Exhibit 99.1

SAUL CENTERS, INC.

7501 Wisconsin Avenue, Suite 1500, Bethesda, Maryland 20814-6522

(301) 986-6200

Saul Centers, Inc. Reports Second Quarter 2006 Earnings

August 8, 2006, Bethesda, MD.

Saul Centers, Inc. (NYSE: BFS), an equity real estate investment trust, announced its second quarter 2006 operating results. Total revenues for the quarter ended June 30, 2006 increased 9.7% to $33,748,000 compared to $30,752,000 for the 2005 quarter. Operating income before minority interests and preferred stock dividends increased 7.8% to $9,648,000 compared to $8,952,000 for the comparable 2005 quarter. Net income available to common stockholders was $5,797,000 or $0.34 per diluted share for the 2006 quarter, a per share increase of 17.2% compared to $4,871,000 or $0.29 per diluted share for the 2005 quarter. Successful leasing activity at several core shopping centers and operating income from development properties produced the significant portion of increased operating income for the 2006 quarter.

Overall same property revenues for the total portfolio increased 4.1% for the 2006 second quarter compared to the same quarter in 2005 and same property operating income increased 4.0%. The same property comparisons exclude the results of operations of properties not in operation for each of the comparable reporting periods. Property operating income is calculated as total property revenue less property operating expenses, provision for credit losses and real estate taxes. Same property operating income in the shopping center portfolio increased 6.5% for the 2006 second quarter, compared to the prior year’s quarter. Successful leasing activity at several core shopping centers was the primary contributor to the improvement in same property results. Same property operating income in the office portfolio declined 2.3% for the 2006 quarter, compared to the prior year’s quarter, due to higher lease termination fees recognized in the 2005 quarter.

For the six month period ended June 30, 2006, total revenues increased 10.1% to $67,215,000 compared to $61,059,000 for the 2005 period. Operating income before minority interests and preferred stock dividends increased 8.9% to $19,157,000 compared to $17,591,000 for the comparable 2005 period. Net income available to common stockholders was $11,504,000 or $0.67 per diluted share for the 2006 period, a per share increase of 17.5% compared to $9,481,000 or $0.57 per diluted share for the 2005 period. Overall same property revenues for the total portfolio increased 4.3% for the 2006 six month period compared to the same period in 2005 and same property operating income increased 4.4%. Shopping center same property operating income increased 6.5% due to successful leasing activity at several core shopping centers and office same property operating income declined 1.1% due to higher lease termination fees recognized in the 2005 period.

www.SaulCenters.com

As of June 30, 2006, 96.7% of the operating portfolio was leased, compared to 93.2% a year earlier. The 2005 leasing percentage was adversely affected by the combined impact of a 113,000 square foot vacancy at Great Eastern Plaza and 133,000 square feet of vacant space in the Lexington Mall which the Company was not leasing in anticipation of redeveloping the shopping center. Since September 30, 2005, the Company has been actively planning the redevelopment of Lexington and has taken the space out of service. On a same property basis, 96.8% of the portfolio was leased, compared to the prior year level of 94.8%. The increase in 2006 leasing percentage resulted from the lease-up of space at Great Eastern Plaza, Southside Plaza and Olde Forte Village and to a lesser extent, improved leasing at several other properties.

Funds From Operations (FFO) available to common shareholders (after deducting preferred stock dividends) increased 12.5% to $14,048,000 in the 2006 second quarter compared to $12,484,000 for the same quarter in 2005. FFO, a widely accepted non-GAAP financial measure of operating performance for real estate investment trusts, is defined as net income, plus minority interests, extraordinary items and real estate depreciation and amortization, excluding gains and losses from property sales. On a diluted per share basis, FFO available to common shareholders increased 8.8% to $0.62 per share for the 2006 quarter compared to $0.57 per share for the 2005 quarter. FFO available to common shareholders for the 2006 six month period increased 12.9% to $27,933,000 from $24,738,000 during the 2005 period. Fully diluted per diluted share FFO available to common shareholders increased 9.7% to $1.24 per diluted share for the 2006 six month period compared to $1.13 per diluted share for the 2005 period. These increases resulted primarily from increased operating income from successful leasing activity at several core shopping centers and operating income from new developments.

Saul Centers is a self-managed, self-administered equity real estate investment trust headquartered in Bethesda, Maryland. Saul Centers currently operates and manages a real estate portfolio of 46 community and neighborhood shopping center and office properties totaling approximately 7.7 million square feet of leaseable area. Over 80% of the Company’s cash flow is generated from properties in the metropolitan Washington, DC/Baltimore area.

Contact:	Scott V. Schneider
	(301) 986-6220

www.SaulCenters.com

Saul Centers, Inc.

Condensed Consolidated Balance Sheets

($ in thousands)

	June 30, 2006			December 31, 2005
	(Unaudited)
Assets
Real estate investments
Land	$	149,863		$	139,421
Buildings and equipment		607,119			575,504
Construction in progress		62,577			47,868
		819,559			762,793
Accumulated depreciation		(205,122	)		(195,376	)
		614,437			567,417
Cash and cash equivalents		3,045			8,007
Accounts receivable and accrued income, net		23,136			23,410
Leasing costs, net		19,698			19,834
Prepaid expenses, net		1,473			2,540
Deferred debt costs, net		5,845			5,875
Other assets		6,995			4,386
Total assets	$	674,629		$	631,469
Liabilities
Mortgage notes payable	$	487,242		$	471,931
Revolving credit facility		26,000			10,500
Dividends and distributions payable		11,418			11,319
Accounts payable, accrued expenses and other liabilities		17,909			13,679
Deferred income		12,546			9,558
Total liabilities		555,115			516,987
Minority Interests		6,194			3,068
Stockholders’ Equity
Preferred stock		100,000			100,000
Common stock		170			169
Additional paid in capital		128,009			123,339
Accumulated deficit		(114,859	)		(112,094	)
Total stockholders’ equity		113,320			111,414
Total liabilities and stockholders’ equity	$	674,629		$	631,469

Saul Centers, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2006			2005			2006			2005
	(Unaudited)						(Unaudited)
Revenue
Base rent	$	27,190		$	24,509		$	54,090		$	48,641
Expense recoveries		5,407			4,700			10,920			9,680
Percentage rent		272			507			598			1,011
Other		879			1,036			1,607			1,727
Total revenue		33,748			30,752			67,215			61,059
Operating Expenses
Property operating expenses		3,963			3,483			7,931			7,256
Provision for credit losses		107			79			187			133
Real estate taxes		2,994			2,757			6,046			5,340
Interest expense and amortization of deferred debt		8,072			7,615			16,091			15,024
Depreciation and amortization of leasing costs		6,400			5,532			12,776			11,147
General and administrative		2,564			2,334			5,027			4,568
Total operating expenses		24,100			21,800			48,058			43,468
Operating Income		9,648			8,952			19,157			17,591
Minority Interests		(1,851	)		(2,081	)		(3,653	)		(4,110	)
Net Income		7,797			6,871			15,504			13,481
Preferred Dividends		(2,000	)		(2,000	)		(4,000	)		(4,000	)
Net Income Available to Common Stockholders	$	5,797		$	4,871		$	11,504		$	9,481
Per Share Net Income Available to Common Stockholders :
Diluted	$	0.34		$	0.29		$	0.67		$	0.57
Weighted Average Common Stock Outstanding :
Common stock		16,993			16,613			16,952			16,540
Effect of dilutive options		132			94			142			92
Diluted weighted average common stock		17,125			16,707			17,094			16,632

Saul Centers, Inc.

Supplemental Information

(In thousands, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2006			2005			2006			2005
	(Unaudited)						(Unaudited)
Reconciliation of Net Income to Funds From Operations (FFO)(1)
Net Income	$	7,797		$	6,871		$	15,504		$	13,481
Add: Real property depreciation & amortization		6,400			5,532			12,776			11,147
Add: Minority interests		1,851			2,081			3,653			4,110
FFO		16,048			14,484			31,933			28,738
Less: Preferred dividends		(2,000	)		(2,000	)		(4,000	)		(4,000	)
FFO available to common shareholders	$	14,048		$	12,484		$	27,933		$	24,738
Weighted Average Shares Outstanding :
Diluted weighted average common stock		17,125			16,707			17,094			16,632
Convertible limited partnership units		5,400			5,201			5,374			5,201
Diluted & converted weighted average shares		22,525			21,908			22,468			21,833
Per Share Amounts:
FFO available to common shareholders	$	0.62		$	0.57		$	1.24		$	1.13
Reconciliation of Net Income to Same Property Operating Income :
Net Income	$	7,797		$	6,871		$	15,504		$	13,481
Add: Interest expense and deferred debt amortization		8,072			7,615			16,091			15,024
Add: Depreciation and amortization		6,400			5,532			12,776			11,147
Add: General and administrative		2,564			2,334			5,027			4,568
Less: Interest income		(99	)		(157	)		(166	)		(297	)
Add: Minority interests		1,851			2,081			3,653			4,110
Property operating income		26,585			24,276			52,885			48,033
Less: Acquisitions & developments		(1,417	)		(45	)		(3,307	)		(460	)
Less: Lexington property operating income		17			(23	)		(2	)		(79	)
Total same property operating income	$	25,185		$	24,208		$	49,576		$	47,494
Total Shopping Centers	$	18,604		$	17,475		$	36,342		$	34,112
Total Office Properties		6,581			6,733			13,234			13,382
Total same property operating income	$	25,185		$	24,208		$	49,576		$	47,494

(1) FFO is a widely accepted non-GAAP financial measure of operating performance of real estate investment trusts (“REITs”). FFO is defined by the National Association of Real Estate Investment Trusts as net income, computed in accordance with GAAP, plus minority interests, extraordinary items and real estate depreciation and amortization, excluding gains or losses from property sales. 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 Consolidated Statements of Cash Flows in the Company’s SEC reports for the applicable periods. 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 supplemental measure of operating performance and along with cash flow from operating activities, financing activities and investing activities, it provides investors with an indication of the ability of the Company to incur and service debt, to make capital expenditures and to fund other cash needs. FFO may not be comparable to similarly titled measures employed by other REITs.