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Notes Payable, Bank Credit Facility, Interest and Amortization of Deferred Debt Costs
 6 Months Ended
Jun. 30, 2025
Debt Disclosure [Abstract]  
Notes Payable, Bank Credit Facility, Interest and Amortization of Deferred Debt Costs Notes Payable, Bank Credit Facility, Interest and Amortization of Deferred Debt Costs
The principal amount of the Company’s outstanding debt totaled approximately $1.6 billion at June 30, 2025, of which approximately $1.4 billion was fixed-rate debt and approximately $201.0 million was unhedged variable rate debt outstanding under the Credit Facility. The carrying amount of the properties collateralizing the notes payable totaled approximately $1.6 billion as of June 30, 2025.

At December 31, 2024, the principal amount of the Company’s outstanding debt totaled approximately $1.6 billion, of which $1.4 billion was fixed rate debt and $187.0 million was unhedged variable rate debt outstanding under the Credit Facility. The carrying amount of the properties collateralizing the notes payable totaled approximately $1.6 billion as of December 31, 2024.
At June 30, 2025 and December 31, 2024, the Company had a $525.0 million senior unsecured credit facility (the “Credit Facility”) comprised of a $425.0 million revolving credit facility and a $100.0 million term loan. The revolving credit facility was scheduled to mature on August 29, 2025, and could have been extended by the Company for one additional year, subject to no default. The term loan was scheduled to mature on February 26, 2027. Interest accrued at the Secured Overnight Financing Rate (“SOFR”) plus 10 basis points plus an applicable spread, which is determined by certain leverage tests. As of June 30, 2025 and December 31, 2024, the applicable spread for borrowings was 140 basis points related to the revolving credit facility and 135 basis points related to the term loan. Letters of credit were issuable under the Credit Facility. On June 30, 2025, based on the value of the Company’s unencumbered properties calculated in accordance with the terms of the Credit Facility, approximately $131.9 million was available and undrawn under the Credit Facility, $301.0 million was outstanding and approximately $185,000 was committed for letters of credit. Saul Centers and certain consolidated subsidiaries of the Operating Partnership have guaranteed the payment obligations of the Operating Partnership under the Credit Facility.

On July 30, 2025, the Company replaced its Credit Facility. The new credit facility, which may be used for working capital, property acquisitions, development projects or letters of credit, provides for a $600.0 million senior unsecured credit facility (the "New Credit Facility") comprised of a $460.0 million revolving credit facility (the "New Revolving Line") and a $140.0 million term loan (the "New Term Loan"). The New Revolving Line has an initial maturity date of July 30, 2029, with a one-year extension option. The New Term Loan has an initial maturity date of July 28, 2028, with two one-year extension options. In general, loan availability under the New Credit Facility is primarily determined by operating income from the Operating Partnership's and certain of its subsidiaries' existing unencumbered properties. Interest accrues at SOFR plus a spread of 1.35% to 1.95% under the New Revolving Line, and 1.30% to 1.90% under the New Term Loan, each as determined by certain leverage tests. As of July 30, 2025, the applicable spreads for borrowings under the New Revolving Line and the New Term Loan are 1.40% and 1.35%, respectively. The Company and certain subsidiaries of the Operating Partnership have guaranteed the payment obligations of the Operating Partnership under the New Credit Facility.

On August 23, 2022, the Company entered into two floating-to-fixed interest rate swap agreements to manage the interest rate risk associated with $100.0 million of its variable-rate debt. The effective date of each swap agreement is October 3, 2022 and each has a $50.0 million notional amount. One agreement terminates on October 1, 2027 and effectively fixes SOFR at 2.96%. The other agreement terminates on October 1, 2030 and effectively fixes SOFR at 2.91%. Because the interest-rate swaps effectively fix SOFR for $100.0 million of variable-rate debt, unless otherwise indicated, $100.0 million of variable-rate debt is treated as fixed-rate debt for disclosure purposes. The Company has designated the agreements as cash flow hedges for accounting purposes.

The Operating Partnership is the guarantor of (a) the mortgage secured by Kentlands Place, Kentlands Square I and Kentlands pad (totaling $26.0 million at June 30, 2025) and (b) a portion of the Thruway mortgage (totaling $17.5 million of the $69.2 million outstanding balance at June 30, 2025).

The Company provides a repayment guaranty of 100% of the loan secured by Twinbrook Quarter during construction and lease-up. Such guaranty is expected to be reduced in the future as the development achieves certain metrics. As of June 30, 2025, the loan balance and the amount guaranteed were $137.6 million and there was $7.4 million remaining to draw on the loan. The Company also provides the lender with a 100% construction completion guaranty.

The Company provides a limited repayment guaranty of $26.6 million during construction and lease-up for the loan secured by Hampden House. Such guaranty is expected to be reduced in the future as the development achieves certain metrics. As of June 30, 2025, the loan balance was $100.5 million and there was $32.5 million remaining to draw on the loan. The Company also provides the lender with a 100% construction completion guaranty.

All other notes payable are non-recourse.
At June 30, 2025, the future principal payments of debt, including scheduled maturities and amortization, for years ending December 31, were as follows:

(Dollars in thousands)Principal Payments
July 1 through December 31, 2025$218,998 (1)
2026168,389 
2027134,276 (2)
202852,873 
202961,169 
203058,844 
Thereafter888,987 
Principal amount1,583,536 
Unamortized deferred debt costs18,857 
Net$1,564,679 
(1)Includes $201.0 million outstanding under the revolving credit facility of the Credit Facility, which was replaced by the New Credit Facility on July 30, 2025 as described above.
(2)Includes $100.0 million outstanding under the term loan of the Credit Facility, which was replaced by the New Credit Facility on July 30, 2025 as described above.

Deferred debt costs consist of fees and costs incurred to obtain long-term financing, construction financing and the Credit Facility. These fees and costs are being amortized on a straight-line basis over the terms of the respective loans or agreements, which approximates the effective interest method. Deferred debt costs totaling $18.9 million and $20.1 million, net of accumulated amortization of $12.6 million and $11.2 million, at June 30, 2025 and December 31, 2024, respectively, are reflected as a reduction of the related debt in the Consolidated Balance Sheets.

Interest expense, net and amortization of deferred debt costs for the three and six months ended June 30, 2025 and 2024, were as follows:

 
Three Months Ended
June 30,
Six Months Ended
June 30,
(Dollars in thousands)2025202420252024
Interest incurred$19,146 $18,400 $38,043 $36,485 
Amortization of deferred debt costs625 582 1,252 1,145 
Capitalized interest(2,917)(6,677)(5,648)(12,845)
Subtotal16,854 12,305 33,647 24,785 
Less: Interest income(34)(38)(80)(70)
Interest expense, net and amortization of deferred debt costs$16,820 $12,267 $33,567 $24,715