continental Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts, each representing 1/100th of a share of 6.875% Series C Cumulative Redeemable Preferred Stock of Saul Centers, Inc.dated September 12, 2019, filed as Exhibit ~~4.1 to Saul Centers’~~3.2 of the Company’s Registration Statement on Form 8-A ~~on February 7, 2013~~filed September 17, 2019 is hereby incorporated by reference.

4.			~~(b)~~(a)	Form specimen of receipt representing the depositary shares, each representing 1/100th of a share of 6.875% Series C Cumulative Redeemable Preferred Stock of Saul Centers, Inc. and included as part of Exhibit 4.2 to Saul Centers’ Registration Statement on Form 8-A on February 7, 2013 is hereby incorporated by reference.

	~~(c)~~	First Amendment to Deposit Agreement, dated November 12, 2014, among the Company, Continental Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts, each representing 1/100th of a share of 6.875% Series C Cumulative Redeemable Preferred Stock of Saul Centers, Inc. filed as Exhibit 4.2 to of the Company's Current Report on Form 8-K, dated November 12, 2014, is hereby incorporated by reference.

	~~(d)~~	Deposit Agreement, dated January 23, 2018, among the Company, Continental Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts, filed as Exhibit 4.2 of the Registrant’s Registration Statement on Form 8-A filed January 23, 2018 is hereby incorporated by reference.

			~~(e)~~(b)	Specimen certificate representing the 6.125% Series D Cumulative Redeemable Preferred Stock, par value $0.01 per share, of the Company, filed as Exhibit 4.4 of the Company’s Registration Statement on Form 8-A filed January 23, 2018 is hereby incorporated by reference.



~~10.~~	~~(a)~~(c)	Deposit Agreement, dated September 17, 2019, among the Company, Continental Stock Transfer & Trust Company, as Depositary, and the holders of depositary receipts, filed as Exhibit 4.1 of the Registrant’s Registration Statement on Form 8-A filed September 17, 2019 is hereby incorporated by reference.

	(d)	Specimen certificate representing the 6.000% Series E Cumulative Redeemable Preferred Stock, par value $0.01 per share, of the Company, filed as Exhibit 4.2 of the Company’s Registration Statement on Form 8-A filed September 17, 2019 is hereby incorporated by reference.

	(e)	Description of Registrant's Securities, filed as Exhibit 4.(h) of the 2019 Annual Report of the Company on Form 10-K is hereby incorporated by reference.

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10.	(a)	First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit No. 10.1 to Registration Statement No. 33-64562 is hereby incorporated by reference. The First Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership, the Second Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership, and the Third Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the 1995 Annual Report of the Company on Form 10-K is hereby incorporated by reference. The Fourth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the March 31, 1997 Quarterly Report of the Company is hereby incorporated by reference.The Fifth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 4.(c) to Registration Statement No. 333-41436, is hereby incorporated by reference.The Sixth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the September 30, 2003 Quarterly Report of the Company on Form 10-Q is hereby incorporated by reference. The Seventh Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the December 31, 2003 Annual Report of the Company on Form 10-K is hereby incorporated by reference.The Eighth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the December 31, 2007 Annual Report of the Company on Form 10-K is hereby incorporated by reference.The Ninth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the March 31, 2008 Quarterly Report of the Company on Form 10-Q is hereby incorporated by reference. The Tenth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the March 31, 2008 Quarterly Report of the Company on Form 10-Q is hereby incorporated by reference.The Eleventh Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.(a) of the September 30, 2011 Quarterly Report of the Company on Form 10-Q is hereby incorporated by reference.The Twelfth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.1 of the Current Report of the Company on Form 8-K dated February 12, 2013 is hereby incorporated by reference.The Thirteenth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership filed as Exhibit 10.1 of the Current Report of the Company on Form 8-K dated November 12, 2014, is hereby incorporated by reference.The Fourteenth Amendment to the First Amended and Restated Agreement of Limited Partnership of the Saul Holdings Limited Partnership, filed as Exhibit 10.1 of the Current Report of the Company on Form 8-K dated January 23, 2018, is hereby incorporated by reference.The Fifteenth Amendment to the First Amended and Restated Agreement of Limited Partnership of the Saul Holdings Limited Partnership, filed as Exhibit 10.1 of the Current Report of the Company on Form 8-K dated May 14, 2018, is hereby incorporated by reference.The Sixteenth Amendment to the First Amended and Restated Agreement of Limited Partnership of the Saul Holdings Limited Partnership, filed as Exhibit 10.1 of the Current Report of the Company on Form 8-K dated September 17, 2019, is hereby incorporated by reference.The Seventeent h Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership, filed as Exhibit 10 .(a) of the June 30 , 2021 Quarterly Report of the Company on Form 10-Q is hereby incorporated by reference The Eighteenth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Holdings Limited Partnership, filed as Exhibit 10 .(a) of t he September 30, 2021 Quarterly Report of the Company on Form 10-Q is hereby incorporated by reference .

	(b)	First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary I Limited Partnership and Amendment No. 1 thereto filed as Exhibit 10.2 to Registration Statement No. 33-64562 are hereby incorporated by reference. The Second Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary I Limited Partnership, the Third Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary I Limited Partnership and the Fourth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary I Limited Partnership as filed as Exhibit 10.(b) of the 1997 Annual Report of the Company on Form 10-K are hereby incorporated by reference.

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			(c)			First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary II Limited Partnership and Amendment No. 1 thereto filed as Exhibit 10.3 to Registration Statement No. 33-64562 are hereby incorporated by reference. The Second Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary II Limited Partnership filed as Exhibit 10.(c) of the June 30, 2001 Quarterly Report of the Company is hereby incorporated by reference.The Third Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary II Limited Partnership filed as exhibit 10.(c) of the 2006 Annual Report of the Company on Form 10-K are hereby incorporated by reference.The Fourth Amendment to the First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary II Limited Partnership as filed as Exhibit 10.(c) of the 2009 Annual Report of the Company on Form 10-K is hereby incorporated by reference.The Fifth Amendment to our First Amended and Restated Agreement of Limited Partnership of Saul Subsidiary II Limited Partnership filed as Exhibit 10.(c) of the September 30, 2016 Quarterly Report of the Company is hereby incorporated by reference.

			(d)			Property Conveyance Agreement filed as Exhibit 10.4 to Registration Statement No. 33- 64562 is hereby incorporated by reference.

			(e)			Management Functions Conveyance Agreement filed as Exhibit 10.5 to Registration Statement No. 33-64562 is hereby incorporated by reference.

			(f)			Registration Rights and Lock-Up Agreement filed as Exhibit 10.6 to Registration Statement No. 33-64562 is hereby incorporated by reference.



		(g)	Exclusivity and Right of First Refusal Agreement filed as Exhibit 10.7 to Registration Statement No. 33-64562 is hereby incorporated by reference.

		(h)	Agreement of Assumption dated as of August 26, 1993 executed by Saul Holdings Limited Partnership and filed as Exhibit 10.(i) of the 1993 Annual Report of the Company on Form 10-K is hereby incorporated by reference.

		(i)	Deferred Compensation Plan for Directors, dated as of April 23, 2004 and filed as Exhibit 10.(k) of the June 30, 2004 Quarterly Report of the Company is hereby incorporated by reference.*

		(j)	Amended and Restated Credit Agreement, dated as of June 24, 2014, by and among Saul Holdings Limited Partnership as Borrower; Wells Fargo Bank, National Association, as Administrative Agent and Sole Lead Arranger; JP Morgan Chase Bank, N.A., as Syndication Agent; and Wells Fargo Bank, National Association, JP Morgan Chase Bank, N.A., Capital One, N.A. and Citizens Bank of Pennsylvania as Lenders, as filed as Exhibit 10.1 of the Company's Current Report on Form 8-K, dated June 25, 2014, is hereby incorporated by reference.

~~(k)~~	Amended and Restated Guaranty, dated as of June 24, 2014, by and between Saul Centers, Inc., as Guarantor, and Wells Fargo Bank, National Association, as Administrative Agent and Sole Lead Arranger for itself and other financial institutions as Lenders, as filed as Exhibit 10.2 of the Company's Current Report on Form 8-K, dated June 25, 2014, is hereby incorporated by reference.

~~(l)~~	Credit Agreement dated January 26, 2018, by and among: the Saul Holdings Limited Partnership, as Borrower; Wells Fargo Bank, National Association ~~(“Wells Fargo”)~~, as Administrative Agent; Capital One, National Association ~~(“Capital One”)~~, as Syndication Agent; TD Bank, N.A. ~~(“TD Bank”)~~ and U.S. Bank National ~~Association (“U.S. Bank”)~~Associatio n,, as Documentation Agents; and Wells Fargo, Capital One, TD Bank, U.S. Bank, Regions Bank and Associated Bank, National Association ~~(“Associated Bank”)~~, as Lenders ~~(the “Agreement”)~~ and filed as Exhibit 10.1 of the Current Report of the Company on Form 8‑K dated January 26, 2018, is hereby incorporated by reference.

		~~(m)~~(k)	Guaranty dated January 26, 2018, by and between: Saul Centers, Inc.; Saul Subsidiary I Limited Partnership; Saul Subsidiary II Limited Partnership; Briggs Chaney Plaza, LLC; Kentlands Lot 1, LLC; 11503 Rockville Pike LLC; Rockville Pike Holdings LLC; 1500 Rockville Pike LLC; Smallwood Village Center LLC; Westview Village Center LLC; Avenel VI, Inc.; Metro Pike Center LLC; and Washington Square Center, LLC, as Guarantors; in favor of Wells Fargo Bank, National Association, as Administrative Agent for the lenders from time to time party to that certain Credit Agreement dated January 26, 2018 and filed as Exhibit 10.2 of the Current Report of the Company on Form 8 K dated January 26, 2018, is hereby incorporated by reference.

		~~(n)~~(l)	Credit Agreement dated August 31, 2021, by and among: the Partnership, as Borrower; Wells Fargo Bank, National Association, as Administrative Agent; Capital One, National Association, as Syndication Agent; TD Bank, N.A. and U.S. Bank National Association, as Documentation Agents; and Wells Fargo, Capital One, TD Bank, U.S. Bank, Regions Bank, PNC Bank and Associated Bank, National Association, as Lenders and filed as Exhibit 10.1 to the Current Report of the Company on Form 8-K dated September 1, 2021, is hereby incorporated by reference.

		(m)	Guaranty dated August 31, 2021, by and between: Saul Centers, Inc.; Saul Subsidiary I Limited Partnership; Saul Subsidiary II Limited Partnership; Briggs Chaney Plaza, LLC; Kentlands Lot 1, LLC; 11503 Rockville Pike LLC; Rockville Pike Holdings LLC; 1500 Rockville Pike LLC; Smallwood Village Center LLC; Westview Village Center LLC; Avenel VI, Inc.; Metro Pike Center LLC; and Washington Square Center LLC, as Guarantors; in favor of Wells Fargo Bank, National Association, as Administrative Agent for the lenders from time to time party to that certain Credit Agreement dated August 31, 2021 and filed as Exhibit 10.1 to the Current Report of the Company on Form 8-K dated September 1, 2021, is hereby incorporated by reference.

		(n)	The Saul Centers, Inc. 2004 Stock Plan, as amended on April 25, 2008, ~~and~~ May 10, 2013 and ~~filed as Exhibit 10.(a) of the Company's Current Report on Form 8-K filed on~~ May ~~14, 2013,~~3, 2019, is hereby incorporated by reference.

		(o)	Form of Director Stock Option Agreements, as filed as Exhibit 10.(j) of the September 30, 2004 Quarterly Report of the Company, is hereby incorporated by reference.*

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		(p)	Form of Officer Stock Option Grant Agreements, as filed as Exhibit 10.(k) of the September 30, 2004 Quarterly Report of the Company, is hereby incorporated by reference.*

		(q)	Promissory Note, dated as of March 23, 2011, by Clarendon Center LLC to The Prudential Life Insurance Company of America as filed as Exhibit 10.(a) of the Company’s Current Report on Form 8-K dated April 28, 2011, is hereby incorporated by reference.

~~(r)~~	~~Deed of Trust, Security Agreement~~Amended and Fixture Filing, dated as of March 23, 2011, by Clarendon Center LLC to Lawyers Title Realty Services, Inc. as trustee for the benefit of The Prudential Insurance Company of America, as beneficiary, as filed as Exhibit 10.(b) of the Company’s Current Report on Form 8-K dated April 28, 2011, is hereby incorporated by reference.

~~(s)~~	Restated Shared Services Agreement dated as of January 1, 2018, between B. F. Saul Company and Saul Centers, Inc., filed as Exhibit 10.(s) of the 2017 Annual Report of the Company on Form 10-K is hereby incorporated by reference.

		~~(t)~~(r)	Purchase Agreement, dated as of August 9, 2011, by and among the Company, Saul Holdings Limited Partnership and B. F. Saul Real Estate Investment Trust and filed as Exhibit 10.(r) of the September 30, 2011 Quarterly Report of the Company is hereby incorporated by reference.

		~~(u)~~(s)	~~Promissory Note, dated~~First Amendment to Amended and Restated Shared Services Agreement effective as of ~~August 14, 2017, by 750 North Glebe LLC to The Northwestern Mutual Life Insurance~~January 1, 2019 , between B. F. Saul Company asand Saul Centers, Inc. filed as Exhibit 10.~~(a)~~(1) of the ~~September~~June 30, ~~2017~~2019 Quarterly Report of the Company, is hereby incorporated by reference.



		~~(v)~~(t)	~~Deed of Trust and Security~~Contribution Agreement, dated as of ~~August 14, 2017,~~November 5, 2019, by ~~750 North Glebe~~and between Saul Holdings Limited Partnership and 1592 Rockville Pike LLC filed as Exhibit 10(u) of the December 31, 2020 Annual Report of the Company is her eby incorporated by reference.

		(u)	First Amendment to ~~Eric J. Ekeroth as trustee for~~ the ~~benefit of The Northwestern Mutual Life Insurance Company, as beneficiary,~~Contribution Agreement, entered into on March 5, 2021, by and between Saul Holdings Limited Partnership and 1592 Rockville Pike LLC, as filed as Exhibit 10.~~(b)~~(a) of the ~~September 30, 2017~~March 31, 2021 Quarterly Report of the Company is hereby incorporated by reference.

21.			Subsidiaries of Saul Centers, Inc. is filed herewith.

23.1			Consent of Independent Registered Public Accounting Firm is filed herewith.

~~23.2~~			~~Consent of Independent Registered Public Accounting Firm is filed herewith.~~
24.
~~24.~~	Power of Attorney (included on signature page).

31.			Rule 13a-14(a)/15d-14(a) Certifications of Chief Executive Officer and Chief Financial Officer are filed herewith.**

32.			Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer are filed herewith.**

101.			The following financial statements from the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018,~~2021, formatted in Extensible Business Reporting Language (“XBRL”): (i) consolidated balance sheets, (ii) consolidated statements of operations, (iii) consolidated statements of changes in stockholders’ equity and comprehensive income, (iv) consolidated statements of cash flows, and (v) the notes to the consolidated financial statements.

104.1.			Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

* - Management Contract of Compensatory Plan or Agreement

** - In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

Item 16. Form 10-K Summary

Not applicable.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



	SAUL CENTERS, INC.
		(Registrant)

Date:	February ~~26, 2019~~24, 2022	/s/ B. Francis Saul II
		B. Francis Saul II
		Chairman of the Board of Directors &and Chief Executive Officer ~~(Principal~~ (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons in the capacities indicated. Each person whose signature appears below hereby constitutes and appoints each of B. Francis Saul II ~~J. Page Lansdale~~ and ~~Scott V. Schneider~~Carlos L. Heard as his attorney-in-fact and agent, with full power of substitution and resubstitution for him in any and all capacities, to sign any or all amendments to this Report and to file same, with exhibits thereto and other documents in connection therewith, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that such attorney-in-fact and agent or his substitutes may do or cause to be done by virtue hereof.



~~Date:~~		~~February 26, 2019~~		~~/s/ J. Page Lansdale~~
				~~J. Page Lansdale, President and Director~~
Date:		February 24, 2022
~~Date:~~	~~February 26, 2019~~		/s/ Philip D. Caraci
				Philip D. Caraci, Vice Chairman

Date:		February ~~26, 2019~~24, 2022		/s/ ~~Scott V. Schneider~~D. Todd Pearson
				~~Scott V. Schneider,~~D. Todd Pearson President and Chief Operating Officer

Date:		February 24, 2022		/s/ Carlos L. Heard
				Carlos L. Heard, Senior Vice President ~~Treasurer~~ and ~~Secretary~~Chief Financial Officer (Principal Financial Officer)

Date:		February ~~26, 2019~~24, 2022		/s/ Joel A. Friedman
				Joel A. Friedman, Senior Vice President-Chief Accounting Officer and Treasurer (Principal Accounting Officer)

Date:		February ~~26, 2019~~24, 2022		~~/s/ John E. Chapoton~~
				John E. Chapoton, Director

Date:		February ~~26, 2019~~24, 2022		/s/ G. Patrick Clancy, Jr.
				G. Patrick Clancy, Jr., Director



Date:	February ~~26, 2019~~24, 2022	/s/ J. Page Lansdale
		J. Page Lansdale, Director

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Date:	February 24, 2022	/s/ Willoughby B. Laycock
		Willoughby B. Laycock, Director

Date:	February 24, 2022	/s/ H. Gregory Platts
		H. Gregory Platts, Director

Date:	February ~~26, 2019~~24, 2022	/s/ Earl A. Powell III
		Earl A. Powell III, Director

Date:	February ~~26, 2019~~24, 2022	/s/ Andrew M. Saul II
		Andrew M. Saul II Director

Date:	February ~~26, 2019~~24, 2022	/s/ Mark Sullivan III
		Mark Sullivan III, Director

Date:	February ~~26, 2019~~24, 2022	/s/ John R. Whitmore
		John R. Whitmore, Director

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Financial Statements

~~Report of Independent Registered Public Accounting Firm~~REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Saul Centers, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance ~~sheet~~sheets of Saul Centers, Inc. and subsidiaries (the “Company”) as of December 31, ~~2018,~~2021 and 2020, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the ~~year~~three years in the period ended December 31, ~~2018,~~2021, and the related notes and the schedule listed in the Index at Item 15(a)2(b) (collectively referred to as the ~~“financial statements”~~"financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2018,~~2021 and 2020, and the results of its operations and its cash flows for each of the ~~year~~three years ended December 31, ~~2018,~~2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the ~~Company’s~~Company's internal control over financial reporting as of December 31, ~~2018,~~2021, based on criteria established in Internal Control -— Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February ~~26, 2019,~~24, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the ~~Company’s~~Company's management. Our responsibility is to express an opinion on the ~~Company’s~~Company's financial statements based on our ~~audit.~~audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our ~~audit~~audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our ~~audit~~audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our ~~audit~~audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our ~~audit~~audits provides a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Collectability of Operating Lease Receivables — Refer to Note 2 to the financial statements

Critical Audit Matter Description

Accounts receivable are primarily comprised of rental and reimbursement billings due from tenants, and straight-line rent receivables representing the cumulative amount of future adjustments necessary to present rental income on a straight-line basis. Individual leases are assessed for collectability and upon the determination that the collection of

F-1

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rents is not probable, accrued rent and accounts receivable are charged off, and the charge off 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. The Company also assessed whether operating lease receivables, at the portfolio level, are appropriately valued based upon an analysis of balances outstanding, effects of tenant bankruptcies, historical levels of bad debt and current economic trends. For the year-ended December 31, 2021, the Company reduced rental revenue by $0.8 million due to lease-related reserves and charge offs.

We identified the Company’s evaluation of collectability of lease receivables as a critical audit matter because of the significant assumptions management makes when determining whether the collection of operating lease receivables is probable. Management’s evaluation is based on the best information available to the Company at the time of preparing the financial statements and takes into consideration the types of business conducted by tenants and current discussions with the tenants, as well as recent rent collection experience. Auditing management’s assessment of collectability of lease receivables required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s analysis and assessment of collectability.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the collectability of operating lease receivables included the following, among others:

•We tested the effectiveness of controls over management’s evaluation of tenant-level considerations that may indicate that the collection of operating lease receivables is not probable including management’s review of its accounts receivable aging schedule.

•We obtained management’s analysis of the collectability of tenant accounts receivables and performed the following procedures, among others:

◦Tested the completeness and accuracy of the accounts receivable aging schedule as of December 31, 2021, by obtaining tenant agreements, monthly charge statements, and evidence of cash collections subsequent to year end; and

◦For a selected sample of tenants with outstanding receivables as of December 31, 2021, evaluated the reasonableness of management’s assumptions regarding collection probability by inspecting tenant correspondence, historical payment patterns and subsequent cash collections, evidence of lease modification negotiations, including rent deferrals or abatements, evidence of tenant bankruptcy or liquidity constraints, and performing corroborating inquiries of management, including the Collections Department.

/s/ Deloitte & Touche LLP

McLean, Virginia

February ~~26, 2019~~24, 2022

We have served as the ~~Company’s~~Company's auditor since 2018.

~~Report~~

F-2

Table of ~~Independent Registered Public Accounting Firm~~Contents

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the ~~Stockholders~~stockholders and the Board of Directors of Saul Centers, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Saul Centers, Inc. and subsidiaries (the “Company”) as of December 31, ~~2018,~~2021, based on criteria established in Internal ~~Control-Integrated~~Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2018,~~2021, based on criteria established in Internal ~~Control-Integrated~~Control – Integrated Framework (2013) issued by COSO.

We have also ~~have~~ audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements ~~of the Company~~ as of and for the year ended December 31, ~~2018,~~2021, of the Company and our report dated February ~~26, 2019~~24, 2022, expressed an unqualified opinion ~~thereon.~~on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Assessment of Effectiveness of Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control ~~Over~~over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & ~~Touch~~Touche LLP

McLean, Virginia

February ~~26, 2019~~24, 2022

F-3

~~Report~~

Table of ~~Independent Registered Public Accounting Firm~~Contents

~~To the Stockholders and the Board of Directors of Saul Centers, Inc.~~

~~Opinion on the Financial Statements~~

We have audited the accompanying consolidated balance sheet of Saul Centers, Inc. (the “Company”) as of December 31, 2017, the related consolidated statements of operations, comprehensive income, equity and cash flows for each of the two years in the period ended December 31, 2017, and the related notes and financial statement schedule listed in the Index at Item 15(a)2(b) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2017, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2017, in conformity with U.S. generally accepted accounting principles.

~~Basis for Opinion~~

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

~~/s/ Ernst & Young LLP~~

~~We served as the Company's auditor from 2002 to 2018.~~

~~Tysons, Virginia~~

~~February 27, 2018~~

Saul Centers, Inc.

CONSOLIDATED BALANCE SHEETS


	December 31,							December 31,
(Dollars in thousands, except per share amounts)	2018			2017			(Dollars in thousands, except per share amounts)	2021		2020
Assets							Assets
Real estate investments							Real estate investments
Land	$	488,918		$	450,256		Land	$	511,529	$	511,482
Buildings and equipment	1,273,275			1,261,830			Buildings and equipment	1,566,686		1,543,837
Construction in progress	185,972			91,114			Construction in progress	205,911		69,477
	1,948,165			1,803,200				2,284,126		2,124,796
Accumulated depreciation	(525,518		)	(488,166		)	Accumulated depreciation	(650,113)		(607,706)
	1,422,647			1,315,034				1,634,013		1,517,090
Cash and cash equivalents	14,578			10,908			Cash and cash equivalents	14,594		26,856
Accounts receivable and accrued income, net	53,876			54,057			Accounts receivable and accrued income, net	58,659		64,917
Deferred leasing costs, net	28,083			27,255			Deferred leasing costs, net	24,005		26,872
Prepaid expenses, net	5,175			5,248

Other assets	3,130			9,950			Other assets	15,490		9,837
Total assets	$	1,527,489		$	1,422,452		Total assets	$	1,746,761	$	1,645,572
Liabilities							Liabilities
Mortgage notes payable	$	880,271		$	897,888		Mortgage notes payable	$	941,456	$	827,603
Term loan facility payable	74,591			—			Term loan facility payable	99,233		74,791
Revolving credit facility payable	45,329			60,734			Revolving credit facility payable	103,167		103,913
Construction loan payable	21,655			—			Construction loan payable	—		144,607
Dividends and distributions payable	19,153			18,520			Dividends and distributions payable	21,672		19,448
Accounts payable, accrued expenses and other liabilities	32,419			23,123			Accounts payable, accrued expenses and other liabilities	25,558		24,384
Deferred income	28,851			29,084			Deferred income	25,188		23,293
Total liabilities	1,102,269			1,029,349			Total liabilities	1,216,274		1,218,039
Equity							Equity
Preferred stock, 1,000,000 shares authorized:							Preferred stock, 1,000,000 shares authorized:
Series C Cumulative Redeemable, 42,000 and 72,000 shares issued and outstanding, respectively	105,000			180,000
Series D Cumulative Redeemable, 30,000 and 0 shares issued and outstanding, respectively	75,000			—
Common stock, $0.01 par value, 40,000,000 shares authorized, 22,739,207 and 22,123,128 shares issued and outstanding, respectively	227			221

Series D Cumulative Redeemable, 30,000 shares issued and outstanding							Series D Cumulative Redeemable, 30,000 shares issued and outstanding	75,000		75,000
Series E Cumulative Redeemable, 44,000 shares issued and outstanding							Series E Cumulative Redeemable, 44,000 shares issued and outstanding	110,000		110,000
Common stock, $0.01 par value, 42,000,000 and 40,000,000 shares authorized, respectively, 23,840,471 and 23,476,626 shares issued and outstanding, respectively							Common stock, $0.01 par value, 42,000,000 and 40,000,000 shares authorized, respectively, 23,840,471 and 23,476,626 shares issued and outstanding, respectively	238		235
Additional paid-in capital	384,533			352,590			Additional paid-in capital	436,609		420,625
Partnership units in escrow							Partnership units in escrow	39,650		—
Distributions in excess of accumulated earnings	(208,593		)	(197,710		)	Distributions in excess of accumulated earnings	(256,448)		(241,535)
Accumulated other comprehensive loss	(255		)	(696		)

Total Saul Centers, Inc. equity	355,912			334,405			Total Saul Centers, Inc. equity	405,049		364,325
Noncontrolling interests	69,308			58,698			Noncontrolling interests	125,438		63,208
Total equity	425,220			393,103			Total equity	530,487		427,533
Total liabilities and equity	$	1,527,489		$	1,422,452		Total liabilities and equity	$	1,746,761	$	1,645,572

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

F-4

Table of Contents

Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS


											For The Year Ended December 31,
(Dollars in thousands, except per share amounts)										(Dollars in thousands, except per share amounts)	2021		2020		2019
Revenue										Revenue
Rental revenue										Rental revenue	$	234,515	$	220,281	$	223,352

Other										Other	4,710		4,926		8,173
Total revenue										Total revenue	239,225		225,207		231,525
Expenses										Expenses
Property operating expenses										Property operating expenses	32,881		28,857		29,946

Real estate taxes										Real estate taxes	28,747		29,560		27,987

	For The Year Ended December 31,
(Dollars in thousands, except per share amounts)	2018			2017			2016
Property revenue
Base rent	$	184,684		$	181,141		$	172,381
Expense recoveries	35,537			35,347			34,269
Percentage rent	994			1,458			1,379
Other	6,689			9,259			8,990
Total property revenue	227,904			227,205			217,019
Property expenses
Property operating expenses	28,202			27,689			27,527
Provision for credit losses	685			906			1,494
Real estate taxes	27,376			26,997			24,680
Total property expenses	56,263			55,592			53,701
Property operating income	171,641			171,613			163,318

Other revenue	272			80			51
Other expenses
Interest expense and amortization of deferred debt costs	45,040			47,225			45,683

Interest expense, net and amortization of deferred debt costs										Interest expense, net and amortization of deferred debt costs	45,424		46,519		41,834
Depreciation and amortization of deferred leasing costs	45,861			45,694			44,417			Depreciation and amortization of deferred leasing costs	50,272		51,126		46,333
General and administrative	18,459			18,176			17,496			General and administrative	20,252		19,107		20,793
Acquisition related costs	—			—			60
Total other expenses	109,360			111,095			107,656
Operating income	62,553			60,598			55,713

Total expenses										Total expenses	177,576		175,169		166,893

Change in fair value of derivatives	(3		)	70			(6		)	Change in fair value of derivatives	—		—		(436)
Gains on sale of property	509			—			1,013

Gain on sale of property										Gain on sale of property	—		278		—

Net Income	63,059			60,668			56,720			Net Income	61,649		50,316		64,196
Noncontrolling interests										Noncontrolling interests

Income attributable to noncontrolling interests	(12,505		)	(12,411		)	(11,441		)	Income attributable to noncontrolling interests	(13,260)		(9,934)		(12,473)
Net income attributable to Saul Centers, Inc.	50,554			48,257			45,279			Net income attributable to Saul Centers, Inc.	48,389		40,382		51,723

Preferred stock dividends										Preferred stock dividends	(11,194)		(11,194)		(12,235)
Extinguishment of issuance costs upon redemption of preferred shares	(2,328		)	—			—			Extinguishment of issuance costs upon redemption of preferred shares	—		—		(3,235)
Preferred stock dividends	(12,262		)	(12,375		)	(12,375		)

Net income available to common stockholders	$	35,964		$	35,882		$	32,904		Net income available to common stockholders	$	37,195	$	29,188	$	36,253
Per share net income available to common stockholders										Per share net income available to common stockholders
Basic:										Basic:

Basic	$	1.61		$	1.64		$	1.53		Basic	$	1.57	$	1.25	$	1.58

Diluted	$	1.60		$	1.63		$	1.52		Diluted	$	1.57	$	1.25	$	1.57

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

F-5

Table of Contents

Saul Centers, Inc.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	For The Year Ended December 31,										For The Year Ended December 31,
(Dollars in thousands)	2018			2017			2016			(Dollars in thousands)	2021		2020		2019
Net income	$	63,059		$	60,668		$	56,720		Net income	$	61,649	$	50,316	$	64,196
Other comprehensive income										Other comprehensive income
Unrealized gain on cash flow hedge	594			812			678			Unrealized gain on cash flow hedge	—		—		93
Total comprehensive income	63,653			61,480			57,398			Total comprehensive income	61,649		50,316		64,289
Comprehensive income attributable to noncontrolling interests	(12,658		)	(12,620		)	(11,616		)	Comprehensive income attributable to noncontrolling interests	(13,260)		(9,934)		(12,561)
Total comprehensive income attributable to Saul Centers, Inc.	50,995			48,860			45,782			Total comprehensive income attributable to Saul Centers, Inc.	48,389		40,382		51,728
Preferred stock dividends										Preferred stock dividends	(11,194)		(11,194)		(12,235)
Extinguishment of issuance costs upon redemption of preferred shares	(2,328		)	—			—			Extinguishment of issuance costs upon redemption of preferred shares	—		—		(3,235)
Preferred dividends	(12,262		)	(12,375		)	(12,375		)

Total comprehensive income available to common stockholders	$	36,405		$	36,485		$	33,407		Total comprehensive income available to common stockholders	$	37,195	$	29,188	$	36,258

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

F-6



Maryland			52-1833074
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)



Title of each class		Trading symbol:		Name of each exchange on which registered
Common Stock, Par Value $0.01 Per Share		BFS		New York Stock Exchange
Depositary Shares each representing 1/~~100~~^th ~~of a share of 6.875% Series C Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share~~		~~New York Stock Exchange~~
~~Depositary Shares each representing 1/100~~^th100th of a share of 6.125% Series D Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share	BFS/PRD		New York Stock Exchange
Depositary Shares each representing 1/100th of a share of 6.000% Series E Cumulative Redeemable Preferred Stock, Par Value $0.01 Per Share		BFS/PRE		New York Stock Exchange


	Period Ended
Index	12/31/2016	12/31/2017	12/31/2018	12/31/2019	12/31/2020	12/31/2021
Saul Centers, Inc. 1	$100.00	$95.78	$76.16	$89.40	$57.15	$100.16
S&P 500 2	$100.00	$121.83	$116.49	$152.71	$181.35	$233.41
Russell 2000 3	$100.00	$114.65	$102.02	$128.06	$153.62	$176.39
FTSE NAREIT Equity 4	$100.00	$105.23	$100.36	$126.45	$116.34	$166.64

1 Source: S&P Capital I.Q.
2 Source: Bloomberg
3 Source: FTSE Russell
4 Source: FTSE National Association of Real Estate Investment Trusts



	Period Ended
Index	12/31/2013		12/31/2014		12/31/2015		12/31/2016		12/31/2017		12/31/2018
Saul Centers, Inc. ¹		$100.00		$123.76		$114.49		$153.66		$142.31		$108.64
S&P 500 ²		$100.00		$113.69		$115.26		$129.05		$157.22		$150.33
Russell 2000 ³		$100.00		$104.89		$100.26		$121.63		$139.44		$124.09
NAREIT Equity ⁴		$100.00		$130.14		$134.30		$145.74		$153.36		$146.27

¹Source: S&P Capital I.Q.
²Source: Bloomberg
³Source: FTSE Russell
⁴Source: National Association of Real Estate Investment Trusts



x☒			ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



SAUL CENTERS, INC.
(Exact name of registrant as specified in its charter)


					Page Numbers
			PART I

				~~Page Numbers~~
Item 1.	~~PART I~~

~~Item 1.~~	Business	34

Item 1A.			Risk Factors		1511

Item 1B.			Unresolved Staff Comments		2725

Item 2.			Properties		2725

Item 3.			Legal Proceedings		3532

Item 4.			Mine Safety Disclosures		3532

			PART II

Item 5.			Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		3633

Item 6.			Selected Financial Data		3835

Item 7.			Management’s Discussion and Analysis of Financial Condition And Results of Operations		3935

Item 7A.			Quantitative and Qualitative Disclosures About Market Risk		6352

Item 8.			Financial Statements and Supplementary Data		6453

Item 9.			Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		6453

Item 9A.			Controls and Procedures		6453

Item 9B.			Other Information		6655

			PART III

Item 10.			Directors, Executive Officers and Corporate Governance		6656

Item 11.			Executive Compensation		6756

Item 12.			Security Ownership of Certain Beneficial Owners and Management And Related Stockholder Matters		6756

Item 13.			Certain Relationships and Related Transactions, and Director Independence		6756

Item 14.			Principal Accountant Fees and Services		6756

			PART IV

Item 15.			Exhibits and Financial Statement Schedules		6857

Item 16.			Form 10-K Summary		7261

			FINANCIAL STATEMENT SCHEDULE

Schedule III.			Real Estate and Accumulated Depreciation		F-~~F-37~~28



Name of Property	Location	Type	Square Footage	Year of Acquisition/ Development/ Disposal
Acquisitions
Burtonsville Town Square	Burtonsville, Maryland	Shopping Center	121,000	2017
7316 Wisconsin Avenue	Bethesda, Maryland	Mixed-Use	69,600	2018
Developments
Park Van Ness	Washington, DC	Mixed-Use	223,400	2013-2016
750 N. Glebe Road	Arlington, Virginia	Mixed-Use		2017-2018
Ashbrook Marketplace	Ashburn, Virginia	Shopping Center		2018
Dispositions
Crosstown Business Center	Tulsa, Oklahoma	Mixed-Use	197,100	2016
Great Eastern	District Heights, Maryland	Shopping Center	255,400	2017


~~(1)~~	~~Calculated using annualized contractual base rent payable as of December 31, 2018 for the expiring GLA, excluding expenses payable by or reimbursable from tenants.~~



Property	Location	Leasable Area (Square Feet)	Year Acquired or Developed (Renovated)	Land Area (Acres)	Percentage Leased as of December 31, (1)
					2021		2020		2019		2018		2017		Anchor / Significant Tenants
Shopping Centers
Ashbrook Marketplace	Ashburn, VA	85,819	2018 (2019)	13.7	100	%	100	%	92	%	N/A		N/A		Lidl, Planet Fitness, Starbucks, Dunkin Donuts, Valvoline, Cafe Rio, McAlisters Deli
Ashburn Village	Ashburn, VA	221,596	1994-2006	26.4	96	%	95	%	97	%	97	%	94	%	Giant Food, Hallmark, McDonald's, Burger King, Dunkin Donuts, Kinder Care, Blue Ridge Grill
Ashland Square Phase I	Dumfries, VA	23,120	2007	2.0	100	%	100	%	100	%	100	%	100	%	Capital One Bank, CVS Pharmacy, The All American Steakhouse
Beacon Center	Alexandria, VA	359,671	1972 (1993/99/07)	32.3	100	%	100	%	100	%	100	%	100	%	Lowe's Home Improvement Center, Giant Food, Home Goods, Outback Steakhouse, Marshalls, Party Depot, Panera Bread, TGI Fridays, Starbucks, Famous Dave's, Chipotle, Capital One Bank, Wendy's
BJ’s Wholesale Club	Alexandria, VA	115,660	2008	9.6	100	%	100	%	100	%	100	%	100	%	BJ's Wholesale Club
Boca Valley Plaza	Boca Raton, FL	121,365	2004	12.7	94	%	89	%	99	%	96	%	95	%	Publix, Palm Beach Fitness, Anima Domus
Boulevard	Fairfax, VA	49,140	1994 (1999/09)	5.0	96	%	97	%	100	%	100	%	100	%	Panera Bread, Party City, Petco, Capital One Bank
Briggs Chaney MarketPlace	Silver Spring, MD	194,258	2004	18.2	95	%	97	%	96	%	92	%	100	%	Global Food, Ross Dress For Less, Advance Auto Parts, McDonald's, Dunkin Donuts, Enterprise Rent-A-Car, Dollar Tree, Dollar General, Salon Plaza
Broadlands Village	Ashburn, VA	174,438	2003 (2004/06)	24.0	92	%	90	%	98	%	98	%	77	%	Aldi Grocery, The All American Steakhouse, Bonefish Grill, Dollar Tree, Starbucks, Minnieland Day Care, Chase Bank, LA Fitness
Burtonsville Town Square	Burtonsville, MD	139,928	2017	26.3	100	%	100	%	98	%	100	%	100	%	Giant Food, Petco, Starbucks, Greene Turtle, Capital One Bank, CVS Pharmacy, Roy Rogers, Mr. Tire, Taco Bell
Countryside Marketplace	Sterling, VA	138,804	2004	16.0	91	%	92	%	95	%	96	%	94	%	Lotte Plaza Market, CVS Pharmacy, Starbucks, McDonald's, 7-Eleven
Cranberry Square	Westminster, MD	141,450	2011	18.9	97	%	87	%	96	%	97	%	100	%	Giant Food, Giant Gas Station, Staples, Party City, Wendy's, Sola Salons
Cruse MarketPlace	Cumming, GA	78,686	2004	10.6	94	%	92	%	94	%	96	%	87	%	Publix, Subway, Orange Theory, Anytime Fitness
Flagship Center	Rockville, MD	21,500	1972, 1989	0.5	100	%	100	%	100	%	100	%	100	%	Chase Bank, Bank of America
French Market	Oklahoma City, OK	246,148	1974 (1984/98)	13.8	75	%	78	%	97	%	96	%	97	%	Burlington Coat Factory, Bed Bath & Beyond, Staples, Petco, The Tile Shop, Lakeshore Learning Center, Dollar Tree, Verizon, Raising Cane's
Germantown	Germantown, MD	18,982	1992	2.7	100	%	100	%	100	%	100	%	100	%	CVS Pharmacy, Jiffy Lube
The Glen	Woodbridge, VA	136,440	1994 (2005)	14.7	93	%	98	%	97	%	96	%	96	%	Safeway, Panera Bread, Five Guys, Chipotle
Great Falls Center	Great Falls, VA	91,666	2008	11.0	98	%	100	%	98	%	100	%	100	%	Safeway, CVS Pharmacy, Trustar Bank, Starbucks, Subway, Long & Foster
Hampshire Langley	Takoma Park, MD	131,700	1972 (1979)	9.9	100	%	100	%	100	%	100	%	100	%	Mega Mart, Starbucks, Chuck E. Cheese's, Sardi's Chicken, Capital One Bank, Kool Smiles, Wells Fargo


~~(1)~~	Percentage leased is a percentage of rentable square feet leased for commercial space and a percentage of units leased for apartments. Includes only operating properties owned as of December 31, 2018. As such, prior year totals do not agree to prior year tables.


~~(2)~~	~~Total percentage leased is for commercial space only.~~


~~(3)~~	Prior year leased percentages for Total Shopping Centers, Total Mixed-Use Properties and Total Portfolio have been recalculated to exclude the impact of properties sold or removed from service and, therefore, the percentages reported in this table may be different than the percentages previously reported.


FORM
~~FORM~~ 10-K



SELECTED FINANCIAL DATA
	Years Ended December 31,
(In thousands, except per share data)	2018			2017			2016			2015			2014
Operating Data:
Total property revenue	$	227,904		$	227,205		$	217,019		$	209,026		$	207,017
Total property expenses	56,263			55,592			53,701			51,143			49,513
Property operating income	171,641			171,613			163,318			157,883			157,504
Other revenue	272			80			51			51			75
Total other expenses	(109,360		)	(111,095		)	(107,656		)	(105,004		)	(105,650		)
Operating income	62,553			60,598			55,713			52,930			51,929
Non-operating income:
Change in fair value of derivatives	(3		)	70			(6		)	(10		)	(10		)
Gains on sales of properties	509			—			1,013			11			6,069
Net income	63,059			60,668			56,720			52,931			57,988
Income attributable to noncontrolling interests	(12,505		)	(12,411		)	(11,441		)	(10,463		)	(11,045		)
Net income attributable to Saul Centers, Inc.	50,554			48,257			45,279			42,468			46,943
Preferred stock redemption	(2,328		)	—			—			—			(1,480		)
Preferred dividends	(12,262		)	(12,375		)	(12,375		)	(12,375		)	(13,361		)
Net income available to common stockholders	$	35,964		$	35,882		$	32,904		$	30,093		$	32,102
Per Share Data (diluted):
Net income available to common stockholders	$	1.60		$	1.63		$	1.52		$	1.42		$	1.54
Basic and Diluted Shares Outstanding:
Weighted average common shares - basic	22,383			21,901			21,505			21,127			20,772
Effect of dilutive options	42			107			110			69			49
Weighted average common shares - diluted	22,425			22,008			21,615			21,196			20,821
Weighted average convertible limited partnership units	7,731			7,503			7,375			7,253			7,156
Weighted average common shares and fully converted limited partnership units - diluted	30,156			29,511			28,990			28,449			27,977
Dividends Paid:
Cash dividends to common stockholders (1)	$	46,306		$	44,576		$	39,472		$	35,645		$	32,346
Cash dividends per share	$	2.08		$	2.04		$	1.84		$	1.69		$	1.56
Balance Sheet Data:
Real estate investments (net of accumulated depreciation)	$	1,422,647		$	1,315,034		$	1,242,534		$	1,197,340		$	1,163,542
Total assets	1,527,489			1,422,452			1,343,025			1,295,408			1,257,113
Total debt, including accrued interest	1,026,932			962,162			903,709			869,652			850,727
Preferred stock	180,000			180,000			180,000			180,000			180,000
Total equity	425,220			393,103			373,249			353,727			339,257


Operating expenses
(Dollars in thousands)	Year ended December 31,						Percentage Change
	2021		2020		2019		2021 from 2020		2020 from 2019
Property operating expenses	$	32,881	$	28,857	$	29,946	13.9	%	(3.6)	%

Real estate taxes	28,747		29,560		27,987		(2.8)	%	5.6	%
Interest expense, net and amortization of deferred debt costs	45,424		46,519		41,834		(2.4)	%	11.2	%
Depreciation and amortization of deferred leasing costs	50,272		51,126		46,333		(1.7)	%	10.3	%
General and administrative	20,252		19,107		20,793		6.0	%	(8.1)	%


Total expenses	$	177,576	$	175,169	$	166,893	1.4	%	5.0	%



Expiring Leases:	Total
Square feet	994,236
Average base rent per square foot	$	19.98
Estimated market base rent per square foot	$	20.18



CONSOLIDATED STATEMENTS OF EQUITY
(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, December 31, 2015	$	180,000		$	213	$	305,008		$	(180,091	)	$	(1,802	)	$	303,328		$	50,399		$	353,727
Issuance of common stock:
186,797 shares pursuant to dividend reinvestment plan	—			2		10,309			—			—			10,311			—			10,311
251,323 shares due to exercise of employee stock options and issuance of directors' deferred stock	—			2		12,854			—			—			12,856			—			12,856
Issuance of 124,758 partnership units pursuant to dividend reinvestment plan	—			—		—			—			—			—			6,910			6,910
Net income	—			—		—			45,279			—			45,279			11,441			56,720
Change in unrealized loss on cash flow hedge	—			—		—			—			503			503			175			678
Series C preferred stock distributions	—			—		—			(9,282		)	—			(9,282		)	—			(9,282		)
Common stock distributions	—			—		—			(30,328		)	—			(30,328		)	(10,392		)	(40,720		)
Distributions payable on Series C preferred stock, $42.97 per share	—			—		—			(3,093		)	—			(3,093		)	—			(3,093		)
Distributions payable common stock ($0.51/share) and partnership units ($0.51/unit)	—			—		—			(11,069		)	—			(11,069		)	(3,789		)	(14,858		)
Balance, December 31, 2016	180,000			217		328,171			(188,584		)	(1,299		)	318,505			54,744			373,249
Issuance of common stock:
266,011 shares pursuant to dividend reinvestment plan	—			2		15,748			—			—			15,750			—			15,750
152,758 shares due to exercise of employee stock options and issuance of directors' deferred stock	—			2		8,671			—			—			8,673			—			8,673
Issuance of 111,351 partnership units pursuant to dividend reinvestment plan	—			—		—			—			—			—			6,735			6,735
Net income	—			—		—			48,257			—			48,257			12,411			60,668
Change in unrealized loss on cash flow hedge	—			—		—			—			603			603			209			812
Series C preferred stock distributions	—			—		—			(9,282		)	—			(9,282		)	—			(9,282		)
Common stock distributions	—			—		—			(33,490		)	—			(33,490		)	(11,479		)	(44,969		)
Distributions payable on Series C preferred stock, $42.97 per share	—			—		—			(3,093		)	—			(3,093		)	—			(3,093		)
Distributions payable common stock ($0.52/share) and partnership units ($0.52/unit)	—			—		—			(11,518		)	—			(11,518		)	(3,922		)	(15,440		)
Balance, December 31, 2017	180,000			221		352,590			(197,710		)	(696		)	334,405			58,698			393,103
CONSOLIDATED STATEMENTS OF EQUITY (continued)
(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
Issuance of 30,000 shares of Series D Cumulative preferred stock	75,000			—		(2,633		)	—			—			72,367			—			72,367
Redemption of 30,000 shares of Series C Cumulative preferred stock	(75,000		)	—		2,311			(2,328		)	—			(75,017		)	—			(75,017		)
Issuance of common stock:
572,928 shares pursuant to dividend reinvestment plan	—			6		28,817			—			—			28,823			—			28,823
43,150 shares due to exercise of employee stock options and issuance of directors' deferred stock	—			—		3,448			—			—			3,448			—			3,448
Issuance of 284,113 partnership units	—			—		—			—			—			—			14,159			14,159
Net income	—			—		—			50,554			—			50,554			12,505			63,059
Change in unrealized loss on cash flow hedge	—			—		—			—			441			441			153			594
Preferred stock distributions:
Series C	—			—		—			(6,145		)	—			(6,145		)	—			(6,145		)
Series D									(3,164		)				(3,164		)				(3,164		)
Common stock distributions	—			—		—			(34,841		)	—			(34,841		)	(12,059		)	(46,900		)
Distributions payable on Series C preferred stock, $42.97 per share	—			—		—			(1,805		)	—			(1,805		)	—			(1,805		)
Distributions payable on Series D preferred stock, $38.28 per share	—			—		—			(1,148		)	—			(1,148		)	—			(1,148		)
Distributions payable common stock ($0.53/share) and partnership units ($0.53/unit)	—			—		—			(12,006		)	—			(12,006		)	(4,148		)	(16,154		)
Balance, December 31, 2018	$	180,000		$	227	$	384,533		$	(208,593	)	$	(255	)	$	355,912		$	69,308		$	425,220

																	CONSOLIDATED STATEMENTS OF CASH FLOWS
	For The Year Ended December 31,										For The Year Ended December 31,
(Dollars in thousands)	2018			2017			2016			(Dollars in thousands)	2021		2020		2019
Cash flows from operating activities:										Cash flows from operating activities:
Net income	$	63,059		$	60,668		$	56,720		Net income	$	61,649	$	50,316	$	64,196
Adjustments to reconcile net income to net cash provided by operating activities:										Adjustments to reconcile net income to net cash provided by operating activities:
Change in fair value of derivatives	3			(70		)	6			Change in fair value of derivatives	—		—		436
Gains on sales of properties	(509		)	—			(1,013		)
Gain on sale of property										Gain on sale of property	—		(278)		—

Depreciation and amortization of deferred leasing costs	45,861			45,694			44,417			Depreciation and amortization of deferred leasing costs	50,272		51,126		46,333
Amortization of deferred debt costs	1,610			1,392			1,343			Amortization of deferred debt costs	1,710		1,570		1,518
Non cash compensation costs of stock grants and options	1,766			1,672			1,603			Non cash compensation costs of stock grants and options	1,562		1,438		1,859
Provision for credit losses	685			906			1,494
Increase in accounts receivable and accrued income	(336		)	(1,643		)	(3,525		)
Credit losses on operating lease receivables										Credit losses on operating lease receivables	812		5,212		1,226
(Increase) decrease in accounts receivable and accrued income										(Increase) decrease in accounts receivable and accrued income	5,446		(17,818)		339
Additions to deferred leasing costs	(6,034		)	(4,615		)	(4,633		)	Additions to deferred leasing costs	(1,814)		(8,050)		(1,843)
Increase (decrease) in prepaid expenses	73			(294		)	(399		)

(Increase) decrease in other assets	3,681			1,374			(6,368		)	(Increase) decrease in other assets	(2,820)		5		706
Increase in accounts payable, accrued expenses and other liabilities	225			1,125			921
Increase (decrease) in accounts payable, accrued expenses and other liabilities										Increase (decrease) in accounts payable, accrued expenses and other liabilities	(331)		875		158
Increase (decrease) in deferred income	255			(2,759		)	(1,476		)	Increase (decrease) in deferred income	1,895		(6,013)		455
Net cash provided by operating activities	110,339			103,450			89,090			Net cash provided by operating activities	118,381		78,383		115,383
Cash flows from investing activities:										Cash flows from investing activities:
Acquisitions of real estate investments (1)	(40,836		)	(79,499		)	(48,250		)
Acquisitions of real estate investments (1) (2) (3)										Acquisitions of real estate investments (1) (2) (3)	(9,011)		—		—
Additions to real estate investments	(12,883		)	(17,653		)	(15,564		)	Additions to real estate investments	(18,636)		(19,484)		(21,891)
Additions to development and redevelopment projects	(76,257		)	(22,842		)	(27,231		)	Additions to development and redevelopment projects	(28,225)		(37,060)		(113,772)
Proceeds from sale of properties (2)	1,326			6,688			4,771
Proceeds from sale of property										Proceeds from sale of property	—		376		—

Net cash used in investing activities	(128,650		)	(113,306		)	(86,274		)	Net cash used in investing activities	(55,872)		(56,168)		(135,663)
Cash flows from financing activities:										Cash flows from financing activities:
Proceeds from mortgage notes payable	54,900			100,000			11,250			Proceeds from mortgage notes payable	—		52,100		50,600
Repayments on mortgage notes payable	(72,572		)	(55,679		)	(24,653		)	Repayments on mortgage notes payable	(42,641)		(45,654)		(109,235)
Proceeds from term loan facility	75,000			—			—			Proceeds from term loan facility	25,000		—		—
Proceeds from revolving credit facility	102,000			63,000			78,500			Proceeds from revolving credit facility	46,000		90,000		152,500
Repayments on revolving credit facility	(116,000		)	(51,000		)	(57,500		)	Repayments on revolving credit facility	(44,500)		(73,000)		(112,000)
Proceeds from construction loans payable	23,332			1,437			24,937			Proceeds from construction loans payable	10,917		35,883		86,868

Additions to deferred debt costs	(3,233		)	(2,583		)	(125		)	Additions to deferred debt costs	(6,393)		(1,206)		(1,010)
Proceeds from the issuance of:										Proceeds from the issuance of:
Common stock	30,503			22,751			21,564			Common stock	14,425		8,264		25,039
Partnership units (1)	5,383			6,735			6,910
Series D preferred stock	72,369			—			—
Partnership units (1) (2) (3)										Partnership units (1) (2) (3)	2,398		1,677		3,180

Series E preferred stock										Series E preferred stock	—		—		106,265
Series C preferred stock redemption	(75,000		)	—			—			Series C preferred stock redemption	—		—		(105,000)
Preferred stock redemption costs	(12		)	—			—

Distributions to:										Distributions to:
Series C preferred stockholders	(9,238		)	(12,375		)	(12,375		)	Series C preferred stockholders	—		—		(7,541)
Series D preferred stockholders	(3,164		)	—			—			Series D preferred stockholders	(4,593)		(4,594)		(4,592)
Series E preferred stockholders										Series E preferred stockholders	(6,600)		(6,600)		(257)
Common stockholders	(46,306		)	(44,576		)	(39,472		)	Common stockholders	(50,963)		(49,383)		(48,568)
Noncontrolling interests	(15,981		)	(15,268		)	(13,533		)	Noncontrolling interests	(17,821)		(16,751)		(16,642)
Net cash provided by (used in) financing activities	21,981			12,442			(4,497		)	Net cash provided by (used in) financing activities	(74,771)		(9,264)		19,607
Net increase (decrease) in cash and cash equivalents	3,670			2,586			(1,681		)	Net increase (decrease) in cash and cash equivalents	(12,262)		12,951		(673)
Cash and cash equivalents, beginning of year	10,908			8,322			10,003			Cash and cash equivalents, beginning of year	26,856		13,905		14,578
Cash and cash equivalents, end of year	$	14,578		$	10,908		$	8,322		Cash and cash equivalents, end of year	$	14,594	$	26,856	$	13,905
Supplemental disclosure of cash flow information:										Supplemental disclosure of cash flow information:
Cash paid for interest	$	43,561		$	45,713		$	44,066		Cash paid for interest	$	44,575	$	44,990	$	40,434
Increase (decrease) in accrued real estate investments and development costs	$	9,663		$	2,097		$	(7,098	)	Increase (decrease) in accrued real estate investments and development costs	$	1,626	$	(11,690)	$	303



~~Name of Property~~	~~Location~~	~~Type~~	~~Year of~~ ~~Acquisition/~~ ~~Development/~~ ~~Disposal~~
~~Acquisitions~~
~~Burtonsville Town Square~~	~~Burtonsville, Maryland~~	~~Shopping Center~~	~~2017~~
~~7316 Wisconsin Avenue~~	~~Bethesda, Maryland~~	~~Mixed-Use~~	~~2018~~
~~Developments~~
~~750 N. Glebe Road~~	~~Arlington, Virginia~~	~~Mixed-Use~~	~~2017-2018~~
~~Ashbrook Marketplace~~	~~Ashburn, Virginia~~	~~Shopping Center~~	~~2018~~
~~Dispositions~~
~~Crosstown Business Center~~	~~Tulsa, Oklahoma~~	~~Mixed-Use~~	~~2016~~
~~Great Eastern~~	~~District Heights, Maryland~~	~~Shopping Center~~	~~2017~~


(In thousands)	December 31, 2021		December 31, 2020
Rents currently due	$	8,484	$	13,321
Deferred rents and payment plans	4,141		8,205
Straight-line rent	46,239		44,863
Other receivables	2,877		3,751
Credit losses on operating lease receivables	(3,082)		(5,223)

Total	$	58,659	$	64,917


(In thousands)	Lease acquisition costs		Above market leases		Below market leases
2022	$	368	$	33	$	1,306
2023	317		33		1,297
2024	198		33		878
2025	153		33		601
2026	131		33		509
Thereafter	712		277		2,744
Total	$	1,879	$	442	$	7,335


(in thousands)	Balloon Payments			Scheduled Principal Amortization		Total
2022	$	36,502		$	31,033	$	67,535
2023	9,225			31,498		40,723
2024	66,164			30,792		96,956
2025	126,363		(a)	27,874		154,237
2026	134,088			24,347		158,435
Thereafter	545,276			91,866		637,142
Principal amount	$	917,618		$	237,410	1,155,028
Unamortized deferred debt costs						11,172
Net						$	1,143,856


(in thousands)
2022	$	163,383
2023	147,981
2024	124,039
2025	101,482
2026	77,584
Thereafter	336,423
	$	950,892



	December 31,
(Shares in thousands)	2018		2017		2016
Weighted average common shares outstanding - Basic	22,383		21,901		21,505
Effect of dilutive options	42		107		110
Weighted average common shares outstanding - Diluted	22,425		22,008		21,615
Average share price	$	52.50	$	61.63	$	58.96
Non-dilutive options	492		—		129
Years non-dilutive options were issued	2015, 2016 and 2017				2007, 2015, and 2016



(in thousands)	700 N. Glebe Road		Thruway Pad			Total
Land	$	7,236	$	2,196		$	9,432
Buildings	—		874			874
In-place Leases	—		93			93
Above Market Rent	—		—			—
Below Market Rent	—		(63		)	(63		)
Total Purchase Price	$	7,236	$	3,100		$	10,336


4.	~~NONCONTROLLING INTERESTS - HOLDERS OF CONVERTIBLE LIMITED PARTNERSHIP UNITS IN THE OPERATING PARTNERSHIP~~


5.	~~MORTGAGE NOTES PAYABLE, REVOLVING CREDIT FACILITY, INTEREST EXPENSE AND AMORTIZATION OF DEFERRED DEBT COSTS~~


~~(ee)~~	The loan is collateralized by Burtonsville Town Square and requires equal monthly principal and interest payments of $197,900 based on a 25-year amortization schedule and a final payment of $20.3 million at loan maturity. Principal of $1.1 million was amortized in 2018.


	Directors									Officers
Grant date	May 3, 2019			April 24, 2020			May 7, 2021			May 3, 2019			April 24, 2020			May 7, 2021
Exercise price	$	55.71		$	50.00		$	43.89		$	55.71		$	50.00		$	43.89
Volatility	0.236			0.258			0.297			0.206			0.240			0.275
Expected life (years)	5.0			5.0			5.0			7.0			7.0			7.0
Assumed yield	3.75		%	3.80		%	4.96		%	3.80		%	3.85		%	4.97		%
Risk-free rate	2.33		%	0.36		%	0.77		%	2.43		%	0.51		%	1.24		%



SAUL CENTERS, INC. Notes to Consolidated Financial Statements (Dollars in thousands, except per share data)
Stock options issued
	Directors
Grant date		4/24/2009			5/7/2010			5/13/2011			5/4/2012			5/10/2013			5/9/2014			5/8/2015			5/6/2016			5/5/2017			5/11/2018			Subtotals
Total grant		32,500			32,500			32,500			35,000			35,000			30,000			35,000			32,500			27,500			27,500			320,000
Vested		32,500			32,500			32,500			35,000			35,000			30,000			35,000			32,500			27,500			27,500			320,000
Exercised		30,000			27,500			25,000			25,000			22,500			17,500			12,500			7,500			—			2,500			170,000
Forfeited		—			2,500			2,500			—			—			—			—			—			2,500			—			7,500
Exercisable at December 31, 2018		2,500			2,500			5,000			10,000			12,500			12,500			22,500			25,000			25,000			25,000			142,500
Remaining unexercised		2,500			2,500			5,000			10,000			12,500			12,500			22,500			25,000			25,000			25,000			142,500
Exercise price		$	32.68		$	38.76		$	41.82		$	39.29		$	44.42		$	47.03		$	51.07		$	57.74		$	59.41		$	49.46
Volatility		0.344			0.369			0.358			0.348			0.333			0.173			0.166			0.166			0.173			0.192
Expected life (years)		6.0			5.0			5.0			5.0			5.0			5.0			5.0			5.0			5.0			5.0
Assumed yield		4.54		%	4.23		%	4.16		%	4.61		%	4.53		%	4.48		%	4.54		%	3.75		%	3.45		%	3.70		%
Risk-free rate		2.19		%	2.17		%	1.86		%	0.78		%	0.82		%	1.63		%	1.50		%	1.23		%	1.89		%	2.84		%
Total value at grant date		$	223		$	288		$	298		$	257		$	278		$	110		$	125		$	151		$	166		$	169		$	2,065
Expensed in previous years		223			288			298			257			278			110			125			—			—			—			1,579
Expensed in 2016		—			—			—			—			—			—			—			151			—			—			151
Expensed in 2017		—			—			—			—			—			—			—			—			166			—			166
Expensed in 2018		—			—			—			—			—			—			—			—			—			169			169
Future expense		—			—			—			—			—			—			—			—			—			—			—
		Officers
Grant date		5/13/2011			5/4/2012			5/10/2013			5/9/2014			5/8/2015			5/6/2016			5/5/2017			5/11/2018			Subtotals						Grand Totals
Total grant		162,500			242,500			202,500			170,000			190,000			194,000			205,000			217,500			1,584,000						1,904,000
Vested		118,750			107,500			171,875			168,125			140,625			96,375			51,250			—			854,500						1,174,500
Exercised		103,750			92,455			129,375			46,126			20,625			3,750			—			—			396,081						566,081
Forfeited		43,750			135,000			30,625			1,875			3,125			1,875			—			—			216,250						223,750
Exercisable at December 31, 2018		15,000			15,045			42,500			121,999			120,000			92,625			51,250			—			458,419						600,919
Remaining unexercised		15,000			15,045			42,500			121,999			166,250			188,375			205,000			217,500			971,669						1,114,169
Exercise price		$	41.82		$	39.29		$	44.42		$	47.03		$	51.07		$	57.74		$	59.41		$	49.46
Volatility		0.330			0.315			0.304			0.306			0.298			0.185			0.170			0.177
Expected life (years)		8.0			8.0			8.0			7.0			7.0			7.0			7.0			7.0
Assumed yield		4.81		%	5.28		%	5.12		%	4.89		%	4.94		%	3.80		%	3.50		%	3.75		%
Risk-free rate		2.75		%	1.49		%	1.49		%	2.17		%	1.89		%	1.55		%	2.17		%	2.94		%
Gross value at grant date		$	1,367		$	1,518		$	1,401		$	1,350		$	1,585		$	1,137		$	1,324		$	1,313		$	10,995					$	13,060
Estimated forfeitures		368			845			212			15			142			86			92			83			1,843						1,843
Expensed in previous years		999			576			762			492			240			—			—			—			3,069						4,648
Expensed in 2016		—			97			269			296			360			175			—			—			1,197						1,348
Expensed in 2017		—			—			158			295			361			263			205			—			1,282						1,448
Expensed in 2018		—			—			—			252			361			263			308			205			1,389						1,558
Future expense		—			—			—			—			121			350			719			1,025			2,215						2,215
Weighted average term of remaining future expense		2.5			years



	Total Distributions to						Dividend Reinvestments
(Dollars in thousands, except per share amounts)	Preferred Stockholders		Common Stockholders		Limited Partnership Unitholders		Common Stock Shares Issued	Discounted Share Price		Limited Partnership Units Issued	Average Unit Price
Distributions during 2018
October 31	$	2,953	$	11,706	$	4,062	216,476	$	49.34	13,867	$	50.20
July 31	2,953		11,590		4,055		201,500	51.68		13,107	52.60
April 30	2,672		11,545		3,942		85,202	47.54		42,422	47.83
January 31	3,824		11,465		3,922		69,750	52.71		38,037	53.03
Total 2018	$	12,402	$	46,306	$	15,981	572,928			107,433
Distributions during 2017
October 31	$	3,094	$	11,221	$	3,838	82,991	$	59.33	15,596	$	60.08
July 31	3,094		11,160		3,830		85,731	57.40		16,021	58.13
April 30	3,094		11,119		3,810		51,003	59.64		40,623	59.96
January 31	3,093		11,076		3,790		46,286	61.85		39,111	62.15
Total 2017	$	12,375	$	44,576	$	15,268	266,011			111,351
Distributions during 2016
October 31	$	3,094	$	10,168	$	3,478	44,176	$	57.18	30,891	$	57.18
July 31	3,094		10,133		3,465		39,487	65.64		26,897	65.64
April 30	3,094		10,029		3,449		48,854	51.59		34,201	51.59
January 31	3,093		9,142		3,141		54,280	49.24		32,769	49.24
Total 2016	$	12,375	$	39,472	$	13,533	186,797			124,758



(In thousands, except per share amounts)	2018
	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter
Total revenue	$	56,496	$	56,293	$	57,059	$	58,328
Operating income before loss on early extinguishment of debt, gain on casualty settlement, and noncontrolling interests	14,946		15,405		16,692		15,510
Gain on sales of properties	—		509		—		—
Net income attributable to Saul Centers, Inc.	12,587		12,543		13,155		12,269
Net income available to common stockholders	6,856		9,590		10,202		9,316
Net income available to common stockholders per diluted share	0.31		0.43		0.45		0.41



SAUL CENTERS, INC. Notes to Consolidated Financial Statements
(In thousands)	Shopping			Mixed-Use			Corporate			Consolidated
As of or for the year ended December 31, 2018	Centers			Properties			and Other			Totals
Real estate rental operations:
Revenue	$	164,671		$	63,233		$	—		$	227,904
Expenses	(34,970		)	(21,293		)	—			(56,263		)
Income from real estate	129,701			41,940			—			171,641
Other revenue	—			—			272			272
Interest expense and amortization of deferred debt costs	—			—			(45,040		)	(45,040		)
General and administrative	—			—			(18,459		)	(18,459		)
Depreciation and amortization of deferred leasing costs	(29,251		)	(16,610		)	—			(45,861		)
Change in fair value of derivatives	—			—			(3		)	(3		)
Gain on sale of property	509			—			—			509
Net income (loss)	$	100,959		$	25,330		$	(63,230	)	$	63,059
Capital investment	$	13,485		$	115,165		$	—		$	128,650
Total assets	$	971,321		$	537,500		$	18,668		$	1,527,489

As of or for the year ended December 31, 2017
Real estate rental operations:
Revenue	$	165,853		$	61,352		$	—		$	227,205
Expenses	(34,675		)	(20,917		)	—			(55,592		)
Income from real estate	131,178			40,435			—			171,613
Other revenue	—			—			80			80
Interest expense and amortization of deferred debt costs	—			—			(47,225		)	(47,225		)
General and administrative	—			—			(18,176		)	(18,176		)
Depreciation and amortization of deferred leasing costs	(29,977		)	(15,717		)	—			(45,694		)
Change in fair value of derivatives	—			—			70			70
Net income (loss)	$	101,201		$	24,718		$	(65,251	)	$	60,668
Capital investment	$	90,896		$	29,098		$	—		$	119,994
Total assets	$	974,061		$	438,283		$	10,108		$	1,422,452

As of or for the year ended December 31, 2016
Real estate rental operations:
Revenue	$	160,179		$	56,840		$	—		$	217,019
Expenses	(34,931		)	(18,770		)	—			(53,701		)
Income from real estate	125,248			38,070			—			163,318
Other revenue	—			—			51			51
Interest expense and amortization of deferred debt costs	—			—			(45,683		)	(45,683		)
General and administrative	—			—			(17,496		)	(17,496		)
Depreciation and amortization of deferred leasing costs	(29,964		)	(14,453		)	—			(44,417		)
Acquisition related costs	(60		)	—			—			(60		)
Change in fair value of derivatives	—			—			(6		)	(6		)
Gain on sale of property	—			1,013			—			1,013
Net income (loss)	$	95,224		$	24,630		$	(63,134	)	$	56,720
Capital investment	$	64,044		$	27,001		$	—		$	91,045
Total assets	$	976,545		$	358,419		$	8,061		$	1,343,025