In addition to the above, Flagship Center consists of two developed outparcels that are part of a larger adjacent community shopping center formerly owned by The Saul Organization and sold to an affiliate of a tenant in 1991. The Company has a 90-year ground leasehold interest which commenced in September 1991 with a minimum rent of one dollar per year. The Company’s corporate headquarters lease commenced in March 2002. The 10-year lease provides for an initial annual rental payment of $513,000, escalated at 3% per year, with payment of a pro-rata share of operating expenses over a base year amount. Reflected in the accompanying financial statements is straight-lined rental expense of $549,000 for the year ended December 31, 2002. The future minimum rental commitments under this lease are $653,000 annually for the five years from 2003 through 2007, and $2,722,000 thereafter. This lease expense is included in the shared services portion of general and administrative expense (see Note 8– Related Party Transactions). The consolidated statement of operations for the year ended December 31, 2002 includes a charge for minority interests of $8,070,000, consisting of $7,130,000 related to The Saul Organization’s share of the net income for the year and $940,000 related to distributions to minority interests in excess of allocated net income for the year. The charge for the year ended December 31, 2001 of $8,069,000, consisting of $6,777,000 related to The Saul Organization’s share of the net income for the year and $1,292,000 related to distributions to minority interests in excess of allocated net income for the year. The charge for the year ended December 31, 2000 of $8,069,000 consists of $6,081,000 related to The Saul Organization’s share of the net income for the year and $1,988,000 related to distributions to minority interests in excess of allocated net income for the year. The Chairman and Chief Executive Officer, the Vice Chairman, the President, and the Chief Accounting Officer of the Company are also affiliated with The Saul Organization but devote a substantial amount of time to the management of the Company. Their annual compensation is fixed by the Compensation Committee of the Board of Directors. An entity controlled by the son of Philip D. Caraci, the Company’s President and director until March 2003 and current Vice Chairman, leased space  in four of the Company’s Shopping Centers during 2002. The total rental income was $143,000 during the year ended December 31, 2002. The leases were assigned to unaffiliated third parties during the year and no further rental income will be received under these leases from the affiliated party during 2003. Additionally, a $37,000 leasing commission payment was made to this affiliated party for procurement of a third party tenant lease at one of the Company’s Shopping Centers. Chevy Chase Bank, an affiliate of The Saul Organization, leases space in 13 of the Company’s properties. Total rental income from Chevy Chase Bank amounted to $1,368,000, $1,330,000 and $1,223,000, for the years ended December 31, 2002, 2001 and 2000, respectively. In August 2000, the Company purchased a land parcel of 7.11 acres, located within the 1,580 acre community of Ashburn Village in Loudoun County, Virginia, adjacent to its Ashburn Village neighborhood shopping center at a price of $1,580,000, based on an independent third party appraisal. The land was developed to expand the existing shopping center. The seller was a member of The Saul Organization. In October 2000, the Company purchased, through its Operating Partnership, Avenel VI, a 30,000 square foot office/flex property for $4,200,000 based on an independent third party appraisal. The seller was a member of The Saul Organization. 8. RELATED PARTY TRANSACTIONS 7. STOCKHOLDERS’ EQUITY  AND MINORITY INTERESTS 25 NOTES TO CONSOLIDATED  FINANCIAL STATEMENTS