Saul Centers, a self-managed equity REIT based in Bethesda, Maryland, has recently released its 10-K report. The company operates and manages a real estate portfolio with 61 properties, including 57 community and neighborhood shopping centers and mixed-use properties, as well as four land and development properties. Over 85% of its property operating income is generated from the metropolitan Washington, DC/Baltimore area. Saul Centers' primary business strategy is to focus on diversifying its assets through the development of transit-oriented, residential mixed-use projects and expanding its grocery-anchored shopping centers in the Washington, DC metropolitan area.
In the 10-K report, Saul Centers' management discusses the company's primary business strategy, critical accounting policies, liquidity and capital resources, and results of operations for the past two years. The company's primary strategy is to continue focusing on diversifying its assets through development projects and expanding its grocery-anchored shopping centers. It also aims to improve the operating performance of its assets and internal growth of its shopping centers through the addition of pad sites. The company has a pipeline of entitled sites in its portfolio for the development of up to an additional 3,200 apartment units and 870,000 square feet of retail and office space.
Saul Centers maintains a ratio of total debt to total asset value of under 50%, allowing the company to obtain additional secured borrowings if necessary. As of December 31, 2024, the company had availability of approximately $134.5 million under its Credit Facility. The company intends to concentrate future acquisition and development activities on transit-oriented, residential mixed-use properties and grocery-anchored shopping centers in the Washington, DC/Baltimore metropolitan area. However, it may also acquire other types of real estate in other areas of the country as opportunities present themselves.
The company's consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). Saul Centers' real estate investment properties are stated at historic cost less depreciation. 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 amount of the property exceeds its estimated fair value.
In terms of financial performance, Saul Centers reported a 4.5% increase in total revenue in 2024 compared to 2023. The increase was primarily due to higher base rent, expense recoveries, and other property revenue. However, total expenses increased by 7.0% in 2024 compared to 2023, primarily due to higher property operating expenses, real estate taxes, interest expense, and general and administrative costs.
The market has reacted to these announcements by moving the company's shares 1.6% to a price of $37.45. For more information, read the company's full 10-K submission here.
