B.F. Saul Real Estate Investment Trust

About B.F. Saul Real Estate Investment Trust

7501 Wisconsin Ave., Bethesda, Md. 20814
301-986-6000 | Founded: 1892

Industry: Real Estate | Category: Top Private Companies

Saul, chairman and chief executive of Chevy Chase Bank and publicly traded Saul Centers Inc. as well as of B.F. Saul Real Estate Investment Trust, is one of the region's best-known businessmen and in November was inducted into the Washington Business Hall of Fame. Saul, his family and entities he controls own all the stock in the trust. It files financial disclosure statements with the Securities and Exchange Commission because it has publicly traded bonds. According to those filings, profit in the year ended Sept. 30 was $57 million, down 22 percent from the previous year.
Although commercial real estate accounts for just 4 percent of the trust's assets, its portfolio would be large by most other standards: As of Dec. 31, it owned 17 hotels and 14 office properties, mostly in the Washington area. In March 2006, it paid $100 million for the historic Hay-Adams hotel across from the White House. The 145-room hotel, where average room rates top $400 per night, was one of several expensive local hotels to change hands last year at soaring per-room prices.
The company also recently began development of a speculative office building in Tysons Corner.
Chevy Chase Bank, the centerpiece of the Saul holdings, is the largest bank based in the Washington area. It is also one of the region's largest home mortgage lenders. Increasingly, its loans have been nontraditional, adjustable-rate mortgages, or ARMs, with low or no down payments and such features as interest-only payments and flexible payment options. In the year ended Sept. 30, the bank originated $6.7 billion in mortgages, almost all of them ARMs. More than half of those loans, $4.3 billion, included a feature called negative amortization, which means that the amount a borrower owes can increase if he chooses to make less than the prescribed payment. Another $1.3 billion were interest-only ARMs without negative amortization. Nontraditional loans have been under increased scrutiny from regulators and investors because of concerns that borrowers are more likely to default than on traditional loans.
In January, a Wisconsin judge ruled against Chevy Chase in a class-action lawsuit arising from some of those ARMs, saying that disclosure of loan terms was inadequate. The bank is appealing the decision.

Chairman and CEO: B. Francis Saul II

2007 Financial Data

Total employees: 1,417 | Local employees: 1,255