Finding long-term financing for new projects will be the biggest hurdle this year for Maryland-based B.F. Saul Real Estate Investment Trust, the company's chairman said yesterday.
B.F. Saul, which develops and owns income-producing properties, may have to forgo some planned projects if interest rates rise sharply, said B. Francis Saul II.
"Our biggest hurdle . . . is to find long-term financing for our business," Saul told stockholders at the firm's annual meeting. "Long-term, fixed-rate financing is virtually nonexistent today."
Saul added that he hopes President Reagan's economic recovery plan works.
The properties that the company already owns are "increasing in rates of return and will continue to do so," Saul said. Its shopping centers around the country also are doing well, he said. However, the motel side of the firm was soft last year "due to the recession," Saul said. "We may see improvement in the second half of the year."
The major reason for uncertainty this year is the volatility of interest rates, Saul continued. "If interest rates stay high and move higher, we'll postpone some of these things," he said.
Some of the company's projects in the works are a 170-acre office park in Atlanta and one-story office and industrial building complexes in Atlanta and at the Avenel Business Park in Gaithersburg. The first of three buildings in the Maryland park should be completed this summer, Saul said.
The area's largest real estate investment trust had reported more than a halving in earnings for its fiscal year ended Sept. 30. Cash flow for the year also dropped from $12.7 million in 1980 to $10.4 million.