10-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2012
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                        to

Commission file number 001-31568

New England Realty Associates Limited Partnership
(Exact name of registrant as specified in its charter)

Massachusetts (State or other jurisdiction of incorporation or organization)	04-2619298 (I.R.S. employer identification no.)
39 Brighton Avenue, Allston, Massachusetts (Address of principal executive offices)	02134 (Zip Code)
Registrant's telephone number, including area code: (617) 783-0039
Securities registered pursuant to Section 12(b) of the Act:
Depositary Receipts (Title of each Class)	NYSE AMEX (Name of each Exchange on which Registered)
Securities registered pursuant to Section 12(g) of the Act:
Class A Limited Partnership Units (Title of class)

          Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o    No ý

          Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o    No ý

          Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

          Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý    No o

          Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K ý

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer o
(Do not check if a smaller
reporting company) Smaller reporting company ý

          Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

          At June 30, 2012, the aggregate market value of the registrant's securities held by non-affiliates of the registrant was $57,067,931 based on the closing price of the registrant's traded securities on the NYSE Amex Exchange on such date. For this computation, the Registrant has excluded the market value of all Depositary Receipts reported as beneficially owned by executive officers and directors of the General Partner of the Registrant; such exclusion shall not be deemed to constitute an admission that any such person is an affiliate of the Registrant.

          Effective January 3, 2012, the Partnership authorized a 3-for-1 forward split of its Depositary Receipts listed on the NYSE Amex and a concurrent adjustment of the exchange ratio of Depositary Receipts for Class A Units of the Partnership from 10-to-1 to 30-to-1, such that each Depositary Receipt represents one-thirtieth (¹/30) of a Class A Unit of the Partnership.

          All references to Depositary Receipts in the report are reflective of the 3-for-1 forward split.

          As of March 1, 2013, there were 104,039 of the registrant's Class A units (3,121,176 Depositary Receipts) of limited partnership issued and outstanding and 24,709 Class B units issued and outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP

TABLE OF CONTENTS

		PAGE
PART I
Item 1.	Business		3
Item 1A.	Risk Factors		7
Item 1B.	Unresolved Staff Comments		11
Item 2.	Properties		11
Item 3.	Legal Proceedings		19
Item 4.	Mine Safety Disclosure		19
PART II
Item 5.	Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		20
Item 6.	Selected Financial Data		22
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations		22
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		37
Item 8.	Consolidated Financial Statements and Supplementary Data		37
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure		37
Item 9A.	Controls and Procedures		37
Item 9B.	Other Information		38
PART III
Item 10.	Directors, Executive Officers and Corporate Governance		39
Item 11.	Executive Compensation		43
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		44
Item 13.	Certain Relationships and Related Transactions, and Director Independence		47
Item 14.	Principal Accounting Fees and Services		47
PART IV
Item 15.	Exhibits and Financial Statement Schedules		48
SIGNATURES			S-1
Exhibit Index			S-2

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP

PART I

ITEM 1.    BUSINESS

General

        New England Realty Associates Limited Partnership ("NERA" or the "Partnership"), a Massachusetts Limited Partnership, was formed on August 12, 1977 as the successor to five real estate limited partnerships (collectively, the "Colonial Partnerships"), which filed for protection under Chapter XII of the Federal Bankruptcy Act in September 1974. The bankruptcy proceedings were terminated in late 1984. In July 2004, the General Partner extended the termination date of the Partnership until 2057, as allowed in the Partnership Agreement.

        The authorized capital of the Partnership is represented by three classes of partnership units ("Units"). There are two categories of limited partnership interests ("Class A Units" and "Class B Units") and one category of general partnership interests (the "General Partnership Units"). The Class A Units were initially issued to creditors and limited partners of the Colonial Partnerships and have been registered under Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Each Class A Unit is exchangeable for 30 publicly traded depositary receipts ("Receipts"), which are currently listed on the NYSE Amex Exchange and are registered under Section 12(b) of the Exchange Act. The Class B Units were issued to the original general partners of the Partnership. The General Partnership Units are held by the current general partner of the Partnership, NewReal, Inc. (the "General Partner"). The Class A Units represent an 80% ownership interest, the Class B Units represent a 19% ownership interest, and the General Partnership Units represent a 1% ownership interest.

        The Partnership is engaged in the business of acquiring, developing, holding for investment, operating and selling real estate. The Partnership, directly or through 24 subsidiary limited partnerships or limited liability companies, owns and operates various residential apartment buildings, condominium units and commercial properties located in Massachusetts and New Hampshire. As used herein, the Partnership's subsidiary limited partnerships and limited liabilities companies are each referred to as a "Subsidiary Partnership" and are collectively referred to as the "Subsidiary Partnerships."

        The Partnership owns between a 99.67% and 100% interest in each of the Subsidiary Partnerships, except in nine limited liability companies (the "Investment Properties" or "Joint Ventures") in which the Partnership has between a 40% and 50% ownership interest. The majority shareholder of the General Partner indirectly owns between 43.2% and 57%, the President of Hamilton owns between 2.5% and 4.5%, and five other management employees of Hamilton own collectively between 0% and 2.3%, respectively. The Partnership's interest in the Investment Properties is accounted for on the equity method in the Consolidated Financial Statements. See Note 1 to the Consolidated Financial Statements—"Principles of Consolidation." See Note 14 to the Consolidated Financial Statements—"Investment in Unconsolidated Joint Ventures" for a description of the properties and their operations. Of those Subsidiary Partnerships not wholly owned by the Partnership, except for the Investment Properties, the remaining ownership interest is held by an unaffiliated third party. In each such case, the third party has entered into an agreement with the Partnership, pursuant to which any benefit derived from its ownership interest in the applicable Subsidiary Partnerships will be returned to the Partnership.

        The long-term goals of the Partnership are to manage, rent and improve its properties and to acquire additional properties with income and capital appreciation potential as suitable opportunities arise. When appropriate, the Partnership may sell or refinance selected properties. Proceeds from any such sales or refinancing will be used to reduce debt, reinvested in acquisitions of other properties,

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distributed to the partners, repurchase equity interests, or used for operating expenses or reserves, as determined by the General Partner.

Operations of the Partnership

        The Partnership is managed by the General Partner, NewReal, Inc., a Massachusetts corporation wholly owned by Harold Brown and Ronald Brown. The General Partner has engaged The Hamilton Company, Inc. (the "Hamilton Company" or "Hamilton") to perform general management functions for the Partnership's properties in exchange for management fees. The Hamilton Company is wholly owned by Harold Brown and employs Ronald Brown and Harold Brown. The Partnership, Subsidiary Partnerships, and the Investment Properties currently contract with the management company for 49 individuals at the Properties and 14 individuals at the Joint Ventures who are primarily involved in the supervision and maintenance of specific properties. The General Partner has no employees.

        As of February 1, 2013, the Partnership and its Subsidiary Partnerships owned 2,251 residential apartment units in 20 residential and mixed-use complexes (collectively, the "Apartment Complexes"). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the "Condominium Units"). The Apartment Complexes, the Condominium Units and the Investment Properties are located primarily in the metropolitan Boston area of Massachusetts.

        As of February 1, 2013, the Subsidiary Partnerships also owned a commercial shopping center in Framingham, Massachusetts, one commercial building in Newton and one in Brookline, Massachusetts and commercial space in mixed-use buildings in Boston, Brockton and Newton, Massachusetts. These properties are referred to collectively as the "Commercial Properties." See Note 2 to the Consolidated Financial Statements, included as a part of this Form 10-K.

        Additionally, as of February 1, 2013, the Partnership owned a 40-50% interest in nine residential and mixed use complexes, the Investment Properties, with a total of 799 residential units, one commercial unit, and a parking lot. See Note 14 to the Consolidated Financial Statements for additional information on these investments.

        The Apartment Complexes, Investment Properties, Condominium Units and Commercial Properties are referred to collectively as the "Properties."

        Harold Brown and, in certain cases, Ronald Brown, and officers and employees of the Hamilton Company own or have owned interests in certain of the Properties, Subsidiary Partnerships and Joint Ventures. See "Item 13. Certain Relationships, Related Transactions and Director Independence."

        The leasing of real estate in the metropolitan Boston area of Massachusetts is highly competitive. The Apartment Complexes, Condominium Units and the Investment Properties must compete for tenants with other residential apartments and condominium units in the areas in which they are located. The Commercial Properties must compete for commercial tenants with other shopping malls and office buildings in the areas in which they are located. Thus, the level of competition at each Property depends on how many other similarly situated properties are in its vicinity. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors that May Affect Future Results."

        The Second Amended and Restated Contract of Limited Partnership of the Partnership (the "Partnership Agreement") authorizes the General Partner to acquire real estate and real estate related investments from or in participation with either or both of Harold Brown and Ronald Brown, or their affiliates, upon the satisfaction of certain terms and conditions, including the approval of the Partnership's Advisory Committee and limitations on the price paid by the Partnership for such investments. The Partnership Agreement also permits the Partnership's limited partners and the General Partner to make loans to the Partnership, subject to certain limitations on the rate of interest

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that may be charged to the Partnership. Except for the foregoing, the Partnership does not have any policies prohibiting any limited partner, General Partner or any other person from having any direct or indirect pecuniary interest in any investment to be acquired or disposed of by the Partnership or in any transaction to which the Partnership is a party or has an interest in or from engaging, for their own account, in business activities of the types conducted or to be conducted by the Partnership. The General Partner is not limited in the number or amount of mortgages which may be placed on any Property, nor is there a policy limiting the percentage of Partnership assets which may be invested in any specific Property.

Industry Segments

        The Partnership operates in only one industry segment—real estate. The Partnership does not have any foreign operations, and its business is not seasonal. See the Consolidated Financial Statements attached hereto and incorporated by reference herein for financial information relating to our industry segment.

Unit Distributions

        Effective January 3, 2012, the Partnership authorized a 3-for-1 forward split of its Depositary Receipts listed on the NYSE Amex and a concurrent adjustment of the exchange ratio of Depositary Receipts for Class A Units of the Partnership from 10-to-1 to 30-to-1, such that each Depositary Receipt represents one-thirtieth (¹/30) of a Class A Unit of the Partnership. All references to Depositary Receipts in the report are reflective of the 3-for-1 forward split.

        In 2012 the Partnership paid four quarterly distributions of an aggregate $30.00 per Unit ($1.00 per Receipt) for a total payment of $3,932,410 in 2012. In 2011, the Partnership paid four quarterly distributions of an aggregate of $28.00 per Unit ($0.93 per Receipt) for a total payment of $3,681,566 in 2011. In February 2013, the Partnership approved a quarterly distribution of $7.50 per Unit ($0.25 per Receipt), payable on March 31, 2013.

        On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program ("Repurchase Program") under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one-thirtieth of a Class A Unit). On January 15, 2008, the General Partner authorized an increase in the Repurchase Program from 300,000 to 600,000 Depositary Receipts. On January 30, 2008 the General Partner authorized an increase the Repurchase Program from 600,000 to 900,000 Depositary Receipts. On March 6, 2008, the General Partner authorized the increase in the total number of Depositary Receipts that could be repurchased pursuant to the Repurchase Program from 900,000 to 1,500,000. On August 8, 2008, the General Partner re-authorized and renewed the Repurchase Program for an additional 12-month period ended August 19, 2009. On March 22, 2010, the General Partner re-authorized and renewed the Repurchase Program that expired on August 19, 2009. Under the terms of the renewed Repurchase Program, the Partnership may purchase up to 1,500,000 Depositary Receipts from the start of the program in 2007 through March 31, 2015. The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership's Second Amended and Restate Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through December 31, 2012, the Partnership has repurchased 1,219,927 Depositary Receipts at an average price of $24.62 per receipt (or $738.60 per underlying Class A Unit), 1,921 Class B Units and 101 General Partnership Units, both at an average

5

price of $613.94 per Unit, totaling approximately $31,386,000 including brokerage fees paid by the Partnership.

        On September 17, 2008, the Partnership completed the issuance of an aggregate of 6,642 Class A Units held in treasury to current holders of Class B and General Partner Units upon the simultaneous retirement to treasury of 6,309 Class B Units and 333 General Partner Units pursuant to an equity distribution plan authorized by the Board of Directors of the General Partner on August 8, 2008 and as further described under Item 3.02 of the Partnership's Current Report on Form 8-K as filed with the Securities and Exchange Commission on September 18, 2008, which is incorporated herein by reference. Harold Brown, the treasurer of the General Partner, controls 75% of the issued and outstanding Class B Units of the Partnership and 75% of the issued and outstanding equity of the General Partner, Ronald Brown, the brother of Harold Brown and the president of the General Partner, owns 25% of the issued and outstanding Class B Units of the Partnership and 25% of the issued and outstanding equity of the General Partner. The 75% of the issued and outstanding Class B units of the Partnership, controlled by Harold Brown, are owned by HBC Holdings LLC, an entity of which he is the manager.

Property Transactions

        On May 18, 2011, the Partnership sold Avon Street Apartments, a 66 unit residential apartment complex located at 130 Avon Street, Malden, Massachusetts. The sales price was $8,750,000, which resulted in a financial statement gain of approximately $7,700,000. The net proceeds of the sale, of approximately $5,444,000 were held by a qualified intermediary in order for the Partnership to structure a tax free exchange in accordance with Section 1031 of the IRS code. This tax free exchange was completed with the purchase of Battle Green Apartments as described below.

        On June 1, 2011, the Partnership purchased the Battle Green Apartments, a 48 unit residential apartment complex located at 34-42 Worthen Road, Lexington, Massachusetts. The purchase price was $10,000,000. The Partnership used cash, the proceeds from the sale of Avon Street and borrowed $3,998,573 from Harold Brown, Treasurer of the General Partner to make this purchase. This loan had an interest rate of 6% and was secured by the Partnership's ownership interest in Battle Green Apartments, LLC. The term of the loan is four years with a provision requiring payment in whole or in part upon demand within six months of notice or prepay without penalty. On July 27, 2011, the Partnership financed the Battle Green Apartments with a new $5,000,000 mortgage at 4.95% which matures in August 2026. Principal payments will be made using a 30 year amortization schedule. Deferred financing costs associated with this mortgage totaled approximately $100,000 and accordingly the effective interest rate is 5.07%. After paying off the existing loan of $3,998,573, approximately $1,000,000 was received by the Partnership. The interest paid on this loan to Harold Brown was $38,123 in 2011. The mortgage balance outstanding on December 31, 2012 was $4,893,448.

        During 2012, the Partnership and its Subsidiary Partnerships completed improvements to certain of the Properties at a total cost of approximately $2,360,000. These improvements were funded from cash reserves and, to some extent, escrow accounts established in connection with the financing or refinancing of the applicable Properties. These sources have been adequate to fully fund improvements. The most significant improvements were made at Westgate Woburn, Hamilton Oaks, 62 Boylston Street, Olde English, Clovelly, 1144 Commonwealth Ave and 140 North Beacon Street at a cost of approximately $445,000, 280,000, $271,000, $206,000, $185,000, $133,000 and $113,000 respectively. The Partnership plans to invest approximately $2,300,000 in capital improvements in 2013.

Advisory Committee

        The Advosry Committee members are Gregory Dube, Robert Nahigian, and Edward Sarkesian. These Advisory Committee members are not affiliated with the General Partner. The Advisory

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Committee meets with the General Partner to review the progress of the Partnership, assist the General Partner with policy formation, review the appropriateness, timing and amount of proposed distributions, approve or reject proposed acquisitions and investments with affiliates, and advise the General Partner on various other Partnership affairs. Per the Partnership Agreement, the Advisory Committee has no binding power except that it must approve certain investments and acquisitions or sales by the Partnership from or with affiliates of the Partnership.

Available Information

        The Partnership's website is www.thehamiltoncompany.com. On its website, the Partnership makes available, free of charge, its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended. These forms are made available as soon as reasonably practical after the Partnership electronically files or furnishes such materials to the Securities and Exchange Commission. In addition, the Partnership's website includes other items related to corporate governance matters, including, among other things, the Partnership's corporate governance guidelines, charters of various committees of the Board of Directors, and the Partnership's code of business conduct and ethics applicable to all employees, officers and directors. Copies of these documents may be obtained, free of charge, from the website. Any shareholder may obtain copies of these documents, free of charge, by sending a request in writing to: Director of Investor Relations, New England Realty Associates Limited Partnership, 39 Brighton Avenue, Allston, MA 02134.

ITEM 1A.    RISK FACTORS

        We are subject to certain risks and uncertainties as described below. These risks and uncertainties may not be the only ones we face; there may be additional risks that we do not presently know of or that we currently consider immaterial. All of these risks could adversely affect our business, financial condition, results of operations and cash flows. Our ability to pay distributions on, and the market price of, our equity securities may be adversely affected if any of such risks are realized. All investors should consider the following risk factors before deciding to purchase or sell securities of the Partnership.

        We are subject to risks inherent in the ownership of real estate.    We own and manage multifamily apartment complexes and commercial properties that are subject to varying degrees of risk generally incident to the ownership of real estate. Our financial condition, the value of our properties and our ability to make distributions to our shareholders will be dependent upon our ability to operate our properties in a manner sufficient to generate income in excess of operating expenses and debt service charges, which may be affected by the following risks, some of which are discussed in more detail below:

•

changes in the economic climate in the markets in which we own and manage properties, including interest rates, the overall level of economic activity, the availability of consumer credit and mortgage financing, unemployment rates and other factors;

•

a lessening of demand for the multifamily and commercial units that we own;

•

competition from other available multifamily residential and commercial units and changes in market rental rates;

•

increases in property and liability insurance costs;

•

changes in real estate taxes and other operating expenses (e.g., cleaning, utilities, repair and maintenance costs, insurance and administrative costs, security, landscaping, pest control, staffing and other general costs);

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•

changes in laws and regulations affecting properties (including tax, environmental, zoning and building codes, and housing laws and regulations);

•

weather and other conditions that might adversely affect operating expenses;

•

expenditures that cannot be anticipated, such as utility rate and usage increases, unanticipated repairs and real estate tax valuation reassessments or mileage rate increases;

•

our inability to control operating expenses or achieve increases in revenues;

•

the results of litigation filed or to be filed against us;

•

risks related to our joint ventures;

•

risks of personal injury claims and property damage related to mold claims because of diminished insurance coverage;

•

catastrophic property damage losses that are not covered by our insurance;

•

risks associated with property acquisitions such as environmental liabilities, among others;

•

changes in market conditions that may limit or prevent us from acquiring or selling properties;

•

the perception of tenants and prospective tenants as to the attractiveness, convenience and safety of our properties or the neighborhoods in which they are located; and

•

the Partnership does not carry directors and officers insurance.

        We are dependent on rental income from our multifamily apartment complexes and commercial properties.    If we are unable to attract and retain tenants or if our tenants are unable to pay their rental obligations, our financial condition and funds available for distribution to our shareholders will be adversely affected.

        Our multifamily apartment complexes and commercial properties are subject to competition.    Our properties and joint venture investments are located in developed areas that include other properties. The properties also compete with other rental alternatives, such as condominiums, single and multifamily rental homes, owner occupied single and multifamily homes, and commercial properties in attracting tenants. This competition may affect our ability to attract and retain residents and to increase or maintain rental rates.

        The properties we own are concentrated in Eastern Massachusetts and Southern New Hampshire.    Our performance, therefore, is linked to economic conditions and the market for available rental housing and commercial space in these states. A decline in the market for apartment housing and/or commercial properties may adversely affect our financial condition, results of operations and ability to make distributions to our shareholders.

        Our insurance may not be adequate to cover certain risks.    There are certain types of risks, generally of a catastrophic nature, such as earthquakes, floods, windstorms, act of war and terrorist attacks that may be uninsurable, or are not economically insurable, or are not fully covered by insurance. Moreover, certain risks, such as mold and environmental exposures, generally are not covered by our insurance. Should an uninsured loss or a loss in excess of insured limits occur, we could lose our equity in the affected property as well as the anticipated future cash flow from that property. Any such loss could have a material adverse effect on our business, financial condition and results of operations.

        Debt financing could adversely affect our performance.    The vast majority of our assets are encumbered by project specific, non-recourse, non-cross-collateralized mortgage debt. There is a risk that these properties will not have sufficient cash flow from operations for payments of required principal and interest. We may not be able to refinance these loans at an amount equal to the loan

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balance and the terms of any refinancing may not be as favorable as the terms of existing indebtedness. If we are unable to make required payments on indebtedness that is secured by a mortgage, the Partnership will either invest additional money in the property or the property securing the mortgage may be foreclosed with a consequent loss of income and value to us.

        Real estate investments are generally illiquid, and we may not be able to sell our properties when it is economically or strategically advantageous to do so.    Real estate investments generally cannot be sold quickly, and our ability to sell properties may be affected by market conditions. We may not be able to diversify or vary our portfolio promptly in accordance with our strategies or in response to economic or other conditions.

        Our access to public debt markets is limited.    Substantially all of our debt financings are secured by mortgages on our properties because of our limited access to public debt markets.

        Litigation may result in unfavorable outcomes.    Like many real estate operators, we may be involved in lawsuits involving premises liability claims, housing discrimination claims and alleged violations of landlord-tenant laws, which may give rise to class action litigation or governmental investigations. Any material litigation not covered by insurance, such as a class action, could result in substantial costs being incurred. The Partnership does not carry directors and officers liability insurance.

        Our financial results may be adversely impacted if we are unable to sell properties and employ the proceeds in accordance with our strategic plan.    Our ability to pay down debt, reduce our interest costs, repurchase Depositary Receipts and acquire properties is dependent upon our ability to sell the properties we have selected for disposition at the prices and within the deadlines we have established for each respective property.

        The costs of complying with laws and regulations could adversely affect our cash flow and ability to make distributions to our shareholders.    Our properties must comply with Title III of the Americans with Disabilities Act (the "ADA") to the extent that they are "public accommodations" or "commercial facilities" as defined in the ADA. The ADA does not consider apartment complexes to be public accommodations or commercial facilities, except for portions of such properties that are open to the public. In addition, the Fair Housing Amendments Act of 1988 (the "FHAA") requires apartment complexes first occupied after March 13, 1990, to be accessible to the handicapped. Other laws also require apartment communities to be handicap accessible. Noncompliance with these laws could result in the imposition of fines or an award of damages to private litigants. We may be subject to lawsuits alleging violations of handicap design laws in connection with certain of our developments. If compliance with these laws involves substantial expenditures or must be made on an accelerated basis, our ability to make distributions to our shareholders could be adversely affected.

        Under various federal, state and local laws, an owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances on, under or in the property. This liability may be imposed without regard to whether the owner or operator knew of, or was responsible for, the presence of the substances. Other law imposes on owners and operators certain requirements regarding conditions and activities that may affect human health or the environment. Failure to comply with applicable requirements could complicate our ability to lease or sell an affected property and could subject us to monetary penalties, costs required to achieve compliance and potential liability to third parties. We are not aware of any material noncompliance, liability or claim relating to hazardous or toxic substances or other environmental matters in connection with any of our properties. Nonetheless, it is possible that material environmental contamination or conditions exist, or could arise in the future, in the apartment communities or on the land upon which they are located.

        We are subject to the risks associated with investments through joint ventures.    Nine of our properties are owned by joint ventures in which we do not have a controlling interest. We may enter into joint

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ventures, including joint ventures that we do not control, in the future. Any joint venture investment involves risks such as the possibility that the co-venturer may seek relief under federal or state insolvency laws, or have economic or business interests or goals that are inconsistent with our business interests or goals. While the bankruptcy or insolvency of our co-venturer generally should not disrupt the operations of the joint venture, we could be forced to purchase the co-venturer's interest in the joint venture or the interest could be sold to a third party. We also may guarantee the indebtedness of our joint ventures. If we do not have control over a joint venture, the value of our investment may be affected adversely by a third party that may have different goals and capabilities than ours.

        We are subject to risks associated with development, acquisition and expansion of multifamily apartment complexes and commercial properties.    Development projects and acquisitions and expansions of apartment complexes are subject to a number of risks, including:

•

availability of acceptable financing;

•

competition with other entities for investment opportunities;

•

failure by our properties to achieve anticipated operating results;

•

construction costs of a property exceeding original estimates;

•

delays in construction; and

•

expenditure of funds on, and the devotion of management time to, transactions that may not come to fruition.

        We are subject to control by our directors and officers.    The directors and executive officers of the General Partner and members of their families and related entities owned approximately 33.84% of our depositary receipts as of December 31, 2012. Additionally, management decisions rest with our General Partner without limited partner approval.

        Competition for skilled personnel could increase our labor costs.    We and our management company compete with various other companies in attracting and retaining qualified and skilled personnel who are responsible for the day-to-day operations of our properties. Competitive pressures may require that we enhance our pay and benefits package to compete effectively for such personnel. We may not be able to offset such added costs by increasing the rates we charge our tenants. If there is an increase in these costs or if we fail to attract and retain qualified and skilled personnel, our business and operating results could be harmed.

        We depend on our key personnel.    Our success depends to a significant degree upon the continued contribution of key members of the management company, who may be difficult to replace. The loss of services of these executives could have a material adverse effect on us. There can be no assurance that the services of such personnel will continue to be available to us. We do not hold key-man life insurance on any of our key personnel.

        Changes in market conditions could adversely affect the market price of our Depositary Receipts.    As with other publicly traded equity securities, the value of our depositary receipts depends on various market conditions, which may change from time to time. Among the market conditions that may affect the value of our depositary receipts are the following:

•

the extent of investor interest in us;

•

the general reputation of real estate companies and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate companies;

•

our financial performance; and

•

general stock and bond market conditions.

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        The market value of our depositary is based primarily upon the market's perception of our growth potential and our current and potential future earnings and cash distributions. Consequently, our depositary receipts may trade at prices that are higher or lower than our net asset value per depositary receipt.

        We face possible risks associated with the physical effects of climate change.    We cannot predict with the certainty whether climate change is occurring and, if so at what rate. However, the physical effects of climate change could have a material effect on our properties, operations, and business. To the extent climate change causes changes in weather patterns, our markets could experience increases in storm intensity and rising sea levels. Over time, these conditions could result in declining demand for our buildings or the inability of us to operate the buildings at all. Climate change may also have indirect effects on our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable, increasing the cost of energy and increasing the cost of snow removal at our properties. Proposed federal legislation to address climate change could increase utility and other costs of operating our properties which, if not offset by rising rental income, would reduce our net income. There can be no assurance that climate change will not have a material adverse effect on our properties, operations or business.

        Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.    In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our tenants and business partners, including personally identifiable information of our tenants and employees, in our data centers and on our networks. Despite our security measures, our information technology and infrastructure may be vulnerable to attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect the privacy of personal information, disrupt our operations, and damage our reputation, which could adversely affect our business.

        Risk of changes in the tax law applicable to real estate partnerships.    Since the Internal Revenue Service, the United States Treasury Department and Congress frequently review federal income legislation, we cannot predict whether, when or to what extent new federal tax laws, regulations, interpretations or rulings will be adopted. Any such legislative action may prospectively or retroactively modify our tax treatment and therefore, may adversely affect taxation to us, and/or our partners.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

        None.

ITEM 2.    PROPERTIES

        The Partnership and its Subsidiary Partnerships own the Apartment Complexes, the Condominium Units, the Commercial Properties and a 40-50% interest in nine Investment Properties.

        See also "Item 13. Certain Relationships and Related Transactions and Director Independence" for information concerning affiliated transactions.

Apartment Complexes

        The table below lists the location of the 2,251 Apartment Units, the number and type of units in each complex, the range of rents and vacancies as of February 1, 2013, the principal amount

11

outstanding under any mortgages as of December 31, 2012, the fixed interest rates applicable to such mortgages, and the maturity dates of such mortgages.

Apartment Complex	Number and Type of Units	Rent Range	Vacancies	Mortgage Balance and Interest Rate As of December 31, 2012			Maturity Date of Mortgage
Battle Green LLC	48 units		0	$	4,893,448			2026
34–42 Worthen Road	0 three-bedroom	N/A			4.95	%
Lexington, MA	24 two-bedroom	$1,860–2,150
	24 one-bedroom	$1,490–1,710
	0 studios	N/A
Boylston Downtown L.P.	269 units		0	$	19,500,000			2013
62 Boylston Street	0 three-bedroom	N/A			4.84	%
Boston, MA	0 two-bedroom	N/A
	53 one-bedroom	$1,650–2,500
	216 studios	$1,190–1,850
Brookside Associates, LLC	44 units		2	$	2,723,830			2020
5-7–10-12 Totman Road	0 three-bedroom	N/A			5.81	%
Woburn, MA	34 two-bedroom	$1,175–1,340
	10 one-bedroom	$1,100–1,160
	0 studios	N/A
Clovelly Apartments L.P.	103 units		2	$	4,160,000			2023
160–170 Concord Street	0 three-bedroom	N/A			5.62	%
Nashua, NH	53 two-bedroom	$865–1,260
	50 one-bedroom	$800–935
	0 studios	N/A
Commonwealth 1137 L.P.	35 units		0	$	3,750,000			2023
1131–1137 Commonwealth Ave.	29 three-bedroom	$1,800–2,550			5.65	%
Allston, MA	4 two-bedroom	$1,625–1,800
	1 one-bedroom	$775
	1 studio	$950
Commonwealth 1144 L.P.	261 units		0	$	14,780,000			2023
1144–1160 Commonwealth Ave.	0 three-bedroom	N/A			5.61	%
Allston, MA	11 two bedroom	$1,050–1,450
	109 one-bedroom	$875–1,425
	141 studios	$750–1,150
Courtyard at Westgate, LLC	20 units		0	$	2,000,000			2015
105–107 Westgate Drive	0 three-bedroom	N/A			5.25	%
Burlington, MA	12 two bedroom	$1,500–1,925
	8 one-bedroom	$1,235–1,360
	0 studios	N/A
Dean Street Associates, LLC	69 units		0	$	5,213,958			2014
38–48 Dean Street	0 three-bedroom	N/A			5.13	%
Norwood, MA	66 two-bedroom	$1,150–1,325
	3 one-bedroom	$1,125
	0 studios	N/A
Executive Apartments L.P	72 units		3	$	2,415,000			2023
545–561 Worcester Road	1 three-bedroom	$1,350			5.59	%
Framingham, MA	47 two-bedroom	$1,000–1,200
	24 one-bedroom	$760–1,100
	0 studios	N/A

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Apartment Complex	Number and Type of Units	Rent Range	Vacancies	Mortgage Balance and Interest Rate As of December 31, 2012			Maturity Date of Mortgage
Hamilton Oaks Associates, LLC	268 units		10	$	11,925,000			2023
30–50 Oak Street Extension	0 three-bedroom	N/A			5.59	%
40–60 Reservoir Street	96 two-bedroom	$1,200–1,325
Brockton, MA	159 one-bedroom	$840–1,050
	13 studios	$770–850
Highland Street Apartments L.P.	36 units		2	$	1,050,000			2023
38–40 Highland Street	0 three-bedroom	N/A			5.59	%
Lowell, MA	24 two-bedroom	$900–1,000
	10 one-bedroom	$775–885
	2 studios	$800
Linhart L.P	9 units		0	$	1,964,119			2014
4–34 Lincoln Street	0 three-bedroom	N/A			4.25	%
Newton, MA	0 two-bedroom	N/A
	5 one-bedroom	$1,050–1,250
	4 studios	$950–1,000
Nashoba Apartments L.P.	32 units		1	$	2,000,000			2013
284 Great Road	0 three-bedroom	N/A			5.30	%
Acton, MA	32 two-bedroom	$1,165–1,500
	0 one-bedroom	N/A
	0 studios	N/A
North Beacon 140 L.P.	65 units		0	$	6,937,000			2023
140–154 North Beacon Street	10 three-bedroom	$2,100–2,350			5.59	%
Brighton, MA	54 two-bedroom	$1,550–1,870
	1 one-bedroom	$800
	0 studios	N/A
Olde English Apartments L.P.	84 units		1	$	3,080,000			2023
703–718 Chelmsford Street	0 three-bedroom	N/A			5.63	%
Lowell, MA	47 two-bedroom	$990–1,215
	30 one-bedroom	$900–1,125
	7 studios	$825–900
Redwood Hills L.P.	180 units		6	$	6,743,000			2023
376–384 Sunderland Road	0 three-bedroom	N/A			5.59	%
Worcester, MA	89 two-bedroom	$995–1,225
	91 one-bedroom	$825–975
	0 studios	N/A
River Drive L.P.	72 units		1	$	3,465,000			2023
3–17 River Drive	0 three-bedroom	N/A			5.62	%
Danvers, MA	60 two-bedroom	$1,025–1,225
	5 one-bedroom	$950–990
	7 studios	$825–890
School Street 9, LLC	184 units		7	$	15,308,474			2013
9 School Street	0 three-bedroom	N/A			5.47	%
Framingham, MA	96 two-bedroom	$1,145–1,350
	88 one-bedroom	$900–1,150
	0 studios	N/A
WCB Associates, LLC	180 units		3	$	7,000,000			2023
10–70 Westland Street	1 three-bedroom	$1,200			5.66	%
985–997 Pleasant Street	94 two-bedroom	$1,010–1,150
Brockton, MA	85 one-bedroom	$825–950
	0 studios	N/A

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Apartment Complex	Number and Type of Units	Rent Range	Vacancies	Mortgage Balance and Interest Rate As of December 31, 2012			Maturity Date of Mortgage
Westgate Apartments, LLC	220 units		1	$	7,931,885			2014
2–20 Westgate Drive	0 three-bedroom	N/A			7.07	%
Woburn, MA	110 two-bedroom	$1,190–1,500
	110 one-bedroom	$880–1,310
	0 studios	N/A

        Current free rent concessions would result in an average reduction in unit rents of less than $1.77 per month per unit. Free rent expense amortized in 2012 was approximately $48,000 compared to approximately $231,000 in 2011.

        On June 1, 2011, the Partnership purchased the Battle Green Apartments, a 48 unit residential apartment complex located at 34-42 Worthen Road, Lexington, Massachusetts. The purchase price was $10,000,000. The purchase price equates to a capitalization rate of 5.0% on the trailing 12 months actual operating income provided by the seller. Operating income is equal to earnings before interest, depreciation and income taxes. Based on the Partnerships operating expectation, the capitalization rate for this investment is 6.2%. The Partnership used cash reserves, the proceeds from the sale of Avon Street and borrowed $3,998,573 from Harold Brown, Treasurer of the General Partner to make this purchase. This loan had an interest rate of 6% and was secured by the Partnership's ownership interest in Battle Green Apartments, LLC. On July 27, 2011, the Partnership financed the Battle Green Apartments with a new $5,000,000 mortgage at 4.95% which matures in August 2026. Proceeds for the financing were used to pay off the loan from Harold Brown and the balance was deposited in the Partnerships operating account. Principal payments will be made using a 30 year amortization schedule. See Note 2 to the Consolidated Financial statements for additional information.

        See Note 5 to the Consolidated Financial Statements, included as part of this Form 10-K, for information relating to the mortgages payable of the Partnership and its Subsidiary Partnerships.

Condominium Units

        The Partnership owns and leases to residential tenants 19 Condominium Units in the metropolitan Boston area of Massachusetts.

        The table below lists the location of the 19 Condominium Units, the type of units, the range of rents received by the Partnership for such units, and the number of vacancies as of February 1, 2013.

Condominiums	Number and Type of Units Owned by Partnership	Rent Range	Vacancies		Mortgage Balance and Interest Rate As of December 31, 2012		Maturity Date of Mortgage
Riverside Apartments	19 units			0		—		—
8–20 Riverside Street	0 three-bedroom	N/A
Watertown, MA	12 two-bedroom	$1,275–1,500
	5 one-bedroom	$1,250–1,350
	2 studios	$1,075

Commercial Properties

        BOYLSTON DOWNTOWN LP.    In 1995, this Subsidiary Partnership acquired the Boylston Downtown property in Boston, Massachusetts ("Boylston"). This mixed-use property includes 17,218 square feet of rentable commercial space. As of February 1, 2013, the commercial space had a 0% vacancy rate, and the average rent per square foot was $24.74. For mortgage balance, interest rate and maturity date information see "Apartment Complexes," above.

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        HAMILTON OAKS ASSOCIATES, LLC.    The Hamilton Oaks Apartment complex, acquired by the Partnership in December 1999 through Hamilton Oaks Associates, LLC, includes 6,075 square feet of rentable commercial space, occupied by a daycare center. As of February 1, 2013, the commercial space was fully occupied, and the average rent per square foot was $12.50. The Partnership also rents roof space for a cellular phone antenna at an average rent of approximately $36,794 per year through November 2015. For mortgage balance, interest rate and maturity date information see "Apartment Complexes," above.

        LINHART LP.    In 1995, the Partnership acquired the Linhart property in Newton, Massachusetts ("Linhart"). This mixed-use property includes 21,555 square feet of rentable commercial space. As of February 1, 2013, the commercial space was fully occupied, and the average rent per square foot was $24.34. For mortgage balance, interest rate and maturity date information see "Apartment Complexes," above.

        NORTH BEACON 140 LP.    In 1995, this Subsidiary Partnership acquired the North Beacon property in Boston, Massachusetts ("North Beacon"). This mixed-use property includes 1,050 square feet of rentable commercial space. The property was fully rented as of February 1, 2013, and the average rent per square foot as of that date was $32.50. For mortgage balance, interest rate and maturity date information see "Apartment Complexes," above.

        STAPLES PLAZA.    In 1999, the Partnership acquired the Staples Plaza shopping center in Framingham, Massachusetts ("Staples Plaza"). The shopping center consists of 39,600 square feet of rentable commercial space. As of December 31, 2012, the mortgage had an outstanding balance $6,000,000 with interest rate of 5.97%, matures in 2018. As of February 1, 2013, Staples Plaza was fully occupied, and the average net rent per square foot was $22.26.

        HAMILTON LINEWT ASSOCIATES, LLC.    In 2007, the Partnership acquired a retail block in Newton, Massachusetts. The property consists of approximately 6,000 square feet of rentable commercial space. The property was fully rented at an average rent of $35.63 per square foot. The Partnership obtained a mortgage in January 2008 of $1,700,000 on this property. The mortgage balance at December 31, 2012 is $1,528,429 the interest rate is 5.75% and matures in January 2018.

        HAMILTON CYPRESS LLC.    In 2008, the Partnership acquired a medical office building in Brookline, Massachusetts. The property consists of approximately 20,000 square feet of rentable commercial space at December 31, 2012. The property was 71% occupied at an average rent of $35.21per square foot. One lease covering 7,037 square feet is expiring on March 31, 2013 which will increase the vacancy rate to 64%. The new rents are expected to average $34.00 per square foot. The Partnership assumed a mortgage of approximately $4,011,000. The mortgage balance at December 31, 2012 is $3,686,380, the interest rate is 5.92% and matures in May 2013. This mortgage was paid off on February 25, 2013.

15

        The following information is provided for commercial leases:

Thru December 31,	Annual base rent for expiring leases		Total square feet for expiring leases		Total number of leases expiring		Percentage of Annual base rent for expiring leases
2013	$	470,463		23,773		11		17	%
2014		588,422		29,523		10		22	%
2015		266,098		8,471		8		10	%
2016		593,346		27,073		3		22	%
2017		448,101		11,997		6		16	%
2018		58,050		1,262		1		2	%
2019		200,375		5,800		2		7	%
2020		64,657		1,106		1		2	%
2021		64,800		1,800		1		2	%
2022		0		—		—		0	%
Totals	$	2,754,312		110,805		43		100	%

        Commercial rental income is accounted for using the straight line method. Forty percent of our commercial leases contain rent escalations which range from $0.50 – $2.00 per square foot per year.

Investment Properties

        See Note 14 to the Financial Statements and Exhibit 99.1 for additional information regarding the Investment Properties.

        The Partnership has a 50% ownership interest in the properties summarized below:

Investment Properties	Number and Type of Units	Range	Vacancies		Mortgage Balance and Interest Rate As of December 31, 2012			Maturity Date of Mortgage
345 Franklin, LLC	40 Units			0	$	6,850,179			2014
345 Franklin Street	0 three-bedroom	N/A				6.90	%
Cambridge, MA	39 two-bedroom	$2,200–2,750
	1 one-bedroom	$1,900
	0 studios	N/A
Hamilton on Main Apartments, LLC	148 Units			2	$	15,611,045			2015
223 Main Street	0 three-bedroom	N/A				5.18	%
Watertown, MA	93 two-bedroom	$1,350–1,750
	31 one-bedroom	$1,200–1,650
	24 studios	$1,050–1,225
Hamilton Minuteman, LLC	42 Units			0	$	5,433,472			2017
1 April Lane	0 three-bedroom	N/A				5.67	%
Lexington, MA	40 two-bedroom	$1,485–1,850
	2 one-bedroom	$1,475–1,500
	0 studios	N/A
Hamilton Essex 81 LLC	49 Units			0	$	8,352,317			2016
Residential	0 three-bedroom	N/A				5.79	%
81–83 Essex Street	11 two-bedroom	$1,390–2,225
Boston, Massachusetts	38 one-bedroom	$1,315–1,575
	0 studios	N/A
Hamilton Essex Development LLC	Parking Lot				$	2,093,184			2013
Commercial						2.8	%
81–83 Essex Street
Boston, Massachusetts

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Investment Properties	Number and Type of Units	Range	Vacancies		Mortgage Balance and Interest Rate As of December 31, 2012			Maturity Date of Mortgage
Hamilton 1025, LLC	48 Units			1	$	4,934,741			2016
Units to be retained	0 three-bedroom	N/A				5.67	%
1025 Hancock Street	32 two-bedroom	$1,450–1,600
Quincy, Massachusetts	16 one-bedroom	$1,300–1,350
	0 studios	N/A
Hamilton Bay, LLC(A)	15 Units			2	$	1,668,000			2013
Units held for sale	0 three-bedroom	N/A				5.75	%
165–185 Quincy Shore Drive	0 two-bedroom	N/A
Quincy, Massachusetts	15 one-bedroom	$1,294–1,450
	0 studios	N/A
Hamilton Bay Apartments, LLC	48 Units			1	$	4,702,087			2017
165–185 Quincy Shore Drive	0 three-bedroom	N/A				5.57	%
Quincy, Massachusetts	24 two-bedroom	$1,350–1,800
	24 one-bedroom	$1,350–1,750
The Partnership has a 40% ownership interest in the property summarized below:
Hamilton Park Towers, LLC	409 Units			0	$	88,611,686			2019
175–185 Freeman Street,	71 three-bedroom	$2,075–4,020				5.57	%
Brookline,	227 two-bedroom	$2,025–3,325
Massachusetts	111 one-bedroom	$1,600–2,450
	0 studios
Current free rent concessions would result in an average reduction in unit rents of less than $1.00 per month per unit.

(A)

Represents unsold units at February 1, 2013.

        345 FRANKLIN, LLC.    In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts. This property has a 12-year mortgage, with a remaining balance at December 31, 2012 of approximately $6,850,000 at 6.9% which is amortized on a 30-year schedule, with a final payment of approximately $6,685,000 in 2014. This investment is referred to as 345 Franklin, LLC.

        HAMILTON ON MAIN, LLC.    In August 2004, the Partnership invested $8,000,000 for a 50% ownership interest in a 280-unit apartment complex located in Watertown, Massachusetts. The total purchase price was $56,000,000. As of May 2008, the Partnership sold 137 units as condominiums. Gains from these sales were taxed as ordinary income (approximately $50,000 per unit). The majority of the sales proceeds were applied to reduce the mortgage with the final payment made during the second quarter of 2007. With the sale of the units and the payments of the liabilities, the assets were combined with Hamilton on Main Apartments, LLC. An entity partially owned by the majority shareholder of the General Partner and the President of the management company, 31% and 5%, respectively, was the sales agent and received a variable commission on each sale of 3% to 5%. Hamilton on Main, LLC is known as Hamilton Place.

17

        In 2005, Hamilton on Main Apartments, LLC obtained a ten year mortgage on the three buildings to be retained. The mortgage is $16,825,000, with interest only of 5.18% for three years and amortizing on a 30 year schedule for the remaining seven years when the balance is due. The net proceeds after funding escrow accounts and closing costs on the mortgage were approximately $16,700,000, which were used to reduce the existing mortgage. Hamilton on Main LLC paid a fee of approximately $400,000 in connection with this early extinguishment of debt. At December 31, 2012, the remaining balance on the mortgage is approximately $15,611,000.

        HAMILTON MINUTEMAN, LLC.    In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. In October 2004, the Partnership obtained a mortgage on the property in the amount of $8,025,000 and returned $3,775,000 to the Partnership. The Partnership obtained a new 10-year mortgage in the amount of $5,500,000 in January 2007. The interest on the new loan is 5.67% fixed for the ten year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan. This loan required a cash contribution by the Partnership of $1,250,000 in December 2006. At December 31, 2012 the remaining balance on this mortgage is approximately $5,433,000. This investment is referred to as Hamilton Minuteman, LLC.

        HAMILTON ESSEX 81, LLC.    On March 7, 2005, the Partnership invested $2,000,000 for a 50% ownership interest in a building comprising 49 apartments, one commercial space and a 50-car surface parking lot located in Boston, Massachusetts. The purchase price was $14,300,000, with a $10,750,000 mortgage. The Partnership plans to operate the building and initiate development of the parking lot. In June 2007, the Partnership separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Partnership restructured the mortgages on both parcels at Essex 81 and transferred the residential apartments to Hamilton Essex 81, LLC. The mortgage on Hamilton Essex 81, LLC is $8,600,000 at 5.79% amortized over 30 years, due in August 2016. The mortgage on Essex Development, LLC, or the parking lot is $2,144,796 with a variable interest rate of 2.25% over the daily Libor rate (0.21% at December 31, 2012) and was originally due in August 2011. This loan was extended to August 2013 with the same conditions except for the addition of fixed principal payments in the amount of $4,301 per month. The cost associated with the extension was approximately $6,000. Harold Brown has issued a personal guaranty up to $1,000,000 of this mortgage. In the event that he is obligated to make payments to the lender as a result of this guaranty, the Partnership and other investors have, in turn, agreed to indemnify him for their proportionate share of any such payments. At December 31, 2012 the remaining balance on the mortgage at Essex 81 LLC is approximately $8,352,000 and the remaining balance on the mortgage at Essex Development is approximately $2,093,000. The investment in the parking lot is referred to as Hamilton Essex Development, LLC; the investment in the apartments is referred to as Hamilton Essex 81, LLC.

        HAMILTON 1025, LLC.    On March 2, 2005, the Partnership invested $2,352,000 for a 50% ownership interest in a 176-unit apartment complex with an additional small commercial building located in Quincy, Massachusetts. The purchase price was $23,750,000. The Partnership sold 127 of the units as condominiums and retained 49 units for long-term investment. The Partnership obtained a new 10-year mortgage in the amount of $5,000,000 on the units to be retained by the Partnership. The interest on the new loan is 5.67% fixed for the 10 year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan term. At December 31, 2012, the mortgage balance is approximately $4,935,000. This investment is referred to as Hamilton 1025, LLC.

        HAMILTON BAY, LLC.    On October 3, 2005, the Partnership invested $2,500,000 for a 50% ownership interest in a 168-unit apartment complex in Quincy, Massachusetts. The purchase price was $30,875,000. The Partnership plans to sell the majority of units as condominium and retain 48 units for long-term investment. Gains from the sales of units will be taxed at ordinary income rates

18

(approximately $47,000 per unit). In February 2007, the Partnership refinanced the 48 units which will be retained with a new mortgage in the amount of $4,750,000 with an interest rate of 5.57%, interest only for five years. The loan will be amortized over 30 years thereafter and matures in March 2017. The balance on the mortgage is approximately $4,700,000 at December 31, 2012. This investment is referred to as Hamilton Bay Apartments, LLC. In April 2008, the Partnership refinanced an additional 20 units and obtained a new mortgage in the amount of $2,368,000 with interest at 5.75%, interest only, which matures in 2013. At December 31, 2012, 15 of the 20 units are still owned by the Partnership. No unit was sold during the year ended December 31, 2012. As of February 1, 2013, the Partnership sold 105 units, the proceeds of which went to pay down the mortgage on the property. The balance on the new mortgage is approximately $1,668,000 at December 31, 2012. This investment is referred to as Hamilton Bay, LLC.

        HAMILTON PARK TOWERS, LLC    On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, referred to as Dexter Park, is a 409 unit residential complex. The purchase price was $129,500,000. The total mortgage is $89,914,000 with an interest rate of 5.57% and it matures in 2019. The mortgage calls for interest only payments for the first two years of the loan and amortized over 30 years thereafter. The balance of this mortgage is approximately $88,612,000 at December 31, 2012. In order to fund this investment, the Partnership used approximately $8,757,000 of its cash reserves and borrowed approximately $7,168,000 with an interest rate of 6% from HBC Holdings, LLC, an entity owned by Harold Brown and his affiliates ("HBC"). The term of the loan is four years with a provision requiring payment in whole or in part upon demand by HBC with six months notice. On August 17, 2010, HBC gave six months written notice to the Partnership requesting a principal pay down of $2,500,000. During the fourth quarter of 2010, the Partnership paid HBC $2,500,000 as requested. During 2011, the Partnership elected to make principal payments of $1,000,000 on August 1, 2011, $1,000,000 on October 3, 2011, and an additional $1,000,000 on December 15, 2011 reducing the loan balance to $1,668,600. This loan will remain subject to the original terms of the Note, including HBC's right to demand payment of the balance of the loan in whole or in part upon six months notice. The interest paid during the year ended December 31, 2012 and 2011 was $18,960 and $238,673, respectively. This loan is collateralized by the Partnership's 99% ownership interest in 62 Boylston Street. A majority of the apartments were leased at the time of the acquisition. As a result, the Partnership amortized the intangible assets associated with the "in place" leases over a 12 month period which began in November 2009. . The intangible asset was fully amortized effective November 2010. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

ITEM 3.    LEGAL PROCEEDINGS

        The Partnership, the Subsidiary Partnerships, and the Investment Properties and their properties are not presently subject to any material litigation, and, to management's knowledge, there is not any material litigation presently threatened against them. The properties are occasionally subject to ordinary routine legal and administrative proceedings incident to the ownership of residential and commercial real estate. Some of the legal and other expenses related to these proceedings are covered by insurance and none of these costs and expenses are expected to have a material adverse effect on the Consolidated Financial Statements of the Partnership.

ITEM 4.    MINE SAFETY DISCLOSURE

        Not applicable.

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ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

        Each Class A Unit is exchangeable, through Computershare Trust Company ("Computershare") (formerly Equiserve LP), the Partnership's Depositary Agent, for 30 Depositary Receipts ("Receipts"). The Receipts are listed and publicly traded on the NYSE Amex Exchange under the symbol "NEN." There has never been an established trading market for the Class B Units or General Partnership Units.

        In 2012, the high and low bid quotations for the Receipts were $30.84 and $23.02 respectively. The table below sets forth the high and low bids for each quarter of 2012 and 2011 and the distributions paid on the Partnership's Depositary Receipts:

        Effective January 3, 2012, the Partnership authorized a 3-for-1 forward split of its Depositary Receipts listed on the NYSE Amex and a concurrent adjustment of the exchange ratio of Depositary Receipts for Class A Units of the Partnership from 10-to-1 to 30-to-1, such that each Depositary Receipt represents one-thirtieth (¹/30) of a Class A Unit of the Partnership.

        All references to Depositary Receipts in the report are reflective of the 3-for-1 forward split.

	2012								2011
	Low Bid		High Bid		Close		Distributions		Low Bid		High Bid		Close		Distributions
First Quarter	$	23.02	$	28.96	$	27.50	$	0.25	$	21.35	$	22.58	$	22.27	$	0.233
Second Quarter	$	25.00	$	28.48	$	27.25	$	0.25	$	21.75	$	23.85	$	22.90	$	0.233
Third Quarter	$	25.98	$	29.98	$	28.97	$	0.25	$	20.53	$	24.00	$	22.98	$	0.233
Fourth Quarter	$	28.06	$	30.84	$	29.70	$	0.25	$	20.45	$	24.84	$	23.75	$	0.233

Distribution to Limited & General Partners were:

	2012		2011
Class A—Limited Partners (80%)	$	3,145,928	$	2,945,253
Class B—Limited Partners (19%)		747,158		699,497
Class C—General Partner (1%)		39,324		36,816
Total	$	3,932,410	$	3,681,566

        On March 15, 2013, the closing price on the NYSE Amex Exchange for a Depositary Receipt was $35.50. There were 2,990,182 Depositary Receipts outstanding and 4,359 Units (representing 130,770 receipts) held by 1,063 record holders.

        Any portion of the Partnership's cash, which the General Partner deems not necessary for cash reserves, is distributed to the Partners, and distributions are made on a quarterly basis. The Partnership has made annual distributions to its Partners since 1978. In 2012, the Partnership made distributions of $30.00 per Unit ($1.00 per Receipt) and in 2011, the Partnership made distributions of $28.00 per Unit, ($0.93 per Receipt). The total value of the distribution in 2012 was $3,932,410 and $3,681,566 in 2011. In February 2013, the Partnership declared a quarterly distribution of $7.50 per Unit ($0.25 per Receipt) payable on March 31, 2013.

        See "Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters" for certain information relating to the number of holders of each class of Units.

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        On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program ("Repurchase Program") under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one-tenth of a Class A Unit). On January 15, 2008, the General Partner authorized an increase in the Repurchase Program from 300,000 to 600,000 Depositary Receipts. On January 30, 2008 the General Partner authorized an increase the Repurchase Program from 600,000 to 900,000 Depositary Receipts. On March 6, 2008, the General Partner authorized the increase in the total number of Depositary Receipts that could be repurchased pursuant to the Repurchase Program from 900,000 to1, 500,000. On August 8, 2008, the General Partner re-authorized and renewed the Repurchase Program for an additional 12-month period ended August 19, 2009. On March 22, 2010, the General Partner re-authorized and renewed the Repurchase Program that expired on August 19, 2009. Under the terms of the renewed Repurchase Program, the Partnership may purchase up to 1,500,000 Depositary Receipts from the start of the program in 2007 through March 31, 2015. The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership's Second Amended and Restate Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through December 31, 2012, the Partnership has repurchased 1,219,927 Depositary Receipts at an average price of $24.62 per receipt (or $738.60 per underlying Class A Unit), 1,921 Class B Units and 101 General Partnership Units, both at an average price of $613.94 per Unit, totaling approximately $31,386,000 including brokerage fees paid by the Partnership.

        On September 17, 2008, the Partnership completed the issuance of an aggregate of 6,642 Class A Units held in treasury to current holders of Class B and General Partner Units upon the simultaneous retirement to treasury of 6,309 Class B Units and 333 General Partner Units pursuant to an equity distribution plan authorized by the Board of Directors of the General Partner on August 8, 2008 and as further described under Item 3.02 of the Partnership's Current Report on Form 8-K as filed with the Securities and Exchange Commission on September 18, 2008, which is incorporated herein by reference. Harold Brown, the treasurer of the General Partner, owns 75% of the issued and outstanding Class B Units of the Partnership and 75% of the issued and outstanding equity of the General Partner, Ronald Brown, the brother of Harold Brown and the president of the General Partner, owns 25% of the issued and outstanding Class B Units of the Partnership and 25% of the issued and outstanding equity of the General Partner.

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        See Note 8 to the Consolidated Financial Statements for information concerning this repurchase program.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among New England Realty Assoc. L.P., the NYSE MKT Composite Index,
and the FTSE NAREIT All REITs Index

*$100 invested on 12/31/07 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.

        The Partnership does not have any securities authorized for issuance under any equity compensation plans that are subject to disclosure under Item 201(d) of Regulation S-K.

ITEM 6.    SELECTED FINANCIAL DATA

        The information required by this Item is included on page 49 of this Form 10-K.

ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

        Certain information contained herein includes forward looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Liquidation Reform Act of 1995 (the "Act"). Forward looking statements in this report, or which management may make orally or in written form from time to time, reflect management's good faith belief when those statements are made, and are based on information currently available to management. Caution should be exercised in interpreting and relying on such forward looking statements, the realization of which may be impacted by known and unknown risks and uncertainties, events that may occur subsequent to the forward looking statements, and other factors which may be beyond the Partnership's control and which can materially affect the Partnership's actual results, performance or achievements for 2012 and beyond. Should one or more of the risks or uncertainties mentioned below materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We expressly disclaim any responsibility to update our forward looking statements, whether as a result of new information, future events or otherwise. Accordingly, investors should use caution in relying on past forward looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

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        Along with risks detailed in Item 1A and from time to time in the Partnership's filings with the Securities and Exchange Commission, some factors that could cause the Partnership's actual results, performance or achievements to differ materially from those expressed or implied by forward looking statements include but are not limited to the following:

•

The Partnership depends on the real estate markets where its properties are located, primarily in Eastern Massachusetts, and these markets may be adversely affected by local economic market conditions, which are beyond the Partnership's control.

•

The Partnership is subject to the general economic risks affecting the real estate industry, such as dependence on tenants' financial condition, the need to enter into new leases or renew leases on terms favorable to tenants in order to generate rental revenues and our ability to collect rents from our tenants.

•

The Partnership is also impacted by changing economic conditions making alternative housing arrangements more or less attractive to the Partnership's tenants, such as the interest rates on single family home mortgages and the availability and purchase price of single family homes in the Greater Boston metropolitan area.

•

The Partnership is subject to significant expenditures associated with each investment, such as debt service payments, real estate taxes, insurance and maintenance costs, which are generally not reduced when circumstances cause a reduction in revenues from a property.

•

The Partnership is subject to increases in heating and utility costs that may arise as a result of economic and market conditions and fluctuations in seasonal weather conditions.

•

Civil disturbances, earthquakes and other natural disasters may result in uninsured or underinsured losses.

•

Actual or threatened terrorist attacks may adversely affect our ability to generate revenues and the value of our properties.

•

Financing or refinancing of Partnership properties may not be available to the extent necessary or desirable, or may not be available on favorable terms.

•

The Partnership properties face competition from similar properties in the same market. This competition may affect the Partnership's ability to attract and retain tenants and may reduce the rents that can be charged.

•

Given the nature of the real estate business, the Partnership is subject to potential environmental liabilities. These include environmental contamination in the soil at the Partnership's or neighboring real estate, whether caused by the Partnership, previous owners of the subject property or neighbors of the subject property, and the presence of hazardous materials in the Partnership's buildings, such as asbestos, lead, mold and radon gas. Management is not aware of any material environmental liabilities at this time.

•

Insurance coverage for and relating to commercial properties is increasingly costly and difficult to obtain. In addition, insurance carriers have excluded certain specific items from standard insurance policies, which have resulted in increased risk exposure for the Partnership. These include insurance coverage for acts of terrorism and war, and coverage for mold and other environmental conditions. Coverage for these items is either unavailable or prohibitively expensive.

•

Market interest rates could adversely affect market prices for Class A Partnership Units and Depositary Receipts as well as performance and cash flow.

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•

Changes in income tax laws and regulations may affect the income taxable to owners of the Partnership. These changes may affect the after-tax value of future distributions.

•

The Partnership may fail to identify, acquire, construct or develop additional properties; may develop or acquire properties that do not produce a desired or expected yield on invested capital; may be unable to sell poorly- performing or otherwise undesirable properties quickly; or may fail to effectively integrate acquisitions of properties or portfolios of properties.

•

Risk associated with the use of debt to fund acquisitions and developments.

•

Competition for acquisitions may result in increased prices for properties.

•

Any weakness identified in the Partnership's internal controls as part of the evaluation being undertaken could have an adverse effect on the Partnership's business.

•

Ongoing compliance with Sarbanes-Oxley Act of 2002 may require additional personnel or systems changes.

        The foregoing factors should not be construed as exhaustive or as an admission regarding the adequacy of disclosures made by the Partnership prior to the date hereof or the effectiveness of said Act. The Partnership expressly disclaims any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

        Since the Partnership's long-term goals include the acquisition of additional properties, a portion of the proceeds from the refinancing and sale of properties is reserved for this purpose. If available acquisitions do not meet the Partnership's criteria, the Partnership may purchase additional depositary receipts. The Partnership will consider refinancing existing properties if the Partnership's cash reserves are insufficient to repay existing mortgages or if the Partnership needs additional funds for future acquisitions.

        Fourth quarter results reflect the high occupancy and increased rental rates that took hold during the second half of 2012. Demand imbalance and limited supply in September solidified the Partnerships revenue for the fourth quarter of 2012 and the first half of 2013. Revenues for the year exceeded those of 2011, operating expenses declined and operating income increased by approximately 13.7% for 2012 over 2011. Both national and local improvements in employment and the general business cycle continue to point to future revenue growth for 2013. Management expects operating expenses for 2013 to be relatively flat resulting in another year of improvement to operating income. It is unclear to management if the present consumer shift to rental housing versus home ownership is permanent or temporary. However, management believes that until this trend changes, upward pressure on rental rates will continue for the foreseeable future. Present empirical experience regarding the Partnership's occupancy level coupled with other anecdotal experiences leads Management to believe that the next 18-24 months will see positive revenue growth and sustained high occupancy.

        While revenue from continuing operations increased by over 4.7% for 2012, expenses excluding depreciation for 2012 versus 2011 have actually declined by 0.9%. Increases in administrative expenses, management fee, repairs and maintenance expenses and taxes and insurance were offset by a 49.7% reduction in renting expenses and an 11.0% reduction in operating expenses. Bad debts also decreased 47%. The Partnership has experienced a 50% decrease in vacancy loss and an 85% decrease in rental concessions. An unseasonably warm winter and management's capitalization on energy conversion and purchasing power also led to a 6.6% reduction in utility costs.

        Management expects to refinance approximately $46,000,000 of maturing debt in 2013. The amount of the new loans will be approximately total of $72,000,000 resulting in additional debt of approximately $25,000,000. Upon receipt, management will consider deploying the excess refinancing proceeds to future acquisitions, stock repurchase and retirement of existing debt. Management will continue to balance and weigh each of these investment options. It is anticipated that the interest rates

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on new debt will be less than the current interest rate. Management believes the existing trading range for the stock is worthy of continuing its Depositary Receipt Repurchase Program. Pursuant to which, 9,709 shares were acquired during the first quarter of 2013 at a total cost of $321,240. When appropriate, Management will continue to repurchase shares per its trading plan and allowed by the SEC. Management continues to weigh investment alternatives including acquiring additional properties against cash liquidity and the current depositary receipt price. Management believes the increase in distributions in 2012 was appropriate given the sustained performance of the portfolio and the expected future earnings of the Partnership.

        The Stock Repurchase Program that was initiated in 2007 has purchased 1,229,636 Depositary Receipts through March 12, 2013 or 30% of the outstanding class A Depositary Receipts. The Partnership has retained The Hamilton Company ("Hamilton") to manage and administer the Partnership's and Joint Ventures' Properties. Hamilton is a full-service real estate management company, which has legal, construction, maintenance, architectural, accounting and administrative departments. The Partnership's properties represent approximately 36% of the total properties and 42% of the residential properties managed by Hamilton. Substantially all of the other properties managed by Hamilton are owned, wholly or partially, directly or indirectly, by Harold Brown. The Partnership's Second Amended and Restated Contract of Limited Partnership (the "Partnership Agreement") expressly provides that the general partner may employ a management company to manage the properties, and that such management company may be paid a fee of up to 4% of rental receipts for administrative and management services (the "Management Fee"). The Partnership pays Hamilton the full annual Management Fee, in monthly installments.

        At March 1, 2013, Harold Brown, his brother Ronald Brown and the President of Hamilton, Carl Valeri, collectively own approximately 40% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons' family members). Harold Brown also controls 75% of the Partnership's Class B Units, 75% of the capital stock of NewReal, Inc. ("NewReal"), the Partnership's sole general partner, and all of the outstanding stock of Hamilton. Ronald Brown also owns 25% of the Partnership's Class B Units and 25% of NewReal's capital stock. In addition, Ronald Brown is the President and director of NewReal and Harold Brown is NewReal's Treasurer and a director. One of NewReal's directors, Roberta Ornstein also owns immaterial amounts of the Partnership's Class A receipts. The 75% of the issued and outstanding Class B units of the Partnership, controlled by Harold Brown, are owned by HBC Holdings LLC, an entity of which he is the manager.

        In addition to the Management Fee, the Partnership Agreement further provides for the employment of outside professionals to provide services to the Partnership and allows NewReal to charge the Partnership for the cost of employing professionals to assist with the administration of the Partnership's properties. Additionally, from time to time, the Partnership pays Hamilton for repairs and maintenance services, legal services, construction services and accounting services. The costs charged by Hamilton for these services are at the same hourly rate charged to all entities managed by Hamilton, and management believes such rates are competitive in the marketplace.

        Residential tenants sign a one year lease. In 2012, tenant renewals were approximately 67% with an average rental increase of approximately 3.7%, new leases accounted for approximately 33% with rental rate increases of approximately 5.2%. In 2012, leasing commissions decreased approximately 56% from 2011, while tenant concessions decreased approximately 36.6% from 2011. Tenant improvements were approximately $1,159,000 in 2012, compared to approximately $1,195,000 in 2011, a decrease of approximately $36,000.

        Hamilton accounted for approximately 5.7% of the repair and maintenance expense paid for by the Partnership in the year ended December 31, 2012 and 4.4% in the year ended December 31, 2011. Of the funds paid to Hamilton for this purpose, the great majority was to cover the cost of services

25

provided by the Hamilton maintenance department, including plumbing, electrical, carpentry services, and snow removal for those properties close to Hamilton's headquarters. Several of the larger Partnership properties have their own maintenance staff. Those properties that do not have their own maintenance staff and are located more than a reasonable distance from Hamilton's headquarters in Allston, Massachusetts are generally serviced by local, independent companies.

        Hamilton's legal department handles most of the Partnership's eviction and collection matters. Additionally, it prepares most long-term commercial lease agreements and represents the Partnership in selected purchase and sale transactions. Overall, Hamilton provided approximately 83% and 69% of the legal services paid for by the Partnership during the years ended December 31, 2012 and 2011, respectively.

        Additionally, as described in Note 3 to the consolidated financial statements, The Hamilton Company receives similar fees from the Investment Properties.

        The Partnership requires that three bids be obtained for construction contracts in excess of $15,000. Hamilton may be one of the three bidders on a particular project and may be awarded the contract if its bid and its ability to successfully complete the project are deemed appropriate. For contracts that are not awarded to Hamilton, Hamilton charges the Partnership a construction supervision fee equal to 5% of the contract amount. Hamilton's architectural department also provides services to the Partnership on an as-needed basis. In 2012, Hamilton provided the Partnership approximately $40,000 in construction and architectural services, compared to $56,000 for the year ended December 31, 2011.

        Prior to 1991, the Partnership employed an outside, unaffiliated company to perform its bookkeeping and accounting functions. Since that time, such services have been provided by Hamilton's accounting staff, which consists of approximately 14 people. In 2012, Hamilton charged the Partnership $125,000 per year ($31,250 per quarter) for bookkeeping and accounting services.

        For more information on related party transactions, see Note 3 to the Consolidated Financial Statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

        The preparation of the consolidated financial statements, in accordance with accounting principles generally accepted in the United States of America, requires the Partnership to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. The Partnership regularly and continually evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate properties and its investments in and advances to joint ventures. The Partnership bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgment. The Partnership's critical accounting policies are those which require assumptions to be made about such matters that are highly uncertain. Different estimates could have a material effect on the Partnership's financial results. Judgments and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions and circumstances. See Note 1 to the Consolidated Financial Statements, Principles of Consolidation.

        Revenue Recognition:    Rental income from residential and commercial properties is recognized over the term of the related lease. For residential tenants, amounts 60 days in arrears are charged against income. The commercial tenants are evaluated on a case by case basis. Certain leases of the commercial properties provide for increasing stepped minimum rents, which are accounted for on a

26

straight-line basis over the term of the lease. Concessions made on residential leases are also accounted for on the straight-line basis.

        Discontinued Operations and Rental Property Held for Sale:    When assets are identified by management as held for sale, the Partnership discontinues depreciating the assets and estimates the sales price, net of selling costs, of such assets. If, in management's opinion, the net sales price of the assets which have been identified as held for sale is less than the net book value of the assets, a valuation allowance is established. Properties identified as held for sale and/or sold are presented in discontinued operations for all periods presented.

        If circumstances arise that previously were considered unlikely and, as a result, the Partnership decides not to sell a property previously classified as held for sale, the property is reclassified as held and used. A property that is reclassified is measured and recorded individually at the lower of (a) its carrying amount before the property was classified as held for sale, adjusted for any depreciation (amortization) expense that would have been recognized had the property been continuously classified as held and used, or (b) the fair value at the date of the subsequent decision not to sell.

        Rental Properties:    Rental properties are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred; improvements and additions are capitalized. When assets are retired or otherwise disposed of, the cost of the asset and related accumulated depreciation is eliminated from the accounts, and any gain or loss on such disposition is included in income. Fully depreciated assets are removed from the accounts. Rental properties are depreciated by both straight-line and accelerated methods over their estimated useful lives. Upon acquisition of rental property, the Partnership estimates the fair value of acquired tangible assets, consisting of land, building and improvements, and identified intangible assets and liabilities assumed, generally consisting of the fair value of (i) above and below market leases, (ii) in-place leases and (iii) tenant relationships. The Partnership allocated the purchase price to the assets acquired and liabilities assumed based on their fair values. The Partnership records goodwill or a gain on bargain purchase (if any) if the net assets acquired/liabilities assumed exceed the purchase consideration of a transaction. In estimating the fair value of the tangible and intangible assets acquired, the Partnership considers information obtained about each property as a result of its due diligence and marketing and leasing activities, and utilizes various valuation methods, such as estimated cash flow projections utilizing appropriate discount and capitalization rates, estimates of replacement costs net of depreciation, and available market information. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant.

        Intangible assets acquired include amounts for in-place lease values, above and below market leases and tenant relationship values, which are based on management's evaluation of the specific characteristics of each tenant's lease and the Partnership's overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant relationships include the nature and extent of the Partnership's existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant's credit quality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles are amortized to expense over the anticipated life of the relationships.

        In the event that facts and circumstances indicate that the carrying value of a rental property may be impaired, an analysis of the value is prepared. The estimated future undiscounted cash flows are compared to the asset's carrying value to determine if a write-down to fair value is required.

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        Impairment:    On an annual basis management assesses whether there are any indicators that the value of the Partnership's rental properties may be impaired. A property's value is impaired only if management's estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the property over the fair value of the property. The Partnership's estimates of aggregate future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter management's assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved. The Partnership has not recognized an impairment loss for the years ended December 31, 2012, 2011, and 2010.

        Rental Property Held for Sale and Discontinued Operations:    When assets are identified by management as held for sale, the Partnership discontinues depreciating the assets and estimates the sales price, net of selling costs, of such assets. If, in management's opinion, the net sales price of the assets which have been identified as held for sale is less than the net book value of the assets, a valuation allowance is established. Properties identified as held for sale and/or sold are presented in discontinued operations for all periods presented.

        Investments in Partnerships:    The Partnership accounts for its 40%-50% ownership in the Investment Properties under the equity method of accounting, as it exercises significant influence over, but does not control these entities. These investments are recorded initially at cost, as Investments in Partnerships, and subsequently adjusted for the Partnership's share in earnings, cash contributions and distributions. Under the equity method of accounting, our net equity is reflected on the consolidated balance sheets, and our share of net income or loss from the Partnership is included on the consolidated statements of income.

        With respect to investments in and advances to the Investment Properties, the Partnership looks to the underlying properties to assess performance and the recoverability of carrying amounts for those investments in a manner similar to direct investments in real estate properties. An impairment charge is recorded if management's estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property.

        Legal Proceedings:    The Partnership is subject to various legal proceedings and claims that arise, from time to time, in the ordinary course of business. These matters are frequently covered by insurance. If it is determined that a loss is likely to occur, the estimated amount of the loss is recorded in the financial statements. Both the amount of the loss and the point at which its occurrence is considered likely can be difficult to determine.

RESULTS OF OPERATIONS

Years Ended December 31, 2012 and December 31, 2011

        The Partnership and its Subsidiary Partnerships earned income before interest expense, loss from investments in unconsolidated joint ventures and other income and loss of approximately $12,922,000 during the year ended December 31, 2012, compared to approximately $11,365,000 for the year ended December 31, 2011, an increase of approximately $1,557,000.

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        The rental activity is summarized as follows:

	Occupancy Date
	February 1, 2013			February 1, 2012
Residential
Units		2,270			2,270
Vacancies		39			32
Vacancy rate		1.7	%		1.4	%
Commercial
Total square feet		110,949			110,949
Vacancy		5,500			0
Vacancy rate		5.0	%		0	%

	Rental Income (in thousands) Year Ended December 31,
	2012						2011
	Total Operations			Continuing Operations			Total Operations			Continuing Operations
Total rents	$	35,244		$	35,244		$	33,958		$	33,609
Residential percentage		90	%		90	%		90	%		90	%
Commercial percentage		10	%		10	%		10	%		10	%
Contingent rentals	$	661		$	661		$	633		$	633

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        Year Ended December 31, 2012 Compared to Year Ended December 31, 2011:

	Year Ended December 31,
							Dollar Change			Percent Change
	2012			2011
Revenues
Rental income	$	35,244,008		$	33,608,799		$	1,635,209			4.9	%
Laundry and sundry income		388,401			426,803			(38,402	)		(9.0	)%
		35,632,409			34,035,602			1,596,807			4.7	%
Expenses
Administrative		1,825,951			1,707,408			118,543			6.9	%
Depreciation and amortization		6,092,725			5,910,746			181,979			3.1	%
Management fee		1,446,620			1,404,467			42,153			3.0	%
Operating		3,633,619			4,080,647			(447,028	)		(11.0	)%
Renting		183,529			365,110			(181,581	)		(49.7	)%
Repairs and maintenance		5,179,408			5,056,054			123,354			2.4	%
Taxes and insurance		4,348,492			4,146,554			201,938			4.9	%
		22,710,344			22,670,986			39,358			0.2	%
Income Before Other Income and Discontinued Operations		12,922,065			11,364,616			1,557,449			13.7	%
Other Income (loss)
Interest income		2,216			3,861			(1,645	)		(42.6	)%
Interest expense		(7,802,999	)		(7,965,422	)		162,423			(2.0	)%
(Loss) from investments in unconsolidated joint ventures		(1,487,484	)		(1,913,800	)		426,316			(22.3	)%
		(9,288,267	)		(9,875,361	)		587,094			(5.9	)%
Income From Continuing Operations		3,633,798			1,489,255			2,144,543			144.0	%
Discontinued Operations
Income from discontinued operations		—			81,567			(81,567	)		(100.0	)%
Gain on the sale of real estate from discontinued operations		—			7,720,459			(7,720,459	)		(100.0	)%
		—			7,802,026			(7,802,026	)		(100.0	)%
Net Income	$	3,633,798		$	9,291,281		$	(5,657,483	)		(60.9	)%

        Rental income from continuing operations for the year ended December 31, 2012 was approximately $35,244,000, compared to approximately $33,609,000 for the year ended December 31, 2011, an increase of approximately $1,635,000 (4.9%). There are a number of factors which can be attributed to this increase as follows: the acquisition of the Battle Green Apartments in June 2011 resulted in an increase in rental income of approximately $430,000; and rental rate increases of approximately 4.2% in 2012. The Partnership Properties with the most significant increases in rental income include 62 Boylston Street, Westgate Woburn, 1144 Commonwealth Avenue and School Street with increases of approximately $293,000, $178,000, $115,000, and $105,000, respectively. Included in rental income is contingent rentals collected on commercial properties. Contingent rentals include such charges as bill backs of common area maintenance charges, real estate taxes, and utility charges.

        Operating expenses from continuing operations for the year ended December 31, 2012 were approximately $22,710,000 compared to approximately $22,671,000 for the year ended December 31, 2011, an increase of approximately $39,000 (0.2%). The most significant factors contributing to this increase were an increase in taxes and insurance of approximately $202,000 (4.9%) due to increases in

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both insurance premiums and real estate taxes; an increase in depreciation and amortization expenses of approximately $182,000 (3.1%) due to the capital improvements to Partnership properties; an increase in repairs and maintenance expenses of approximately $123,000 (2.4%) due to repairs at the properties to maintain occupancy and an increase in administrative expenses of approximately $118,000 (6.9%) due primarily to increases in employee benefits and administrative service fees paid.

        These increases are offset by a decrease in operating expenses of approximately $447,000 (11.0%) due to a milder winter in 2012 resulting in lower snow removal and utility costs and a decrease in renting expenses of approximately $182,000 (49.7%) due to a decrease in rental commissions and related rental expenses as a result of the increased demand for apartments and the lower vacancy levels.

        Interest expense for the year ended December 31, 2012 was approximately $7,803,000 compared to approximately $7,965,000 for the year ended December 31, 2011, a decrease of approximately $162,000 (2.0%). This decrease is due to a lower level of debt in 2012 compared to 2011.

        At December 31, 2012, the Partnership has between a 40% and 50% ownership interests in nine different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 14 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.

        As described in Note 14 to the Consolidated Financial Statements, the Partnership's share of the net loss from the Investment Properties was approximately $1,487,000 for the year ended December 31, 2012, compared to approximately $1,914,000 for the year ended December 31, 2011, a decrease in the loss of approximately $426,000 (22.3%). This decrease in loss is consistent with the continued strength in the rental real estate market including approximately 5% increase in revenue. Included in the loss for the year ended December 31, 2012 is depreciation and amortization expense of approximately $3,681,000. The allocable loss for the year ended December 31, 2012 associated with the October 2009 investment in Dexter Park is approximately $981,000 of which approximately $2,294,000 is depreciation and amortization.

        Interest income for the year ended December 31, 2012 was approximately $2,200 compared to approximately $3,900 for the year ended December 31, 2011, a decrease of approximately $1,700. This decrease is due to a drop in interest rates.

        In June 2011, the Partnership sold the Avon Street Apartments located in Malden, Massachusetts. The net income from Avon Street for 2011 was approximately $82,000 and the gain on the sale of Avon Street was approximately $7,720,000. This is included in income from discontinued operations.

        As a result of the changes discussed above, net income for the year ended December 31, 2012 was approximately $3,634,000 compared to income of approximately $9,291,000 for the year ended December 31, 2011, a decrease in income of approximately $5,657,000.

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Years Ended December 31, 2011 and December 31, 2010

        The Partnership and its Subsidiary Partnerships earned income before interest expense, loss from investments in unconsolidated joint ventures and other income and loss of approximately $11,365,000 during the year ended December 31, 2011, compared to approximately $10,339,000 for the year ended December 31, 2010, an increase of approximately $1,025,000 (9.9%).

        The rental activity is summarized as follows:

	Occupancy Date
	February 1, 2012			February 1, 2011
Residential
Units		2,270			2,288
Vacancies		32			79
Vacancy rate		1.4	%		3.5	%
Commercial
Total square feet		110,949			110,949
Vacancy		0			0
Vacancy rate		0	%		0	%

	Rental Income (in thousands) Year Ended December 31,
	2011						2010
	Total Operations			Continuing Operations			Total Operations			Continuing Operations
Total rents	$	33,958		$	33,609		$	32,726		$	31,816
Residential percentage		90	%		90	%		90	%		90	%
Commercial percentage		10	%		10	%		10	%		10	%
Contingent rentals	$	633		$	633		$	653		$	653

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        Year Ended December 31, 2011 Compared to Year Ended December 31, 2010:

	Year Ended December 31,
							Dollar Change			Percent Change
	2011			2010
Revenues:
Rental income	$	33,608,799		$	31,816,175		$	1,792,624			5.6	%
Laundry and sundry income		426,803			439,782			(12,979	)		(3.0	)%
		34,035,602			32,255,957			1,779,645			5.5	%
Expenses
Administrative		1,707,408			1,772,599			(65,191	)		(3.7	)%
Depreciation and amortization		5,910,746			5,531,509			379,237			6.9	%
Management fees		1,404,467			1,330,157			74,310			5.6	%
Operating		4,080,647			3,784,401			296,246			7.8	%
Renting		365,110			528,686			(163,576	)		(30.9	)%
Repairs and maintenance		5,056,054			4,886,724			169,330			3.5	%
Taxes and insurance		4,146,554			4,082,588			63,966			1.6	%
		22,670,986			21,916,664			754,322			3.4	%
Income Before Other Income and Discontinued Operations		11,364,616			10,339,293			1,025,322			9.9	%
Other Income (Loss)
Interest expense		(7,965,422	)		(8,053,628	)		88,206			(1.1	)%
Interest income		3,861			5,932			(2,071	)		(34.9	)%
(Loss) from investment in unconsolidated joint ventures		(1,913,800	)		(3,869,996	)		1,956,196			(50.5	)%
Other (loss)		—			(700	)		700			(100.0	)%
		(9,875,361	)		(11,918,392	)		2,043,031			(17.1	)%
Income (loss) from Continuing Operations		1,489,255			(1,579,099	)		3,068,353			(194.3	)%
Discontinued Operations
Income from discontinued operations		81,567			219,867			(138,300	)		(62.9	)%
Gain on the sale of real estate from discontinued operations		7,720,459			—			7,720,459			100.0	%
		7,802,026			219,867			7,582,159			3,448.5	%
Net Income (loss)	$	9,291,281		$	(1,359,232	)	$	10,650,512			(783.6	)%

        Rental income from continuing operations for the year ended December 31, 2011 was approximately $33,609,000, compared to approximately $31,816,000 for the year ended December 31, 2010, an increase of approximately $1,793,000 (5.6%). There are a number of factors which can be attributed to this increase as follows: the acquisition of the Battle Green Apartments in June 2011 resulted in an increase of approximately $552,000; the amortization in 2010 of approximately $404,000 in connection with the free rents granted to tenants; an approximately 2% drop in the vacancies; and rental rate increases of approximately 2% – 4% in 2011. The Partnership Properties with the most significant increases in rental income include 62 Boylston Street, Hamilton Oaks, Westgate Woburn, Westside Colonial and 1144 Commonwealth Avenue with increases of approximately $184,000, $151,000, $58,000, $55,000 and $38,000, respectively. Included in rental income is contingent rentals collected on commercial properties. Contingent rentals include such charges as bill backs of common area maintenance charges, real estate taxes, and utility charges.

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        Operating expenses from continuing operations for the year ended December 31, 2011 were approximately $22,671,000 compared to approximately $21,917,000 for the year ended December 31, 2010, an increase of approximately $754,000 (3.4%). The most significant factors contributing to this increase were an increase in depreciation and amortization expenses of approximately $379,000 (6.9%) due to the acquisition of the Battle Green Apartments in June 2011; an increase in operating expenses of approximately $296,000 (7.8%) due to increases in snow removal and water and sewer charges, an increase in repairs and maintenance expenses of approximately $169,000 (3.5%) due to repairs at the properties to maintain occupancy and an increase in taxes and insurance of approximately $64,000 (1.6%) due to increases in real estate taxes.

        These increases are offset by a decrease in renting expenses of approximately $164,000 (30.9%) due to a decrease in rental commissions and related rental expenses due to the increased demand for apartments and the lower vacancy levels, and a decrease in administrative expenses of approximately $65,000 (3.7%) due to a decrease in administrative payroll.

        Interest expense for the year ended December 31, 2011 was approximately $7,965,000 compared to approximately $8,054,000 for the year ended December 31, 2010, a decrease of approximately $89,000 (1.1%). This decrease is due to a lower level of debt in 2011 compared to 2010.

        At December 31, 2011, the Partnership has between a 40% and 50% ownership interests in nine different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 14 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.

        As described in Note 14 to the Consolidated Financial Statements, the Partnership's share of the net loss from the Investment Properties was approximately $1,914,000 for the year ended December 31, 2011, compared to approximately $3,870,000 for the year ended December 31, 2010, a decrease in the loss of approximately $1,956,000. This decrease in loss is due to the amortization of the in place leases of approximately $1,600,000 in 2010. Included in the loss for the year ended December 31, 2011 is depreciation and amortization expense of approximately $3,707,000. The allocable loss for the year ended December 31, 2011 associated with the October 2009 investment in Dexter Park is approximately $1,152,000 of which approximately $2,279,000 is depreciation and amortization.

        Interest income for the year ended December 31, 2011 was approximately $3,900 compared to approximately $5,900 for the year ended December 31, 2010, a decrease of approximately $2,000. This decrease is due to a drop in interest rates as well as a decrease in cash available for investment.

        In June 2011, the Partnership sold the Avon Street Apartments located in Malden, Massachusetts. The net income from Avon Street for 2011was approximately $82,000 and the gain on the sale of Avon Street was approximately $7,720,000. This is included in income from discontinued operations.

        As a result of the changes discussed above, net income for the year ended December 31, 2011 was approximately $9,291,000 compared to a loss of approximately $1,359,000 for the year ended December 31, 2010, an increase in income of approximately $10,650,000.

LIQUIDITY AND CAPITAL RESOURCES

        The Partnership's principal source of cash during 2012 and 2011 was the collection of rents and proceeds on the sale of real estate. The majority of cash and cash equivalents of $6,981,906 at December 31, 2012 and $4,050,157 at December 31, 2011 were held in interest bearing accounts at creditworthy financial institutions.

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        This increase in cash of $2,931,748 at December 31, 2012 is summarized as follows:

	Year Ended December 31,
	2012			2011
Cash provided by operating activities	$	11,951,863		$	9,091,123
Cash (used in) investing activities		(1,053,399	)		(2,980,150	)
Cash (used in) financing activities		(3,128,091	)		(1,624,611	)
Repurchase of Depositary Receipts, Class B and General Partner Units		(906,214	)		—
Distributions paid		(3,932,410	)		(3,681,566	)
Net increase in cash and cash equivalents	$	2,931,748		$	804,796

        The cash provided by operating activities is primarily due to the collection of rents less cash operating expenses. The decrease in cash used in investing activities is due to the acquisition of Battle Green Apartments in June 2011, significant improvements to Partnership properties offset by the sale of Avon Street in May 2011. The increase in cash used in financing activities is due to the payoff of notes payable of $1,668,600 to HBC Holdings, LLC and prepaid financing costs of $353,400 in 2012. In 2012 the Partnership purchased 24,967 Depositary Receipts for a cost of $726,058, 198 Class B Units for a cost of $171,148 and 10 General Partnership Units for a cost of $9,008 for a total cost of $906,214.

        The Partnership did not buy any receipts, Class B Units or General Partnership Units in 2011. In 2010 the Partnership repurchased 20,688 Class A Depositary Receipts, 164 Class B Units and 9 General Partnership Units for a total cost of $540,911 ($432,920, $102,591 and $5,400 respectively). The purchase was funded from cash received from the refinancing of Partnership properties in 2010 and 2009.

        During 2012, the Partnership and its Subsidiary Partnerships completed improvements to certain of the Properties at a total cost of approximately $2,360,000. These improvements were funded from cash reserves and, to some extent, escrow accounts established in connection with the financing or refinancing of the applicable Properties. These sources have been adequate to fully fund improvements. The most significant improvements were made at Westgate Woburn, Hamilton Oaks, 62 Boylston Street, Olde English, Clovelly, 1144 Commonwealth Ave and 140 North Beacon Street at a cost of approximately $445,000, 280,000, $271,000, $206,000, $185,000, $133,000 and $113,000 respectively. The Partnership plans to invest approximately $2,300,000 in capital improvements in 2013.

        On June 1, 2011, the Partnership purchased the Battle Green Apartments, a 48 unit residential apartment complex located at 34-42 Worthen Road, Lexington, Massachusetts. The purchase price was $10,000,000. The Partnership used cash reserves, the proceeds from the sale of Avon Street and borrowed $3,998,573 from Harold Brown, Treasurer of the General Partner to make this purchase. This loan had an interest rate of 6% and was secured by the Partnership's ownership interest in Battle Green Apartments, LLC. The term of the loan is four years with a provision requiring payment in whole or in part upon demand within six months of notice or prepay without penalty. On July 27, 2011, the Partnership financed the Battle Green Apartments with a new $5,000,000 mortgage at 4.95% which matures in August 2026. Principal payments will be made using a 30 year amortization schedule. Deferred financing costs associated with this mortgage totaled approximately $100,000 and accordingly the effective interest rate is 5.07%. After paying off the existing loan of $3,998,573, approximately $1,000,000 was received by the Partnership. The interest paid on this loan to Harold Brown in 2011 was $38,123.

        On May 18, 2011, the Partnership sold Avon Street Apartments, a 66 unit residential apartment complex located at 130 Avon Street, Malden, Massachusetts. The sales price was $8,750,000, which resulted in a gain of approximately $7,700,000. The net proceeds of the sale, of approximately

35

$5,444,000 were held by a qualified intermediary in order for the Partnership to structure a tax free exchange in accordance with Section 1031 of the IRS code. This tax free exchange was completed with the purchase of Battle Green Apartments.

        On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, referred to as Dexter Park, is a 409 unit residential complex. The purchase price was $129,500,000. The total mortgage was $89,914,000 with an interest rate of 5.57% and it matures in 2019. The mortgage calls for interest only payments for the first two years of the loan and amortized over 30 years thereafter. The balance of this mortgage is approximately $88,612,000 at December 31, 2012. In order to fund this investment, the Partnership used approximately $8,757,000 of its cash reserves and borrowed approximately $7,168,000 with an interest rate of 6% from HBC Holdings, LLC, an entity owned by Harold Brown and his affiliates ("HBC"). The term of the loan was four years with a provision requiring payment in whole or in part upon demand by HBC with six months notice. On August 17, 2010, HBC gave six months written notice to the Partnership requesting a principal pay down of $2,500,000. During the fourth quarter of 2010, the Partnership paid HBC $2,500,000 as requested. During 2011, the Partnership elected to make principal payments of $1,000,000 on August 1, 2011, $1,000,000 on October 1, 2011, and an additional $1,000,000 on December 15, 2011 reducing the loan balance to $1,668,600 at December 31, 2011. In February 2012, the Partnership elected to make an additional principal payment of $750,000 to HBC Holdings and the balance of $918,600 was paid in April 2012. The interest paid during the year ended December 31, 2012 and 2011 was $18,960 and $238,673, respectively. A majority of the apartments were leased at the time of the acquisition. As a result, the Partnership amortized the intangible assets associated with the "in place" leases over a 12 month period which began in November 2009. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

        During the year ended December 31, 2012, the Partnership received distributions of approximately $1,366,000 from the investment properties of which $802,000 was from Dexter Park.

        In 2012 the Partnership paid four quarterly distributions of $30.00 per Unit ($1.00 per Receipt) for a total payment of $3,932,410 in 2012. In 2011, the Partnership paid four quarterly distributions of an aggregate of $28.00 per Unit ($0.93 per Receipt) for a total payment of $3,681,566 in 2011. In February 2013, the Partnership approved a quarterly distribution of $7.50 per Unit ($0.25 per Receipt) payable on March 31, 2013.

        The Partnership anticipates that cash from operations and interest bearing accounts will be sufficient to fund its current operations; pay distributions, make required debt payments and to finance current improvements to its properties. The Partnership may also sell or refinance properties. The Partnership's net income and cash flow may fluctuate dramatically from year to year as a result of the sale or refinancing of properties, increases or decreases in rental income or expenses, or the loss of significant tenants.

Off-Balance Sheet Arrangements—Joint Venture Indebtedness

        As of December 31, 2012, the Partnership had a 40%-50% ownership interest in nine Joint Ventures, all of which have mortgage indebtedness. We do not have control of these partnerships and therefore we account for them using the equity method of consolidation. At December 31, 2012, our proportionate share of the non-recourse debt related to these investments was approximately $60,267,000. See Note 14 to the Consolidated Financial Statements.

Contractual Obligations

        See Notes 5 and 14 to the Consolidated Financial Statements for a description of mortgage notes payable. The Partnerships has no other material contractual obligations to be disclosed.

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ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        Market risk is the exposure to loss resulting from changes in interest rates and equity prices. In pursuing its business plan, the primary market risk to which the Partnership is exposed is interest rate risk. Changes in the general level of interest rates prevailing in the financial markets may affect the spread between the Partnership's yield on invested assets and cost of funds and, in turn, its ability to make distributions or payments to its investors.

        As of December 31, 2012, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have approximately $276,312,000 in long-term debt, substantially all of which pay interest at fixed rates. Accordingly, the fair value of these debt instruments is affected by changes in market interest rates. These mortgages mature through 2026. For information regarding the fair value and maturity dates of these debt obligations, see Item 2. Properties and Note 5 to the Consolidated Financial Statements—"Mortgage Notes Payable," Note 12 to the Consolidated Financial Statements—"Fair Value Measurements" and Note 14 to the Consolidated Financial Statements—"Investment in Unconsolidated Joint Ventures." See Note 18—Subsequent Events—for additional information about the refinancing anticipated in 2013.

        For additional disclosure about market risk, see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Affect Future Results".

ITEM 8.    CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        The financial statements of the Partnership appear on pages F-1 through F-39 of this Form 10-K and are indexed herein under Item 15(a)(1).

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

        None.

ITEM 9A.    CONTROLS AND PROCEDURES

        Disclosure Controls and Procedures.    We have evaluated the design and operation of our disclosure controls and procedures to determine whether they are effective in ensuring that the disclosure of required information is timely made in accordance with the Securities Exchange Act of 1934 ("Exchange Act") and the rules and forms of the Securities and Exchange Commission. This evaluation was made under the supervision and with the participation of management, including the Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") of our General Partner as of the end of the period covered by this annual report on Form 10-K. The CEO and CFO have concluded, based on their reviews, that our disclosure controls and procedures, as defined in Exchange Act Rules 13a-15(e), are effective to ensure that information required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

        Management's Report on Internal Control over Financial Reporting.    We are responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15-15(f) under the Exchange Act. We assessed the effectiveness of our internal control over financial reporting using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in "Internal Control—Integrated Framework". Based on that assessment and those criteria, our management, with the participation of the CEO and CFO of the General Partner concluded that our internal control over financial reporting is effective as of December 31, 2012.

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        We believe that because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        Changes in Internal Control over Financial Reporting.    There were no changes in our internal control over financial reporting during the fourth quarter of 2012 that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

ITEM 9B.    OTHER INFORMATION

        Not applicable

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PART III

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS, AND COPORATE GOVERNANCE

        Our General Partner, New Real, Inc. is a Massachusetts corporation wholly owned by Harold Brown and Ronald Brown, who are brothers. Harold Brown and Ronald Brown were individual general partners of the Partnership until May 1984, when NewReal, Inc. replaced them as the sole General Partner of the Partnership. The General Partner is responsible for making all decisions and taking all action deemed by it necessary or appropriate to conduct the business of the Partnership.

        The General Partner engages The Hamilton Company, Inc. to manage the properties of the Partnership and its Subsidiary Partnerships. The Hamilton Company, Inc. is wholly owned by Harold Brown. See "Item 11. Executive Compensation" for information concerning fees paid by the Partnership to The Hamilton Company during 2012.

        Because the General Partner has engaged The Hamilton Company as the manager for the Properties, the General Partner has no employees.

        The directors of the General Partner are Ronald Brown, Harold Brown, Guilliaem Aertsen, Roberta Ornstein and David Aloise. The directors of the General Partner hold office until their successors are duly elected and qualified.

        Ronald Brown and Harold Brown hold all of the executive officer positions of the General Partner. The executive officers of the General Partner serve at the pleasure of the Board of Directors.

        On June 14, 2001, the Board of Directors of the General Partner created an Audit Committee, in accordance with Section 3(a)(58)(A) of the Exchange Act, consisting of three members, and approved the charter of the Audit Committee. As of November 6, 2007, the Audit Committee consisted of Guilliaem Aertsen, David Aloise, and Roberta Ornstein. The Board of Directors of the General Partner has determined that Guilliaem Aertsen is an audit committee financial expert, as that term is defined in Item 407 of Securities and Exchange Commission Regulation S-K.

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        The following table sets forth the name and age of each director and officer of the General Partner and each such person's principal occupation and affiliation during the preceding five years.

Name and Position	Age		Other Position
Ronald Brown, President and Director (since 1984)		77	Co-General Partner since the Partnerships formation in 1977. Associate, Hamilton Realty Company (since 1967); President, Treasurer, Clerk and Director of R. Brown Partners Inc. (since 1985), a real estate management company; Member, Greater Boston Real Estate Board (since 1981); Director, Brookline Chamber of Commerce (since 1978); Trustee of Reservations (since 1988); Director, Brookline Music School (1997-2004); President, Brookline Chamber of Commerce (1990-1992); Director, Coolidge Corner Theater Foundation (1990-1993); President, Brookline Property Owner's Association (1981-1990); Trustee, Brookline Hospital (1982-1989); Director, Brookline Symphony Orchestra (1996-2002); Director and Treasurer, Brookline Greenspace Alliance (since 1999). Mr. Brown is a graduate of Northeastern University earning a B.A. degree in Mechanical Engineering and an M.S. degree in Engineering Management. Based on Mr. Brown's ownership interest in the Partnership, ownership interest in the Partnership's General Partner, years of experience in the real estate industry and as a long standing member of the Board of Directors of the General Partner, the Board of Directors concluded that Mr. Brown has the requisite experience, qualifications, attributes and skills necessary to serve as a member of the Board of Directors.
Harold Brown, Treasurer and Director (since 1984)		88	Co-General Partner since the Partnerships formation in 1977. Sole proprietor, The Hamilton Company, Inc., manager and developer of residential and commercial real estate (since 1954); Trustee, Treasurer and Director of Wedgestone Realty Investors Trust (1982-1985); Chairman of the Board and principal stockholder of the Wedgestone Advisory Corporation (1980-1985); Director of AFC Financial Corp. (1983-1985); Director, Coolidge Bank and Trust (1980-1983). Mr. Brown is a graduate of the Massachusetts Institute of Technology. Based on Mr. Brown's ownership interest in the Partnership, ownership interest in the Partnership's General Partner, years of experience in the real estate industry and as a long standing member of the Board of Directors of the General Partner, the Board of Directors concluded that Mr. Brown has the requisite experience, qualifications, attributes and skills necessary to serve as a member of the Board of Directors.

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Name and Position	Age		Other Position
Guilliaem Aertsen, IV, Director (since 2002)		65	Director and Chairman of the Partnership's Audit Committee. Chief Executive Officer, Aertsen Ventures LLC (since 1999) a private venture capital firm focused on early stage companies engaged in technology, real estate and distressed financial assets; Director and CFO of CineCast LLC (since 1999); Member of Premier Capital LLC (since 2000); Chairman of the Board of Directors of the Massachusetts Housing Investment Corporation (since 1997) a partnership of corporate investors, housing sponsors and public agencies engaged in the financing of affordable housing and community development projects in Massachusetts and New England; Chairman of the Board of Trustees of the Old South Church (1992-2002); Executive Vice President and member of the senior management group of BankBoston Corporation (1996-1998); Executive and management assignments including corporate lending, real estate, capital markets, venture capital and asset management Bank Boston Corporation (1973-1998). Mr. Aertsen is a graduate of Harvard University. Based on Mr. Aertsen's familiarity with the Partnership as a member of the Board of Directors and as Chairman of the Audit Committee, his experience as a director with several other companies and his banking, management and financial expertise, the Board of Directors concluded that Mr. Aertsen has the requisite experience, qualifications, attributes and skills necessary to serve as a member of the Board of Directors.
Roberta Ornstein, Director (since 2007)		63	Director and member of the Partnership's Audit Committee. Managing Director and Head of Product Development Deutsche Asset Management (2002-2005); Vice President and Managing Director, Scudder Investments (1998-2001); Director and Chief Financial Officer, Summit Partners (1997-1998); Vice President, Liberty Financial (1996-1997); Senior Vice President, Shearson Lehman Brothers (1993-1994); Senior Vice President—Treasury Group, The Boston Company (1983-1993). Previous Member of the Board of Directors of the Boston YMCA, the New England Organ Bank and the Town of Brookline, Massachusetts Advisory Committee. Ms. Ornstein is a graduate of Brown University and has earned a Master Degree in Business Administration from Boston College. Based on Ms. Ornstein's financial, managerial and investment management experience, the Board of Directors concluded that Ms. Ornstein has the requisite experience, qualifications, attributes and skills necessary to serve as a member of the Board of Directors.

41

Name and Position	Age		Other Position
David Aloise, Director (since 2007)		58	Director and member of the Partnership's Audit Committee. Founder and principal of Aloise & Associates, LLC (since 2000) a consulting firm that provides advisory, training and credit risk management services; BankBoston Corporation (1979-2000) Director of Commercial Loan Workout, Managing Director Small Business Banking, Vice President Restructured Real Estate, Vice President C & I Loan Workout; Board of Trustees New England Banking Institute; Advisory Board Member Wells Fargo Retail Finance, LLC; Senior Advisor to Eaton Vance Bank Loan Mutual Fund Group; Member of the Turnaround Management Association. Mr. Aloise is a graduate of Boston College and the National Commercial Lending Graduate School, University of Oklahoma. Based on Mr. Aloise's experience in banking, credit markets, small business management and business turnarounds, the Board of Directors concluded that Mr. Aloise has the requisite experience, qualifications, attributes and skills necessary to serve as a member of the Board of Directors.

COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934

        Section 16(a) of the Securities Exchange Act of 1934 requires the Partnership's directors, executive officers, and persons who own more than 10% of a registered class of the Partnership's equity securities to file with the Securities and Exchange Commission reports of ownership changes and changes in ownership of the Partnership. Officers, directors and greater-than-10% shareholders are required by SEC regulations to furnish the Partnership with copies of all Section 16(a) forms they file.

        Based solely upon a review of Forms 3 and 4 furnished to the company under Rule 16a-3(e) of the Securities Exchange Act during its most recent fiscal year, Forms 5 furnished to the company with respect to its most recent fiscal year and any written representations received by the company from persons required to file such forms, the following persons—either officers, directors or beneficial owners of more than ten percent of any class of equity of the company registered pursuant to Section 12 of the Securities Exchange Act—failed to file on a timely basis reports required by Section 16(a) of the Securities Exchange Act during the most recent fiscal year:

CODE OF ETHICS

        The Partnership, its General Partner and Hamilton, the Partnership's management company, have adopted a Code of Business Conduct and Ethics, which constitutes a "Code of Ethics" as defined by the SEC and applies to executive officers as well as to all other employees. A copy of the Code of Business Conduct and Ethics is available in the "NERA" section of the management company's website at www.thehamiltoncompany.com. To the extent required by the rules of the SEC, the Partnership and its related entities will disclose amendments to and waivers from the Code of Business Conduct and Ethics in the same place on the aforementioned website.

42

REPORT OF THE AUDIT COMMITTEE

        The Audit Committee of NewReal Inc. (NewReal), which is the General Partner of New England Realty Associates Limited Partnership ("NERA" or the "Partnership"), is currently comprised of Guilliaem Aertsen, IV, David Aloise, and Roberta Ornstein, each of whom is an independent director of NewReal. The Audit Committee operates under a written charter.

        The Partnership's management, which consists of NERA's General Partner, is responsible for the preparation of the Partnership's financial statements and for maintaining an adequate system of internal controls and processes for that purpose. Miller Wachman LLP ("Miller Wachman") acts as the Partnership's independent auditor and is responsible for conducting an independent audit of the Partnership's annual financial statements, in accordance with generally accepted auditing standards, and issuing a report on the results of their audit. The Audit Committee is responsible for providing independent, objective oversight of both of these processes.

        The Audit Committee has reviewed and discussed the audited financial statements for the year ended December 31, 2012 with management of the Partnership and with representatives of Miller Wachman. As a result of these discussions, the Audit Committee believes that NERA maintains an effective system of accounting controls that allow it to prepare financial statements that fairly present the Partnership's financial position and results of its operations. Discussions with Miller Wachman also included the matters required by Statement on Auditing Standard No. 61 (Communications with Audit Committee).

        In addition, the Audit Committee reviewed the independence of Miller Wachman. We received written disclosures and a letter from Miller Wachman regarding its independence as required by Independent Standards Board Standards No. 1 and discussed this information with Miller Wachman.

        Based on the foregoing, the Audit Committee has recommended that the audited financial statements of the Partnership for the year ended December 31, 2012 be included in the Partnership's annual report on form 10-K to be filed with the Securities and Exchange Commission.

Guilliaem Aertsen, IV
David Aloise
Roberta Ornstein

ITEM 11.    EXECUTIVE COMPENSATION

        The Partnership does not have "Executive Compensation." As more fully described below, the Partnership employs a management company to which it pays management fees and administrative fees.

        The Partnership is not required to and did not pay any compensation to its officers or the officers and directors of the General Partner in 2012. As more fully described below, the Partnership employs a management company which is solely responsible for performing all management and policy making functions for the Partnership. The only compensation paid by the Partnership to any person or entity is in the form of management fees and administrative fees paid to the General Partner, or any management entity employed by the General Partner, in accordance with the Partnership Agreement.

        Specifically, the Partnership Agreement provides that the General Partner, or any management entity employed by the General Partner, is entitled to a management fee equal to 4% (2% at Dexter Park and 3% at Linewt) of the rental and other operating income from the Partnership Properties and a mortgage servicing fee equal to 0.5% of the unpaid principal balance of any debt instruments received, held and serviced by the Partnership (the "Management Fee"). The Partnership Agreement also authorizes the General Partner to charge to the Partnership its cost for employing professionals to assist with the administration of the Partnership Properties (the "Administrative Fees"). The Administrative Fee is not charged against the Management Fee. In addition, upon the sale or disposition of any Partnership

43

Properties, the General Partner, or any management entity which is the effective cause of such sale, is entitled to a commission equal to 3% of the gross sale price (the "Commission"), provided that should any other broker be entitled to a commission in connection with the sale, the commission shall be the difference between 3% of the gross sale price and the amount to be paid to such broker.

        The General Partner has engaged The Hamilton Company ("Hamilton") to operate and manage the Partnership, and in accordance with the Partnership Agreement, the Management Fee, the Administrative Fees and the Commission are paid to Hamilton. See "Item 10. Directors and Executive Officers of the Registrant." The total Management Fee paid to Hamilton during 2012 was approximately $1,447,000. The management services provided by Hamilton include but are not limited to: collecting rents and other income; approving, ordering and supervising all repairs and other decorations; terminating leases, evicting tenants, purchasing supplies and equipment, financing and refinancing properties, settling insurance claims, maintaining administrative offices and employing personnel. In addition, the Partnership engages the president of Hamilton as a consultant to provide asset management services to the Partnership, for which the Partnership paid $75,000 in 2012. The Partnership does not have a written agreement with this individual.

        In 2012, the Partnership and its Subsidiary Partnerships paid administrative fees to Hamilton of approximately $710,000 inclusive of construction supervision and architectural fees of approximately $43,000, rental commissions of $25,000, repairs and maintenance service fees of approximately $295,000, legal fees of approximately $198,000and $125,000 for accounting services. The administrative fees included $24,000 that was paid by the Partnership to Ronald Brown for construction supervision services.

        Additionally, the Hamilton Company received approximately $728,000 from the 40-50% owned Investment Properties of which approximately $567,000 was the management fee, approximately $5,000 was for construction supervision and architectural fees, approximately $64,000 was for maintenance services, $76,000 for legal services, rental commissions of approximately $6,000 and $10,000 for construction costs. The Advisory Committee held 6 meetings during 2012, and a total of $31,000 was paid for attendance and participation in such meetings. Additionally, the Audit Committee held 4 meetings in 2012 and a total of $12,000 was paid for attendance and participation in such meetings.

Compensation Committee Interlocks and Insider Participation

        The Board of Directors of our General Partner does not have a compensation committee. No member of the Board of Directors of the General Partner was at any time in 2012 or at any other time an officer or employee of the General Partner, and no member had any relationship with the Partnership requiring disclosure as a related-person transaction under Item 404 of Regulation S-K. No officer of the General Partner has served on the board of directors or compensation committee of any other entity that has or has had one or more executive officers who served as a member of the Board of Directors of the General Partner at any time in 2012.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

        As of March 15, 2013, except as listed below, the General Partner was not aware of any beneficial owner of more than 5% of the outstanding Class A Units or the Depositary Receipts, other than Computershare, which, under the Deposit Agreement, as Depositary, is the record holder of the Class A Units exchanged for Depositary Receipts. As of March 15, 2013, pursuant to the Deposit Agreement, Computershare was serving as the record holder of the Class A Units with respect to which 2,990,182 Depositary Receipts had been issued to 847 holders. As of March 15, 2013, there were issued and outstanding 4,359 Class A Units (not including the Depositary Receipts) held by 216 unit holders, 24,707 Class B Units and 1,300 General Partnership Units held by the persons listed below. During 2012, 78 Class A Units were exchanged for 2,340 Depositary Receipts.

44

The following table sets forth certain information regarding each class of Partnership Units beneficially owned as of December 31, 2012 by (i) each person known by the Partnership to beneficially own more than 5% of any class of Partnership Units, (ii) each director and officer of the General Partner and (iii) all directors and officers of the General Partner as a group. For purposes of this table, all Depositary Receipts are included as if they were converted back into Class A Units. The inclusion in the table below of any Units deemed beneficially owned does not constitute an admission that the named persons are direct or indirect beneficial owners of such Units. Unless otherwise indicated, each person listed below has sole voting and investment power with respect to the Units listed.

	Class A						Class B						General Partnership
Directors and Officers	Number of Units Beneficially Owned			% Of Outstanding Units Beneficially Owned			Number of Units Beneficially Owned			% Of Outstanding Units Beneficially Owned			Number of Units Beneficially Owned			% Of Outstanding Units Beneficially Owned
Harold Brown			(1)(2)			(1)(2)		18,588	(3)		75	%(3)			(4)		100	%(4)
c/o New England Realty Associates Limited Partnership 39 Brighton Avenue Allston, MA 02134
Harold Brown 1999 Revocable Trust			(2)			(2)
c/o Saul Ewing LLP 131 Dartmouth Street Boston, MA 02116
HBC Holdings, LLC			(1)			(1)			(3)			(3)		0			0
39 Brighton Avenue
Allston, MA 02134
Ronald Brown		2,872	(5)		2.75	%(5)		6,196			25	%			(4)		100	%(4)
c/o New England Realty Associates Limited Partnership 39 Brighton Avenue Allston, MA 02134
Guilliaem Aertsen		0			0			0			0			0			0
160 Boylston Street #2149 Chestnut Hill, MA 02467
David Aloise		0			0			0			0			0			0
241 Cottage Park Road Winthrop, MA 02152
Roberta Ornstein		178			0.17	%		0			0			0			0
160 Boylston Street #2149 Chestnut Hill, MA 02467
NewReal, Inc.		333			0.32	%		0			0			1,304			100	%
39 Brighton Avenue Allston, MA 02134
All directors and officers as a group		35,311	(6)		33.84	%3(6)		24,784	(7)		100	%(7)			(4)		100	%(4)
5% Owners that are not Directors and Officers
Carl Valeri		6,478	(8)		6.21	%(8)		0			0			0			0
50 Udine Street
Arlington, MA 02476

(1)

As of March 1, 2013, 507,849 Depositary Receipts are held of record by the HBC Holdings, LLC (HBC). Harold Brown is the sole manager of HBC with sole voting and dispositive control over the Depositary Receipts. Accordingly, Mr. Brown may be deemed to beneficially own the Depositary Receipts held by HBC. Because a Depositary Receipt represents beneficial ownership of one-thirtieth of a Class A Unit, Harold Brown may be deemed to beneficially own approximately

45

16,928 Class A Units (approximately 16.22% of the outstanding Class A Units). On January 12, 2011, the NERA 1994 Irrevocable Trust transferred 207,849 Depositary Receipts to HBC as partial consideration for additional economic interests in HBC. Also on January 12, 2011, the Harold Brown 1999 Revocable Trust transferred 300,000 Depositary Receipts to HBC as partial consideration for additional economic interest in HBC.

(2)

On October 15, 2009, the Harold Brown 1999 Revocable Trust (1999 Trust) effected an equity exchange with the NERA 1994 Irrevocable Trust (1994 Trust) pursuant to which the 1994 Trust transferred 660,000 Depositary Receipts to the 1999 Trust in exchange for property ownership interests held by the 1999 Trust. On June 4, 2010, the 1994 Trust transferred 90,000 Depositary Receipts to the 1999 Trust as consideration for a 2.18% economic interest in HBC Holdings, LLC ("HBC Holdings'). On January 12, 2011, the 1999 Trust transferred 300,000 Depositary Receipts to HBC as partial consideration for additional economic interest in HBC. As of March 1, 2013, 450,000 Depositary Receipts are held of record by the Harold Brown 1999 Revocable Trust. Harold Brown is the sole beneficiary of the 1999 Trust during his lifetime and is a co-trustee of the 1999 Trust and exercises voting and dispositive control over the Depositary Receipts beneficially owned by the Trust. Accordingly, Mr. Brown may be deemed to beneficially own the Depositary Receipts held by the Trust. Because a Depositary Receipt represents beneficial ownership of one-thirtieth of a Class A Unit, Harold Brown may be deemed to beneficially own approximately 15,000 Class A Units (approximately 14.37% of the outstanding Class A Units) and the Trust may be deemed to beneficially own approximately 15,000 Class A Units (approximately 14.37% of the outstanding Class A Units).

(3)

Consists of Class B Units held by HBC Holdings, LLC. See Note (1) above. Harold Brown, as Manager, has voting and investment power over the Class B Units held by the LLC, subject to the provisions of the LLC, and thus may be deemed to beneficially own the 18,588 Class B Units held by the LLC. On January 12, 2011, the NERA 1994 Irrevocable Trust transferred to HBC, 18,588 Class B Units for additional economic interest in HBC.

(4)

Since Harold Brown and Ronald Brown are the controlling stockholders, executive officers and directors of NewReal, Inc., they may be deemed to beneficially own all 1,304 of the General Partnership Units held of record by NewReal, Inc.

(5)

Consists of 86,160 Depositary Receipts held of record jointly by Ronald Brown and his wife. Because a Depositary Receipt represents beneficial ownership of one-thirtieth of a Class A Unit, Ronald Brown may be deemed to beneficially own approximately 2,872 Class A Units.

(6)

Consists of the Class A Units described in Notes (1) and (4) above, plus New Real, Inc. and Ms. Ornstein, as indicated in the table.

(7)

Includes the Class B Units described in Note (2) above.

(8)

Consists of 194,346 Depositary Receipts held by Carl Valeri and his immediate family members. Because a Depositary Receipt represents beneficial ownership of one thirtieth of a Class A Unit, Carl Valeri may be deemed to beneficially own approximately 6,478 Class A Units.

        On November 13, 2000, the Partnership adopted a Policy for Establishment of Rule 10b5-1 Trading Plans. Pursuant to this Policy, the Partnership authorized its officers, directors and certain employees, shareholders and affiliates who are deemed "insiders" of the Partnership to adopt individual plans for trading the Partnership's securities ("Trading Plans"), and established certain procedural requirements relating to the establishment, modification and termination of such Trading Plans. On May 14, 2001, the Partnership approved a Trading Plan of Harold Brown, providing for the purchase of up to 60,000 Depositary Receipts of the Partnership as such become available during the period from May 14, 2001 through May 13, 2002. Mr. Brown amended and restated this Trading Plan on November 19, 2001 to increase the number of Depositary Receipts which were to be purchased pursuant thereto from 60,000 to 150,000, expanding the date through which purchases could be made to September 30, 2002, and to provide that purchases under his Trading Plan were to be made only if the price per Depositary Receipt was $15.00 or less. On November 7, 2007, Mr. Brown amended and restated the Trading Plan expanding the date through which Depositary Receipts may be purchased through September 30, 2009 for up to 150,000 Depositary Receipts at prices up to $33.33 each. On November 4, 2009, Mr. Brown amended and restated the Trading Plan expanding the date through which Depositary Receipts may be purchase through September 30, 2012 for up to 150,000 Depositary Receipts at price up to $28.33 each. On November 14, 2012, Mr. Brown amended and restated the Trading Plan extending the date through which Depositary Receipts may be purchased through September 30, 2016 for up to 600,000 Depositary Receipts at prices up to $45.00.

        The Partnership does not have any securities authorized for issuance pursuant to any equity compensation plans.

46

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

        Harold Brown and Ronald Brown are brothers.

        Guilliaem Aertsen and Roberta Ornstein are married.

        There are no other family relationships among any of our directors. Messrs. Aertsen, Aloise and Ms. Ornstein representing a majority of our directors, are determined to be independent under the rules of the NYSE Amex Exchange and the SEC. The board holds regularly scheduled meetings.

        The Partnership invested approximately $34,049,000 in nine limited liability companies formed to acquire Investment Properties. The Partnership has a 40%-50% ownership interest in each of these limited liability companies accounted for on the equity method of consolidation. The majority stockholder of the General Partner owns between 43.2% and 57% and the President and five employees of the management company own between 0% and 6.8% in each of the Investment Properties. See Note 14 of the consolidated financial statements for a description of the Investment Properties.

        See also "Item 2. Properties," "Item 10. Directors and Executive Officers of the Registrant" and "Item 11. Executive Compensation" for information regarding the fees paid to The Hamilton Company, an affiliate of the General Partner.

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

        Miller Wachman LLP served as the Partnership's independent accountants for the fiscal year ended December 31, 2012 and has reported on the 2012 Consolidated Financial Statements. Aggregate fees rendered to Miller Wachman LLP for the years ended December 31, 2012 and 2011 were as follows:

	2012		2011
Audit Fees
Recurring annual audits and quarterly reviews	$	238,000	$	236,000
Subtotal		238,000		236,000
Other Audit Related Fees		—		—
Tax Fees
Recurring tax compliance for the Partnership, 25 subsidiary Partnerships and 20 General Partnerships		80,000		80,000
Tax Planning and research		—		—
Subtotal		80,000		80,000
Other Fees		—		—
Total Fees	$	318,000	$	316,000

        The Audit Committee's charter provides that it has the sole authority to review in advance and grant any pre-approvals of (i) all auditing services to be provided by the independent auditor, (ii) all significant non-audit services to be provided by the independent auditors as permitted by Section 10A of the Securities Exchange Act of 1934, and (iii) all fees and the terms of engagement with respect to such services. All audit and non-audit services performed by Miller Wachman during fiscal 2012 and 2011 were pre-approved pursuant to the procedures outlined above.

47

PART IV

ITEM 15.    EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)

1. Financial Statements:

The following Financial Statements are included in this Form 10-K:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets at December 31, 2012 and 2011

Consolidated Statements of Income for the years ended December 31, 2012, 2011 and 2010

Consolidated Statements of Changes in Partners' Capital for the years ended December 31, 2012, 2011 and 2010

Consolidated Statements of Cash Flows for the years ended December 31, 2012, 2011 and 2010

Notes to Consolidated Financial Statements

2. Consolidated Financial Statement Schedules:

Financial statement schedules are omitted because they are not applicable or not required, or because the required information is included in the financial statements or notes thereto.

(b)

Exhibits:

The exhibits filed as part of this Annual Report on Form 10-K are listed in the Exhibit Index included herewith.

48

SELECTED FINANCIAL DATA

	Year Ended December 31,
	2012			2011			2010			2009			2008
INCOME STATEMENT INFORMATION
Revenues	$	35,632,409		$	34,035,602		$	32,255,957		$	32,362,155		$	31,434,943
Expenses		22,710,344			22,670,986			21,916,664			21,555,223			22,032,644
Income before other income and discontinued operations		12,922,065			11,364,616			10,339,293			10,806,932			9,402,299
Other (Loss)		(9,288,267	)		(9,875,361	)		(11,918,392	)		(9,433,313	)		(13,060,859	)
Income (loss) before discontinued operations		3,633,798			1,489,254			(1,579,099	)		1,373,619			(3,658,560	)
Discontinued operations		—			7,802,026			219,867			238,919			10,240,271
Net (Loss) Income	$	3,633,798		$	9,291,281		$	(1,359,232	)	$	1,612,538		$	6,581,711
Income (loss) before discontinued operations per Unit	$	27.69		$	11.33		$	(11.99	)	$	10.33		$	(26.56	)
Discontinued operations per Unit		—			59.34			1.67			1.80			74.33
Net income (loss) per Unit		27.69			70.67			(10.32	)		12.13			47.77
Distributions to Partners per Unit	$	30.00		$	28.00		$	28.00		$	28.00		$	28.00
Net income (loss) per Depositary Receipt	$	0.92		$	2.36		$	(0.34	)	$	0.40		$	1.59
Distributions to Partners per Depositary Receipt	$	1.00		$	0.93		$	0.93		$	0.93		$	0.93
BALANCE SHEET INFORMATION
Real Estate, gross		159,876,368			159,123,799			150,818,648			150,411,555			150,344,799
Real Estate, net		95,435,850			98,924,534			92,744,257			95,971,937			98,560,454
Total Assets		121,538,490			125,376,764			121,276,735			129,089,736			125,243,457
Total Debt Outstanding		138,055,522			140,830,212			142,349,260			144,809,354			138,160,262
Partners' Capital		(22,515,678	)		(21,310,852	)		(26,920,567	)		(21,332,824	)		(17,717,182	)

        The Partnership may purchase and/or sell properties at any time.

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        The table below reflects the totals of property available for rental at each December 31,

	Year Ended December 31,
	2012			2011			2010			2009			2008
Residential
Units		2,270			2,270			2,288			2,288			2,288
Vacancies		39			32			79			63			67
Vacancy rate		1.7	%		1.4	%		3.5	%		2.8	%		3.0	%
Commercial
Total square feet		110,949			110,949			110,949			110,949			110,949
Vacancy (in square feet)		5,500			0			0			2,384			0
Vacancy rate		5.0	%		0	%		0	%		2.1	%		0	%

        See Items 1A and 7 for factors that may affect future operations. The above tables may not be indicative of future results.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Partners
New England Realty Associates Limited Partnership:

        We have audited the accompanying consolidated balance sheets of New England Realty Associates Limited Partnership (the "Partnership") as of December 31, 2012 and 2011 and the related consolidated statements of income, changes in partners capital and cash flows for each of the years in the three-year period ended December 31, 2012. These consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Partnership is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Partnership's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of New England Realty Associates Limited Partnership at December 31, 2012 and 2011, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2012, in conformity with accounting principles generally accepted in the United States of America.

/s/ MILLER WACHMAN LLP  

Boston, Massachusetts
March 22, 2013

F-1

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31,
	2012			2011
ASSETS
Rental Properties	$	95,435,850		$	98,924,534
Cash and Cash Equivalents		6,981,906			4,050,157
Rents Receivable		475,083			434,252
Real Estate Tax Escrows		449,652			401,325
Prepaid Expenses and Other Assets		3,073,890			3,866,652
Investments in Unconsolidated Joint Ventures		13,986,173			16,780,657
Financing and Leasing Fees		1,135,936			919,187
Total Assets	$	121,538,490		$	125,376,764
LIABILITIES AND PARTNERS' CAPITAL
Note Payable	$	—		$	1,668,600
Mortgage Notes Payable		138,055,522			139,161,612
Accounts Payable and Accrued Expenses		2,361,942			2,253,696
Advance Rental Payments and Security Deposits		3,636,704			3,603,708
Total Liabilities		144,054,168			146,687,616
Commitments and Contingent Liabilities (Notes 3 and 9)		—			—
Partners' Capital 130,444 and 131,484 units outstanding in 2012 and 2011 respectively		(22,515,678	)		(21,310,852	)
Total Liabilities and Partners' Capital	$	121,538,490		$	125,376,764

See notes to consolidated financial statements.

F-2

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

	Year Ended December 31,
	2012			2011			2010
Revenues
Rental income	$	35,244,008		$	33,608,799		$	31,816,175
Laundry and sundry income		388,401			426,803			439,782
		35,632,409			34,035,602			32,255,957
Expenses
Administrative		1,825,951			1,707,408			1,772,599
Depreciation and amortization		6,092,725			5,910,746			5,531,509
Management fee		1,446,620			1,404,467			1,330,157
Operating		3,633,619			4,080,647			3,784,401
Renting		183,529			365,110			528,686
Repairs and maintenance		5,179,408			5,056,054			4,886,724
Taxes and insurance		4,348,492			4,146,554			4,082,588
		22,710,344			22,670,986			21,916,664
Income Before Other Income (loss) and Discontinued Operations		12,922,065			11,364,616			10,339,293
Other Income (loss)
Interest income		2,216			3,861			5,932
Interest expense		(7,802,999	)		(7,965,422	)		(8,053,628	)
(Loss) from investments in unconsolidated joint ventures		(1,487,484	)		(1,913,800	)		(3,869,996	)
Other (loss)		—			—			(700	)
		(9,288,267	)		(9,875,361	)		(11,918,392	)
Income (loss) From Continuing Operations		3,633,798			1,489,255			(1,579,099	)
Discontinued Operations
Income from discontinued operations		—			81,567			219,867
Gain on the sale of real estate		—			7,720,459			—
		—			7,802,026			219,867
Net Income (loss)	$	3,633,798		$	9,291,281		$	(1,359,232	)
Income (loss) per Unit
Income (loss) before discontinued operations	$	27.69		$	11.33		$	(11.99	)
Income from discontinued operations		—			59.34			1.67
Net Income per Unit	$	27.69		$	70.67		$	(10.32	)
Weighted Average Number of Units Outstanding		131,230			131,484			131,696

See notes to consolidated financial statements.

F-3

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

														Partners' Capital
	Limited
	Units
														Limited
					General Partnership				Treasury Units											General Partnership
	Class A		Class B				Subtotal				Total			Class A			Class B						Total
Balance January 1, 2010		144,180		34,243		1,802		180,225		47,879		132,346		$	(17,069,520	)	$	(4,050,138	)	$	(213,165	)	$	(21,332,823	)
Distribution to Partners		—		—		—		—		—		—			(2,950,080	)		(700,644	)		(36,876	)		(3,687,600	)
Stock Buyback		—		—		—		—		862		(862	)		(432,920	)		(102,591	)		(5,400	)		(540,911	)
Net Loss		—		—		—		—		—		—			(1,087,386	)		(258,254	)		(13,592	)		(1,359,232	)
Balance December 31, 2010		144,180		34,243		1,802		180,225		48,741		131,484		$	(21,539,906	)	$	(5,111,627	)	$	(269,033	)	$	(26,920,566	)
Distribution to Partners		—		—		—		—		—		—			(2,945,253	)		(699,498	)		(36,815	)	$	(3,681,566	)
Net Income		—		—		—		—		—		—			7,433,025			1,765,343			92,913		$	9,291,281
Balance December 31, 2011		144,180		34,243		1,802		180,225		48,741		131,484		$	(17,052,134	)	$	(4,045,782	)	$	(212,935	)	$	(21,310,851	)
Distribution to Partners		—		—		—		—		—		—			(3,145,928	)		(747,158	)		(39,324	)		(3,932,410	)
Stock Buyback		—		—		—		—		1,040		(1,040	)		(726,058	)		(171,148	)		(9,008	)		(906,214	)
Net Income		—		—		—		—		—		—			2,907,038			690,422			36,338			3,633,798
Balance December 31, 2012		144,180		34,243		1,802		180,225		49,781		130,444		$	(18,017,082	)	$	(4,273,666	)	$	(224,929	)	$	(22,515,677	)

See notes to consolidated financial statements.

F-4

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2012			2011			2010
Cash Flows from Operating Activities
Net income (loss)	$	3,633,798		$	9,291,281		$	(1,359,232	)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		6,092,725			5,910,746			5,531,509
Loss from investments in joint venture		1,487,484			1,913,800			3,869,996
Depreciation and amortization—discontinued operations		—			30,132			90,886
(Gain) on the sale of real estate from discontinued operations					(7,720,459	)
Change in operating assets and liabilities
(Increase) Decrease in rents receivable		(40,831	)		188,692			415,876
Increase (Decrease) in accounts payable and accrued expense		108,246			(186,445	)		244,896
(Increase) Decrease in real estate tax escrow		(48,327	)		(99,472	)		9,729
(Increase) Decrease in prepaid expenses and other assets		685,772			(432,957	)		(480,598	)
Increase in advance rental payments and security deposits		32,996			195,807			(9,460	)
Total Adjustments		8,318,065			(200,156	)		9,672,834
Net cash provided by operating activities		11,951,863			9,091,125			8,313,602
Cash Flows Used in Investing Activities
Proceeds from unconsolidated joint ventures		1,366,383			1,408,950			1,140,801
(Investment in) unconsolidated joint ventures		(59,383	)		(26,450	)		(123,301	)
Purchase and improvement of rental properties		(2,360,399	)		(2,618,794	)		(2,268,039	)
Purchase of rental properties		—			(10,041,784	)		—
Net proceeds from the sale of rental property		—			8,297,928			—
Net cash (used in) investing activities		(1,053,399	)		(2,980,150	)		(1,250,539	)
Cash Flows from Financing Activities
Payment of financing costs		(353,400	)		(105,564	)		(8,161	)
Proceeds of mortgage notes payable		—			5,000,000			904,122
Proceeds of note payable		—			3,998,573			—
Principal payments of mortgage notes payable		(1,106,091	)		(3,519,047	)		(864,815	)
Principal payments of note payable		(1,668,600	)		(6,998,573	)		(2,500,000	)
Stock buyback		(906,214	)		—			(540,911	)
Distributions to partners		(3,932,410	)		(3,681,566	)		(3,687,600	)
Net cash (used in) financing activities		(7,966,715	)		(5,306,177	)		(6,697,365	)
Net Increase in Cash and Cash Equivalents		2,931,749			804,798			365,698
Cash and Cash Equivalents, at beginning of period		4,050,157			3,245,361			2,879,663
Cash and Cash Equivalents, at end of period	$	6,981,906		$	4,050,159		$	3,245,361

See notes to consolidated financial statements.

F-5

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2012

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

        Line of Business:    New England Realty Associates Limited Partnership ("NERA" or the "Partnership") was organized in Massachusetts in 1977. NERA and its subsidiaries own 24 properties which include 16 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,251 apartment units, 19 condominium units and 110,949 square feet of commercial space. Additionally, the Partnership also owns a 40-50% interest in nine residential and mixed use properties consisting of 799 apartment units, 12,500 square feet of commercial space and a 50 car parking lot. The properties are located in Eastern Massachusetts and Southern New Hampshire.

        Basis of Presentation:    The preparation of the financial statements, in conformity with accounting principles generally accepted in the United State of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Accordingly, actual results could differ from those estimates.

        Principles of Consolidation:    The consolidated financial statements include the accounts of NERA and its subsidiaries. NERA has a 99.67% to 100% ownership interest in each subsidiary except for the nine limited liability companies (the "Investment Properties" or "Joint Ventures") in which the Partnership has a 40 - 50% ownership interest. The consolidated group is referred to as the "Partnership." Minority interests are not recorded, since they are insignificant. All significant intercompany accounts and transactions are eliminated in consolidation. The Partnership accounts for its investment in the above-mentioned Investment Properties using the equity method of consolidation. (See Note 14: Investments in Unconsolidated Joint Ventures).

        The Partnership accounts for its investments in joint ventures using the equity method of accounting. These investments are recorded initially at cost, as Investments in Unconsolidated Joint Ventures, and subsequently adjusted for equity in earnings and cash contributions and distributions. The authoritative guidance on consolidation provides guidance on the identification of entities for which control is achieved through means other than voting rights ("variable interest entities" or "VIEs") and the determination of which business enterprise, if any, should consolidate the VIE (the "primary beneficiary"). Generally, the consideration of whether an entity is a VIE applies when either (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest, (2) the equity investment at risk is insufficient to finance that entity's activities without additional subordinated financial support or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest.

        On January 1, 2010, the Partnership adopted the updated provisions of ASC 810, pursuant to FASB No. 167, which amends FIN 46(R) to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. Additionally, FASB No. 167 amends FIN 46(R) to eliminate the quantitative approach previously required for determining the primary beneficiary of a variable interest entity, which was based on determining which enterprise absorbs the majority of the entity's expected losses, receives a majority of the entity's expected residual returns, or both. FASB No. 167 amends certain guidance in Interpretation 46(R) for determining whether an entity is a variable interest entity. Also, FASB No. 167 amends FIN 46(R) to require enhanced disclosures that

F-6

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

will provide users of financial statements with more transparent information about an enterprise's involvement in a variable interest entity. The enhanced disclosures are required for any enterprise that holds a variable interest in a variable interest entity. The adoption of this guidance did not have a material impact to these financial statements.

        Impairment:    On an annual basis management assesses whether there are any indicators that the value of the Partnership's rental properties or investments in unconsolidated subsidiaries may be impaired. In addition to identifying any specific circumstances which may affect a property or properties, management considers other criteria for determining which properties may require assessment for potential impairment. The criteria considered by management include reviewing low leased percentages, significant near term lease expirations, recently acquired properties, current and historical operating and/or cash flow losses, near term mortgage debt maturities or other factors that might impact the Partnership's intent and ability to hold property. A property's value is impaired only if management's estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the property over the fair value of the property. The Partnership's estimates of aggregate future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter management's assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved. The Partnership has not recognized an impairment loss since 1995.

        Revenue Recognition:    Rental income from residential and commercial properties is recognized over the term of the related lease. For residential tenants, amounts 60 days in arrears are charged against income. The commercial tenants are evaluated on a case by case basis. Certain leases of the commercial properties provide for increasing stepped minimum rents, which are accounted for on a straight-line basis over the term of the lease. Contingent rent for commercial properties are received from tenants for certain costs as provided in the lease agreement. The costs generally include real estate taxes, utilities, insurance, common area maintenance and recoverable costs. Concessions made on residential leases are also accounted for on the straight-line basis.

        Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the differences between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management's estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed-rate renewal options for below-market leases. The capitalized above-market lease values for acquired properties are amortized as a reduction of base rental revenue over the remaining term of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.

F-7

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

        Rental Properties:    Rental properties are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred; improvements and additions which improve or extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost of the asset and related accumulated depreciation is eliminated from the accounts, and any gain or loss on such disposition is included in income. Fully depreciated assets are removed from the accounts. Rental properties are depreciated by both straight-line and accelerated methods over their estimated useful lives. Upon acquisition of rental property, the Partnership estimates the fair value of acquired tangible assets, consisting of land, building and improvements, and identified intangible assets and liabilities assumed, generally consisting of the fair value of (i) above and below market leases, (ii) in-place leases and (iii) tenant relationships. The Partnership allocated the purchase price to the assets acquired and liabilities assumed based on their fair values. The Partnership records goodwill or a gain on bargain purchase (if any) if the net assets acquired/liabilities assumed exceed the purchase consideration of a transaction. In estimating the fair value of the tangible and intangible assets acquired, the Partnership considers information obtained about each property as a result of its due diligence and marketing and leasing activities, and utilizes various valuation methods, such as estimated cash flow projections utilizing appropriate discount and capitalization rates, estimates of replacement costs net of depreciation, and available market information. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant.

        Other intangible assets acquired include amounts for in-place lease values and tenant relationship values, which are based on management's evaluation of the specific characteristics of each tenant's lease and the Partnership's overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant relationships include the nature and extent of the Partnership's existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant's credit quality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles are amortized to expense over the anticipated life of the relationships.

        In the event that facts and circumstances indicate that the carrying value of a rental property may be impaired, an analysis of the value is prepared. The estimated future undiscounted cash flows are compared to the asset's carrying value to determine if a write-down to fair value is required.

        Financing and Leasing Fees:    Financing fees are capitalized and amortized, using the interest method, over the life of the related mortgages. Leasing fees are capitalized and amortized on a straight-line basis over the life of the related lease. Unamortized balances are expensed when the corresponding fee is no longer applicable.

        Income Taxes:    The financial statements have been prepared on the basis that NERA and its subsidiaries are entitled to tax treatment as partnerships. Accordingly, no provision for income taxes have been recorded (See Note 13).

F-8

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

        Cash Equivalents:    The Partnership considers cash equivalents to be all highly liquid instruments purchased with a maturity of three months or less.

        Segment Reporting:    Operating segments are revenue producing components of the Partnership for which separate financial information is produced internally for management. Under the definition, NERA operated, for all periods presented, as one segment.

        Comprehensive Income:    Comprehensive income is defined as changes in partners' equity, exclusive of transactions with owners (such as capital contributions and dividends). NERA did not have any comprehensive income items in 2012, 2011, or 2010 other than net income as reported.

        Income Per Depositary Receipt:    Effective January 3, 2012, the Partnership authorized a 3-for-1 forward split of its Depositary Receipts listed on the NYSE Amex and a concurrent adjustment of the exchange ratio of Depositary Receipts for Class A Units of the Partnership from 10-to-1 to 30-to-1, such that each Depositary Receipt represents one-thirtieth (¹/30) of a Class A Unit of the Partnership. All references to Depositary Receipts in the report are reflective of the 3-for-1 forward split.

        Income Per Unit:    Net income per unit has been calculated based upon the weighted average number of units outstanding during each period presented. The Partnership has no dilutive units and, therefore, basic net income is the same as diluted net income per unit (see Note 7).

        Concentration of Credit Risks and Financial Instruments:    The Partnership's properties are located in New England, and the Partnership is subject to the general economic risks related thereto. No single tenant accounted for more than 5% of the Partnership's revenues in 2012, 2011, or 2010. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At December 31, 2012, substantially all of the Partnership's cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01% to 0.45%. At December 31, 2012 and 2011, respectively approximately $8,000,000 and $5,051,000 of cash and cash equivalents, and security deposits included in prepaid expenses and other assets exceeded federally insured amounts.

        Advertising Expense:    Advertising is expensed as incurred. Advertising expense was $52,084, $88,585 and $70,074 in 2012, 2011 and 2010, respectively.

        Discontinued Operations and Rental Property Held for Sale:    When assets are identified by management as held for sale, the Partnership discontinues depreciating the assets and estimates the sales price, net of selling costs, of such assets. If, in management's opinion, the net sales price of the assets which have been identified as held for sale is less than the net book value of the assets, a valuation allowance is established. Properties identified as held for sale and/or sold are presented in discontinued operations for all periods presented.

        If circumstances arise that previously were considered unlikely and, as a result, the Partnership decides not to sell a property previously classified as held for sale, the property is reclassified as held and used. A property that is reclassified is measured and recorded individually at the lower of (a) its carrying amount before the property was classified as held for sale, adjusted for any depreciation (amortization) expense that would have been recognized had the property been continuously classified as held and used, or (b) the fair value at the date of the subsequent decision not to sell.

F-9

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

        Interest Capitalized:    The Partnership follows the policy of capitalizing interest as a component of the cost of rental property when the time of construction exceeds one year. During the years ended December 31, 2012, 2011 and 2010 there was no capitalized interest.

        Extinguishment of Debt:    When existing mortgages are refinanced with the same lender and it is determined that the refinancing is substantially different then they are recorded as an extinguishment of debt. However if it is determined that the refinancing is substantially the same then they are recorded as an exchange of debt. All refinancing qualify as extinguishment of debt.

        Reclassifications:    Certain reclassifications have been made to prior period amounts in order to conform to current period presentation.

NOTE 2. RENTAL PROPERTIES

        As of December 31, 2012, the Partnership and its Subsidiary Partnerships owned 2,251 residential apartment units in 20 residential and mixed-use complexes (collectively, the "Apartment Complexes"). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the "Condominium Units"). The Apartment Complexes and Condominium Units are located primarily in the metropolitan Boston area of Massachusetts.

        Additionally, as of December 31, 2012, the Partnership and Subsidiary Partnerships owned a commercial shopping center in Framingham, commercial buildings in Newton and Brookline and mixed-use properties in Boston, Brockton and Newton, all in Massachusetts. These properties are referred to collectively as the "Commercial Properties."

        The Partnership also owned a 40% to 50% ownership interest in nine residential and mixed use complexes (the "Investment Properties") at December 31, 2012 with a total of 799 units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

F-10

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 2. RENTAL PROPERTIES (Continued)

        Rental properties consist of the following:

	December 31, 2012			December 31, 2011			Useful Life
Land, improvements and parking lots	$	27,849,721		$	27,614,537			15–40 years
Buildings and improvements		119,579,923			119,097,186			15–40 years
Kitchen cabinets		3,620,196			3,542,249			5–10 years
Carpets		3,354,593			3,307,499			5–10 years
Air conditioning		764,671			788,146			7–10 years
Laundry equipment		378,806			368,955			5–7 years
Elevators		1,139,296			1,139,296			20 years
Swimming pools		235,242			235,242			10 years
Equipment		1,586,591			1,744,006			5–7 years
Motor vehicles		101,657			107,788			5 years
Fences		22,445			22,974			5–10 years
Furniture and fixtures		1,038,136			1,039,439			5–7 years
Smoke alarms		205,091			116,482			5–7 years
Total fixed assets		159,876,368			159,123,799
Less: Accumulated depreciation		(64,440,518	)		(60,199,265	)
	$	95,435,850		$	98,924,534

        Real estate and accumulated depreciation as of December 31, 2012 is as follows:

			Initial Cost to Partnerships(1)				Cost Capitalized Subsequent to Acquisition(2)		Gross Amount at Which Carried at Close of Period
	Encumbrances (First Mortgages)				Buildings Improvements						Buildings Improvements				Accumulated Depreciation(3)
			Land				Improvements		Land				Totals				Date Acquired
Boylston Downtown L.P. Residential Apartments Boston, Massachusetts	$	19,500,000	$	2,112,000	$	8,593,111	$	7,116,107	$	2,112,000	$	15,709,218	$	17,821,218	$	9,086,787		July 1995
Brookside Associates LLC Residential Apartments Woburn, Massachusetts	$	2,723,830	$	684,000	$	3,116,000	$	492,070	$	684,000	$	3,608,070	$	4,292,070	$	1,621,108		Oct. 2000
Courtyard @ Westgate Residential Units Burlington, Massachusetts	$	2,000,000	$	44,965	$	4,478,687	$	253,696	$	44,965	$	4,732,383	$	4,777,348	$	1,465,723		Sep. 2004
Clovelly Apartments L.P. Residential Apartments Nashua, New Hampshire	$	4,160,000	$	177,610	$	1,478,359	$	1,268,279	$	177,610	$	2,746,638	$	2,924,248	$	1,981,658		Sept. 1977
Commonwealth 1137 L.P. Residential Apartments Boston, Massachusetts	$	3,750,000	$	342,000	$	1,367,669	$	933,759	$	342,000	$	2,301,428	$	2,643,428	$	1,251,632		July 1995
Commonwealth 1144 L.P. Residential Apartments Boston, Massachusetts	$	14,780,000	$	1,410,000	$	5,664,816	$	1,616,613	$	1,410,000	$	7,281,429	$	8,691,429	$	4,373,285		July 1995
Condominium Units—Riverside Residential Units Massachusetts	$	—	$	23,346	$	190,807	$	22,428	$	23,346	$	213,235	$	236,581	$	205,326		Sept. 1977
Executive Apartments L.P. Residential Apartments Framingham, Massachusetts	$	2,415,000	$	91,400	$	740,360	$	758,449	$	91,400	$	1,498,809	$	1,590,209	$	1,128,556		Sept. 1977

F-11

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 2. RENTAL PROPERTIES (Continued)

			Initial Cost to Partnerships(1)				Cost Capitalized Subsequent to Acquisition(2)			Gross Amount at Which Carried at Close of Period
	Encumbrances (First Mortgages)				Buildings Improvements							Buildings Improvements				Accumulated Depreciation(3)
			Land				Improvements			Land				Totals				Date Acquired
Hamilton Battle Green LLC Residential Apartments Lexington, Massachusetts	$	4,893,448	$	1,341,737	$	8,457,497	$	31,849		$	1,341,737	$	8,489,346	$	9,831,083	$	612,568		Jun. 2011
Hamilton Cypress LLC Commercial—1031Exchange Brookline, Massachusetts	$	3,686,380	$	2,362,596	$	4,613,985	$	51,823		$	2,362,596	$	4,665,808	$	7,028,404	$	696,283		Oct. 2008
Hamilton Linewt LLC Commercial—1031Exchange Newton, Massachusetts	$	1,528,429	$	884,042	$	2,652,127	$	50,608		$	884,042	$	2,702,735	$	3,586,777	$	353,574		Nov. 2007
Hamilton Oaks Associates LLC Residential Apartments Brockton, Massachusetts	$	11,925,000	$	2,175,000	$	12,325,000	$	1,726,607		$	2,175,000	$	14,051,607	$	16,226,607	$	7,256,645		Dec. 1999
Highland Street Apartments, L.P. Residential Apartments Lowell, Massachusetts	$	1,050,000	$	156,000	$	634,085	$	400,178		$	156,000	$	1,034,263	$	1,190,263	$	569,822		Dec. 1996
Linhart L.P. Residential/Commercial Newton, Massachusetts	$	1,964,119	$	385,000	$	1,540,000	$	1,157,151		$	385,000	$	2,697,151	$	3,082,151	$	1,769,651		Jan. 1995
Nashoba Apartments L.P. Residential Apartments Acton, Massachusetts	$	2,000,000	$	79,650	$	284,548	$	887,277		$	79,650	$	1,171,825	$	1,251,475	$	789,226		Sept. 1977
NERA Dean St. Associates LLC Residential Apartments Norwood, Massachusetts	$	5,213,958	$	1,512,000	$	5,701,480	$	426,220		$	1,512,000	$	6,127,700	$	7,639,700	$	2,477,008		Jun. 2002
North Beacon 140 L.P. Residential Units Boston, Massachusetts	$	6,937,000	$	936,000	$	3,762,013	$	1,490,223		$	936,000	$	5,252,236	$	6,188,236	$	3,120,665		July 1995
Olde English Apartments L.P. Residential Apartments Lowell, Massachusetts	$	3,080,000	$	46,181	$	878,323	$	1,161,011		$	46,181	$	2,039,334	$	2,085,515	$	1,345,108		Sept. 1977
River Drive L.P. Residential Apartments Danvers, Massachusetts	$	3,465,000	$	72,525	$	587,777	$	1,426,304		$	72,525	$	2,014,081	$	2,086,606	$	1,601,231		Sept. 1977
Redwood Hills L.P. Residential Units Worcester, Massachusetts	$	6,743,000	$	1,200,000	$	4,810,604	$	2,117,589		$	1,200,000	$	6,928,193	$	8,128,193	$	4,055,659		July 1995
School St Assoc LLC Residential Apartments Framingham, Massachusetts	$	15,308,474	$	4,686,728	$	18,746,911	$	(1,928,307	)	$	4,686,728	$	16,818,604	$	21,505,332	$	6,112,019		Apr. 2003
Staples Plaza Strip Mall Framingham, Massachusetts	$	6,000,000	$	3,280,000	$	4,920,000	$	36,724		$	3,280,000	$	4,956,724	$	8,236,724	$	2,235,613		May 1999

F-12

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 2. RENTAL PROPERTIES (Continued)

			Initial Cost to Partnerships(1)				Cost Capitalized Subsequent to Acquisition(2)		Gross Amount at Which Carried at Close of Period
	Encumbrances (First Mortgages)				Buildings Improvements						Buildings Improvements				Accumulated Depreciation(3)
			Land				Improvements		Land				Totals				Date Acquired
WCB Associates LLC Residential Apartments Brockton, Massachusetts	$	7,000,000	$	1,335,000	$	7,565,501	$	1,083,048	$	1,335,000	$	8,648,549	$	9,983,549	$	4,552,121		Dec. 1999
Westgate Apartments LLC Residential Apartments Woburn, Massachusetts	$	7,931,885	$	461,300	$	2,424,636	$	6,007,478	$	417,107	$	8,432,114	$	8,849,221	$	5,779,250		Sept. 1977
	$	138,055,522	$	25,799,080	$	105,534,296	$	28,587,184	$	25,754,887	$	134,121,480	$	159,876,368	$	64,440,518

(1)

The initial cost to the Partnerships represents both the balance of mortgages assumed in September 1977, including subsequent adjustments to such amounts, and subsequent acquisitions at cost.

(2)

Net of retirements, which are not significant.

(3)

In 2012, rental properties were depreciated over the following estimated useful lives:

Assets	Life
Buildings and Improvements		15–40 years
Other Categories of Assets		5–20 years

        A reconciliation of rental properties and accumulated depreciation is as follows:

	December 31,
	2012		2011		2010
Rental Properties
Balance, Beginning	$	159,123,799	$	150,818,648	$	150,411,555
Additions:
Buildings, improvements and other assets		2,360,399		12,444,604		2,268,039
		161,484,198		163,263,252		152,679,594
Deduct:
Write-off of retired or disposed assets		1,607,830		2,437,555		1,860,946
Rental properties held for sale and/or sold		—		1,701,898		—
Balance, Ending	$	159,876,368	$	159,123,799	$	150,818,648
Accumulated Depreciation
Balance, Beginning	$	60,199,265	$	58,074,391	$	54,439,618
Add:
Depreciation for the year		5,849,083		5,750,989		5,495,719
		66,048,348		63,825,380		59,935,337
Deduct:
Accumulated depreciation of retired or disposed assets		1,607,830		2,437,555		1,860,946
Accumulated depreciation of rental properties held for sale and/or sold		—		1,188,560		—
Balance, Ending	$	64,440,518	$	60,199,265	$	58,074,391

F-13

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 2. RENTAL PROPERTIES (Continued)

        On May 18, 2011, the Partnership sold Avon Street Apartments, a 66 unit residential apartment complex located at 130 Avon Street, Malden, Massachusetts. The sales price was $8,750,000, which resulted in a gain of approximately $7,700,000. The net proceeds of the sale, of approximately $5,444,000 were held by a qualified intermediary in order for the Partnership to structure a tax free exchange in accordance with Section 1031 of the IRS code. This tax free exchange was completed with the purchase of Battle Green Apartments described below.

        On June 1, 2011, the Partnership purchased Battle Green Apartments, a 48 unit residential apartment complex located at 34-42 Worthen Road, Lexington, Massachusetts. The purchase price was $10,000,000. The Partnership used cash reserves, the proceeds from the sale of Avon Street and borrowed $3,998,573 from Harold Brown, Treasurer of the General Partner to make this purchase. This loan had an interest rate of 6% and was secured by the Partnership's ownership interest in Battle Green Apartments, LLC. The term of the loan is four years with a provision requiring payment in whole or in part upon demand within six months of notice or prepay without penalty. On July 27, 2011, the Partnership financed Battle Green Apartments with a new $5,000,000 mortgage at 4.95% which matures in August 2026. Principal payments will be made using a 30 year amortization schedule. Deferred financing costs associated with this mortgage totaled approximately $100,000 and accordingly the effective interest rate is 5.07%. After paying off the existing loan of $3,998,573, approximately $1,000,000 was received by the Partnership. The interest paid on this loan to Harold Brown in 2011 was $38,123.

NOTE 3. RELATED PARTY TRANSACTIONS

        The Partnership's properties are managed by an entity that is owned by the majority shareholder of the General Partner. The management fee is equal to 4% of gross receipts rental revenue and laundry income on the majority of the Partnership's properties and 3% on Linewt. Total fees paid were approximately $1,447,000, $1,420,000 and $1,367,000 in 2012, 2011 and 2010, respectively.

        The Partnership Agreement permits the General Partner or Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA. In 2012, 2011 and 2010, approximately $686,000, $758,000 and $705,000, was charged to NERA for legal, accounting, construction, maintenance, rental and architectural services and supervision of capital improvements. Of the 2012 expenses referred to above, approximately $295,000 consisted of repairs and maintenance and $348,000 of administrative expense. Approximately $43,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2012, the Hamilton Company received approximately $728,000 from the Investment Properties of which approximately $567,000 was the management fee, approximately $15,000 was for construction, architectural services and supervision of capital projects, approximately $64,000 was for maintenance services and approximately $82,000 was for administrative services. The management fee is equal to 4% of gross receipts rental income on the majority of investment properties and 2% on Dexter Park.

        On January 1, 2004, all employees were transferred to the Management Company's payroll. The Partnership reimburses the management company for the payroll and related expenses of the employees who work at the properties. Total reimbursement was approximately $2,606,000, $2,537,000 and $2,599,000 for the years ended December 31, 2012, 2011 and 2010, respectively. The Management Company maintains a 401K plan for all eligible employees whereby the employees may contribute the maximum allowed by law. The plan also provides for discretionary contributions by the employer. There were no employer contributions in 2012, 2011 or 2010.

F-14

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 3. RELATED PARTY TRANSACTIONS (Continued)

        Prior to 1991, the Partnership employed an outside, unaffiliated company to perform its bookkeeping and accounting functions. Since that time, such services have been provided by the Management Company's accounting staff, which consists of approximately 14 people. During the years ended December 31, 2012, 2011 and 2010 the Management Company charged the Partnership $125,000 for bookkeeping and accounting services included in administrative expenses above.

        In 1996, prior to becoming an employee of the Management Company, the President of the Management Company performed asset management consulting services for the Partnership. This individual continues to perform this service and receives an asset management fee from the Partnership. The Partnership does not have a written agreement with this individual. During the years ended December 31, 2012, 2011 and 2010 this individual received a quarterly fee of $18,750 for a total fee of $75,000.

        The Partnership has invested in nine limited partnerships, which have invested in mixed use residential apartment complexes. The Partnership has a 40% to 50% ownership interest in each investment property. The other investors are Harold Brown, the President of the Management Company and five other employees of the Management Company. Harold Brown's ownership interest is between 43.2% and 60%. See Note 14 for a description of the properties and their operations.

        See Note 8 for information regarding the repurchase of Class B and General Partnership Units.

        On October 28, 2009, the Partnership borrowed approximately $7,168,000 with an interest rate of 6% from HBC Holdings, LLC, an entity owned by Harold Brown and his affiliates ("HBC"). The term of the loan is four years with a provision requiring payment in whole or in part upon demand by HBC with six months notice. The Partnership may also prepay the note without penalty. On August 17, 2010, HBC gave six months written notice to the Partnership requesting a principal pay down of $2,500,000. During the fourth quarter of 2010, the Partnership paid HBC $2,500,000 as requested. During 2011, the Partnership elected to make principal payments of $1,000,000 on August 1, 2011, $1,000,000 on October 1, 2011 and $1,000,000 on December 15, 2011 reducing the loan balance to $1,668,600. In February 2012, the Partnership elected to make an additional principal payment of $750,000 to HBC Holdings and the balance of $918,600 was paid in full in April 2012. The interest paid during the year ended December 31, 2012, 2011 and 2010 was $18,960, $238,673 and $414,740 respectively.

        See Note 8 for information regarding the repurchase of Class B and General Partnership Units.

NOTE 4. OTHER ASSETS

        Approximately $1,919,000 and $1,879,000 of security deposits are included in prepaid expenses and other assets at December 31, 2012 and December 31, 2011, respectively. The security deposits and escrow accounts are restricted cash.

        Included in prepaid expenses and other assets at December 31, 2012 and December 31, 2011 is approximately $420,000 and $1,014,000, respectively, held in escrow to fund future capital improvements.

        Financing fees of approximately $1,136,000 and $919,000 are net of accumulated amortization of approximately $772,000 and $636,000 at December 31, 2012 and December 31, 2011, respectively.

F-15

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 5. MORTGAGE NOTES PAYABLE

        At December 31, 2012 and 2011, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At December 31, 2012, the interest rates on these loans ranged from 4.25% to 7.07%, payable in monthly installments aggregating approximately $742,000, including principal, to various dates through 2026. The majority of the mortgages are subject to prepayment penalties. At December 31, 2012, the weighted average interest rate on the above mortgages was 5.53%. The effective rate of 5.63% includes the amortization expense of deferred financing costs. See Note 12 for fair value information. The Partnership's mortgage debt and the mortgage debt of its unconsolidated joint ventures generally is non-recourse except for customary exceptions pertaining to misuse of funds and material misrepresentations.

        The Partnership has pledged tenant leases as additional collateral for certain of these loans.

        Approximate annual maturities at December 31, 2012 are as follows:

2013—current maturities	$	41,275,000
2014		14,669,000
2015		2,184,000
2016		194,000
2017		205,000
Thereafter		79,529,000
	$	138,056,000

        On July 27, 2011, the Partnership financed the Battle Green Apartments with a new $5,000,000 mortgage at 4.95% which matures in August 2026. Principal payments will be made using a 30 year amortization schedule. Deferred financing costs associated with this mortgage totaled approximately $100,000 and accordingly the effective interest rate is 5.07%.

        The Partnership is currently in the process of refinancing the mortgages at Boylston Downtown LLC, Westgate Apartments LLC, School Street LLC, and Hamilton Cypress LLC. The total amount expected to be refinanced is approximately $47,000,000. As of December 31, 2012, the Partnership has paid approximately $353,000 of financing costs related to the expected refinancing. This amount is included in financing and leasing fees in consolidated balance sheets. The Partnership may incur prepayment penalties of approximately $250,000 in connection with this refinancing. The Partnership has no lender commitment at this time and anticipates closing on theses mortgages in the first half of 2013.

NOTE 6. ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

        The Partnership's residential lease agreements may require tenants to maintain a one-month advance rental payment and/or a security deposit. At December 31, 2012, amounts received for prepaid rents of approximately $1,339,000 are included in cash and cash equivalents, and security deposits of approximately $1,919,000 are included in prepaid expenses and other assets and are restricted cash.

F-16

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 7. PARTNERS' CAPITAL

        The Partnership has two classes of Limited Partners (Class A and B) and one category of General Partner. Under the terms of the Partnership Agreement, distributions to holders of Class B Units and General Partnership Units must represent 19% and 1%, respectively, of the total units outstanding. All classes have equal profit sharing and distribution rights, in proportion to their ownership interests.

        Effective January 3, 2012, the Partnership authorized a 3-for-1 forward split of its Depositary Receipts listed on the NYSE Amex and a concurrent adjustment of the exchange ratio of Depositary Receipts for Class A Units of the Partnership from 10-to-1 to 30-to-1, such that each Depositary Receipt represents one-thirtieth (¹/30) of a Class A Unit of the Partnership.

        On February 4, 2013, the Partnership announced the approval of a quarterly distribution of its Class A Limited Partners and holders of Depositary Receipts of record as of March 15, 2013 and payable on March 31, 2013, $7.50 per unit and $0.25 per receipt.

        In 2012, the Partnership paid quarterly distributions of $7.50 per unit ($0.25 per receipt) in March, June, September, and December for a total distribution of $30.00 per unit ($1.00 per receipt). In 2011 and 2010 the Partnership paid quarterly distributions of $7.00 per unit ($0.23 per receipt) in March, June, September, and December for a total distribution of $28.00 per unit ($0.93 per receipt) each year.

        The Partnership has entered into a deposit agreement with an agent to facilitate public trading of limited partners' interests in Class A Units. Under the terms of this agreement, the holders of Class A Units have the right to exchange each Class A Unit for 30 Depositary Receipts. The following is information per Depositary Receipt:

	Year Ended December 31,
	2012		2011
Income per Depositary Receipt before Discontinued Operations	$	0.92	$	0.38
Income from Discontinued Operations		0		1.98
Net Income per Depositary Receipt after Discontinued Operations	$	0.92	$	2.36
Distributions per Depositary Receipt	$	1.00	$	0.93

NOTE 8. TREASURY UNITS

        Treasury Units at December 31, 2012 are as follows:

Class A	39,825
Class B	9,458
General Partnership	498
	49,781

        On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program ("Repurchase Program") under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one-tenth of a Class A Unit). On

F-17

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 8. TREASURY UNITS (Continued)

January 15, 2008, the General Partner authorized an increase in the Repurchase Program from 300,000 to 600,000 Depositary Receipts. On January 30, 2008 the General Partner authorized an increase the Repurchase Program from 600,000 to 900,000 Depositary Receipts. On March 6, 2008, the General Partner authorized the increase in the total number of Depositary Receipts that could be repurchased pursuant to the Repurchase Program from 900,000 to1, 500,000. On August 8, 2008, the General Partner re-authorized and renewed the Repurchase Program for an additional 12-month period ended August 19, 2009. On March 22, 2010, the General Partner re-authorized and renewed the Repurchase Program that expired on August 19, 2009. Under the terms of the renewed Repurchase Program, the Partnership may purchase up to 1,500,000 Depositary Receipts from the start of the program in 2007 through March 31, 2015. The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership's Second Amended and Restate Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through December 31, 2012, the Partnership has repurchased 1,219,927 Depositary Receipts at an average price of $24.62 per receipt (or $738.60 per underlying Class A Unit), 1,921 Class B Units and 101 General Partnership Units, both at an average price of $613.94 per Unit, totaling approximately $31,386,000 including brokerage fees paid by the Partnership.

        On September 17, 2008, the Partnership completed the issuance of an aggregate of 6,642 Class A Units held in treasury to current holders of Class B and General Partner Units upon the simultaneous retirement to treasury of 6,309 Class B Units and 333 General Partner Units pursuant to an equity distribution plan authorized by the Board of Directors of the General Partner on August 8, 2008 and as further described under Item 3.02 of the Partnership's Current Report on Form 8-K as filed with the Securities and Exchange Commission on September 18, 2008, which is incorporated herein by reference. Harold Brown, the treasurer of the General Partner, owns 75% of the issued and outstanding Class B Units of the Partnership and 75% of the issued and outstanding equity of the General Partner, Ronald Brown, the brother of Harold Brown and the president of the General Partner, owns 25% of the issued and outstanding Class B Units of the Partnership and 25% of the issued and outstanding equity of the General Partner.

        During the year ended December 31, 2012, the Partnership purchased 24,967 Depositary Receipts for a cost of $726,058, 198 Class B Units for a cost of $171,148 and 10 General Partnership Units for a cost of $9,008 for a total cost of $906,214.

        From January 1, 2013 through March 14, 2013, the Partnership purchased a total of 9,709 Depositary Receipts. The average price was $32.24 per receipt or $967.20 per unit. The total cost was $321,240. The Partnership is required to repurchase76.86 Class B Units and 4.05 General Partnership units at a cost of $74,335 and $3,912, respectively.

        The Partnership did not purchase any Depositary Receipts during the year ended December 31, 2011.

        During the year ended December 31, 2010, the Partnership purchased 20,688 receipts for $432,920, 164 Class B Units for $102,591 and 9 General Partnership units for $5,400.

F-18

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 9. COMMITMENTS AND CONTINGENCIES

        From time to time, the Partnership is involved in various ordinary routine litigation incidental to their business. The Partnership either has insurance coverage or provides for any uninsured claims when appropriate. The Partnership is not involved in any material pending legal proceedings.

NOTE 10. RENTAL INCOME

        During the year ended December 31, 2012, approximately 90% of rental income was related to residential apartments and condominium units with leases of one year or less. The majority of these leases expire in June, July and August. Approximately 10% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at December 31, 2012 as follows:

	Commercial Property Leases
2013	$	2,384,000
2014		2,011,000
2015		1,583,000
2016		1,165,000
2017		485,000
Thereafter		775,000
	$	8,403,000

        The aggregate minimum future rental income does not include contingent rentals that may be received under various leases in connection with common area charges and real estate taxes. Aggregate contingent rentals from continuing operations were approximately $661,000, $633,000 and $653,000 for the years ended December 31, 2012, 2011 and 2010 respectively.

        The following information is provided for commercial leases:

Thru December 31,	Annual base rent for expiring leases		Total square feet for expiring leases		Total number of leases expiring		Percentage of Annual base rent for expiring leases
2013	$	470,463		23,773		11		17	%
2014		588,422		29,523		10		22	%
2015		266,098		8,471		8		10	%
2016		593,346		27,073		3		22	%
2017		448,101		11,997		6		16	%
2018		58,050		1,262		1		2	%
2019		200,375		5,800		2		7	%
2020		64,657		1,106		1		2	%
2021		64,800		1,800		1		2	%
2022		0		—		—		0	%
Totals	$	2,754,312		110,805		43		100	%

F-19

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 10. RENTAL INCOME (Continued)

        Rents receivable are net of an allowance for doubtful accounts of approximately $381,000 and $448,000. at December 31, 2012 and 2011. Included in rents receivable at December 31, 2012 is approximately $268,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis. The majority of this amount is for long-term leases with Staples and Trader Joe's at Staples Plaza in Framingham, Massachusetts.

        Rents receivable at December 31, 2012 also includes approximately $25,000 representing the deferral of rental concession primarily related to the residential properties.

        For the year ended December 31, 2012 rent at the commercial properties includes approximately $4,100 of amortization of deferred rents arising from the fair values assigned to in-place leases upon the purchase of Cypress Street in Brookline, Massachusetts.

NOTE 11. CASH FLOW INFORMATION

        During the years ended December 31, 2012, 2011 and 2010, cash paid for interest was approximately $7,776,000, $8,011,000 and $8,182,000 respectively. Cash paid for state income taxes was approximately $48,000, $55,000 and $35,000 during the years ended December 31, 2012, 2011 and 2010 respectively.

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

        At December 31, 2012 and 2011, we do not have any significant financial assets or financial liabilities that are measured at fair value on a recurring basis in our consolidated financial statements.

Financial Assets and Liabilities not Measured at Fair Value

        At December 31, 2012 and 2011 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, and note payable, accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments or, the recent acquisition of these items.

        At December 31, 2012 and 2011, we estimated the fair value of our mortgages payable and other notes based upon quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available. We estimated the fair value of our secured mortgage debt that does not have current quoted market prices available by discounting the future cash flows using rates currently available to us for debt with similar terms and maturities (Level 3). The differences in the fair value of our debt from the carrying value are the result of differences in interest rates and/or borrowing spreads that were available to us at December 31, 2012 and 2011, as compared with those in effect when the debt was issued or acquired. The secured mortgage debt contain pre-payment penalties or yield maintenance provisions that could make the cost of refinancing the debt at lower rates exceed the benefit that would be derived from doing so.

F-20

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 12. FAIR VALUE MEASUREMENTS (Continued)

        The following methods and assumptions were used by the Partnership in estimating the fair value of its financial instruments:

•

For cash and cash equivalents, accounts receivable, other assets, investment in partnerships, accounts payable, advance rents and security deposits: fair value approximates the carrying value of such assets and liabilities.

•

For mortgage notes payable: fair value is generally based on estimated future cash flows, which are discounted using the quoted market rate from an independent source for similar obligations. Refer to the table below for the carrying amount and estimated fair value of such instruments.

        The following table reflects the carrying amounts and estimated fair value of our debt.

	Carrying Amount		Estimated Fair Value
Mortgage Notes Payable
Partnership Properties
At December 31, 2012	$	138,055,523	$	155,942,880
At December 31, 2011	$	139,161,612	$	158,050,039
Investment Properties
At December 31, 2012	$	138,256,711	$	157,983,030
At December 31, 2011	$	140,159,839	$	160,535,764

        Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2012 and December 31, 2011. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2012 and current estimates of fair value may differ significantly from the amounts presented herein.

NOTE 13. TAXABLE INCOME AND TAX BASIS

        Taxable income reportable by the Partnership and includable in its partners' tax returns is different than financial statement income because of tax free exchanges, accelerated depreciation, different tax lives, and timing differences related to prepaid rents, allowances and intangible assets at significant acquisitions. Taxable income was approximately $530,000 greater than statement income for the year ended December 31, 2012. The primary reason for the increase is reduced tax depreciation due to tax free exchanges and accelerated depreciation in prior years. The cumulative tax basis of the Partnership's real estate at December 31, 2012 is approximately $12,000,000, less than the statement basis. The primary reasons for the lower tax basis are tax free exchanges, and accelerated depreciation. The Partnership's tax basis in its joint venture investments is approximately $1,700,000 less than statement basis because of accelerated depreciation.

        Certain entities included in the Partnership's consolidated financial statements are subject to certain state taxes. These taxes are not significant and are recorded as operating expenses in the accompanying consolidates financial statements.

F-21

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 13. TAXABLE INCOME AND TAX BASIS (Continued)

        The following reconciles GAAP net income to taxable income:

	For the year ended December 31,
	2012			2011			2010
	(in thousands)
Financial statement ("book") net income (loss)	$	3,634		$	9,291		$	(1,359	)
Book/Tax differences from depreciation and amortization		51			(1,024	)		(643	)
Book/Tax differences on tax free exchanges		266			(7,707	)		—
Book/Tax differences from Investment Properties		198			(161	)		403
Increase (Decrease) in prepaid rent and allowances		(40	)		29			(204	)
Other		57			7			—
Taxable income (loss)	$	4,166		$	435		$	(1,803	)

        Allowable accelerated depreciation deductions have been reduced for 2013. This may result in higher taxable income in future years. Future tax law changes may significantly affect taxable income.

        The Partnership adopted the amended provisions related to uncertain tax provisions of ASC 740, Income Taxes. As a result of the implementation of the guidance, the Partnership recognized no material adjustments regarding its tax accounting treatment. The Partnership expects to recognize interest and penalties related to uncertain tax positions, if any, as income tax expense, which would be included in general and administrative expense.

        In the normal course of business the Partnership or one of its subsidiaries is subject to examination by federal, state and local jurisdictions in which it operates, where applicable. As of December 31, 2012, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2004 forward.

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

        Since November 2001, the Partnership has invested in nine limited partnerships and limited liability companies, the majority of which have invested in residential apartment complexes, with three partnerships investing in commercial property. The Partnership has between a 40%-50% ownership interests in each investment. The other investors are Harold Brown, the President of the Management Company and five other employees of the Management Company. Harold Brown's ownership interest is between 43.2% and 57%, with the balance owned by the others. A description of each investment is as follows:

        On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, referred to as Dexter Park, is a 409 unit residential complex. The purchase price was $129,500,000. The total mortgage was $89,914,000 with an interest rate of 5.57% and it matures in 2019. The mortgage calls for interest only payments for the first two years of the loan and amortized over 30 years thereafter. The balance of this mortgage is approximately $88,612,000 at December 31, 2012. In order to fund this investment, the Partnership used approximately $8,757,000 of its cash reserves and borrowed approximately $7,168,000 with an interest rate of 6% from HBC Holdings, LLC, an entity

F-22

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

owned by Harold Brown and his affiliates ("HBC"). The term of the loan was four years with a provision requiring payment in whole or in part upon demand by HBC with six months notice. On August 17, 2010, HBC gave six months written notice to the Partnership requesting a principal pay down of $2,500,000. During the fourth quarter of 2010, the Partnership paid HBC $2,500,000 as requested. During 2011, the Partnership elected to make principal payments of $1,000,000 on August 1, 2011, $1,000,000 on October 1, 2011, and an additional $1,000,000 on December 15, 2011 reducing the loan balance to $1,668,600 at December 31, 2011. In February 2012, the Partnership elected to make an additional principal payment of $750,000 to HBC Holdings and the balance of $918,600 was paid in April 2012. The interest paid during the year ended December 31, 2012 and 2011 was $18,960 and $238,673, respectively. A majority of the apartments were leased at the time of the acquisition. As a result, the Partnership amortized the intangible assets associated with the "in place" leases over a 12 month period which began in November 2009. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

        On October 3, 2005, the Partnership invested $2,500,000 for a 50% ownership interest in a 168-unit apartment complex in Quincy, Massachusetts. The purchase price was $30,875,000. The Partnership plans to sell the majority of units as condominium and retain 48 units for long-term investment. Gains from the sales of units were taxed at ordinary income rates. In February 2007, the Partnership refinanced the 48 units with a new mortgage in the amount of $4,750,000 with an interest rate of 5.57%, interest only for five years. The loan will be amortized over 30 years thereafter and matures in March 2017. As of December 31, 2012, the balance of the mortgage is approximately $4,702,000. This investment is referred to as Hamilton Bay Apartments, LLC. In April 2008, the Partnership refinanced an additional 20 units and obtained a new mortgage in the amount of $2,368,000 with interest at 5.75%, interest only, which matures in 2013. We are working on refinancing the property with the current lender. At December 31, 2012, 15 of the 20 units are still owned by the Partnership. As of February 1, 2013, 105 units have been sold, the proceeds of which went to pay down the mortgage on the property. No unit was sold during the year ended December 31, 2012. The balance on the new mortgage is approximately $1,668,000 at December 31, 2012. This investment is referred to as Hamilton Bay, LLC.

        On March 7, 2005, the Partnership invested $2,000,000 for a 50% ownership interest in a building comprising 49 apartments, one commercial space and a 50-car surface parking lot located in Boston, Massachusetts. The purchase price was $14,300,000, with a $10,750,000 mortgage. The Partnership plans to operate the building and initiate development of the parking lot. In June 2007, the Partnership separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Partnership restructured the mortgages on both parcels at Essex 81 and transferred the residential apartments to Hamilton Essex 81, LLC. The mortgage on Hamilton Essex 81, LLC is approximately $8,352,000 amortizing over 30 years at 5.79% due in August 2016. The mortgage on Essex Development, LLC, or the parking lot is approximately $2,093,000 with a variable interest rate of 2.25% over the daily Libor rate (0.21% at December 31, 2012). This loan was extended to August 2013 with the same conditions except for the addition of fixed principal payments in the amount of $4,301 per month. The cost associated with the extension was approximately $6,000. Harold Brown has issued a personal guaranty up to $1,000,000 of this mortgage. In the event that he is obligated to make

F-23

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

payments to the lender as a result of this guaranty, the Partnership and other investors have, in turn, agreed to indemnify him for their proportionate share of any such payments. The investment in the parking lot is referred to as Hamilton Essex Development, LLC; the investment in the apartments is referred to as Hamilton Essex 81, LLC.

        On March 2, 2005, the Partnership invested $2,352,000 for a 50% ownership interest in a 176-unit apartment complex with an additional small commercial building located in Quincy, Massachusetts. The purchase price was $23,750,000. The Partnership sold 127 of the units as condominiums and retained 49 units for long-term investment. The Partnership obtained a new 10-year mortgage in the amount of $5,000,000 on the units to be retained by the Partnership. The interest on the new loan is 5.67% fixed for the 10 year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan term. The balance of this mortgage is approximately $4,935,000 at December 31, 2012. This investment is referred to as Hamilton 1025, LLC.

        In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. In October 2004, the Partnership obtained a mortgage on the property in the amount of $8,025,000 and returned $3,775,000 to the Partnership. The Partnership obtained a new 10-year mortgage in the amount of $5,500,000 in January 2007. The interest on the new loan is 5.67% fixed for the ten year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan. This loan required a cash contribution by the Partnership of $1,250,000 in December 2006. At December 31, 2012, the balance of this mortgage is approximately $5,433,000. This investment is referred to as Hamilton Minuteman, LLC.

        In August 2004, the Partnership invested $8,000,000 for a 50% ownership interest in a 280-unit apartment complex located in Watertown, Massachusetts. The total purchase price was $56,000,000. As of May 2008, the Partnership sold 137 units as condominiums. Gains from these sales were taxed as ordinary income. The majority of the sales proceeds were applied to reduce the mortgage with the final payment made during the second quarter of 2007. With the sale of the units and the payments of the liabilities, the assets were combined with Hamilton on Main Apartments, LLC. An entity partially owned by the majority shareholder of the General Partner and the President of the management company, 31% and 5%, respectively, was the sales agent and received a variable commission on each sale of 3% to 5%. Hamilton on Main Apartments, LLC is known as Hamilton Place.

        In 2005, Hamilton on Main Apartments, LLC obtained a ten year mortgage on the three buildings to be retained. The mortgage was $16,825,000, with interest only of 5.18% for three years and amortizing on a 30 year schedule for the remaining seven years when the balance is due. The net proceeds after funding escrow accounts and closing costs on the mortgage were approximately $16,700,000, which were used to reduce the existing mortgage. Hamilton on Main LLC paid a fee of approximately $400,000 in connection with this early extinguishment of debt. At December 31, 2012, the remaining balance on the mortgage is approximately $15,611,000.

        In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts. This property has a 12-year mortgage, with a remaining balance at December 31, 2012 of approximately $6,850,000 at 6.9% which is amortized on a 30-year schedule, with a final payment of approximately $6,000,000 in 2014. This investment is referred to as 345 Franklin, LLC.

F-24

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

Summary financial information for the year ended December 31, 2012

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay Apts		Hamilton Minuteman Apts		Hamilton on Main Apts		Dexter Park		Total
ASSETS
Rental Properties	$	9,103,858	$	2,610,574	$	7,885,745	$	5,621,970	$	1,844,219	$	6,975,854	$	7,020,471	$	21,148,813	$	107,496,918	$	169,708,422
Cash & Cash Equivalents		27,848		20,214		3,533		2,706		20,695		62,473		44,170		103,990		941,391		1,227,018
Rent Receivable		44,005		—		600		7,283		2,200		2,686		2,626		11,108		35,250		105,758
Real Estate Tax Escrow		49,793		—		20,242		74,443		—		41,225		43,612		70,364		424,159		723,838
Prepaid Expenses & Other Assets		61,895		505		75,222		33,659		127,530		14,345		48,715		154,396		1,367,274		1,883,541
Financing & Leasing Fees		64,116		4,325		8,164		19,645		5,505		26,243		15,950		14,581		399,678		558,206
Total Assets	$	9,351,515	$	2,635,617	$	7,993,505	$	5,759,706	$	2,000,148	$	7,122,825	$	7,175,545	$	21,503,252	$	110,664,670	$	174,206,783
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$	8,352,317	$	2,093,184	$	6,850,179	$	4,934,741	$	1,668,000	$	4,702,087	$	5,433,472	$	15,611,045	$	88,611,686	$	138,256,711
Accounts Payable & Accrued Expense		34,673		6,319		93,810		49,566		7,481		49,690		58,378		204,413		843,422		1,347,752
Advance Rental Pmts& Security Deposits		175,871		—		140,759		80,264		25,147		86,028		71,025		273,302		1,919,573		2,771,968
Total Liabilities		8,562,861		2,099,503		7,084,748		5,064,570		1,700,628		4,837,806		5,562,875		16,088,760		91,374,681		142,376,432
Partners' Capital		788,654		536,114		908,757		695,135		299,520		2,285,019		1,612,669		5,414,492		19,289,989		31,830,352
Total Liabilities and Capital	$	9,351,515	$	2,635,617	$	7,993,505	$	5,759,706	$	2,000,148	$	7,122,825	$	7,175,545	$	21,503,252	$	110,664,670	$	174,206,783
Partners' Capital—NERA 50%	$	394,327	$	268,057	$	454,379	$	347,568	$	149,760	$	1,142,510	$	806,335	$	2,707,246				6,270,181
Partners' Capital—NERA 40%																	$	7,715,996		7,715,996
																			$	13,986,177
Total units/condominiums
Apartments		48		—		40		175		120		48		42		148		409		1,030
Commercial		1		1		—		1		—		—		—		—		—		3
Total		49		1		40		176		120		48		42		148		409		1,033
Units to be retained		49		1		40		49		—		48		42		148		409		786
Units to be sold		—		—		—		127		120		—		—		—		—		247
Units sold through March 1, 2013		—		—		—		127		105		—		—		—		—		232
Unsold units		—		—		—		—		15		—		—		—		—		15
Unsold units with deposits for future sale as of March 1, 2013		—		—		—		—		—		—		—		—		—		—

F-25

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

Year ended December 31, 2012

	Hamilton Essex 81			Hamilton Essex Development			345 Franklin			Hamilton 1025			Hamilton Bay Sales			Hamilton Bay Apts			Hamilton Minuteman Apts			Hamilton on Main Apts			Dexter Park			Total
Revenues
Rental Income	$	1,270,141		$	287,537		$	1,178,712		$	861,998		$	235,061		$	886,122		$	809,707		$	2,623,994		$	12,202,615		$	20,355,887
Laundry and Sundry Income		15,363			—			1,206			—			—			—			2,435			20,952			98,042			137,999
		1,285,504			287,537			1,179,918			861,998			235,061			886,122			812,142			2,644,946			12,300,657			20,493,885
Expenses
Administrative		15,237			1,749			27,942			5,142			7,553			34,600			7,825			46,400			219,218			365,666
Depreciation and Amortization		409,488			11,638			441,704			256,696			82,287			297,737			317,231			957,452			5,733,920			8,508,153
Management Fees		55,308			11,502			48,596			34,517			9,894			34,659			32,615			104,807			261,355			593,253
Operating		112,172			—			62,277			816			1,251			1,190			73,092			341,054			1,006,570			1,598,421
Renting		18,350			—			5,326			6,815			1,894			4,053			3,538			10,974			74,705			125,655
Repairs and Maintenance		118,786			5,475			82,052			320,997			70,812			273,652			57,448			380,605			880,103			2,189,930
Taxes and Insurance		197,566			49,237			106,785			145,755			46,017			161,137			102,505			337,256			1,485,297			2,631,555
		926,908			79,600			774,681			770,738			219,707			807,027			594,254			2,178,549			9,661,169			16,012,632
Income Before Other Income		358,596			207,937			405,237			91,260			15,354			79,095			217,888			466,397			2,639,488			4,481,253
Other Income (Loss)
Interest Expense		(497,631	)		(60,451	)		(486,051	)		(288,470	)		(98,361	)		(271,283	)		(317,448	)		(840,874	)		(5,092,838	)		(7,953,407	)
Interest Income		—			—			48			74			215			—			—			—			—			337
Interest Income from Note		—			—			—			—			6,180			—			—			—			—			6,180
		(497,631	)		(60,451	)		(486,003	)		(288,395	)		(91,966	)		(271,283	)		(317,448	)		(840,874	)		(5,092,838	)		(7,946,890	)
Net Income (Loss)	$	(139,035	)	$	147,486		$	(80,766	)	$	(197,135	)	$	(76,612	)	$	(192,188	)	$	(99,560	)	$	(374,477	)	$	(2,453,350	)	$	(3,465,636	)
Net Income (Loss)—NERA 50%	$	(69,517	)	$	73,743		$	(40,383	)	$	(98,567	)	$	(38,306	)	$	(96,094	)	$	(49,780	)	$	(187,239	)					(506,143	)
Net Income (Loss)—NERA 40%																									$	(981,340	)		(981,340	)
																												$	(1,487,483	)

F-26

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2012

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

Future annual mortgage maturities at December 31, 2012 are as follows:

	Hamilon Essex 81		Hamilton Essex 81 Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay Apts		Hamilton Minuteman		Hamilton on Main Apts		Dexter Park
Period End	March 2005		March 2005		November 2001		March 2005		October 2005		October 2005		August 2004		August 2004		October 2009		Total
12/31/2013		125,660		2,093,184		165,412		65,157		1,668,000		66,163		71,363		293,222		1,275,835		7,082,229
12/31/2014		133,132				6,684,767		69,003				69,944		75,575		309,178		1,348,741		10,020,473
12/31/2015		141,048						73,077				73,941		80,036		15,008,646		1,425,814		18,208,704
12/31/2016		7,952,477						4,727,503				78,166		77,128				1,507,291		15,829,060
12/31/2017												4,413,873		5,129,371				1,593,424		12,708,108
Thereafter																		81,460,581		163,299,264
	$	8,352,317	$	2,093,184	$	6,850,179	$	4,934,741	$	1,668,000	$	4,702,087	$	5,433,472	$	15,611,045	$	88,611,686	$	138,256,711

F-27

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
DECEMBER 31, 2012

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

        At December 31, 2012 the weighted average interest rate on the above mortgages was 5.65%. The effective rate was 5.65% including the amortization expense of deferred financing costs.

Summary financial information for the year ended December 31, 2011

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay		Hamilton Minuteman		Hamilton on Main		Dexter Park		Total
ASSETS
Rental Properties		9,454,959		2,613,064		8,229,651		5,863,176		1,916,445		7,257,981		7,256,528		21,939,796		112,921,940		177,453,541
Cash & Cash Equivalents		47,526		1,529		17,027		1,848		19,416		5,026		31,125		90,940		836,347		1,050,783
Rent Receivable		73,459		—		—		15,682		—		2,512		7,457		8,593		86,722		194,425
Real Estate Tax Escrow		98,610		—		18,360		64,464		—		89,760		43,864		104,505		582,028		1,001,592
Prepaid Expenses & Other Assets		59,508		493		54,276		88,524		167,811		95,190		54,023		180,899		1,216,214		1,916,937
Financing & Leasing Fees		71,108		6,987		16,330		24,672		6,570		32,605		19,918		21,442		458,995		658,626
Total Assets		9,805,169		2,622,073		8,335,644		6,058,364		2,110,241		7,483,074		7,412,916		22,346,175		116,102,247		182,275,903
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		8,462,041		2,144,796		7,019,119		4,995,487		1,668,000		4,750,000		5,500,000		15,887,203		89,733,192		140,159,839
Accounts Payable & Accrued Expense		32,238		6,309		15,323		48,236		12,682		28,690		58,596		212,224		820,603		1,234,900
Advance Rental Pmts & Security Dep		152,940		—		114,179		69,970		20,027		85,575		69,592		257,780		1,800,113		2,570,176
Total Liabilities		8,647,219		2,151,105		7,148,621		5,113,694		1,700,709		4,864,265		5,628,188		16,357,207		92,353,908		143,964,915
Partners' Capital		1,157,950		470,968		1,187,023		944,670		409,532		2,618,809		1,784,728		5,988,968		23,748,339		38,310,988
Total Liabilities & Capital		9,805,169		2,622,073		8,335,644		6,058,364		2,110,241		7,483,074		7,412,916		22,346,175		116,102,247		182,275,903
Partners' Capital—NERA 50%		578,975		235,484		593,512		472,335		204,766		1,309,404		892,364		2,994,484				7,281,325
NERA 40%																		9,499,335		9,499,335
																				16,780,660
Total units/ condominiums
Apartments		48		—		40		175		120		48		42		148		409		1,030
Commercial		1		1		—		1		—		—		—		—		—		3
Total		49		1		40		176		120		48		42		148		409		1,033
Units to be retained		49		1		40		49		—		48		42		148		409		786
Units to be sold		—		—		—		127		120		—		—		—		—		247
Units sold through January 25, 2012		—		—		—		127		105		—		—		—		—		232
Unsold units		—		—		—		—		15		—		—		—		—		15
Unsold units with deposits for future sale as of February 1, 2012		—		—		—		—		—		—		—		—		—		—

F-28

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

Year ended December 31, 2011

	Hamilton Essex 81			Hamilton Essex Development			345 Franklin			Hamilton 1025			Hamilton Bay Sales			Hamilton Bay			Hamilton Minuteman			Hamilton on Main			Dexter Park			Total
Revenues
Rental Income		1,244,322			255,050			1,136,831			816,015			232,938			863,657			789,897			2,491,957			11,559,414			19,390,080
Laundry and Sundry Income		16,589			—			2,367			—			—			—			1,362			20,599			97,275			138,193
		1,260,911			255,050			1,139,198			816,015			232,938			863,657			791,258			2,512,556			11,656,690			19,528,273
Expenses
Administrative		20,839			1,339			24,424			11,258			5,396			18,625			10,249			36,155			163,511			291,796
Depreciation and Amortization		424,695			8,498			443,055			257,961			103,536			329,930			322,216			965,324			5,698,657			8,553,872
Management Fees		49,677			11,040			45,829			32,120			9,486			33,916			31,666			100,581			251,071			565,386
Operating		121,521			—			66,278			1,733			239			732			54,650			371,687			929,543			1,546,382
Renting		8,058			—			19,206			13,322			1,750			8,927			3,559			15,140			144,149			214,111
Repairs and Maintenance		127,528			3,050			71,479			300,534			78,167			316,782			98,904			371,109			935,839			2,303,393
Taxes and Insurance		184,119			47,709			97,028			143,002			45,303			155,681			92,300			325,868			1,300,995			2,392,005
		936,438			71,636			767,299			759,930			243,877			864,593			613,544			2,185,864			9,423,765			15,866,945
Income Before Other Income		324,473			183,414			371,899			56,085			(10,939	)		(936	)		177,714			326,693			2,232,924			3,661,328
Other Income (Loss)
Interest Expense		(503,102	)		(61,593	)		(494,468	)		(289,222	)		(98,010	)		(271,348	)		(317,927	)		(848,786	)		(5,113,523	)		(7,997,979	)
Interest Income		—			—			49			88			457			—			—			—			3,219			3,814
Interest Income from Note		—			—			—			—			8,904			—			—			—			—			8,904
Gain on Sale of Real Estate		—			—			—			—			—			—			—			—			—			—
Other Income (Expenses)		(2,331	)		—			(5,375	)		(3,621	)		—			(2,271	)		(61,589	)		(1,152	)		(3,500	)		(79,839	)
		(505,433	)		(61,593	)		(499,793	)		(292,756	)		(88,649	)		(273,619	)		(379,515	)		(849,938	)		(5,113,804	)		(8,065,100	)
Net Income (loss)		(180,960	)		121,821			(127,894	)		(236,671	)		(99,588	)		(274,555	)		(201,801	)		(523,245	)		(2,880,880	)		(4,403,772	)
Net Income (loss)—NERA 50%		(90,480	)		60,911			(63,947	)		(118,335	)		(49,794	)		(137,277	)		(100,900	)		(261,622	)					(761,446	)
NERA 40%																										(1,152,352	)		(1,152,352	)
																													(1,913,798	)

F-29

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

Summary financial information for the year ended December 31, 2010

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay		Hamilton Minuteman		Hamilton on Main		Dexter Park		Total
ASSETS
Rental Properties		9,827,917		2,595,266		8,648,591		6,078,526		2,006,989		7,569,060		7,582,687		22,822,785		118,468,247		185,600,068
Cash & Cash Equivalents		2,833		29,596		25,617		736		48,053		57,956		51,637		19,325		754,066		989,818
Rent Receivable		24,062		—		8,887		10,088		2,224		2,295		683		10,686		125,475		184,400
Real Estate Tax Escrow		85,348		—		18,649		58,089		—		82,370		34,331		98,036		484,566		861,390
Prepaid Expenses & Other Assets		49,518		480		50,720		76,810		209,610		94,181		43,655		418,289		1,089,897		2,033,161
Financing & Leasing Fees		96,105		4,175		24,496		29,698		11,634		38,966		23,887		28,304		518,395		775,660
Total Assets		10,085,783		2,629,517		8,776,960		6,253,948		2,278,510		7,844,829		7,736,879		23,397,425		121,440,647		190,444,498
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		8,566,871		2,162,000		7,176,827		5,000,000		1,668,000		4,750,000		5,500,000		16,151,526		89,914,000		140,889,224
Accounts Payable & Accrued Expense		33,190		6,239		36,027		43,541		6,346		5,693		65,588		206,997		787,584		1,191,205
Advance Rental Pmts & Security Dep		132,044		—		129,188		63,965		20,044		80,772		61,762		226,689		1,684,843		2,399,308
Total Liabilities		8,732,105		2,168,239		7,342,042		5,107,506		1,694,390		4,836,465		5,627,350		16,585,212		92,386,428		144,479,737
Partners' Capital		1,353,679		461,278		1,434,918		1,146,442		584,119		3,008,364		2,109,529		6,812,213		29,054,219		45,964,761
Total Liabilities & Capital		10,085,783		2,629,517		8,776,960		6,253,948		2,278,510		7,844,829		7,736,879		23,397,425		121,440,647		190,444,498
Partners' Capital—NERA 50%		676,839		230,639		717,459		573,221		292,060		1,504,182		1,054,765		3,406,107				8,455,271
NERA 40%																		11,621,688		11,621,688
																				20,076,959
Total units/ condominiums
Apartments		48		—		40		175		120		48		42		148		409		1,030
Commercial		1		1		—		1		—		—		—		—		—		3
Total		49		1		40		176		120		48		42		148		409		1,033
Units to be retained		49		1		40		49		—		48		42		148		409		786
Units to be sold		—		—		—		127		120		—		—		—		—		247
Units sold through January 25, 2010		—		—		—		127		105		—		—		—		—		232
Unsold units		—		—		—		—		15		—		—		—		—		15
Unsold units with deposits for future sale as of February 1, 2011		—		—		—		—		0		—		—		—		—		—

F-30

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Continued)

Year ended December 31, 2010

	Hamilton Essex 81			Hamilton Essex Development			345 Franklin			Hamilton 1025			Hamilton Bay Sales			Hamilton Bay			Hamilton Minuteman			Hamilton on Main			Dexter Park			Total
Revenues
Rental Income		1,122,915			275,950			1,097,957			794,993			221,191			839,361			765,509			2,455,222			11,019,862			18,592,960
Laundry and Sundry Income		16,184			—			2,436			—			—			—			762			19,780			97,902			137,063
		1,139,099			275,950			1,100,393			794,993			221,191			839,361			766,271			2,475,002			11,117,764			18,730,023
Expenses
Administrative		13,709						30,904			13,038			7,073			17,324			10,288			39,289			148,097			279,724
Depreciation and Amortization		425,450			6,254			439,666			269,475			98,678			359,727			320,553			981,881			9,428,284			12,329,966
Management Fees		46,734			11,040			45,559			31,795			9,245			33,345			31,563			97,239			244,178			550,698
Operating		134,016						62,994			1,777						411			63,841			358,827			960,328			1,582,193
Renting		24,785			—			49,517			8,576			375			6,213			3,770			15,361			281,545			390,142
Repairs and Maintenance		134,941			—			80,190			376,560			76,510			344,852			99,553			342,310			859,088			2,314,005
Taxes and Insurance		179,939			46,658			98,151			127,637			42,465			132,188			96,213			318,150			1,451,017			2,492,417
		959,574			63,952			806,981			828,857			234,346			894,061			625,780			2,153,057			13,372,537			19,939,145
Income Before Other Income		179,525			211,998			293,412			(33,864	)		(13,155	)		(54,700	)		140,491			321,944			(2,254,773	)		(1,209,122	)
Other Income (Loss)
Interest Expense		(507,425	)		(62,694	)		(504,667	)		(289,042	)		(97,909	)		(271,389	)		(317,360	)		(860,500	)		(5,116,598	)		(8,027,583	)
Interest Income		3			2			47			90			569			2			1,780			8			5			2,505
Interest Income from Note		—			—			—			—			11,445			—			—			—			—			11,445
Gain on Sale of Real Estate		—			—			—			—									—			—			—
Other Income (Expenses)		—			—			—			—			11,021			9,478			—			2,168			(17,720	)		4,947
		(507,422	)		(62,692	)		(504,619	)		(288,952	)		(74,874	)		(261,909	)		(315,581	)		(858,323	)		(5,134,313	)		(8,008,686	)
Net Income (loss)		(327,897	)		149,305			(211,208	)		(322,816	)		(88,029	)		(316,608	)		(175,090	)		(536,379	)		(7,389,086	)		(9,217,808	)
Net Income (loss)—NERA 50%		(163,948	)		74,653			(105,604	)		(161,408	)		(44,015	)		(158,304	)		(87,545	)		(268,189	)					(914,361	)
NERA 40%																										(2,955,635	)		(2,955,635	)
																													(3,869,995	)

F-31

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

        In May 2011, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2011-04, (Fair Value Measurement Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U. S. GAAP and IFRS. ASU 2011-04 clarifies some existing concepts, eliminates wording differences between U.S. GAAP and International Financial Reporting Standards ("IFRS"), and in some limited cases, changes some principals to achieve convergence between U.S. GAAP and IFRS. ASU 2011-04 results in a consistent definition of fair value and common requirements for measurementof and disclosure about fair value between GAAP and IFRS. ASU 2011-04 also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. ASU 2011-04 was effective for us as of January 1, 2012. The adoption of this pronouncement did not materially impact our consolidated financial statements.

        In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income, which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. ASU 2011-05 was effective for us as of January 1, 2012. The adoption of this pronouncement did not materially impact our consolidated financial statements.

        In August 2012, the FASB issued ASU 2012-03, Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-950, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update). This update amends a number of SEC sections in the FASB Accounting Standards Codification as a result of (1) the issuance of SAB 114, (2) the issuance of SEC Final Rule 33-9250, and (3) corrections related to ASU 2010-22. ASU 2012-03 was effective upon issuance. The adoption of this pronouncement did not have a material impact on our consolidated financial statements.

        In October 2012, the FASB issued ASU 2012-04, Technical Corrections and Improvements. The amendments in this update cover a wide range of topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. ASU 2012-04 will be effective for us as of January 1, 2013. The adoption of this pronouncement did not have a material impact on our consolidated financial statements.

F-32

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 16. DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

        The following tables summarize income from discontinued operations and the related realized gain on sale of rental property for the years ended December 31, 2012, 2011 and 2010:

	Year Ended December 31,
	2012		2011		2010
Total Revenues	$	—	$	348,997	$	910,155
Operating and other expenses		—		237,298		599,402
Depreciation and amortization		—		30,132		90,886
		—		267,430		690,288
Income from discontinued operations	$	—	$	81,567	$	219,867

Gain on the sale of Avon Street:
Sale price	$	8,750,000
Net book value		(594,035	)
Expense of sale		(435,506	)
Gain on the sale of real estate	$	7,720,459

NOTE 17. QUARTERLY FINANCIAL DATA (UNAUDITED)

	Three Months Ended
	March 31, 2012			June 30, 2012			September 30, 2012			December 31, 2012			Total
Revenue	$	8,852,382		$	8,800,416		$	8,875,596		$	9,104,015		$	35,632,409
Expenses		5,861,694			5,413,735			5,730,319			5,704,596			22,710,344
Income Before Other Income		2,990,688			3,386,681			3,145,277			3,399,419			12,922,065
Other Income (loss)		(2,363,735	)		(2,339,420	)		(2,370,824	)		(2,214,288	)		(9,288,267	)
Net Income	$	626,953		$	1,047,261		$	774,453		$	1,185,131		$	3,633,798
Net Income per Unit before discontinued operations	$	4.77		$	7.97		$	5.90		$	9.07		$	27.69
Income per Unit from discontinued operations		0.00			0.00			0.00			0.00			0.00
Net income per Unit	$	4.77		$	7.97		$	5.90		$	9.07		$	27.69
Income per depositary receipt before discontinued operations		0.16			0.27			0.20			0.30			0.92
Income per depositary receipt from discontinued operations		0.00			0.00			0.00			0.00			0.00
Net Income per depositary receipt	$	0.16		$	0.27		$	0.20		$	0.30		$	0.92

F-33

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 17. QUARTERLY FINANCIAL DATA (UNAUDITED) (Continued)

	Three Months Ended
	March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011			Total
Revenue	$	8,280,894		$	8,345,643		$	8,648,526		$	8,760,538		$	34,035,602
Expenses		5,773,941			5,508,842			5,665,232			5,722,971			22,670,986
Income Before Other Income		2,506,953			2,836,801			2,983,294			3,037,567			11,364,616
Income (loss) from discontinued operations		68,599			7,736,789			(3,054	)		(308	)		7,802,026
Other Income (loss)		(2,402,740	)		(2,480,305	)		(2,523,314	)		(2,469,002	)		(9,875,361	)
Net Income	$	172,812		$	8,093,285		$	456,926		$	568,257		$	9,291,281
Net Income per unit before discontinued operations	$	0.79		$	2.71		$	3.50		$	4.33		$	11.33
Income (loss) per unit from discontinued operations		0.52			58.84			(0.02	)		—			59.34
Net income per unit	$	1.31		$	61.55		$	3.48		$	4.33		$	70.67
Income per depositary receipt before discontinued operations		0.02			0.09			0.12			0.15			0.38
Income per depositary receipt from discontinued operations		0.02			1.96			—			—			1.98
Net Income per depositary receipt	$	0.04		$	2.05		$	0.12		$	0.15		$	2.36

NOTE 18. SUBSEQUENT EVENTS

        From January 1, 2013 through March 14, 2013, the Partnership purchased a total of 9,709 Depositary Receipts. The average price was $32.24 per receipt or $967.20 per unit. The total cost was $321,240. The Partnership is required to repurchase 76.86 Class B Units and 4.05 General Partnership units at a cost of $74,335 and $3,912, respectively.

        On February 4, 2013, the Partnership announced the approval of a quarterly distribution to its Class A Limited Partners and holders of Depositary Receipts of record as of March 15, 2013 and payable on March 31, 2013 of $7.50 per unit and $0.25 per receipt.

Discontinued Operations

        At the February 4, 2013 meeting of the Advisory Committee, the Committee approved managements plan to seek a sale of the 32 unit Nashoba Apartments LP in Acton, Massachusetts. This complex will be accounted for as a discontinued operation in 2013. There is no assurance that the complex can be sold at an acceptable price. The selling price is expected to be well in excess of its book value and outstanding mortgage. Summary historical information is presented below:

F-34

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 18. SUBSEQUENT EVENTS (Continued)

        Financial Statements for Nashoba Apartments LP is as follows:

Nashoba Apartments LP
Balance Sheets
(In Thousands)

	December 31,
	2012			2011
Assets:
Rental property	$	1,283		$	1,210
Accumulated depreciation		821			743
Rental property (net)		462			467
Other current assets		123			80
Other assets		2			6
Total assets	$	587		$	553
Liabilities:
Mortgage note payable	$	2,000		$	2,000
Other liabilities		71			70
Total liabilities		2,071			2,070
Partner's equity		(1,484	)		(1,517	)
Total liabilities & partner's equity	$	587		$	553

Nashoba Apartments LP
Statements of Income
(In Thousands)

	Years ended December 31,
	2012		2011		2010
Rental and other Income	$	462	$	451	$	450
Operating Expenses		241		260		261
Interest Expense		108		108		108
Depreciation		80		72		63
Total Expenses		429		440		432
Net Income	$	33	$	11	$	18

F-35

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 18. SUBSEQUENT EVENTS (Continued)

Nashoba Apartments LP
Cash Flow Information
(In Thousands)

	Years ended December 31,
	2012		2011			2010
Distributions from (to) Nashoba	$	1	$	(72	)	$	45

Mortgage Notes Payable—Refinancing

        On February 25, 2013, the Partnership paid off the mortgage of approximately $3,697,000 on Hamilton Cypress LLC. There was no penalty on the early payoff. The funds used to pay off the mortgage were from the Partnerships cash reserves.

        On March 11, 2013, the Partnership refinanced the property located at School Street. The new loan is $15,000,000 with an interest rate of 3.7% due in 2023. The loan calls for interest only for three years followed by principal and interest payments over the remainder of the loan term. The costs associated with this refinancing were approximately $159,000.

        Additionally, the Partnership is anticipating refinancing debt of approximately $28,000,000 in maturing debt for Boylston Downtown LP and Westgate Apartments LLC. In connection with this refinancing, the Partnership may borrow additional debt of approximately $29,000,000. These funds will be used for future acquisitions, repurchase of additional Depositary Receipts, improvements to its properties or other operating items.

Unaudited Pro Forma Financial Information

        Four of the Partnerships mortgaged properties have or will have changes to their mortgage debt during 2013. On February 25, 2013, the Partnership paid off the mortgage of approximately $3,697,000 on Hamilton Cypress LLC. On March 11, 2013, the Partnership refinanced the property held by School Street 9, LLC with a new mortgage loan in the amount of $15,000,000. For the balance of 2013, the Partnership is working towards refinancing the properties held by Boylston Downtown L.P. and Westgate Apartments, LLC. As of March 22, 2013 no firm commitment had been executed with a lender. However, the Partnership anticipates refinancing the existing Boylston Downtown loan of $19,500,000 with a new loan of $40,000,000 and refinancing the existing Westgate Apartments loan of approximately $7,932,000 with a new loan of $17,000,000. The cumulative effects of these financing activities are presented in the following unaudited pro forma financial statements.

        The following unaudited pro forma consolidated balance sheet as of December 31, 2012 has been prepared to give effect to the payoff and refinancing of mortgage debt occurring in the first quarter of 2013 and additional refinancing expected to occur during the balance of the year. The following unaudited pro forma balance sheet does not purport to reflect the actual transactions as the majority have yet to occur.

F-36

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 18. SUBSEQUENT EVENTS (Continued)

        The following unaudited pro forma consolidated statement of income for the twelve months ended December 31, 2012 has been prepared to give effect of the payoff and refinancing of mortgage debt occurring in the first quarter of 2013 and additional refinancing expected to occur during the balance of the year.

        The following unaudited pro forma financial statements have been prepared for informational purposes only and are not necessarily indicative of future results or actual results that would have been achieved had the Partnership structured its debt refinancing as presented.

New England Realty Associates Limited Partnership
Pro Forma Consolidated Balance Sheet
As of December 31, 2012
(Unaudited)

				Pro Forma
	Historical NERA			Adjustments Refinancings			Consolidated Totals
ASSETS
Rental Properties	$	95,435,850		$	—		$	95,435,850
Cash and Cash Equivalents		6,981,906	(a)		21,465,693			28,447,599
Rents Receivable		475,083			—			475,083
Real Estate Tax Escrows		449,652			—			449,652
Prepaid Expenses and Other Assets		3,073,890	(b)		2,028,400			5,102,290
Investments in Unconsolidated Joint Ventures		13,986,173			—			13,986,173
Financing and Leasing Fees		1,135,936	(c)		1,445,795			2,581,731
Total Assets	$	121,538,490		$	24,939,888		$	146,478,378
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$	138,055,522	(d)	$	24,980,014		$	163,035,536
Accounts Payable and Accrued Expenses		2,361,942			—			2,361,942
Advance Rental Payments and Security Deposits		3,636,704			—			3,636,704
Total Liabilities	$	144,054,168		$	24,980,014		$	169,034,182
Partners' Capital 130,444 units outstanding in 2012		(22,515,678	)		(40,126	)		(22,555,804	)
Total Liabilities and Partners' Capital	$	121,538,490		$	24,939,888		$	146,478,378

F-37

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 18. SUBSEQUENT EVENTS (Continued)

New England Realty Associates Limited Partnership
Pro Forma Consolidated Statement of Income
For the Twelve Months Ended December 31, 2012
(Unaudited)

				Pro Forma
	Historic NERA			Adjustments Refinancing			Consolidated Totals
Revenues
Rental income	$	35,244,008		$	—		$	35,244,008
Laundry and sundry income		388,401			—			388,401
		35,632,409			—			35,632,409
Expenses
Administrative		1,825,951			—			1,825,951
Depreciation and amortization		6,092,725	(e)		112,948			6,205,673
Management fee		1,446,620			—			1,446,620
Operating		3,633,619			—			3,633,619
Renting		183,529			—			183,529
Repairs and maintenance		5,179,408			—			5,179,408
Taxes and insurance		4,348,492			—			4,348,492
		22,710,344			112,948			22,823,292
Income Before Other Income and Discontinued Operations		12,922,065			(112,948	)		12,809,117
Other Income (Loss)
Interest income		2,216			—			2,216
Interest expense		(7,802,999	)(f)		72,822			(7,730,177	)
(Loss) from investments in unconsolidated joint ventures		(1,487,484	)		—			(1,487,484	)
Other		—			—			—
		(9,288,267	)		72,822			(9,215,445	)
Income From Continuing Operations		3,633,798			(40,126	)		3,593,672
Discontinued Operations
Income from discontinued operations		—			—			—
Gain on the sale of real estate from discontinued operations		—			—			—
		—			—			—
Net Income	$	3,633,798		$	(40,126	)	$	3,593,672
Income per Unit
Income before discontinued operations	$	27.69		$	(0.31	)	$	27.38
Income from discontinued operations		—			—			—
Net Income per Unit	$	27.69		$	(0.30	)	$	27.38
Weighted Average Number of Units Outstanding		131,230			131,230			131,230

Notes to unaudited pro forma consolidated balance sheet and consolidated statement of income:

(a)

Cash adjusted for new loan proceeds, existing loan payoff, financing fees, replacement reserves and changes to mortgage debt service.

F-38

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 18. SUBSEQUENT EVENTS (Continued)

(b)

Replacement reserves required by new debt agreement

(c)

Change in prepaid financing fees between existing debt and refinanced debt

(d)

Difference between existing debt balance and refinanced debt balance

(e)

Increase in the amortization of the balance of prepaid finance costs for the existing debt and the proportionate share of prepaid finance costs for the refinanced debt

(f)

Decrease in mortgage interest expense between existing mortgage debt and refinanced debt

NOTE 19. QUALIFYING ACCOUNTS

New England Realty Associates Limited Partnership

Valuation and Qualifying Accounts

			Additions
Description	Balance at Beginning of Period		Charged to Costs and Expenses		Charged to other account describe	Deductions Describe(a)		Balance at end of Period
Year ended December 31, 2012:
Deducted from asset accounts:
Allowance for doubtful accounts		448,119		190,032			257,443		380,708
Year ended December 31, 2011:
Deducted from asset accounts:
Allowance for doubtful accounts		482,518		265,807			300,206		448,119
Year ended December 31, 2010:
Deducted from asset accounts:
Allowance for doubtful accounts		475,684		374,597			367,763		482,518

(a)

Uncollectible accounts written off

F-39

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP
By:	/s/ NEWREAL, INC. Its General Partner
By:	/s/ RONALD BROWN Ronald Brown, President
Dated: March 27, 2013

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ RONALD BROWN Ronald Brown	President and Director of the General Partner (Principal Executive Officer)	March 27, 2013
/s/ HAROLD BROWN Harold Brown	Treasurer and Director of the General Partner (Principal Financial Officer and Principal Accounting Officer)	March 27, 2013
/s/ GUILLIAEM AERTSEN Guilliaem Aertsen	Director of the General Partner	March 27, 2013
/s/ DAVID ALOISE David Aloise	Director of the General Partner	March 27, 2013
/s/ ROBERTA ORNSTEIN Roberta Ornstein	Director of the General Partner	March 27, 2013

S-1

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
(3)	Second Amended and Restated Contract of Limited Partnership.(1)
(4)	(a)	Specimen certificate representing Depositary Receipts.(2)
	(b)	Description of rights of holders of Partnership securities.(2)
	(c)	Deposit Agreement, dated August 12, 1987, between the General Partner and the First National Bank of Boston.(3)
(10.1)	Purchase and Sale Agreement by and between Sally A. Starr and Lisa Brown, Trustees of Omnibus Realty Trust, a nominee trust.(5)
(10.2)	Commitment letter from Wachovia Multifamily Capital, Inc. to The Hamilton Company dated January 11, 2008.(6)
(10.3)	Amendment dated February 27, 2008 to Commitment letter from Wachovia Multifamily Capital, Inc. to The Hamilton Company dated January 11, 2008.(7)
(10.4)	Purchase and Sale and Escrow Agreement dated September 1, 2009 by and between 175 Free Street Investors LLC, as Seller, The Hamilton Company, as Purchaser, and First American Title Insurance Company, as Escrow Agent.(8)
(10.5)	Limited Liability Company Operating Agreement of HBC Holdings, LLC.(9)
(10.6)	Limited Liability Company Agreement of Hamilton Park Towers, LLC.(10)
(10.7)	Pledge Agreement dated October 28, 2009 by and between New England Realty Associates Limited Partnership and HBC Holdings, LLC.(11)
(10.8)	Promissory Note dated October 28, 2009 of New England Realty Associates Limited Partnership in favor of HBC Holdings, LLC.(12)
(10.9)	MultiFamily Note—CME of Hamilton Park Towers, LLC, as Borrower, in favor of Wachovia Multifamily Capital, Inc., as Lender, in the principal amount of $89,914,000 dated October 28, 2009.(13)
(10.10)	Purchase and sale agreement by and between Avon Street Apartments and 503-509 Pleasant Street, LLC.
(10.11)	Purchase and Sale Agreement dated May 20, 2011 by and between Battlegreen Apartments Trust and Hamilton Battle Green LLC(14).
(10.12)	Promissory Note dated June 1, 2011 by and between Avon Street Apartments Limited Partnership, as Maker, and Harold Brown, as Lender(15).
(10.13)	Pledge Agreement dated June 1, 2011 by and between Avon Street Apartments Limited Partnership, as Pledgor, and Harold Brown, as Pledgee(16).
(21)	Subsidiaries of the Partnership.(4)
(31.1)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Ronald Brown, Principal Executive Officer of the Partnership (President and a Director of NewReal, Inc., sole General Partner of the Partnership)
(31.2)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Harold Brown, Principal Financial Officer of the Partnership (Treasurer and a Director of NewReal, Inc., sole General Partner of the Partnership)

S-2

Exhibit No.	Description of Exhibit
(32.1)	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Ronald Brown, Principal Executive Officer of the Partnership (President and a Director of NewReal, Inc., sole General Partner of the Partnership) and Harold Brown, Principal Financial Officer of the Partnership (Treasurer and a Director of NewReal, Inc., sole General Partner of the Partnership).
(99.1)	Combined Financial Statements of Significant Subsidiaries
(101.1)	The following financial statements from New England Realty Associates Limited Partnership Quarterly Report on Form 10-K for the year ended December 31, 2012 formatted in XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Changes in Partners' Capital, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements.

(1)

Incorporated by reference to Exhibit A to the Partnership's Statement Furnished in Connection with the Solicitation of Consents filed under the Securities Exchange Act of 1934 on October 14, 1986.

(2)

Incorporated herein by reference to Exhibit A to Exhibit 2(b) to the Partnership's Registration Statement on Form 8-A, filed under the Securities Exchange Act of 1934 on August 17, 1987.

(3)

Incorporated herein by reference to Exhibit 2(b) to the Partnership's Registration Statement on Form 8-A, filed under the Securities Exchange Act of 1934 on August 17, 1987.

(4)

Incorporated by reference to Notes 2 and 14 to Financial Statements included as part of this Form 10-K.

(5)

Incorporated by reference to Exhibit 2.1 to the Partnership's Current Report on Form 8-K dated June 30, 1995.

(6)

Incorporated herein by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K dated January 11, 2008 and filed with the Securities and Exchange Commission on February 6, 2008.

(7)

Incorporated herein by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K dated February 27, 2008 and filed with the Securities and Exchange Commission on March 4, 2008.

(8)

Incorporated herein by reference to Exhibit 10.1 to the Partnership's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009.

(9)

Incorporated herein by reference to Exhibit 10.2 to the Partnership's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009.

(10)

Incorporated herein by reference to Exhibit 10.3 to the Partnership's Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2009.

(11)

Incorporated herein by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 3, 2009.

(12)

Incorporated herein by reference to Exhibit 10.2 to the Partnership's Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 3, 2009.

(13)

Incorporated herein by reference to Exhibit 10.3 to the Partnership's Current Report on Form 8-K as filed with the Securities and Exchange Commission on November 3, 2009.

(14)

Incorporated herein by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K as filed with the Securities and Exchange Commission on May 26, 2011

(15)

Incorporated herein by reference to Exhibit 10.1 to the Partnership's Current Report on Form 8-K as filed with the Securities and Exchange Commission on June 7, 2011.

(16)

Incorporated herein by reference to Exhibit 10.2 to the Partnership's Current Report on Form 8-K as filed with the Securities and Exchange Commission on June 7, 2011.

S-3

EX-10.10

Exhibit 10.10

PURCHASE AND SALE AGREEMENT

This 1st day of March, 2011

1. PARTIES

Avon Street Apartments Limited Partnership, a Massachusetts limited partnership with an address of 39 Brighton Ave., Allston, MA 02134, hereinafter called the SELLER, agrees to SELL and 503-509 Pleasant Street, LLC and/or Francis D. Privitera with an address of 59 Union Square, Somerville, MA 02143, hereinafter called the BUYER, agrees to BUY, upon the terms hereinafter set forth, the following described premises:

2. DESCRIPTION

Land and buildings (the “Premises” or “Property”) located at 130 Avon Street, Malden, Massachusetts.

For title see Deed filed at the Middlesex South District of the Land Court, Document No.: 973883; with Certificate of Title No. 202152 in Book 01141, Page 2.

3. BUILDINGS, STRUCTURES, IMPROVEMENTS, FIXTURES

Included in the sale as a part of said premises are the buildings, structures, and improvements now thereon, and all equipment and supplies belonging to the SELLER and used in connection therewith and the fixtures belonging to the SELLER and used in connection therewith, doors, furnaces, heaters, heating equipment, oil and gas burners and fixtures appurtenant thereto, hot water heaters, plumbing and bathroom fixtures, electric and other lighting fixtures, mantels, and, only if built in, air conditioning equipment, and ventilators, six (6) Washing Machines and six (6) Dryers located in basement..

4. TITLE DEED

Said premises are to be conveyed by a good and sufficient quitclaim deed running to the BUYER, or to the nominee designated by the BUYER by written notice to the SELLER at least seven (7) days before the deed is to be delivered as herein provided, and said deed shall convey a good and clear record and marketable title thereto, free from encumbrances, except

(a)	Provisions of existing building and zoning laws;
(b)	Existing rights and obligations in party walls which are not the subject of written agreement;
(c)	Such taxes for the then current year as are not due and payable on the date of the delivery of such deed;
(d)	Any liens for municipal betterments assessed after the date of this agreement;
(e)	Easements, restrictions and reservations of record, if any, so long as the same do not prohibit or materially interfere with the current use of said premises;

5. PLANS

If said deed refers to a plan necessary to be recorded therewith the SELLER shall deliver such plan with the deed in form adequate for recording or registration.

6.     PURCHASE PRICE

The agreed purchase price for said premises is One Million Two Hundred Thousand dollars ($8,750,000.00), of which

$	200,000	have been paid as a deposit this day; and
$	8,550,000	are to be paid at the time of delivery of the deed in cash, or by certified, cashier’s, treasurer’s or bank check. *
$	8,750,000	TOTAL

*If for any reason, Buyer desires to extend the closing date by up to an additional 15 days, Seller agrees that Buyer my so extend the closing date, subject to the payment of an additional $100,000 deposit, in which event the amount due at closing shall be adjusted accordingly.

7.     TIME FOR PERFORMANCE; DELIVERY OF DEED

Such deed is to be delivered at 1:00 o’clock P.M. on May 16, 2011, at the Middlesex County Registry of Deeds or the offices of Buyer’s counsel, unless otherwise agreed upon in writing. It is agreed that time is of the essence of this agreement.

8A.     POSSESSION AND CONDITION OF PREMISES

The Premises shall be delivered at the Date of Closing subject to existing tenants and occupants as of the date hereof, in substantially the same condition as they are now, reasonable wear and tear excepted and except for conditions caused or created by Buyer’s Inspections or otherwise permitted by this Agreement. Buyer shall be entitled to inspect the Premises on the day prior to the Date of Closing to ensure that the provisions of the preceding sentence have been complied with, and until closing Seller shall grant Buyer such access in the presence of Seller’s representatives to the Premises as is reasonably necessary (subject to the rights of tenants of the property) to facilitate such inspection and Buyer’s financing efforts.

8B.     BUYER’S DUE DILIGENCE

Buyer shall have reasonable access to the Premises as contemplated below and the right to conduct such inspections of the Premises as it deems necessary as set forth below. Buyer and its agents, servants and employees shall maintain as confidential and not disclose any information obtained as a result of or pursuant to the Site Investigations and Inspections (both herein below defined) except to the extent that any law or regulation shall require such disclosure and except to Buyer’s attorneys, consultants and lenders. Buyer shall contractually require any agent performing the Site Investigation on its behalf to maintain all such information as confidential and not to disclose such information to any person other than Buyer except as may be required by law. This obligation with respect to confidentiality and non-disclosure shall survive the delivery of the Deed or any earlier termination of this Agreement.

(a)     Environmental Inspection. Buyer may conduct, at its sole cost and expense by consultants selected by it, an environmental site analysis (“Site Investigation”) to determine the existence of hazardous wastes and materials at the Property (the “Hazardous Materials”). In the event that the results of the Site Investigation indicates that there has been a release of Hazardous Materials that would impose any further investigation, monitoring, or remediation costs on Buyer if Buyer were to own the Premises, Buyer shall be entitled to terminate this Agreement by delivering written notice thereof, together with a copy of all reports, if any, of the results of the Site Investigation, to Seller and Escrow Agent no later than 5:00 p.m. on the date which is fourteen (14) days following the date of this Agreement. In such event, the Deposit shall be returned to Buyer

and this Agreement shall terminate and be null and void and without recourse to either party. If Buyer fails to timely give such notice, Buyer’s right to terminate this Agreement shall be deemed to be waived. Buyer acknowledges that Seller has no obligation whatsoever to undertake any corrective or remedial work as a result of matters disclosed by the Site Investigation.

In order to permit Buyer to conduct the Site Investigation, Seller shall permit Buyer, its agents, servants or employees, a license to enter upon the Premises to conduct the Site Investigation, in accordance with the terms and conditions set forth herein below:

(i)            Buyer will not unreasonably interfere with Seller’s, tenants’ or other occupants’ use of the Premises.

(ii)           Buyer shall at the conclusion of the Site Investigation restore the Premises to the condition existing prior to the Site Investigation, and this obligation shall survive any termination of this Agreement.

(iii)          Before commencing any aspect of the Site Investigation that involves physical inspection or invasive testing of the Premises, Buyer shall give Seller prior written notice of the scope of testing, methodologies to be used and identities of the consultants/contractors retained by Buyer, all of which shall be subject to Seller’s prior written approval, which shall not be unreasonably withheld or delayed. In addition, prior to such testing, Buyer shall submit to Seller evidence of Buyer’s and its environmental site analyst’s public liability and workers’ compensation insurance, which shall be reasonably acceptable to Seller and shall name Seller as an additional insured on such policies.

(iv)          Buyer agrees to indemnify and hold Seller harmless from and against any and all claims for personal injury or property damage resulting from the conduct by Buyer or its agents of the Site Investigation. The provisions of this paragraph (v) shall survive the delivery of the Deed or earlier termination of this Agreement.

(vi)          Seller shall have the right to terminate this license upon twenty four (24) hours written notice to Buyer if the foregoing conditions are not met, or if Buyer is in default under this Agreement, or if this Agreement terminates for any other reason.

(b)           General Building and Other Inspections. Buyer may conduct, at its sole cost and expense by consultants selected by it, structural, mechanical, and any other inspections reasonably required by Buyer (“Inspections”). In the event that the results of any of such Inspections, in Buyer’s sole discretion disclose any defects or unacceptable conditions in the Premises, Buyer shall be entitled to terminate this Agreement by delivering written notice thereof, together with a copy of all reports, if any, of the results of such Inspections to Seller no later than 5:00 p.m. on the date which is fourteen (14) days following the date of this Agreement. However, if such date were to fall on a Saturday, Sunday or legal holiday then such date would be extended to the next business day thereafter. In such event, the Deposit shall be returned to the Buyer and this Agreement shall terminate and be null and void and without recourse to either party. If Buyer fails to timely give such notice, Buyer’s right to terminate this Agreement shall be deemed to be waived.

In order to permit Buyer to conduct the Inspections, Seller shall permit Buyer reasonable access to the Premises, such access to be exercised in the presence of Seller and or Seller’s representatives, and provided such access does not interfere with rights of tenants under leases. Buyer shall, at the conclusion of the Inspections restore the Premises to the condition existing prior to the Inspections. Buyer agrees to indemnify and hold Seller harmless from and against any and all claims for personal injury or property damage resulting from the conduct by Buyer or its agents of the Inspections. The provisions of this paragraph with respect to Buyer’s restoration obligations and indemnity of Seller shall survive the delivery of the Deed or earlier termination of this Agreement.

(c)           Permits, Zoning, Leases, Litigation; etc.           Buyer shall be entitled to conduct such other investigations and reviews, and make other due diligence inquiries with respect to the Premises including without limitation any and all permits; governmental approvals; zoning status; leases, occupancies and other tenancies; and litigation pertaining thereto (the “Legal Investigations”). In the event that the results of any of such Legal Investigations, in Buyer’s sole discretion disclose any defects or unacceptable conditions in the Premises, Buyer shall be entitled to terminate this Agreement by delivering written notice thereof, together with a copy of all reports, if any, of the results of such Legal Investigations to Seller no later than 5:00 p.m. on the date which is fourteen (14) days following the date of this Agreement. However, if such date were to fall on a Saturday, Sunday or legal holiday then such date would be extended to the next business day thereafter. In such event, the Deposit shall be returned to the Buyer and this Agreement shall terminate and be null and void and without recourse to either party. If Buyer fails to timely give such notice, Buyer’s right to terminate this Agreement under this paragraph 8 shall be deemed to be waived.

9.      EXTENSION TO PERFECT TITLE OR MAKE PREMISES CONFORM

If the SELLER shall be unable to give title or to make conveyance, or to deliver possession of the premises, all as herein stipulated, or if at the time of the delivery of the deed the premises do not conform with the provisions hereof, however, the SELLER shall use reasonable efforts to remove any defects in title, or to deliver possession as provided herein, or to make said premises conform to the provisions hereof, as the case may be, in which event the SELLER shall give written notice thereof to the BUYER at or before the time for performance hereunder, and thereupon the time for performance hereof shall be extended for a period of thirty (30) days.. Should SELLER need the additional thirty (30) days to remove any defects in title or to deliver possession as provided herein, or to make the Premises conform to the provisions of this Purchase and Sale Agreement, the extension shall only be in force for as long as BUYER’S mortgage commitment is in full force and effect under the original terms granted to the BUYER or as extended so long as BUYER notifies Seller on or before April 1, 2011 of Buyer’s mortgage rate commitment expiration date. Moreover, Buyer agrees to use diligent efforts to extend the mortgage commitment. In the event that Buyer cannot extend said commitment without a fee and Seller does not agree to pay same, then it shall be at Buyer’s option whether or not to proceed beyond the original commitment date. Further, the SELLER shall not be required to expend more than $10,000.00, exclusive of liens or encumbrances on the Premises, to make the Premises conform to the provisions of this paragraph.

10.    FAILURE TO PERFECT TITLE OR MAKE PREMISES CONFORM

If at the expiration of the extended time the SELLER shall have failed so to remove any defects in title, deliver possession, or make the premises conform, as the case may be, all as herein agreed, or if at any time during the period of this agreement or any extension thereof, the holder of a mortgage on said premises shall refuse to permit the insurance proceeds, if any, to be used for such purposes, then any payments made under this agreement shall be forthwith refunded and all other obligations of all parties hereto shall cease and this agreement shall be void without recourse to the parties hereto.

11.    BUYER’S ELECTION TO ACCEPT TITLE

The BUYER shall have the election, at either the original or any extended time for performance, to accept such title as the SELLER can deliver to said premises in their then condition and to pay therefor the purchase price without deduction, in which case the SELLER shall convey such title, except that in the event of such conveyance in accord with the provisions of this clause, if said premises shall have been damaged by fire or casualty insured against, then the SELLER shall, unless the SELLER has previously restored the premises to their former condition, either

(a)           pay over or assign to the BUYER, on delivery of the deed, all amounts recovered or recoverable on account of such insurance, less any amounts reasonably expended by the SELLER for any partial restoration, or

(b)           if a holder of a mortgage on said premises shall not permit the insurance proceeds or a part thereof to be used to restore said premises to their former condition or to be so paid over or assigned, give to the BUYER a credit against the purchase price, on delivery of the deed, equal to said amount so recovered or recoverable and retained by the holder of said mortgage less any amount reasonably expended by the SELLER for any partial restoration.

12.    ACCEPTANCE OF DEED

The acceptance of a deed by the BUYER or his nominee as the case may be, shall be deemed to be a full performance and discharge of every agreement and obligation herein contained or expressed, except such as are, by the terms hereof, to be performed after the delivery of said deed.

13.    USE OF MONEY TO CLEAR TITLE

To enable the SELLER to make conveyance as herein provided, the SELLER may, at the time of delivery of the deed, use the purchase money or any portion thereof to clear the title of any or all encumbrances or interests.

14.    INSURANCE

Until the delivery of the deed, the SELLER shall maintain insurance on said premises as follows:

Type of Insurance	Amount of Coverage
(a)    Fire	$ As is presently insured
(b)    Extended coverage	$

15.    ADJUSTMENTS

Water and sewer use charges, collected rents, security deposits, if any, real estate taxes for the current tax year and any other additional rents, operating expenses and prepaid amounts or charges, including, but not limited to fuel oil and any service contracts, shall be apportioned as of the Date of Closing.

16.    ADJUSTMENT OF UNASSESSED AND ABATED TAXES

If the amount of said taxes is not known at the time of the delivery of the deed, they shall be apportioned on the basis of the taxes assessed for the preceding year, with a reapportionment as soon as the new tax rate and valuation can be ascertained; and, if the taxes which are to be apportioned shall thereafter be reduced by abatement, the amount of such abatement, less the reasonable cost of obtaining the same, shall be apportioned between the parties, provided that neither party shall be obligated to institute or prosecute proceedings for an abatement unless herein otherwise agreed.

17.    BROKER’S FEE

A broker’s fee of $200,000 for professional services, to be split equally between SELLER and BUYER to NAI Hunneman, the Broker(s) herein, payable if and when title passes as herein provided and the Deed is recorded and not otherwise.

18.    BROKER(S) WARRANTY

The Broker(s) named herein warrant(s) that the Broker(s) is (are) duly licensed as such by the Commonwealth of Massachusetts.

19.    DEPOSIT

All deposits made hereunder shall be held in escrow by NAI Hunneman in an interest bearing FDIC insured bank account in Massachusetts,  as escrow agent subject to the terms of this agreement and shall be duly accounted for at the time for performance of this agreement.

20.    BUYER’S DEFAULT; DAMAGES

If the BUYER shall fail to fulfill the BUYER’S agreements herein, all deposits made hereunder by the BUYER shall be retained by the SELLER as liquidated damages unless within thirty (30) days after the time for performance of this agreement or any extension hereof, the SELLER otherwise notifies the BUYER in writing.

21.    BROKER AS PARTY

The Broker(s) named herein, join(s) in this agreement and become(s) a party hereto, insofar as any provisions of this agreement expressly apply to the Broker(s), and to any amendments or modifications of such provision to which the Broker(s) agree(s) in writing.

22.    SMOKE DETECTOR and CO       The SELLER shall, at the time of the delivery of the deed, deliver a certificate from the fire department of the city or town in which said premises are located stating that said premises have been equipped with approved smoke and carbon monoxide detectors in conformity with applicable law.

23.    LEAD PAINT       The parties acknowledge that under Massachusetts law, whenever a child or children under six (6) years of age resides in any residential premises in which any paint, plaster, or other accessible material contains dangerous levels of lead, the owner of said premises must remove or cover said paint, plaster or other material so as to make it inaccessible to children under six years of age. Buyer hereby acknowledges receipt of a Lead Paint Disclosure.

24.    CORRECTIONS -  If any errors or omissions are found to have occurred in any calculations or figures used in the settlement statement signed by the parties and notice thereof is given to a party within one year of the Closing Date, then such party agrees to execute any document reasonably required by BUYER’S attorney to correct such errors or omissions including re-execution of applicable documents.

25.    PARTIES REPRESENTED BY COUNSEL.  Each party hereto acknowledges to the other that such party has been represented by separate legal counsel of such party’s own choosing and at such party’s own expense prior to the signing of this Agreement.

26.    FINANCING.  In order to help finance the acquisition of said Property, the Buyer shall apply for a conventional bank or other institutional commercial mortgage loan of $6.125.000.00 at prevailing rates, terms and conditions. If despite the Buyer’s diligent efforts, a commitment for such loan cannot be obtained on or before_thirty (30) days following the date of this agreement (The “Financing Date”), the Buyer may terminate this agreement by written notice to the Seller prior to the expiration of such time, whereupon this Agreement shall automatically terminate and become null and void and without recourse to any party hereunder, and all deposits shall be forthwith refunded to BUYER. Where the Financing Date falls on a Saturday, Sunday or legal holiday then such date shall be automatically extended to the next business day thereafter. In the event that BUYER does not notify SELLER’s attorney before 3:00 p.m. on the Financing Date of BUYER’s inability to obtain such a mortgage commitment, it shall be conclusively presumed that BUYER has obtained such mortgage commitment and the contingency contained in this clause shall be thereby waived. If for any reason, Buyer desires to extend the Financing Date by up to an additional thirty (30) days, Seller agrees that Buyer may so extend the Financing Date, subject to the payment of an additional $100,000 deposit, in which event the amount due at closing shall be adjusted accordingly.

27.          NOTICES.  All notices required to be given herein may be given by (a) certified mail, postage prepaid, return receipt requested, (b) by service in hand with receipt, or (c) by recognized overnight delivery service for which proof of delivery is available, to the following addresses:

If to Seller:	Linda M. Vaccaro, Esq.
	The Hamilton Company, Inc.
	39 Brighton Ave.
	Allston, MA 02134
	Tel: (617) 850-7236
	Fax: (617) 783-0568
	Ivaccaro@thehamiltoncompany.com
If to Buyer:	Frank D. Privitera, Jr.
	Attorney-At-Law
	531 Medford Street
	Somerville, MA 02145
	Tel: (617) 666-1116
	Fax: (617) 666-1117
	frankiep@gis.net
If to Escrow Agent:	NAI Huneman Commercial
	David Ross
	303 Congress Street
	Boston, MA 02210
	617-457-3400 x.2610 office
	617-457-3268 fax
	617-875-6222 cell
	dlross@naihunneman.com

or to such other address as any party may direct by notice given in the manner herein provided. All notices shall be deemed to have been received, if given by hand or overnight delivery service, when delivered; if by mail, on the third (3rd) day following its deposit to the mails.

28     LIABILITY OF TRUSTEE, SHAREHOLDER, BENEFICIARY, ETC.

If the SELLER or BUYER executes this agreement in a representative or fiduciary capacity, only the principal or the estate represented shall be bound, and neither the SELLER or BUYER so executing, nor any shareholder or beneficiary of any trust, shall be personally liable for any obligation, express or implied, hereunder.

29.    WARRANTIES AND REPRESENTATIONS

The BUYER acknowledges that the BUYER has not been influenced to enter into this transaction nor has he relied upon any warranties or representations not set forth or incorporated in this agreement or previously made in writing, except for the following additional warranties and representations, if any, made by either the SELLER or the Broker(s): None. Buyer has had the opportunity to perform its due diligence inspections of the Property.

30.    CONSTRUCTION OF AGREEMENT

This instrument, executed in multiple counterparts, is to be construed as a Massachusetts contract, is to take effect as a sealed instrument, sets forth the entire contract between the parties, is binding upon and enures to the benefit of the parties hereto and their respective heirs, devisees, executors, administrators, successors and assigns, and may be

canceled, modified or amended only by a written instrument executed by both the SELLER and the BUYER. If two or more persons are named herein as BUYER their obligations hereunder shall be joint and several. The captions are used only as a matter of convenience and are not to be considered a part of this agreement or to be used in determining the intent of the parties to it.

31.ASSIGNMENT OF LEASES. At the Date of Closing, Buyer and Seller shall each execute and deliver an Assignment of Rents and Leases in the form provided herein as Exhibit A. A list of all current tenants and a rent roll is attached hereto as Exhibit B.

32.SELLER’S REPRESENTATIONS. Seller represents to the best of its information and belief, as follows:

(a)Seller has the authority to enter into this Agreement and perform without the need for approval from any other person, entity, court or government. Seller or any general partner or owner of Seller has not filed for, and is not contemplating filing for bankruptcy protection, and is not affected by any action, agreement, court, order or other matter that would hinder or delay, the closing or adversely affect Seller’s ability to perform hereunder;

(b)Seller has no knowledge of any pending or threatened litigation regarding the Premises or any part thereof, except as disclosed in writing to Buyer

(c)Seller has not received any written notices of which Seller has knowledge, for violations of any applicable law, not since rectified with respect to the Premises;

(d)Seller has provided the Buyer with accurate and complete copies of any environmental reports or studies with respect to the Premises, if any, that are in Seller’s possession;

(e)to Seller’s best knowledge and belief there do not exist underground storage tanks at the Premises and Seller is not aware of any violations of environmental laws with respect to the Premises;

(f)the only tenancies, leases or occupancy agreements affecting the Premises are those described in that Rent Roll attached hereto as Exhibit “B.” Rent due for each tenants is all current through the date hereof and not in arrears, except as shown on the Rent Roll. Each tenant(s) is responsible for the payment of electricity for each of the respective units. Seller shall deliver to Buyer an updated rent roll inclusive of the above information (other than utilities) at closing.

(g)Seller has provided Buyer with materially true and accurate copies of Seller’s Income and Expense statements for the Premises for the two years beginning January 1, 2009 and January 1, 2010. January 1, 2011 year to date shall be provided if ready prior to closing.

(h)Seller has provided Buyer with true and accurate copies of any written notices, orders, declarations or the like, received by Seller from any government entity regarding the presence of lead paint in any of the units or common areas of the Premises;

33.Service Agreements. As of the date hereof, except for a contract with Constellation Energy (a copy of which has been provided to the Buyer), which contract shall be assumed by Buyer, there are no service agreements or contracts, in effect and affecting the Premises that cannot be terminated on 30 days notice and at closing, there shall be no additional service agreements or contracts other than those in effect as of the date hereof. Seller shall be responsible for all balances due for any goods, services, and/or labor supplied to or for the benefit of the Premises up until the time of Closing and shall hold Buyer harmless from the same. Buyer shall hold Seller harmless from the same from and after the closing.

34.Delivery of Premises. Between the date hereof and Closing, Seller shall continue to manage, maintain and

service the Premises at the same level of effort and expense as Seller has managed, maintained and serviced the Premises for Seller’s own account. At closing, Seller shall deliver the Premises (except for tenant spaces) in broom clean condition, removing all trash, debris and personal property, not included in the within sale.

35.Cooperation With Buyer’s Lender. Seller shall reasonably cooperate with Buyer’s lender and its counsel in executing and delivering those document reasonably needed to close the subject transaction, in accordance with customary practices. Seller shall also reasonably cooperate with Buyer and its prospective lender(s) so as to facilitate Buyer obtaining mortgage financing and shall promptly provide Buyer, Buyer’s lender and their counsel with information and documentation reasonably requested or necessarily incidental to Buyer’s aforedescribed financing efforts, including but not limited to rent rolls, income/expense information, third party contracts/information.

36.No Brokers.Both Buyer and Seller warrant and represent to one another that neither party has dealt with any broker or other person entitled to a broker’s commission in connection with the negotiation or execution of this Agreement or the consummation of the transaction contemplated hereby, except that Broker identified in Paragraph No. 17 hereof. Each party shall hold the other harmless from, and indemnify the other against all damages, including legal fees and court costs, incurred by the other and arising out of or resulting from the failure of such representation and warranty.

37.Title and Deed.Title standards of the Massachusetts Real Estate Bar Association shall be determinative of any matter which is the subject of any such standard. Seller shall not deliver a Deed in accordance with ¶ 4 hereof or any recorded document which is signed under Power of Attorney and Buyer shall not be required to accept a Deed or such recorded documents from Seller signed under Power of Attorney.

38.Miscellaneous.This Agreement may be executed in counterparts, and facsimile signatures shall have the effect of original signatures.

39.Seller acknowledges that Buyer intends the purchase of the within subject Premises to be a “replacement purchase” of real property for that loss of property suffered by Buyer at 503-509 Pleasant Street, Malden, MA. In this regard, Seller agrees to cooperate with Buyer, at no cost to Seller, in executing and delivering information and documents to Buyer and Buyer’s insurer (and their counsel) and providing access to the Premises as reasonably requested by Buyer (or its insurer) so to complete the aforementioned purchase by Buyer of the Premises as a “replacement purchase” of property within the manner prescribed by Buyer’s insurer, Norfolk & Dedham Group.

AVON STREET APARTMENTS LIMITED PARTNERSHIP
	BY:	AVON STREET APARTMENTS, INC., Its General Partner
	By:	/s/ Ronald Brown
		Ronald Brown, Its President
BUYER: 503-509 PLEASANT STREET, LLC				BUYER: FRANCIS D. PRIVITERA
	By:	/s/ Philip J. Privitera		By:	/s/  Francis D. Privitera
		Name: Philip J. Privitera			Name: Francis D. Privitera
BROKER: NAI HUNNEMAN
	BY:	/s/ David N. Ross
		Name:	David N. Ross
		Title:	EVP

EX-31.1

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Exhibit 31.1

New England Realty Associates Limited Partnership

CERTIFICATION

I, Ronald Brown, certify that:

        1.     I have reviewed this Annual Report on Form 10-K of New England Realty Associates Limited Partnership;

        2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

        3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

        4.     The registrant's other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

        (a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

        (b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

        (c)   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

        (d)   Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

        5.     The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

        (a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

        (b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ RONALD BROWN
Principal Executive Officer
(President and Director of the
Partnership's General Partner, NewReal, Inc.)

Date: March 27, 2013

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Exhibit 31.1

New England Realty Associates Limited Partnership CERTIFICATION

EX-31.2

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Exhibit 31.2

CERTIFICATIONS

I, Harold Brown, certify that:

        1.     I have reviewed this Annual Report on Form 10-K of New England Realty Associates Limited Partnership;

        2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

        3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

        4.     The registrant's other certifying officer(s) and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

        (a)   Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

        (b)   Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

        (c)   Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

        (d)   Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

        5.     The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

        (a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

        (b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ HAROLD BROWN
Principal Financial Officer
(Treasurer and Director of the
Partnership's General Partner, NewReal, Inc.)

Date: March 27, 2013

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Exhibit 31.2

CERTIFICATIONS

EX-32.1

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Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002

        In connection with the Annual Report on Form 10-K of New England Realty Associates Limited Partnership for the year ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Ronald Brown, as President and Director of the Partnership's General Partner, NewReal, Inc., and Harold Brown, the President and a Director of the Partnership's General Partner, NewReal, Inc., each hereby certifies, pursuant to 18.U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and



(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

/s/ RONALD BROWN
Ronald Brown
Principal Executive Officer
(President and Director of the
Partnership's General Partner, NewReal, Inc.)

Date: March 27, 2013

/s/ HAROLD BROWN
Harold Brown
Principal Financial Officer
(Treasurer and Director of the
Partnership's General Partner, NewReal, Inc.)

Date: March 27, 2013

        This certification accompanies each Report pursuant to §906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Partnership for purposes of §18 of the Security Exchange Act of 1934, as amended.

        A signed original of this written statement required by §906 has been provided to the Partnership and will be retained by the Partnership and furnished to the Securities and Exchange Commission or its staff upon request.

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Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EX-99.1

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Exhibit 99.1

HAMILTON PARK TOWERS LLC
HAMILTON ON MAIN APARTMENTS LLC
Combined Financial Statements—Unconsolidated Significant Joint Ventures
As of December 31, 2012 and 2011
and for the years ended December 31, 2012, 2011 and 2010
Together With Report of Independent
Registered Public Accounting Firm

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Joint Venture Members of
Hamilton Park Towers LLC and Hamilton on Main Apartments LLC

        We have audited the accompanying combined balance sheets of Hamilton Park Towers LLC and Hamilton on Main Apartments LLC (the "Joint Ventures") as of December 31, 2012 and 2011, and the related combined statements of operation, changes in members' capital and cash flows for each of the years in the three-year period ended December 31, 2012. The combined financial statements are the responsibility of the Joint Ventures' management. Our responsibility is to express an opinion on these combined financial statements based on our audits.

        We conducted our audits in accordance with auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the combined financial statements referred to above present fairly, in all material respects, the combined financial position of Hamilton Park Towers LLC and Hamilton on Main Apartments LLC at December 31, 2012 and 2011 and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2012 in conformity with accounting principles generally accepted in the United States of America.

/s/ MILLER WACHMAN LLP
Boston, Massachusetts
March 22, 2013

1

Hamilton Park Towers LLC
Hamilton on Main Apartments LLC

(Unconsolidated Significant Joint Ventures)

Combined Balance Sheets

	December 31,
	2012		2011
ASSETS
Rental Properties	$	128,645,731	$	134,861,736
Cash and Cash Equivalents		1,045,381		927,287
Rents Receivable		46,358		95,315
Real Estate Tax Escrows		494,523		686,534
Prepaid Expenses and Other Assets		1,521,670		1,397,113
Financing and Leasing Fees		414,259		480,437
Total Assets	$	132,167,922	$	138,448,422
LIABILITIES AND MEMBERS' CAPITAL
Mortgage Notes Payable	$	104,222,731	$	105,620,395
Accounts Payable and Accrued Expenses		1,047,835		1,032,827
Advance Rental Payments and Security Deposits		2,192,875		2,057,893
Total Liabilities		107,463,441		108,711,115
Commitments and Contingent Liabilities (Note7)
Members' Capital		24,704,481		29,737,307
Total Liabilities and Members' Capital	$	132,167,922	$	138,448,422

See notes to accompany the combined financial statements.

2

Hamilton Park Towers, LLC
Hamilton on Main Apartments, LLC

(Unconsolidated Significant Joint Ventures)

Combined Statements of Operation

Years Ended December 31, 2012, 2011 and 2010

	Year Ended December 31,
	2012			2011			2010
Revenues
Rental Income	$	14,826,609		$	14,051,371		$	13,475,084
Laundry and Sundry Income		118,994			117,875			117,681
		14,945,603			14,169,246			13,592,765
Expenses
Administrative		265,618			199,666			187,387
Depreciation and Amortization		6,691,372			6,663,981			10,410,164
Management Fees		366,162			351,652			341,417
Operating		1,347,626			1,301,230			1,319,155
Renting		85,679			159,289			296,906
Repairs and Maintenance		1,260,708			1,306,948			1,201,399
Taxes and Insurance		1,822,553			1,626,863			1,769,166
		11,839,718			11,609,629			15,525,593
Income (Loss) Before Other Income		3,105,885			2,559,617			(1,932,829	)
Other Income (Loss)
Interest Income		—			3,219			13
Interest Expense		(5,933,712	)		(5,962,309	)		(5,977,098	)
Other Expenses		—			(4,652	)		(15,552	)
		(5,933,712	)		(5,963,742	)		(5,992,636	)
Net Loss	$	(2,827,827	)	$	(3,404,125	)	$	(7,925,465	)

See notes to accompany the combined financial statements.

3

Hamilton Park Towers LLC and Hamilton on Main Apartments LLC

(Unconsolidated Significant Joint Ventures)

Combined Statements of Changes in Members' Capital

	Hamilton Park Towers LLC			Hamilton on Main Apartments LLC			Total
Balance, January 1, 2010	$	38,518,305		$	7,510,591		$	46,028,896
Distribution to members		(2,075,000	)		(162,000	)		(2,237,000	)
Net Loss		(7,389,086	)		(536,378	)		(7,925,465	)
Balance, December 31, 2010	$	29,054,219		$	6,812,213		$	35,866,432
Distribution to members		(2,425,000	)		(300,000	)		(2,725,000	)
Net Loss		(2,880,880	)		(523,245	)		(3,404,125	)
Balance, December 31, 2011	$	23,748,339		$	5,988,968		$	29,737,307
Distribution to members		(2,005,000	)		(200,000	)		(2,205,000	)
Net Loss		(2,453,350	)		(374,477	)		(2,827,827	)
Balance, December 31, 2012	$	19,289,989		$	5,414,492		$	24,704,481
Allocation to New England Realty Associations Limited Partnership for 2012:
Percentage Ownership		40	%		50	%		Total
Distributions Received	$	802,000		$	100,000		$	902,000
Net Loss	$	(981,340	)	$	(187,239	)	$	(1,168,579	)
Member's Capital	$	7,715,996		$	2,707,246		$	10,423,242

See notes to accompany the combined financial statements.

4

HAMILTON PARK TOWERS LLC
HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

Combined Statements of Cash Flow

	Year Ended December 31,
	2012			2011			2010
Cash Flows from Operating Activites
Net (Loss)	$	(2,827,827	)	$	(3,404,125	)	$	(7,925,465	)
Adjustments to reconcile net income to net cash provided by (used in) operating activites:
Depreciation and amortization		6,691,372			6,663,981			10,410,165
Amortization of above market lease		—			—			301,729
Changes in operating assets and liabilities:
(Increase) Decrease in rents receivable		48,957			40,846			(47,694	)
Increase in accounts payable and accrued expenses		15,008			38,246			4,837
(Increase) Decrease in real estate tax escrow		192,010			(103,931	)		(146,628	)
(Increase) Decrease in prepaid expenses and other assets		(124,556	)		111,073			(170,680	)
Increase in advance rental payments and security deposits		134,982			146,361			107,511
Total adjustments		6,957,773			6,896,576			10,459,240
Net cash provided by operating activites		4,129,946			3,492,451			2,533,775
Cash flows from investing activites
Improvement of rental properties		(409,188	)		(168,424	)		(391,741	)
Net cash (used in) investing activites		(409,188	)		(168,424	)		(391,741	)
Cash flows from financing activites
Payment of financing cost		—			—			(5,000	)
Principal payments of mortgage notes payable		(1,397,664	)		(445,131	)		(250,827	)
Distributions to members		(2,205,000	)		(2,725,000	)		(2,237,000	)
Net cash (used in) financing activities		(3,602,664	)		(3,170,131	)		(2,492,827	)
Net increase (decrease) in cash and cash equivalents		118,094			153,896			(350,793	)
Cash and cash equivalents, at beginning of year		927,287			773,391			1,124,183
Cash and cash equivalents, at end of year	$	1,045,381		$	927,287		$	773,391
Supplementary cash flow statement information:
Cash paid for interest	$	5,882,231		$	5,919,142		$	5,933,103
Cash paid for state taxes	$	4,406		$	6,146		$	4,458

See notes to accompany the combined financial statements.

5

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS

DECEMBER 31, 2012

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

        Principles of Combination:    The combined financial statements include the accounts of Hamilton Park Towers LLC ("Dexter Park" or "Hamilton Park") and Hamilton on Main Apartments LLC ("Hamilton Place Apartments") collectively (the "Joint Ventures"). Hamilton Place Apartments is owned 50% and Hamilton Park is owned 40% by New England Realty Associates, Limited Partnership ("NERA") and are "significant unconsolidated subsidiaries" under Rule 3-09 of Regulation S-X requiring separate financial statements. All significant intercompany accounts and transactions are eliminated in the combined statements between these two entities.

        Line of Business:    The Joint Ventures own and operate various residential apartment buildings located in Greater Boston.

        Basis of Preparation:    The preparation of the financial statements, in conformity with accounting principles generally accepted in the United State of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Accordingly, actual results could differ from those estimates.

        Revenue Recognition:    Rental income from residential properties is recognized over the term of the related lease. For residential tenants, amounts 60 days in arrears are charged against income. Concessions made on residential leases are accounted for on the straight-line basis.

        Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the differences between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management's estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed-rate renewal options for below-market leases. The capitalized above-market lease values for acquired properties are amortized as a reduction of base rental revenue over the remaining term of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.

        Rental Properties:    Rental properties are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred; improvements and additions, which improve or extend the life of assets, are capitalized. When assets are retired or otherwise disposed of, the cost of the asset and related accumulated depreciation is eliminated from the accounts, and any gain or loss on such disposition is included in income. Fully depreciated assets are removed from the accounts. Rental properties are depreciated by both straight-line and accelerated methods over their estimated useful lives. Significant acquisitions with long term leases are evaluated to determine if a portion of the purchase price is allocable to intangibles such as non market rate rents.

        Upon acquisition of rental property, the Joint Ventures estimate the fair value of acquired tangible assets, consisting of land, building and improvements, and identified intangible assets and liabilities assumed, generally consisting of the fair value of (i) above and below market leases, (ii) in-place leases and (iii) tenant relationships. The Joint Ventures allocated the purchase price to the assets acquired

6

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

and liabilities assumed based on their fair values. The Joint Ventures record goodwill or a gain on bargain purchase (if any) if the net assets acquired/liabilities assumed exceed the purchase consideration of a transaction. In estimating the fair value of the tangible and intangible assets acquired, the Joint Ventures consider information obtained about each property as a result of its due diligence and marketing and leasing activities, and utilizes various valuation methods, such as estimated cash flow projections utilizing appropriate discount and capitalization rates, estimates of replacement costs net of depreciation, and available market information. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant.

        Other intangible assets acquired include amounts for in-place lease values and tenant relationship values, which are based on management's evaluation of the specific characteristics of each tenant's lease and the Joint Ventures' overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases. In estimating carrying costs, management includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant relationships include the nature and extent of the Joint Ventures' existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant's credit quality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles are amortized to expense over the anticipated life of the relationships.

        In the event that facts and circumstances indicate that the carrying value of a rental property may be impaired, an analysis of the value is prepared. The estimated future undiscounted cash flows are compared to the asset's carrying value to determine if a write-down to fair value is required.

        Financing and Leasing Fees:    Financing fees are capitalized and amortized, using the interest method, over the life of the related mortgages. Leasing fees are capitalized and amortized on a straight-line basis over the life of the related lease. Unamortized balances are expensed when the corresponding fee is no longer applicable.

        Income Taxes:    The financial statements have been prepared on the basis that the joint ventures are entitled to tax treatment as partnerships. Accordingly, no provision for income taxes has been recorded. (See note 11)

        Cash Equivalents:    The Joint Ventures considers cash equivalents to be all highly liquid instruments purchased with a maturity of three months or less.

        Comprehensive Income:    Comprehensive income is defined as changes in members' equity, exclusive of transactions with owners (such as capital contributions and dividends). The Joint Ventures did not have any comprehensive income items in 2012, 2011, or 2010 other than net income as reported.

7

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)

        Concentration of Credit Risks and Financial Instruments:    The Joint Venture's properties are located in Greater Boston, and are subject to the general economic risks related thereto. No single tenant accounted for more than 5% of the revenues in 2012, 2011 or 2010. The Joint Ventures make their temporary cash investments with high-credit-quality financial institutions. At December 31, 2012 and 2011, respectively approximately $1,571,000 and $1,430,000 of cash and cash equivalents, and security deposits included in prepaid expenses and other assets exceeded federally insured amounts.

        Advertising Expense:    Advertising is expensed as incurred. Advertising expense was $18,000 in 2012, $32,000 in 2011 and $59,000 in 2010.

        Interest Capitalized:    The Joint Ventures follow the policy of capitalizing interest as a component of the cost of rental property when the time of construction exceeds one year. During the years ended December 31, 2012, 2011 and 2010 there was no capitalized interest.

        Reclassifications:    Certain reclassifications have been made to prior period amounts in order to conform to current period presentation.

NOTE 2. RENTAL PROPERTIES

        Rental Properties Consist of the Following:

	Year Ended December 31,
	2012			2011			Useful Life
Land, Improvements and Parking Lots	$	35,259,499		$	35,246,904		15–40 years
Buildings and Improvements		95,841,481			95,814,901		15–40 years
Kitchen Cabinets		198,445			259,617		5–10 years
Carpets		1,738,602			1,665,573		5–10 years
Air Conditioning		57,428			34,231		5–10 years
Laundry Equipment		157,278			—		5–10 years
Elevators		1,705,708			1,705,708		20 years
Equipment		7,268,284			7,237,647		5–7 years
Furniture and Fixtures		11,715,931			11,697,856		5–7 years
Smoke Alarms		943			943		5–7 years
		153,943,600			153,663,381
Less Accumulated Depreciation		(25,297,869	)		(18,801,644	)
	$	128,645,731		$	134,861,736

8

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 2. RENTAL PROPERTIES (Continued)

	Hamilton Park Towers LLC		Hamilton on Main Apts LLC			Total
Rental Properties at Cost:
Balance, January 1, 2010	$	124,628,719	$	31,679,194		$	156,307,913
Purchase of and addition to Property		363,261		28,480			391,741
Fully Depreciated Properties		—		(3,002,233	)		(3,002,233	)
Balance, December 31, 2010		124,991,980		28,705,441			153,697,421
Purchase of and addition to Property		92,950		75,474			168,424
Fully Depreciated Properties		—		(202,464	)		(202,464	)
Balance, December 31, 2011		125,084,930		28,578,451			153,663,381
Purchase of and addition to Property		249,581		159,607			409,188
Fully Depreciated Properties		—		(128,969	)		(128,969	)
Balance, December 31, 2012	$	125,334,511	$	28,609,089		$	153,943,600
Accumulated Depreciation:
Balance, January 1, 2010	$	926,330	$	7,909,870		$	8,836,200
Depreciation for year		5,597,403		975,019			6,572,422
Fully Deprciation written off		—		(3,002,233	)		(3,002,233	)
Balance, December 31, 2010		6,523,733		5,882,656			12,406,389
Depreciation for year		5,639,257		958,463			6,597,720
Fully Deprciation written off		—		(202,464	)		(202,464	)
Balance, December 31, 2011		12,162,990		6,638,655			18,801,644
Depreciation for year		5,674,604		950,590			6,625,194
Fully Deprciation written off		—		(128,969	)		(128,969	)
Balance, December 31, 2012	$	17,837,594	$	7,460,276		$	25,297,870
Book Value	$	107,496,917	$	21,148,814		$	128,645,731

NOTE 3. RELATED PARTY TRANSACTIONS

        The Joint Ventures' properties are managed by an entity that is owned by the majority shareholder of the General Partner. The management fee is equal to 4% at Hamilton Place Apartments and 2% at Hamilton Park Towers of gross receipts of rental revenue and laundry income. Total fees paid were approximately $366,000, $352,000 and $341,000 in 2012, 2011 and 2010, respectively.

        In 2012, the Management Company also received approximately $3,000 for construction supervision and architectural fees, $10,000 for maintenance services and $66,000 for administrative services.

        In 2011, the Management Company also received approximately $1,000 for construction supervision and architectural fees, $24,000 for maintenance service and $31,000 for administrative services.

9

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 3. RELATED PARTY TRANSACTIONS (Continued)

        In 2010, the Management Company also received approximately $4,000 for construction supervision and architectural fees, $28,000 for maintenance services and $17,000 for administrative services.

NOTE 4. OTHER ASSETS

        Financing and leasing fees of approximately $414,000 and $480,000 are net of accumulated amortization of approximately $243,000 and $176,000 at December 31, 2012 and 2011, respectively.

NOTE 5. MORTGAGE NOTES PAYABLE

        At December 31, 2012 and 2011, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At December 31, 2012, the interest rates on these loans ranged from 5.18% to 5.57%, payable in monthly installments aggregating approximately $607,000, including interest, to various dates through 2019. The majority of the mortgages are subject to prepayment penalties. At December 31, 2012, the weighted average interest rate on the above mortgages was 5.51%.

        The Joint Ventures have pledged tenant leases as additional collateral for certain of these loans.

        Approximate annual maturities at December 31, 2012 are as follows:

	Hamilton Park Towers LLC		Hamilton on Main Apartments LLC		Total
2013 Current Maturities	$	1,275,835	$	293,222	$	1,569,057
2014		1,348,741		309,178		1,657,919
2015		1,425,814		15,008,646		16,434,460
2016		1,507,291				1,507,291
2017		1,593,424				1,593,424
Thereafter		81,460,581				81,460,581
	$	88,611,686	$	15,611,045	$	104,222,731

NOTE 6. ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

        The Joint Ventures' residential lease agreements may require tenants to maintain a one-month advance rental payment and/or a security deposit. At December 31, 2012, security deposits of approximately $930,000 are included with other assets and it is restricted cash.

NOTE 7. COMMITMENTS AND CONTINGENCIES

        From time to time, the Joint Ventures may be involved in various ordinary routine litigation incidentals to their business. The Joint Ventures either have insurance coverage or provide for any uninsured claims when appropriate. The Joint Ventures are not involved in any material pending legal proceedings.

10

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 8. RENTAL INCOME

        Substantially all rental income was related to residential apartments and condominium units with leases of one year of less.

        Rents receivable are approximately $46,000, $92,000 and $136,000 net of allowances for doubtful accounts at December 31, 2012, 2011 and 2010, respectively.

NOTE 9. CASH FLOW INFORMATION

        During the years ended December 31, 2012, 2011 and 2010, cash paid for interest was approximately $5,882,000, $5,919,000 and $5,933,000 respectively.

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS

Fair Value Measurements on a Recurring Basis

        At December 31, 2012 and 2011, we do not have any significant financial assets or financial liabilities that are measured at fair value on a recurring basis in our consolidated financial statements.

Financial Assets and Liabilities not Measured at Fair Value

        At December 31, 2012 and 2011 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, and note payable, accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments or, the recent acquisition of these items.

        At December 31, 2012 and 2011, we estimated the fair value of our mortgages payable and other notes based upon quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available. We estimated the fair value of our secured mortgage debt that does not have current quoted market prices available by discounting the future cash flows using rates currently available to us for debt with similar terms and maturities (Level 3). The differences in the fair value of our debt from the carrying value are the result of differences in interest rates and/or borrowing spreads that were available to us at December 31, 2012 and 2011, as compared with those in effect when the debt was issued or acquired. The secured mortgage debt contain pre-payment penalties or yield maintenance provisions that could make the cost of refinancing the debt at lower rates exceed the benefit that would be derived from doing so.

        The following table reflects the carrying amounts and estimated fair value of our debt.

	Carrying Amount		Estimated Fair Value
Mortgage Notes Payable
At December 31, 2012	$	104,222,731	$	120,117,433
At December 31, 2011	$	105,620,395	$	121,777,340

        Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2012 and 2011. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued

11

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 10. FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

for purposes of these financial statements since December 31, 2012 and current estimates of fair value may differ significantly from the amounts presented herein.

NOTE 11. TAXABLE INCOME AND TAX BASIS

        The Joint Ventures are not subject to income taxes as they file partnership tax returns whereby their income or loss is reportable by the members.

        Taxable income or loss is different than financial statement income because of intangible assets, accelerated depreciation, different tax lives, and timing differences related to prepaid rents and allowances. The Partnerships share of the taxable loss is approximately $180,000 less than statement loss for the year ended December 31, 2012. The cumulative tax basis of the Joint Ventures real estate allocated to the Partnership at December 31, 2012 is approximately $1,600,000 less than the statement basis primarily due to the purchase price allocation to intangible assets at Hamilton Park Towers and accelerated depreciation.

        The Joint Ventures adopted the amended provisions related to uncertain tax provisions of ASC 740, Income Taxes. As a result of the implementation of the guidance, the Joint Ventures recognized no material adjustments regarding its tax accounting treatment. The Joint Ventures expects to recognize interest and penalties related to uncertain tax positions, if any, as income tax expense, which would be included in general and administrative expense.

        In the normal course of business the Partnership or one of its subsidiaries is subject to examination by federal, state and local jurisdictions in which it operates, where applicable. As of December 31, 2012, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2004 forward.

NOTE 12. INTANGIBLE ASSETS

        The Joint Ventures estimate the fair value of intangible assets acquired at significant acquisitions as described in Note 1 including above market leases, in place leases and tenant relationships as though the acquisition is acquired "as if vacant". Hamilton Park Towers, a 409 unit residential complex, was acquired on October 28, 2009. Substantially all of the property's leases are for one year and there is substantial "turnover" of the existing tenants each year. The analysis of the above mentioned factors resulted in approximately $4,900,000 of the $129,500,000 purchase price allocated to intangible assets amortizable over a twelve month period as follows:

	Fair Value at Acquisition		Monthly Amortization
In-place leases	$	4,100,000	$	340,000
Tenant relationships		450,000		37,500
		4,550,000		377,500
Over-market leases		350,000		30,000
	$	4,900,000	$	407,500

12

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 12. INTANGIBLE ASSETS (Continued)

        Approximate in-place leases and tenant relationships are amortized in operating expenses and amortization of over-market leases are a reduction of rental income as follows:

	At Acquisition October 28, 2009		2009 Amortization		2010 Amortization		2011 Amortization		2012 Amortization		Book Value December 31, 2012
In-place leases and tenant relationships	$	4,550,000	$	755,000	$	3,795,000	$	—	$	—	$	—
Over-market leases		350,000		60,000		290,000		—		—		—
	$	4,900,000	$	815,000	$	4,085,000	$	—	$	—	$	—

        These deferred charges were fully amortized in 2010.

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES

Combining Balance Sheet

December 31, 2012

	Hamilton Park Towers LLC		Hamilton on Main Apartments LLC		Total
ASSETS
Rental Properties	$	107,496,918	$	21,148,813	$	128,645,731
Cash & Cash Equivalents		941,391		103,990		1,045,381
Rent Receivable		35,250		11,108		46,358
Real Estate Tax Escrow		424,159		70,364		494,523
Prepaid Expenses & Other Assets		1,367,274		154,396		1,521,670
Financing & Leasing Fees		399,678		14,581		414,259
Total Assets	$	110,664,670	$	21,503,252	$	132,167,922
LIABILITIES AND MEMBERS' CAPITAL
Mortgage Notes Payable	$	88,611,686	$	15,611,045	$	104,222,731
Accounts Payable & Accrued Expenses		843,422		204,413		1,047,835
Advance Rental Payments & Security Deposits		1,919,573		273,302		2,192,875
Total Liabilities		91,374,681		16,088,760		107,463,441
Members' Capital		19,289,989		5,414,492		24,704,481
Total Liabilities and Members' Capital	$	110,664,670	$	21,503,252	$	132,167,922
Member's Capital—NERA 50%		—		2,707,246		2,707,246
Member's Capital—NERA 40%		7,715,996		—		7,715,996
	$	7,715,996	$	2,707,246	$	10,423,242

13

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Statement of Operation

Year Ended December 31, 2012

	Hamilton Park Towers LLC			Hamilton on Main Apartments LLC			Total
Revenues
Rental Income	$	12,202,615		$	2,623,994		$	14,826,609
Laundry and Sundry Income		98,042			20,952			118,994
		12,300,657			2,644,946			14,945,603
Expenses
Administrative		219,218			46,400			265,618
Depreciation and Amortization		5,733,920			957,452			6,691,372
Management Fees		261,355			104,807			366,162
Operating		1,006,572			341,054			1,347,626
Renting		74,705			10,974			85,679
Repairs and Maintenance		880,103			380,605			1,260,708
Taxes and Insurance		1,485,297			337,256			1,822,553
		9,661,171			2,178,549			11,839,718
Income Before Other Income		2,639,488			466,397			3,105,885
Other Income (Loss)
Interest Expense		(5,092,838	)		(840,874	)		(5,933,712	)
		(5,092,838	)		(840,874	)		(5,933,712	)
Net (Loss)	$	(2,453,350	)	$	(374,477	)	$	(2,827,827	)
NERA 50%		—			(187,239	)		(187,239	)
NERA 40%		(981,340	)		—			(981,340	)
	$	(981,340	)	$	(187,239	)	$	(1,168,578	)

14

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Statement of Cash Flow

Year Ended December 31, 2012

	Hamilton Park Towers LLC			Hamilton on Main Apartments LLC			Total
Cash Flows from Operating Activites
Net (Loss)	$	(2,453,350	)	$	(374,477	)	$	(2,827,827	)
Adjustments to reconcile net income to net cash provided by (used in) operating activites:
Depreciation and amortization		5,733,920			957,452			6,691,372
Changes in operating assets and liabilities:
(Increase) Decrease in rent receivable		51,472			(2,515	)		48,957
Increase (Decrease) in accounts payable and accrued exp		22,819			(7,811	)		15,008
Decrease in real estate tax escrow		157,869			34,141			192,010
(Increase) Decrease in prepaid expsenses and other assets		(151,059	)		26,503			(124,556	)
Increase in advance rental payments and security deposit		119,460			15,522			134,982
Total adjustments		5,934,481			1,023,292			6,957,773
Net cash provided by operating activites		3,481,131			648,815			4,129,946
Cash flows from investing activites
Improvement of rental properties		(249,581	)		(159,607	)		(409,188	)
Net cash used in investing activites		(249,581	)		(159,607	)		(409,188	)
Cash flows from financing activites
Principal payments of mortgage & notes payable		(1,121,506	)		(276,158	)		(1,397,664	)
Distributions to members		(2,005,000	)		(200,000	)		(2,205,000	)
Net cash used in financing activities		(3,126,506	)		(476,158	)		(3,602,664	)
Net increase in cash and cash equivalents		105,044			13,050			118,094
Cash and cash equivalents, at beginning of year		836,347			90,940			927,287
Cash and cash equivalents, at end of year	$	941,391		$	103,990		$	1,045,381
Supplementary cash flow statement information:
Cash paid for interest	$	5,052,227		$	830,004		$	5,882,231
Cash paid for state taxes	$	1,694		$	2,712		$	4,406

15

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Balance Sheet

December 31, 2011

	Hamilton Park Towers LLC		Hamilton on Main Apartments LLC		Total
ASSETS
Rental Properties	$	112,921,940	$	21,939,796	$	134,861,736
Cash & Cash Equivalents		836,347		90,940		927,287
Rent Receivable		86,722		8,593		95,315
Real Estate Tax Escrow		582,028		104,505		686,534
Prepaid Expenses & Other Assets		1,216,214		180,899		1,397,113
Financing & Leasing Fees		458,995		21,442		480,437
Total Assets	$	116,102,247	$	22,346,175	$	138,448,422
LIABILITIES AND MEMBERS' CAPITAL
Mortgage Notes Payable	$	89,733,192	$	15,887,203	$	105,620,395
Accounts Payable & Accrued Expense		820,603		212,224		1,032,827
Advance Rental Payments & Security Deposits		1,800,113		257,780		2,057,893
Total Liabilities		92,353,908		16,357,207		108,711,115
Members' Capital		23,748,339		5,988,968		29,737,307
Total Liabilities and Members' Capital	$	116,102,247	$	22,346,175	$	138,448,422
Member's Capital—NERA 50%		—		2,994,484		2,994,484
Member's Capital—NERA 40%		9,499,335		—		9,499,335
	$	9,499,335	$	2,994,484	$	12,493,820

16

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Statement of Operation

Year Ended December 31, 2011

	Hamilton Park Towers LLC			Hamilton on Main Apartments LLC			Total
Revenues
Rental Income	$	11,559,414		$	2,491,957		$	14,051,371
Laundry and Sundry Income		97,275			20,599			117,875
		11,656,690			2,512,556			14,169,246
Expenses
Administrative		163,511			36,155			199,666
Depreciation and Amortization		5,698,657			965,324			6,663,981
Management Fees		251,071			100,581			351,652
Operating		929,543			371,687			1,301,230
Renting		144,149			15,140			159,289
Repairs and Maintenance		935,839			371,109			1,306,948
Taxes and Insurance		1,300,995			325,868			1,626,863
		9,423,765			2,185,864			11,609,629
Income Before Other Income		2,232,924			326,693			2,559,617
Other Income (Loss)
Interest Income		3,219			—			3,219
Interest Expense		(5,113,523	)		(848,786	)		(5,962,309	)
Other (Expenses)		(3,500	)		(1,152	)		(4,652	)
		(5,113,804	)		(849,938	)		(5,963,742	)
Net (Loss)	$	(2,880,880	)	$	(523,245	)	$	(3,404,125	)
NERA 50%		—			(261,622	)		(261,622	)
NERA 40%		(1,152,352	)		—			(1,152,352	)
	$	(1,152,352	)	$	(261,622	)	$	(1,413,975	)

17

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Statement of Cash Flow

Year Ended December 31, 2011

	Hamilton Park Towers LLC			Hamilton on Main Apartments LLC			Total
Cash Flows from Operating Activites
Net (Loss)	$	(2,880,880	)	$	(523,245	)	$	(3,404,125	)
Adjustments to reconcile net income to net cash provided by (used in) operating activites:
Depreciation and amortization		5,698,657			965,324			6,663,981
Changes in operating assets and liabilities:
Decrease in rent receivable		38,753			2,093			40,846
Increase in accounts payable and accrued expenses		33,019			5,227			38,246
(Increase) in real estate tax escrow		(97,462	)		(6,469	)		(103,931	)
(Increase)Decrease in prepaid expsenses and other assets		(126,318	)		237,391			111,073
Increase in advance rental payments and security deposits		115,270			31,091			146,361
Total adjustments		5,661,919			1,234,657			6,896,576
Net cash provided by operating activites		2,781,039			711,412			3,492,451
Cash flows from investing activites
Improvement of rental properties		(92,950	)		(75,474	)		(168,424	)
Net cash used in investing activites		(92,950	)		(75,474	)		(168,424	)
Cash flows from financing activites
Principal payments of mortgage & notes payable		(180,808	)		(264,323	)		(445,131	)
Distributions to members		(2,425,000	)		(300,000	)		(2,725,000	)
Net cash used in financing activities		(2,605,808	)		(564,323	)		(3,170,131	)
Net increase in cash and cash equivalents		82,281			71,615			153,896
Cash and cash equivalents, at beginning of year		754,066			19,325			773,391
Cash and cash equivalents, at end of year	$	836,347		$	90,940		$	927,287
Supplementary cash flow statement information:
Cash paid for interest	$	5,077,302		$	841,839		$	5,919,142
Cash paid for state income taxes	$	2,751		$	3,395		$	6,146

18

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Balance Sheet

December 31, 2010

	Hamilton Park Towers LLC		Hamilton on Main Apartments LLC		Total
ASSETS
Rental Properties	$	118,468,247	$	22,822,785	$	141,291,032
Cash and Cash Equivalents		754,066		19,325		773,390
Rent Receivable		125,475		10,686		136,162
Real Estate Tax Escrow		484,566		98,036		582,603
Prepaid Expenses and Other Assets		1,089,897		418,289		1,508,187
Financing and Leasing Fees		518,395		28,304		546,699
Total Assets	$	121,440,647	$	23,397,425	$	144,838,072
LIABILITIES AND MEMBERS' CAPITAL
Mortgage Notes Payable	$	89,914,000	$	16,151,526	$	106.065,526
Accounts Payable and Accrued Expense		787,584		206,997		994,582
Advance Rental Payments and Security Deposits		1,684,843		226,689		1,911,533
Total Liabilities		92,386,428		16,585,212		108,971,640
Members' Capital		29,054,219		6,812,213		35,866,432
Total Liabilities and Members' Capital	$	121,440,647	$	23,397,425	$	144,838,072
Member's Capital—NERA 50%		—		3,406,107		3,406,107
Member's Capital—NERA 40%		11,621,688		—		11,621,688
	$	11,621,688	$	3,406,107	$	15,027,794

19

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combine Statement of Operation

Year Ended December 31, 2010

	Hamilton Park Towers LLC			Hamilton on Main Apartments LLC			Total
Revenues
Rental Income	$	11,019,862		$	2,455,222		$	13,475,084
Laundry and Sundry Income		97,902			19,780			117,681
		11,117,763			2,475,001			13,592,765
Expenses
Administrative		148,097			39,289			187,387
Depreciation and Amortization		9,428,284			981,881			10,410,164
Management Fees		244,178			97,239			341,417
Operating		960,328			358,827			1,319,155
Renting		281,545			15,361			296,906
Repairs and Maintenance		859,088			342,310			1,201,399
Taxes and Insurance		1,451,016			318,150			1,769,166
		13,372,537			2,153,057			15,525,593
Income (Loss) Before Other Income		(2,254,773	)		321,944			(1,932,829	)
Other Income (Loss)
Interest Income		5			8			13
Interest Expense		(5,116,598	)		(860,500	)		(5,977,098	)
Other Income (Expenses)		(17,720	)		2,168			(15,552	)
		(5,134,313	)		(858,323	)		(5,992,636	)
Net (Loss)	$	(7,389,086	)	$	(536,379	)	$	(7,925,465	)
NERA 50%		—			(268,189	)		(268,189	)
NERA 40%		(2,955,635	)		—			(2,955,635	)
	$	(2,955,635	)	$	(268,189	)	$	(3,223,824	)

20

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 13. COMBINING FINANCIAL STATEMENT SCHEDULES (Continued)

Combining Statement of Cash Flow

Year Ended December 31, 2010

	Hamilton Park Towers LLC			Hamilton on Main Apartments LLC			Total
Cash Flows from Operating Activities
Net (loss)	$	(7,389,086	)	$	(536,379	)	$	(7,925,465	)
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation and amortization		9,428,284			981,881			10,410,165
Amortization of above market lease		301,729			—			301,729
Changes in operating assets and liabilities:
(Increase) in rents receivable		(42,525	)		(5,169	)		(47,694	)
(Decrease) Increase in accounts payable and accrued exp		33,916			(29,079	)		4,837
(Increase) in real estate tax escrow		(146,176	)		(452	)		(146,628	)
(Increase) in prepaid expenses and other assets		(81,863	)		(88,817	)		(170,680	)
Increase in advance rental payments and security deposits		107,206			305			107,511
Total adjustments		9,600,571			858,669			10,459,240
Net cash provided by operating activities		2,211,485			322,290			2,533,775
Cash flows provided by (used in) investing activities
Improvement of rental properties		(363,261	)		(28,480	)		(391,741	)
Net cash (used in) investing activities		(363,261	)		(28,480	)		(391,741	)
Cash flows provided by (used in) investing activities
Payment of financing cost		(5,000	)		—			(5,000	)
Principal payments of mortgage notes payable		—			(250,827	)		(250,827	)
(Distributions) to members		(2,075,000	)		(162,000	)		(2,237,000	)
Net cash (used in) financing activities		(2,080,000	)		(412,827	)		(2,492,827	)
Net (decrease) in cash and cash equivalents		(231,776	)		(119,017	)		(350,793	)
Cash and cash equivalents, at beginning of year		985,842			138,342			1,124,184
Cash and cash equivalents, at end of year	$	754,066		$	19,325		$	773,391
Supplementary cash flow statement information:
Cash paid for interest	$	5,077,768		$	855,334		$	5,933,103
Cash paid for state income taxes	$	3,350		$	1,108		$	4,458

21

HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC

(Unconsolidated Significant Joint Ventures)

NOTES TO COMBINED FINANCIAL STATEMENTS (Continued)

DECEMBER 31, 2012

NOTE 14. NEW ACCOUNTING PRONOUNCEMENT

        In May 2011, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2011-04, (Fair Value Measurement Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U. S. GAAP and IFRS. ASU 2011-04 clarifies some existing concepts, eliminates wording differences between U.S. GAAP and International Financial Reporting Standards ("IFRS"), and in some limited cases, changes some principals to achieve convergence between U.S. GAAP and IFRS. ASU 2011-04 results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between GAAP and IFRS. ASU 2011-04 also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. ASU 2011-04 was effective for us as of January 1, 2012. The adoption of this pronouncement did not materially impact our Joint Ventures' consolidated financial statements.

        In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income, which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. ASU 2011-05 was effective for us as of January 1, 2012. The adoption of this pronouncement did not materially impact our Joint Ventures' consolidated financial statements.

        In August 2012, the FASB issued ASU 2012-03, Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-950, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update). This update amends a number of SEC sections in the FASB Accounting Standards Codification as a result of (1) the issuance of SAB 114, (2) the issuance of SEC Final Rule 33-9250, and (3) corrections related to ASU 2010-22. ASU 2012-03 was effective upon issuance. The adoption of this pronouncement did not have a material impact on our Joint Ventures' consolidated financial statements.

        In October 2012, the FASB issued ASU 2012-04, Technical Corrections and Improvements. The amendments in this update cover a wide range of topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. ASU 2012-04 will be effective for us as of January 1, 2013. The adoption of this pronouncement did not have a material impact on our Joint Ventures' consolidated financial statements.

22

QuickLinks

Exhibit 99.1

HAMILTON PARK TOWERS LLC HAMILTON ON MAIN APARTMENTS LLC Combined Financial Statements—Unconsolidated Significant Joint Ventures As of December 31, 2012 and 2011 and for the years ended December 31, 2012, 2011 and 2010 Together With Report of Independent Registered Public Accounting Firm
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Hamilton Park Towers LLC Hamilton on Main Apartments LLC (Unconsolidated Significant Joint Ventures) Combined Balance Sheets
Hamilton Park Towers, LLC Hamilton on Main Apartments, LLC (Unconsolidated Significant Joint Ventures) Combined Statements of Operation Years Ended December 31, 2012, 2011 and 2010
Hamilton Park Towers LLC and Hamilton on Main Apartments LLC (Unconsolidated Significant Joint Ventures) Combined Statements of Changes in Members' Capital
HAMILTON PARK TOWERS LLC HAMILTON ON MAIN APARTMENTS LLC (Unconsolidated Significant Joint Ventures) Combined Statements of Cash Flow
HAMILTON PARK TOWERS LLC AND HAMILTON ON MAIN APARTMENTS LLC (Unconsolidated Significant Joint Ventures) NOTES TO COMBINED FINANCIAL STATEMENTS DECEMBER 31, 2012
Combining Balance Sheet December 31, 2012
Combining Statement of Operation Year Ended December 31, 2012
Combining Statement of Cash Flow Year Ended December 31, 2012
Combining Balance Sheet December 31, 2011
Combining Statement of Operation Year Ended December 31, 2011
Combining Statement of Cash Flow Year Ended December 31, 2011

XML

SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $)	1 Months Ended	12 Months Ended			1 Months Ended			12 Months Ended			12 Months Ended
	Jan. 31, 2012	Dec. 31, 2012 item	Dec. 31, 2011	Dec. 31, 2010	Jan. 31, 2012 Class A units	Jan. 03, 2012 Class A units	Aug. 20, 2007 Class A units	Dec. 31, 2012 Minimum	Dec. 31, 2012 Minimum Cash and cash equivalents	Dec. 31, 2012 Maximum	Dec. 31, 2012 Maximum Cash and cash equivalents	Dec. 31, 2012 Investment Properties/Joint Venture item	Dec. 31, 2012 Investment Properties/Joint Venture Minimum	Dec. 31, 2012 Investment Properties/Joint Venture Maximum
Principles of Consolidation
Ownership interest in each subsidiary (as a percent)								99.67%		100.00%
Number of limited liability companies												9
Percentage of ownership in Joint Ventures													40.00%	50.00%
Revenue Recognition
Period for which arrears are charged against income		60 days
Segment Reporting
Number of segments		1
Income Per Depositary Receipt
Forward split of depositary receipts	3
Exchange ratio of depositary receipts for partnership units before adjustment					10
Exchange ratio of depositary receipts for partnership units after adjustment					30
Number of units in each depository receipt						0.03333	0.1
Concentration of Credit Risks and Financial Instruments
Interest rate on interest bearing accounts (as a percent)									0.01%		0.45%
Federally uninsured amounts of cash and cash equivalents, and security deposits included in prepaid expenses and other assets		$ 8,000,000	$ 5,051,000
Advertising Expense
Advertising expense		$ 52,084	$ 88,585	$ 70,074
Interest Capitalized
Criteria of capitalization of interest on property based on specified period of construction								1 year

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 2) (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2012 Hamilton Essex 81 item	Dec. 31, 2011 Hamilton Essex 81 item	Dec. 31, 2010 Hamilton Essex 81 item	Dec. 31, 2012 Hamilton Essex 81 NERA 50%	Dec. 31, 2011 Hamilton Essex 81 NERA 50%	Dec. 31, 2010 Hamilton Essex 81 NERA 50%	Dec. 31, 2012 Hamilton Essex 81 Apartments item	Dec. 31, 2011 Hamilton Essex 81 Apartments item	Dec. 31, 2010 Hamilton Essex 81 Apartments item	Dec. 31, 2012 Hamilton Essex 81 Commercial item	Dec. 31, 2011 Hamilton Essex 81 Commercial item	Dec. 31, 2010 Hamilton Essex 81 Commercial item	Dec. 31, 2012 Hamilton Essex Development item	Dec. 31, 2011 Hamilton Essex Development item	Dec. 31, 2010 Hamilton Essex Development item	Dec. 31, 2012 Hamilton Essex Development NERA 50%	Dec. 31, 2011 Hamilton Essex Development NERA 50%	Dec. 31, 2010 Hamilton Essex Development NERA 50%	Dec. 31, 2012 Hamilton Essex Development Commercial item	Dec. 31, 2011 Hamilton Essex Development Commercial item	Dec. 31, 2010 Hamilton Essex Development Commercial item	Dec. 31, 2012 345 Franklin item	Dec. 31, 2011 345 Franklin item	Dec. 31, 2010 345 Franklin item	Nov. 30, 2001 345 Franklin item	Dec. 31, 2012 345 Franklin NERA 50%	Dec. 31, 2011 345 Franklin NERA 50%	Dec. 31, 2010 345 Franklin NERA 50%	Dec. 31, 2012 345 Franklin Apartments item	Dec. 31, 2011 345 Franklin Apartments item	Dec. 31, 2010 345 Franklin Apartments item	Dec. 31, 2012 Hamilton 1025 item	Dec. 31, 2011 Hamilton 1025 item	Dec. 31, 2010 Hamilton 1025 item	Mar. 02, 2005 Hamilton 1025 item	Dec. 31, 2012 Hamilton 1025 NERA 50%	Dec. 31, 2011 Hamilton 1025 NERA 50%	Dec. 31, 2010 Hamilton 1025 NERA 50%	Dec. 31, 2012 Hamilton 1025 Apartments item	Dec. 31, 2011 Hamilton 1025 Apartments item	Dec. 31, 2010 Hamilton 1025 Apartments item	Dec. 31, 2012 Hamilton 1025 Commercial item	Dec. 31, 2011 Hamilton 1025 Commercial item	Dec. 31, 2010 Hamilton 1025 Commercial item	Feb. 03, 2013 Hamilton Bay Sales item	Dec. 31, 2012 Hamilton Bay Sales item	Dec. 31, 2011 Hamilton Bay Sales item	Dec. 31, 2010 Hamilton Bay Sales item	Apr. 30, 2008 Hamilton Bay Sales item	Oct. 03, 2005 Hamilton Bay Sales item	Dec. 31, 2012 Hamilton Bay Sales NERA 50%	Dec. 31, 2011 Hamilton Bay Sales NERA 50%	Dec. 31, 2010 Hamilton Bay Sales NERA 50%	Dec. 31, 2012 Hamilton Bay Sales Apartments item	Dec. 31, 2011 Hamilton Bay Sales Apartments item	Dec. 31, 2010 Hamilton Bay Sales Apartments item	Dec. 31, 2012 Hamilton Bay item	Dec. 31, 2011 Hamilton Bay item	Dec. 31, 2010 Hamilton Bay item	Oct. 03, 2005 Hamilton Bay item	Dec. 31, 2012 Hamilton Bay NERA 50%	Dec. 31, 2011 Hamilton Bay NERA 50%	Dec. 31, 2010 Hamilton Bay NERA 50%	Dec. 31, 2012 Hamilton Bay Apartments item	Dec. 31, 2011 Hamilton Bay Apartments item	Dec. 31, 2010 Hamilton Bay Apartments item	Dec. 31, 2012 Hamilton Minuteman item	Dec. 31, 2011 Hamilton Minuteman item	Dec. 31, 2010 Hamilton Minuteman item	Sep. 30, 2004 Hamilton Minuteman item	Dec. 31, 2012 Hamilton Minuteman NERA 50%	Dec. 31, 2011 Hamilton Minuteman NERA 50%	Dec. 31, 2010 Hamilton Minuteman NERA 50%	Dec. 31, 2012 Hamilton Minuteman Apartments item	Dec. 31, 2011 Hamilton Minuteman Apartments item	Dec. 31, 2010 Hamilton Minuteman Apartments item	Dec. 31, 2012 Hamilton on Main item	Dec. 31, 2011 Hamilton on Main item	Dec. 31, 2010 Hamilton on Main item	May 31, 2008 Hamilton on Main item	Aug. 31, 2004 Hamilton on Main item	Dec. 31, 2012 Hamilton on Main NERA 50%	Dec. 31, 2011 Hamilton on Main NERA 50%	Dec. 31, 2010 Hamilton on Main NERA 50%	Dec. 31, 2012 Hamilton on Main Apartments item	Dec. 31, 2011 Hamilton on Main Apartments item	Dec. 31, 2010 Hamilton on Main Apartments item	Dec. 31, 2012 Dexter Park item	Dec. 31, 2011 Dexter Park item	Dec. 31, 2010 Dexter Park item	Oct. 28, 2009 Dexter Park item	Dec. 31, 2012 Dexter Park NERA 40%	Dec. 31, 2011 Dexter Park NERA 40%	Dec. 31, 2010 Dexter Park NERA 40%	Dec. 31, 2012 Dexter Park Apartments item	Dec. 31, 2011 Dexter Park Apartments item	Dec. 31, 2010 Dexter Park Apartments item	Dec. 31, 2012 Total item	Dec. 31, 2011 Total item	Dec. 31, 2010 Total item	Dec. 31, 2012 Total NERA 50%	Dec. 31, 2011 Total NERA 50%	Dec. 31, 2010 Total NERA 50%	Dec. 31, 2012 Total NERA 40%	Dec. 31, 2011 Total NERA 40%	Dec. 31, 2010 Total NERA 40%	Dec. 31, 2012 Total Apartments item	Dec. 31, 2011 Total Apartments item	Dec. 31, 2010 Total Apartments item	Dec. 31, 2012 Total Commercial item	Dec. 31, 2011 Total Commercial item	Dec. 31, 2010 Total Commercial item
ASSETS
Rental Properties	$ 95,435,850	$ 98,924,534			$ 9,103,858	$ 9,454,959	$ 9,827,917										$ 2,610,574	$ 2,613,064	$ 2,595,266							$ 7,885,745	$ 8,229,651	$ 8,648,591								$ 5,621,970	$ 5,863,176	$ 6,078,526												$ 1,844,219	$ 1,916,445	$ 2,006,989									$ 6,975,854	$ 7,257,981	$ 7,569,060								$ 7,020,471	$ 7,256,528	$ 7,582,687								$ 21,148,813	$ 21,939,796	$ 22,822,785									$ 107,496,918	$ 112,921,940	$ 118,468,247								$ 169,708,422	$ 177,453,541	$ 185,600,068
Cash & Cash Equivalents	6,981,906	4,050,157	3,245,361	2,879,663	27,848	47,526	2,833										20,214	1,529	29,596							3,533	17,027	25,617								2,706	1,848	736												20,695	19,416	48,053									62,473	5,026	57,956								44,170	31,125	51,637								103,990	90,940	19,325									941,391	836,347	754,066								1,227,018	1,050,783	989,818
Rent Receivable	475,083	434,252			44,005	73,459	24,062																			600		8,887								7,283	15,682	10,088												2,200		2,224									2,686	2,512	2,295								2,626	7,457	683								11,108	8,593	10,686									35,250	86,722	125,475								105,758	194,425	184,400
Real Estate Tax Escrow	449,652	401,325			49,793	98,610	85,348																			20,242	18,360	18,649								74,443	64,464	58,089																							41,225	89,760	82,370								43,612	43,864	34,331								70,364	104,505	98,036									424,159	582,028	484,566								723,838	1,001,592	861,390
Prepaid Expenses & Other Assets	3,073,890	3,866,652			61,895	59,508	49,518										505	493	480							75,222	54,276	50,720								33,659	88,524	76,810												127,530	167,811	209,610									14,345	95,190	94,181								48,715	54,023	43,655								154,396	180,899	418,289									1,367,274	1,216,214	1,089,897								1,883,541	1,916,937	2,033,161
Financing & Leasing Fees	1,135,936	919,187			64,116	71,108	96,105										4,325	6,987	4,175							8,164	16,330	24,496								19,645	24,672	29,698												5,505	6,570	11,634									26,243	32,605	38,966								15,950	19,918	23,887								14,581	21,442	28,304									399,678	458,995	518,395								558,206	658,626	775,660
Total Assets	121,538,490	125,376,764			9,351,515	9,805,169	10,085,783										2,635,617	2,622,073	2,629,517							7,993,505	8,335,644	8,776,960								5,759,706	6,058,364	6,253,948												2,000,148	2,110,241	2,278,510									7,122,825	7,483,074	7,844,829								7,175,545	7,412,916	7,736,879								21,503,252	22,346,175	23,397,425									110,664,670	116,102,247	121,440,647								174,206,783	182,275,903	190,444,498
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	138,055,522	139,161,612			8,352,317	8,462,041	8,566,871										2,093,184	2,144,796	2,162,000							6,850,179	7,019,119	7,176,827								4,934,741	4,995,487	5,000,000												4,702,087	4,750,000	4,750,000									1,668,000	1,668,000	1,668,000								5,433,472	5,500,000	5,500,000								15,611,045	15,887,203	16,151,526									88,611,686	89,733,192	89,914,000								138,256,711	140,159,839	140,889,224
Accounts Payable & Accrued Expense	2,361,942	2,253,696			34,673	32,238	33,190										6,319	6,309	6,239							93,810	15,323	36,027								49,566	48,236	43,541												7,481	12,682	6,346									49,690	28,690	5,693								58,378	58,596	65,588								204,413	212,224	206,997									843,422	820,603	787,584								1,347,752	1,234,900	1,191,205
Advance Rental Pmts & Security Deposits	3,636,704	3,603,708			175,871	152,940	132,044																			140,759	114,179	129,188								80,264	69,970	63,965												25,147	20,027	20,044									86,028	85,575	80,772								71,025	69,592	61,762								273,302	257,780	226,689									1,919,573	1,800,113	1,684,843								2,771,968	2,570,176	2,399,308
Total Liabilities	144,054,168	146,687,616			8,562,861	8,647,219	8,732,105										2,099,503	2,151,105	2,168,239							7,084,748	7,148,621	7,342,042								5,064,570	5,113,694	5,107,506												1,700,628	1,700,709	1,694,390									4,837,806	4,864,265	4,836,465								5,562,875	5,628,188	5,627,350								16,088,760	16,357,207	16,585,212									91,374,681	92,353,908	92,386,428								142,376,432	143,964,915	144,479,737
Partners' Capital	(22,515,677)	(21,310,851)	(26,920,566)	(21,332,823)	788,654	1,157,950	1,353,679										536,114	470,968	461,278							908,757	1,187,023	1,434,918								695,135	944,670	1,146,442												299,520	409,532	584,119									2,285,019	2,618,809	3,008,364								1,612,669	1,784,728	2,109,529								5,414,492	5,988,968	6,812,213									19,289,989	23,748,339	29,054,219								31,830,352	38,310,988	45,964,761
Total Liabilities and Partners' Capital	121,538,490	125,376,764			9,351,515	9,805,169	10,085,783										2,635,617	2,622,073	2,629,517							7,993,505	8,335,644	8,776,960								5,759,706	6,058,364	6,253,948												2,000,148	2,110,241	2,278,510									7,122,825	7,483,074	7,844,829								7,175,545	7,412,916	7,736,879								21,503,252	22,346,175	23,397,425									110,664,670	116,102,247	121,440,647								174,206,783	182,275,903	190,444,498
Share of partners capital in investments								$ 394,327	$ 578,975	$ 676,839										$ 268,057	$ 235,484	$ 230,639								$ 454,379	$ 593,512	$ 717,459								$ 347,568	$ 472,335	$ 573,221													$ 149,760	$ 204,766	$ 292,060								$ 1,142,510	$ 1,309,404	$ 1,504,182								$ 806,335	$ 892,364	$ 1,054,765									$ 2,707,246	$ 2,994,484	$ 3,406,107								$ 7,715,996	$ 9,499,335	$ 11,621,688				$ 13,986,177	$ 16,780,660	$ 20,076,959	$ 6,270,181	$ 7,281,325	$ 8,455,271	$ 7,715,996	$ 9,499,335	$ 11,621,688
Percentage of ownership interest								50.00%	50.00%	50.00%										50.00%	50.00%	50.00%							50.00%	50.00%	50.00%	50.00%							50.00%	50.00%	50.00%	50.00%												50.00%	50.00%	50.00%	50.00%								50.00%	50.00%	50.00%							50.00%	50.00%	50.00%	50.00%								50.00%	50.00%	50.00%	50.00%							40.00%	40.00%	40.00%	40.00%							50.00%	50.00%	50.00%	40.00%	40.00%	40.00%
Total units/ condominiums
Total					49	49	49				48	48	48	1	1	1	1	1	1				1	1	1	40	40	40	40				40	40	40	176	176	176	176				175	175	175	1	1	1		48	48	48	20	168				48	48	48	120	120	120					120	120	120	42	42	42	42				42	42	42	148	148	148		280				148	148	148	409	409	409	409				409	409	409	1,033	1,033	1,033							1,030	1,030	1,030	3	3	3
Units to be retained					49	49	49										1	1	1							40	40	40								49	49	49	49											48	48	48												48							42	42	42								148	148	148									409	409	409								786	786	786
Units to be sold																																				127	127	127												120	120	120																																																		247	247	247
Units sold																																				127	127	127	127										105												105	105	105																					137																		232	232	232
Unsold units																																																		15	15	15																																																		15	15	15
Unsold units with deposits for future sale																																																				0

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TREASURY UNITS (Details) (USD $)	0 Months Ended		12 Months Ended		64 Months Ended				3 Months Ended	0 Months Ended	12 Months Ended		64 Months Ended			0 Months Ended	12 Months Ended		64 Months Ended	3 Months Ended			0 Months Ended	12 Months Ended		64 Months Ended	3 Months Ended
	Aug. 08, 2008	Aug. 20, 2007	Dec. 31, 2012	Dec. 31, 2010	Dec. 31, 2012	Mar. 06, 2008	Jan. 30, 2008	Jan. 15, 2008	Mar. 31, 2013 Subsequent event	Sep. 17, 2008 Class A Treasury Units	Dec. 31, 2012 Class A Treasury Units	Dec. 31, 2010 Class A Treasury Units	Dec. 31, 2012 Class A Treasury Units	Jan. 03, 2012 Class A Treasury Units	Aug. 20, 2007 Class A Treasury Units	Sep. 17, 2008 Class B Treasury Units	Dec. 31, 2012 Class B Treasury Units	Dec. 31, 2010 Class B Treasury Units	Dec. 31, 2012 Class B Treasury Units	Mar. 31, 2013 Class B Treasury Units Subsequent event	Dec. 31, 2012 Class B Treasury Units Harold Brown, the treasurer of the General Partner	Dec. 31, 2012 Class B Treasury Units Ronald Brown, the president of the General Partner	Sep. 17, 2008 General Partnership	Dec. 31, 2012 General Partnership	Dec. 31, 2010 General Partnership	Dec. 31, 2012 General Partnership	Mar. 31, 2013 General Partnership Subsequent event	Dec. 31, 2012 General Partnership Harold Brown, the treasurer of the General Partner	Dec. 31, 2012 General Partnership Ronald Brown, the president of the General Partner
Treasury units (in shares)			49,781		49,781						39,825		39,825				9,458		9,458					498		498
Period for repurchase of depository receipts	12 months	12 months
Depository receipts authorized to be repurchased (in shares)		300,000				1,500,000	900,000	600,000
Number of units in each depository receipt														0.03333	0.1
Fixed distribution percentage of unit holders											80.00%						19.00%							1.00%
Repurchase of depository receipts (in shares)			24,967	20,688	1,219,927				9,709									164	1,921					10	9	101
Repurchase price of depository receipts (in dollars per share)					$ 24.62				$ 32.24
Repurchase price of units (in dollars per share)									$ 967.20				$ 738.60						$ 613.94	$ 967.20						$ 613.94	$ 967.20
Repurchase of units (in shares)			(1,040)	(862)												6,309	198			76.86			333				4.05
Repurchase of units			$ 906,214	$ 540,911	$ 31,386,000				$ 321,240		$ 726,058	$ 432,920					$ 171,148	$ 102,591		$ 74,335				$ 9,008	$ 5,400		$ 3,912
Issuance of treasury units (in shares)										6,642
Percentage of units owned by partners																					75.00%	25.00%						75.00%	25.00%
Repurchase of depository receipts			$ 726,058

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 3) (USD $)	3 Months Ended								12 Months Ended																			12 Months Ended							12 Months Ended							12 Months Ended													12 Months Ended							12 Months Ended							12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2012 Hamilton Essex 81	Dec. 31, 2011 Hamilton Essex 81	Dec. 31, 2010 Hamilton Essex 81	Dec. 31, 2012 Hamilton Essex 81 NERA 50%	Dec. 31, 2011 Hamilton Essex 81 NERA 50%	Dec. 31, 2010 Hamilton Essex 81 NERA 50%	Dec. 31, 2012 Hamilton Essex Development	Dec. 31, 2011 Hamilton Essex Development	Dec. 31, 2010 Hamilton Essex Development	Dec. 31, 2012 Hamilton Essex Development NERA 50%	Dec. 31, 2011 Hamilton Essex Development NERA 50%	Dec. 31, 2010 Hamilton Essex Development NERA 50%	Dec. 31, 2012 345 Franklin	Dec. 31, 2011 345 Franklin	Dec. 31, 2010 345 Franklin	Nov. 30, 2001 345 Franklin	Dec. 31, 2012 345 Franklin NERA 50%	Dec. 31, 2011 345 Franklin NERA 50%	Dec. 31, 2010 345 Franklin NERA 50%	Dec. 31, 2012 Hamilton 1025	Dec. 31, 2011 Hamilton 1025	Dec. 31, 2010 Hamilton 1025	Mar. 02, 2005 Hamilton 1025	Dec. 31, 2012 Hamilton 1025 NERA 50%	Dec. 31, 2011 Hamilton 1025 NERA 50%	Dec. 31, 2010 Hamilton 1025 NERA 50%	Dec. 31, 2012 Hamilton Bay Sales	Dec. 31, 2011 Hamilton Bay Sales	Dec. 31, 2010 Hamilton Bay Sales	Oct. 03, 2005 Hamilton Bay Sales	Dec. 31, 2012 Hamilton Bay Sales NERA 50%	Dec. 31, 2011 Hamilton Bay Sales NERA 50%	Dec. 31, 2010 Hamilton Bay Sales NERA 50%	Dec. 31, 2012 Hamilton Bay	Dec. 31, 2011 Hamilton Bay	Dec. 31, 2010 Hamilton Bay	Dec. 31, 2012 Hamilton Bay NERA 50%	Dec. 31, 2011 Hamilton Bay NERA 50%	Dec. 31, 2010 Hamilton Bay NERA 50%	Dec. 31, 2012 Hamilton Minuteman	Dec. 31, 2011 Hamilton Minuteman	Dec. 31, 2010 Hamilton Minuteman	Sep. 30, 2004 Hamilton Minuteman	Dec. 31, 2012 Hamilton Minuteman NERA 50%	Dec. 31, 2011 Hamilton Minuteman NERA 50%	Dec. 31, 2010 Hamilton Minuteman NERA 50%	Dec. 31, 2012 Hamilton on Main	Dec. 31, 2011 Hamilton on Main	Dec. 31, 2010 Hamilton on Main	Aug. 31, 2004 Hamilton on Main	Dec. 31, 2012 Hamilton on Main NERA 50%	Dec. 31, 2011 Hamilton on Main NERA 50%	Dec. 31, 2010 Hamilton on Main NERA 50%	Dec. 31, 2012 Dexter Park	Dec. 31, 2011 Dexter Park	Dec. 31, 2010 Dexter Park	Oct. 28, 2009 Dexter Park	Dec. 31, 2012 Dexter Park NERA 40%	Dec. 31, 2011 Dexter Park NERA 40%	Dec. 31, 2010 Dexter Park NERA 40%	Dec. 31, 2012 Total	Dec. 31, 2011 Total	Dec. 31, 2010 Total	Dec. 31, 2012 Total NERA 50%	Dec. 31, 2011 Total NERA 50%	Dec. 31, 2010 Total NERA 50%	Dec. 31, 2012 Total NERA 40%	Dec. 31, 2011 Total NERA 40%	Dec. 31, 2010 Total NERA 40%
Revenues
Rental income									$ 35,244,008	$ 33,608,799	$ 31,816,175	$ 1,270,141	$ 1,244,322	$ 1,122,915				$ 287,537	$ 255,050	$ 275,950				$ 1,178,712	$ 1,136,831	$ 1,097,957					$ 861,998	$ 816,015	$ 794,993					$ 235,061	$ 232,938	$ 221,191					$ 886,122	$ 863,657	$ 839,361				$ 809,707	$ 789,897	$ 765,509					$ 2,623,994	$ 2,491,957	$ 2,455,222					$ 12,202,615	$ 11,559,414	$ 11,019,862					$ 20,355,887	$ 19,390,080	$ 18,592,960
Laundry and sundry income									388,401	426,803	439,782	15,363	16,589	16,184										1,206	2,367	2,436																									2,435	1,362	762					20,952	20,599	19,780					98,042	97,275	97,902					137,999	138,193	137,063
Total Revenues	9,104,015	8,875,596	8,800,416	8,852,382	8,760,538	8,648,526	8,345,643	8,280,894	35,632,409	34,035,602	32,255,957	1,285,504	1,260,911	1,139,099				287,537	255,050	275,950				1,179,918	1,139,198	1,100,393					861,998	816,015	794,993					235,061	232,938	221,191					886,122	863,657	839,361				812,142	791,258	766,271					2,644,946	2,512,556	2,475,002					12,300,657	11,656,690	11,117,764					20,493,885	19,528,273	18,730,023
Expenses
Administrative									1,825,951	1,707,408	1,772,599	15,237	20,839	13,709				1,749	1,339					27,942	24,424	30,904					5,142	11,258	13,038					7,553	5,396	7,073					34,600	18,625	17,324				7,825	10,249	10,288					46,400	36,155	39,289					219,218	163,511	148,097					365,666	291,796	279,724
Depreciation and amortization									6,092,725	5,910,746	5,531,509	409,488	424,695	425,450				11,638	8,498	6,254				441,704	443,055	439,666					256,696	257,961	269,475					82,287	103,536	98,678					297,737	329,930	359,727				317,231	322,216	320,553					957,452	965,324	981,881					5,733,920	5,698,657	9,428,284					8,508,153	8,553,872	12,329,966
Management fees												55,308	49,677	46,734				11,502	11,040	11,040				48,596	45,829	45,559					34,517	32,120	31,795					9,894	9,486	9,245					34,659	33,916	33,345				32,615	31,666	31,563					104,807	100,581	97,239					261,355	251,071	244,178					593,253	565,386	550,698
Operating									3,633,619	4,080,647	3,784,401	112,172	121,521	134,016										62,277	66,278	62,994					816	1,733	1,777					1,251	239						1,190	732	411				73,092	54,650	63,841					341,054	371,687	358,827					1,006,570	929,543	960,328					1,598,421	1,546,382	1,582,193
Renting									183,529	365,110	528,686	18,350	8,058	24,785										5,326	19,206	49,517					6,815	13,322	8,576					1,894	1,750	375					4,053	8,927	6,213				3,538	3,559	3,770					10,974	15,140	15,361					74,705	144,149	281,545					125,655	214,111	390,142
Repairs and maintenance									5,179,408	5,056,054	4,886,724	118,786	127,528	134,941				5,475	3,050					82,052	71,479	80,190					320,997	300,534	376,560					70,812	78,167	76,510					273,652	316,782	344,852				57,448	98,904	99,553					380,605	371,109	342,310					880,103	935,839	859,088					2,189,930	2,303,393	2,314,005
Taxes and insurance									4,348,492	4,146,554	4,082,588	197,566	184,119	179,939				49,237	47,709	46,658				106,785	97,028	98,151					145,755	143,002	127,637					46,017	45,303	42,465					161,137	155,681	132,188				102,505	92,300	96,213					337,256	325,868	318,150					1,485,297	1,300,995	1,451,017					2,631,555	2,392,005	2,492,417
Total Expenses	5,704,596	5,730,319	5,413,735	5,861,694	5,722,971	5,665,232	5,508,842	5,773,941	22,710,344	22,670,986	21,916,664	926,908	936,438	959,574				79,600	71,636	63,952				774,681	767,299	806,981					770,738	759,930	828,857					219,707	243,877	234,346					807,027	864,593	894,061				594,254	613,544	625,780					2,178,549	2,185,864	2,153,057					9,661,169	9,423,765	13,372,537					16,012,632	15,866,945	19,939,145
Income Before Other Income (loss) and Discontinued Operations	3,399,419	3,145,277	3,386,681	2,990,688	3,037,567	2,983,294	2,836,801	2,506,953	12,922,065	11,364,616	10,339,293	358,596	324,473	179,525				207,937	183,414	211,998				405,237	371,899	293,412					91,260	56,085	(33,864)					15,354	(10,939)	(13,155)					79,095	(936)	(54,700)				217,888	177,714	140,491					466,397	326,693	321,944					2,639,488	2,232,924	(2,254,773)					4,481,253	3,661,328	(1,209,122)
Other Income (Loss)
Interest expense									(7,802,999)	(7,965,422)	(8,053,628)	(497,631)	(503,102)	(507,425)				(60,451)	(61,593)	(62,694)				(486,051)	(494,468)	(504,667)					(288,470)	(289,222)	(289,042)					(98,361)	(98,010)	(97,909)					(271,283)	(271,348)	(271,389)				(317,448)	(317,927)	(317,360)					(840,874)	(848,786)	(860,500)					(5,092,838)	(5,113,523)	(5,116,598)					(7,953,407)	(7,997,979)	(8,027,583)
Interest income									2,216	3,861	5,932			3						2				48	49	47					74	88	90					215	457	569							2						1,780							8						3,219	5					337	3,814	2,505
Interest Income from Note																																						6,180	8,904	11,445																																6,180	8,904	11,445
Gain on the sale of real estate										7,720,459
Other Income (Expenses)													(2,331)												(5,375)							(3,621)								11,021						(2,271)	9,478					(61,589)							(1,152)	2,168						(3,500)	(17,720)						(79,839)	4,947
Total Other Income (Expense)	(2,214,288)	(2,370,824)	(2,339,420)	(2,363,735)	(2,469,002)	(2,523,314)	(2,480,305)	(2,402,740)	(9,288,267)	(9,875,361)	(11,918,392)	(497,631)	(505,433)	(507,422)				(60,451)	(61,593)	(62,692)				(486,003)	(499,793)	(504,619)					(288,395)	(292,756)	(288,952)					(91,966)	(88,649)	(74,874)					(271,283)	(273,619)	(261,909)				(317,448)	(379,515)	(315,581)					(840,874)	(849,938)	(858,323)					(5,092,838)	(5,113,804)	(5,134,313)					(7,946,890)	(8,065,100)	(8,008,686)
Net Income (loss)	1,185,131	774,453	1,047,261	626,953	568,257	456,926	8,093,285	172,812	3,633,798	9,291,281	(1,359,232)	(139,035)	(180,960)	(327,897)				147,486	121,821	149,305				(80,766)	(127,894)	(211,208)					(197,135)	(236,671)	(322,816)					(76,612)	(99,588)	(88,029)					(192,188)	(274,555)	(316,608)				(99,560)	(201,801)	(175,090)					(374,477)	(523,245)	(536,379)					(2,453,350)	(2,880,880)	(7,389,086)					(3,465,636)	(4,403,772)	(9,217,808)
Proportionate share of net loss															$ (69,517)	$ (90,480)	$ (163,948)				$ 73,743	$ 60,911	$ 74,653					$ (40,383)	$ (63,947)	$ (105,604)					$ (98,567)	$ (118,335)	$ (161,408)					$ (38,306)	$ (49,794)	$ (44,015)				$ (96,094)	$ (137,277)	$ (158,304)					$ (49,780)	$ (100,900)	$ (87,545)					$ (187,239)	$ (261,622)	$ (268,189)					$ (981,340)	$ (1,152,352)	$ (2,955,635)	$ (1,487,483)	$ (1,913,798)	$ (3,869,995)	$ (506,143)	$ (761,446)	$ (914,361)	$ (981,340)	$ (1,152,352)	$ (2,955,635)
Percentage of ownership interest															50.00%	50.00%	50.00%				50.00%	50.00%	50.00%				50.00%	50.00%	50.00%	50.00%				50.00%	50.00%	50.00%	50.00%				50.00%	50.00%	50.00%	50.00%				50.00%	50.00%	50.00%				50.00%	50.00%	50.00%	50.00%				50.00%	50.00%	50.00%	50.00%				40.00%	40.00%	40.00%	40.00%				50.00%	50.00%	50.00%	40.00%	40.00%	40.00%

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ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS (Details) (USD $)	12 Months Ended
	Dec. 31, 2012
ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS
Period for advance rental payment	1 month
Amount received for prepaid rent	$ 1,339,000
Security deposits	$ 1,919,000

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TAXABLE INCOME AND TAX BASIS (Tables)

12 Months Ended

Dec. 31, 2012

TAXABLE INCOME AND TAX BASIS

Schedule of reconciliation of GAAP net income to taxable income

	For the year ended December 31,
	2012			2011			2010
	(in thousands)
Financial statement ("book") net income (loss)	$	3,634		$	9,291		$	(1,359	)
Book/Tax differences from depreciation and amortization		51			(1,024	)		(643	)
Book/Tax differences on tax free exchanges		266			(7,707	)		—
Book/Tax differences from Investment Properties		198			(161	)		403
Increase (Decrease) in prepaid rent and allowances		(40	)		29			(204	)
Other		57			7			—
Taxable income (loss)	$	4,166		$	435		$	(1,803	)

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DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE (Details) (USD $)	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010
DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE
Total Revenues	$ 348,997	$ 910,155
Operating and other expenses	237,298	599,402
Depreciation and amortization	30,132	90,886
Total Expenses	267,430	690,288
Income from discontinued operations	81,567	219,867
Gain on the sale of Avon Street:
Gain on the sale of real estate	7,720,459
Avon Street Apartments
Gain on the sale of Avon Street:
Sales price	8,750,000
Net book value	(594,035)
Expense of sale	(435,506)
Gain on the sale of real estate	$ 7,720,459

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SCHEDULE - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2012

Valuation and Qualifying Accounts [Abstract]

SCHEDULE - Valuation and Qualifying Accounts

Valuation and Qualifying Accounts

			Additions
Description	Balance at Beginning of Period		Charged to Costs and Expenses		Charged to other account describe	Deductions Describe(a)		Balance at end of Period
Year ended December 31, 2012:
Deducted from asset accounts:
Allowance for doubtful accounts		448,119		190,032			257,443		380,708
Year ended December 31, 2011:
Deducted from asset accounts:
Allowance for doubtful accounts		482,518		265,807			300,206		448,119
Year ended December 31, 2010:
Deducted from asset accounts:
Allowance for doubtful accounts		475,684		374,597			367,763		482,518

(a)

Uncollectible accounts written off

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CASH FLOW INFORMATION (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
CASH FLOW INFORMATION
Cash paid for interest	$ 7,776,000	$ 8,011,000	$ 8,182,000
Cash paid for state income taxes	$ 48,000	$ 55,000	$ 35,000

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RENTAL PROPERTIES (Details 3) (USD $)	12 Months Ended				1 Months Ended		1 Months Ended		1 Months Ended		1 Months Ended		12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2012 Mortgages payable	May 31, 2011 Avon Street Apartments Residential apartment complex	May 18, 2011 Avon Street Apartments Residential apartment complex item	Jul. 31, 2011 Battle Green Apartments Mortgages payable	Jul. 27, 2011 Battle Green Apartments Mortgages payable	Jun. 30, 2011 Battle Green Apartments Residential apartment complex	Jun. 02, 2011 Battle Green Apartments Residential apartment complex item	Jul. 31, 2011 Battle Green Apartments Harold Brown Mortgages payable	Jun. 30, 2011 Battle Green Apartments Harold Brown Mortgages payable	Dec. 31, 2011 Battle Green Apartments Harold Brown Mortgages payable	Jun. 02, 2011 Battle Green Apartments Harold Brown Mortgages payable
RENTAL PROPERTIES
Number of units						66				48
Sales price of real estate properties					$ 8,750,000
Gain on sale of property					7,700,000
Net proceeds from sale of property		8,297,928			5,444,000
Purchase price of real estate properties									10,000,000
Borrowings							5,000,000					3,998,573
Interest rate (as a percent)								4.95%						6.00%
Term of debt												4 years
Notice period demanding early payment												6 months
Amortization period of debt							30 years
Deferred financing cost associated with mortgage								100,000
Effective interest rate (as a percent)	5.65%			5.63%				5.07%
Repayment of debt											3,998,573
Amount returned to partnership											1,000,000
Interest paid	$ 7,776,000	$ 8,011,000	$ 8,182,000										$ 38,123

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SUBSEQUENT EVENTS (Tables)

12 Months Ended

Dec. 31, 2012

SUBSEQUENT EVENTS

Schedule of balance sheets

Nashoba Apartments LP
Balance Sheets
(In Thousands)

	December 31,
	2012			2011
Assets:
Rental property	$	1,283		$	1,210
Accumulated depreciation		821			743
Rental property (net)		462			467
Other current assets		123			80
Other assets		2			6
Total assets	$	587		$	553
Liabilities:
Mortgage note payable	$	2,000		$	2,000
Other liabilities		71			70
Total liabilities		2,071			2,070
Partner's equity		(1,484	)		(1,517	)
Total liabilities & partner's equity	$	587		$	553

Schedule of statements of income

Nashoba Apartments LP
Statements of Income
(In Thousands)

	Years ended December 31,
	2012		2011		2010
Rental and other Income	$	462	$	451	$	450
Operating Expenses		241		260		261
Interest Expense		108		108		108
Depreciation		80		72		63
Total Expenses		429		440		432
Net Income	$	33	$	11	$	18

Schedule of cash flow information

Nashoba Apartments LP
Cash Flow Information
(In Thousands)

	Years ended December 31,
	2012		2011			2010
Distributions from (to) Nashoba	$	1	$	(72	)	$	45

Schedule of pro forma consolidated balance sheet

New England Realty Associates Limited Partnership
Pro Forma Consolidated Balance Sheet
As of December 31, 2012
(Unaudited)

				Pro Forma
	Historical NERA			Adjustments Refinancings			Consolidated Totals
ASSETS
Rental Properties	$	95,435,850		$	—		$	95,435,850
Cash and Cash Equivalents		6,981,906	(a)		21,465,693			28,447,599
Rents Receivable		475,083			—			475,083
Real Estate Tax Escrows		449,652			—			449,652
Prepaid Expenses and Other Assets		3,073,890	(b)		2,028,400			5,102,290
Investments in Unconsolidated Joint Ventures		13,986,173			—			13,986,173
Financing and Leasing Fees		1,135,936	(c)		1,445,795			2,581,731
Total Assets	$	121,538,490		$	24,939,888		$	146,478,378
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$	138,055,522	(d)	$	24,980,014		$	163,035,536
Accounts Payable and Accrued Expenses		2,361,942			—			2,361,942
Advance Rental Payments and Security Deposits		3,636,704			—			3,636,704
Total Liabilities	$	144,054,168		$	24,980,014		$	169,034,182
Partners' Capital 130,444 units outstanding in 2012		(22,515,678	)		(40,126	)		(22,555,804	)
Total Liabilities and Partners' Capital	$	121,538,490		$	24,939,888		$	146,478,378

Schedule of pro forma consolidated income statement

New England Realty Associates Limited Partnership
Pro Forma Consolidated Statement of Income
For the Twelve Months Ended December 31, 2012
(Unaudited)

				Pro Forma
	Historic NERA			Adjustments Refinancing			Consolidated Totals
Revenues
Rental income	$	35,244,008		$	—		$	35,244,008
Laundry and sundry income		388,401			—			388,401
		35,632,409			—			35,632,409
Expenses
Administrative		1,825,951			—			1,825,951
Depreciation and amortization		6,092,725	(e)		112,948			6,205,673
Management fee		1,446,620			—			1,446,620
Operating		3,633,619			—			3,633,619
Renting		183,529			—			183,529
Repairs and maintenance		5,179,408			—			5,179,408
Taxes and insurance		4,348,492			—			4,348,492
		22,710,344			112,948			22,823,292
Income Before Other Income and Discontinued Operations		12,922,065			(112,948	)		12,809,117
Other Income (Loss)
Interest income		2,216			—			2,216
Interest expense		(7,802,999	)(f)		72,822			(7,730,177	)
(Loss) from investments in unconsolidated joint ventures		(1,487,484	)		—			(1,487,484	)
Other		—			—			—
		(9,288,267	)		72,822			(9,215,445	)
Income From Continuing Operations		3,633,798			(40,126	)		3,593,672
Discontinued Operations
Income from discontinued operations		—			—			—
Gain on the sale of real estate from discontinued operations		—			—			—
		—			—			—
Net Income	$	3,633,798		$	(40,126	)	$	3,593,672
Income per Unit
Income before discontinued operations	$	27.69		$	(0.31	)	$	27.38
Income from discontinued operations		—			—			—
Net Income per Unit	$	27.69		$	(0.30	)	$	27.38
Weighted Average Number of Units Outstanding		131,230			131,230			131,230

Notes to unaudited pro forma consolidated balance sheet and consolidated statement of income:

(a)

Cash adjusted for new loan proceeds, existing loan payoff, financing fees, replacement reserves and changes to mortgage debt service.

(b)

Replacement reserves required by new debt agreement

(c)

Change in prepaid financing fees between existing debt and refinanced debt

(d)

Difference between existing debt balance and refinanced debt balance

(e)

Increase in the amortization of the balance of prepaid finance costs for the existing debt and the proportionate share of prepaid finance costs for the refinanced debt

(f)

Decrease in mortgage interest expense between existing mortgage debt and refinanced debt

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TAXABLE INCOME AND TAX BASIS (Details) (USD $)	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
TAXABLE INCOME AND TAX BASIS
Excess amount of taxable income over statement income									$ 530,000
Excess amount of cumulative statement basis over cumulative taxable basis	12,000,000								12,000,000
Excess amount of statement income from joint venture investments over taxable income									1,700,000
Reconciliation of GAAP net income to taxable income
Financial statement ("book") net income (loss)	1,185,131	774,453	1,047,261	626,953	568,257	456,926	8,093,285	172,812	3,633,798	9,291,281	(1,359,232)
Book/Tax differences from depreciation and amortization									51,000	(1,024,000)	(643,000)
Book/Tax differences on tax free exchanges									266,000	(7,707,000)
Book/Tax differences from Investment Properties									198,000	(161,000)	403,000
Increase (Decrease) in prepaid rent and allowances									(40,000)	29,000	(204,000)
Other									57,000	7,000
Taxable income (loss)									$ 4,166,000	$ 435,000	$ (1,803,000)

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SCHEDULE II - Valuation and Qualifying Accounts (Details) (Allowance for doubtful accounts, USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Allowance for doubtful accounts
Valuation and Qualifying Accounts
Balance at Beginning of Period	$ 448,119	$ 482,518	$ 475,684
Additions, Charged to Costs and Expenses	190,032	265,807	374,597
Deductions	257,443	300,206	367,763
Balance at end of Period	$ 380,708	$ 448,119	$ 482,518

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PARTNERS' CAPITAL (Details) (USD $)	1 Months Ended	3 Months Ended								12 Months Ended			12 Months Ended	1 Months Ended	12 Months Ended															12 Months Ended
	Jan. 31, 2012	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2012 Limited Partner item	Jan. 31, 2012 Class A	Dec. 31, 2012 Class A	Feb. 04, 2013 Class A	Sep. 30, 2012 Class A	Jun. 30, 2012 Class A	Mar. 31, 2012 Class A	Jan. 03, 2012 Class A	Dec. 31, 2011 Class A	Sep. 30, 2011 Class A	Jun. 30, 2011 Class A	Mar. 31, 2011 Class A	Dec. 31, 2010 Class A	Sep. 30, 2010 Class A	Jun. 30, 2010 Class A	Mar. 31, 2010 Class A	Aug. 20, 2007 Class A	Dec. 31, 2012 Class B	Dec. 31, 2012 General Partnership item
Number of classes of limited partners													2																		1
Fixed distribution percentage of unit holders															80.00%															19.00%	1.00%
Forward split of depositary receipts	3
Exchange ratio of depositary receipts for partnership units before adjustment														10
Exchange ratio of depositary receipts for partnership units after adjustment														30
Number of units in each depository receipt																				0.03333									0.1
Quarterly distribution per unit (in dollars per unit)															$ 7.50	$ 7.50	$ 7.50	$ 7.50	$ 7.50		$ 7.00	$ 7.00	$ 7.00	$ 7.00	$ 7.00	$ 7.00	$ 7.00	$ 7.00
Quarterly distributions per depositary receipt (in dollars per share)															$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25		$ 0.23	$ 0.23	$ 0.23	$ 0.23	$ 0.23	$ 0.23	$ 0.23	$ 0.23
Distribution per unit (in dollars per unit)		$ 30.00				$ 28.00				$ 30.00	$ 28.00	$ 28.00
Earnings per depository receipt
Income per Depositary Receipt before Discontinued Operations (in dollars per share)		$ 0.30	$ 0.20	$ 0.27	$ 0.16	$ 0.15	$ 0.12	$ 0.09	$ 0.02	$ 0.92	$ 0.38
Income from Discontinued Operations (in dollars per share)		$ 0.00	$ 0.00	$ 0.00	$ 0.00			$ 1.96	$ 0.02	$ 0.00	$ 1.98
Net Income (loss) per Depositary Receipt after Discontinued Operations (in dollars per share)						$ 0.15	$ 0.12	$ 2.05	$ 0.04	$ 0.92	$ 2.36
Distributions per Depositary Receipt (in dollars per share)		$ 1.00				$ 0.93				$ 1.00	$ 0.93	$ 0.93

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RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2012

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 3. RELATED PARTY TRANSACTIONS

        The Partnership's properties are managed by an entity that is owned by the majority shareholder of the General Partner. The management fee is equal to 4% of gross receipts rental revenue and laundry income on the majority of the Partnership's properties and 3% on Linewt. Total fees paid were approximately $1,447,000, $1,420,000 and $1,367,000 in 2012, 2011 and 2010, respectively.

        The Partnership Agreement permits the General Partner or Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA. In 2012, 2011 and 2010, approximately $686,000, $758,000 and $705,000, was charged to NERA for legal, accounting, construction, maintenance, rental and architectural services and supervision of capital improvements. Of the 2012 expenses referred to above, approximately $295,000 consisted of repairs and maintenance and $348,000 of administrative expense. Approximately $43,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2012, the Hamilton Company received approximately $728,000 from the Investment Properties of which approximately $567,000 was the management fee, approximately $15,000 was for construction, architectural services and supervision of capital projects, approximately $64,000 was for maintenance services and approximately $82,000 was for administrative services. The management fee is equal to 4% of gross receipts rental income on the majority of investment properties and 2% on Dexter Park.

        On January 1, 2004, all employees were transferred to the Management Company's payroll. The Partnership reimburses the management company for the payroll and related expenses of the employees who work at the properties. Total reimbursement was approximately $2,606,000, $2,537,000 and $2,599,000 for the years ended December 31, 2012, 2011 and 2010, respectively. The Management Company maintains a 401K plan for all eligible employees whereby the employees may contribute the maximum allowed by law. The plan also provides for discretionary contributions by the employer. There were no employer contributions in 2012, 2011 or 2010.

        Prior to 1991, the Partnership employed an outside, unaffiliated company to perform its bookkeeping and accounting functions. Since that time, such services have been provided by the Management Company's accounting staff, which consists of approximately 14 people. During the years ended December 31, 2012, 2011 and 2010 the Management Company charged the Partnership $125,000 for bookkeeping and accounting services included in administrative expenses above.

        In 1996, prior to becoming an employee of the Management Company, the President of the Management Company performed asset management consulting services for the Partnership. This individual continues to perform this service and receives an asset management fee from the Partnership. The Partnership does not have a written agreement with this individual. During the years ended December 31, 2012, 2011 and 2010 this individual received a quarterly fee of $18,750 for a total fee of $75,000.

        The Partnership has invested in nine limited partnerships, which have invested in mixed use residential apartment complexes. The Partnership has a 40% to 50% ownership interest in each investment property. The other investors are Harold Brown, the President of the Management Company and five other employees of the Management Company. Harold Brown's ownership interest is between 43.2% and 60%. See Note 14 for a description of the properties and their operations.

        See Note 8 for information regarding the repurchase of Class B and General Partnership Units.

        On October 28, 2009, the Partnership borrowed approximately $7,168,000 with an interest rate of 6% from HBC Holdings, LLC, an entity owned by Harold Brown and his affiliates ("HBC"). The term of the loan is four years with a provision requiring payment in whole or in part upon demand by HBC with six months notice. The Partnership may also prepay the note without penalty. On August 17, 2010, HBC gave six months written notice to the Partnership requesting a principal pay down of $2,500,000. During the fourth quarter of 2010, the Partnership paid HBC $2,500,000 as requested. During 2011, the Partnership elected to make principal payments of $1,000,000 on August 1, 2011, $1,000,000 on October 1, 2011 and $1,000,000 on December 15, 2011 reducing the loan balance to $1,668,600. In February 2012, the Partnership elected to make an additional principal payment of $750,000 to HBC Holdings and the balance of $918,600 was paid in full in April 2012. The interest paid during the year ended December 31, 2012, 2011 and 2010 was $18,960, $238,673 and $414,740 respectively.

        See Note 8 for information regarding the repurchase of Class B and General Partnership Units.

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RELATED PARTY TRANSACTIONS (Details) (USD $)	1 Months Ended							3 Months Ended	12 Months Ended
	Apr. 30, 2012	Feb. 29, 2012	Dec. 31, 2011	Oct. 31, 2011	Aug. 31, 2011	Aug. 31, 2010	Oct. 31, 2009	Dec. 31, 2010	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Oct. 28, 2009
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue									4.00%
Management fee as percentage of Linewt									3.00%
Management fees of related party									$ 1,447,000	$ 1,420,000	$ 1,367,000
Repairs and maintenance									5,179,408	5,056,054	4,886,724
Administrative expense									1,825,951	1,707,408	1,772,599
Management fee									1,446,620	1,404,467	1,330,157
Number of limited partnerships and limited liability companies in which the entity has invested									9
Outstanding amount of mortgage loan			139,161,612						138,055,522	139,161,612
Interest paid									7,776,000	8,011,000	8,182,000
Limited Partnerships | Minimum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest									40.00%
Limited Partnerships | Maximum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest									50.00%
General Partner or Management Company
RELATED PARTY TRANSACTIONS
Costs related to professional services									686,000	758,000	705,000
Repairs and maintenance									295,000
Administrative expense									348,000
Expenses for construction, architectural services and supervision of capital projects									43,000
Management Company
RELATED PARTY TRANSACTIONS
Reimbursement to related party for payroll transfers									2,606,000	2,537,000	2,599,000
Number of accounting staff of related party providing bookkeeping and accounting functions									14
Fees for accounting and bookkeeping services									125,000	125,000	125,000
Number of employees having ownership interest									6
Hamilton Company
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue									4.00%
Repairs and maintenance									64,000
Administrative expense									82,000
Expenses for construction, architectural services and supervision of capital projects									15,000
Amount paid to related party									728,000
Management fee									567,000
Dexter Park
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue									2.00%
President of Management Company
RELATED PARTY TRANSACTIONS
Fee for asset management consulting services									75,000	75,000	75,000
Quarterly fee for asset management consulting services									18,750	18,750	18,750
Harold Brown | Minimum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest									43.20%
Harold Brown | Maximum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest									60.00%
HBC Holdings, LLC
RELATED PARTY TRANSACTIONS
Borrowings							7,168,000
Interest rate (as a percent)												6.00%
Term of mortgage loan							4 years
Notice period demanding early payment							6 months
Principal paydown of debt upon notice						2,500,000
Repayment of loan	918,600							2,500,000
Amount of principal payment		750,000	1,000,000	1,000,000	1,000,000
Outstanding amount of mortgage loan			1,668,600							1,668,600
Interest paid									$ 18,960	$ 238,673	$ 414,740

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PARTNERS' CAPITAL (Tables)

12 Months Ended

Dec. 31, 2012

PARTNERS' CAPITAL

Schedule of information per depositary receipt

	Year Ended December 31,
	2012		2011
Income per Depositary Receipt before Discontinued Operations	$	0.92	$	0.38
Income from Discontinued Operations		0		1.98
Net Income per Depositary Receipt after Discontinued Operations	$	0.92	$	2.36
Distributions per Depositary Receipt	$	1.00	$	0.93

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MORTGAGE NOTES PAYABLE (Tables)

12 Months Ended

Dec. 31, 2012

MORTGAGE NOTES PAYABLE

Schedule of approximate annual maturities

2013—current maturities	$	41,275,000
2014		14,669,000
2015		2,184,000
2016		194,000
2017		205,000
Thereafter		79,529,000
	$	138,056,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 4) (USD $)	Dec. 31, 2012
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
12/31/2013	$ 41,275,000
12/31/2014	14,669,000
12/31/2015	2,184,000
12/31/2016	194,000
12/31/2017	205,000
Thereafter	79,529,000
Total	138,056,000
Weighted average interest rate (as a percent)c	5.65%
Effective interest rate (as a percent)	5.65%
Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
12/31/2013	125,660
12/31/2014	133,132
12/31/2015	141,048
12/31/2016	7,952,477
Total	8,352,317
Hamilton Essex Development
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
12/31/2013	2,093,184
Total	2,093,184
345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
12/31/2013	165,412
12/31/2014	6,684,767
Total	6,850,179
Hamilton 1025
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
12/31/2013	65,157
12/31/2014	69,003
12/31/2015	73,077
12/31/2016	4,727,503
Total	4,934,741
Hamilton Bay Sales
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
12/31/2013	1,668,000
Total	1,668,000
Hamilton Bay
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
12/31/2013	66,163
12/31/2014	69,944
12/31/2015	73,941
12/31/2016	78,166
12/31/2017	4,413,873
Total	4,702,087
Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
12/31/2013	71,363
12/31/2014	75,575
12/31/2015	80,036
12/31/2016	77,128
12/31/2017	5,129,371
Total	5,433,472
Hamilton on Main
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
12/31/2013	293,222
12/31/2014	309,178
12/31/2015	15,008,646
Total	15,611,045
Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
12/31/2013	1,275,835
12/31/2014	1,348,741
12/31/2015	1,425,814
12/31/2016	1,507,291
12/31/2017	1,593,424
Thereafter	81,460,581
Total	88,611,686
Total
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
12/31/2013	7,082,229
12/31/2014	10,020,473
12/31/2015	18,208,704
12/31/2016	15,829,060
12/31/2017	12,708,108
Thereafter	163,299,264
Total	$ 138,256,711

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OTHER ASSETS (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
OTHER ASSETS
Security deposits	$ 1,919,000	$ 1,879,000
Escrow deposits to fund future capital improvements	420,000	1,014,000
Financing fees, net	1,136,000	919,000
Accumulated amortization on financing and leasing fees	$ 772,000	$ 636,000

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TREASURY UNITS (Tables)

12 Months Ended

Dec. 31, 2012

TREASURY UNITS

Schedule of treasury units

Class A	39,825
Class B	9,458
General Partnership	498
	49,781

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RENTAL INCOME (Tables)

12 Months Ended

Dec. 31, 2012

RENTAL INCOME

Schedule of minimum future annual rental income on non-cancellable operating leases

	Commercial Property Leases
2013	$	2,384,000
2014		2,011,000
2015		1,583,000
2016		1,165,000
2017		485,000
Thereafter		775,000
	$	8,403,000

Schedule of information for commercial leases

Thru December 31,	Annual base rent for expiring leases		Total square feet for expiring leases		Total number of leases expiring		Percentage of Annual base rent for expiring leases
2013	$	470,463		23,773		11		17	%
2014		588,422		29,523		10		22	%
2015		266,098		8,471		8		10	%
2016		593,346		27,073		3		22	%
2017		448,101		11,997		6		16	%
2018		58,050		1,262		1		2	%
2019		200,375		5,800		2		7	%
2020		64,657		1,106		1		2	%
2021		64,800		1,800		1		2	%
2022		0		—		—		0	%
Totals	$	2,754,312		110,805		43		100	%

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RENTAL PROPERTIES

12 Months Ended

Dec. 31, 2012

RENTAL PROPERTIES

RENTAL PROPERTIES

NOTE 2. RENTAL PROPERTIES

        As of December 31, 2012, the Partnership and its Subsidiary Partnerships owned 2,251 residential apartment units in 20 residential and mixed-use complexes (collectively, the "Apartment Complexes"). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the "Condominium Units"). The Apartment Complexes and Condominium Units are located primarily in the metropolitan Boston area of Massachusetts.

        Additionally, as of December 31, 2012, the Partnership and Subsidiary Partnerships owned a commercial shopping center in Framingham, commercial buildings in Newton and Brookline and mixed-use properties in Boston, Brockton and Newton, all in Massachusetts. These properties are referred to collectively as the "Commercial Properties."

        The Partnership also owned a 40% to 50% ownership interest in nine residential and mixed use complexes (the "Investment Properties") at December 31, 2012 with a total of 799 units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

        Rental properties consist of the following:

	December 31, 2012			December 31, 2011			Useful Life
Land, improvements and parking lots	$	27,849,721		$	27,614,537			15–40 years
Buildings and improvements		119,579,923			119,097,186			15–40 years
Kitchen cabinets		3,620,196			3,542,249			5–10 years
Carpets		3,354,593			3,307,499			5–10 years
Air conditioning		764,671			788,146			7–10 years
Laundry equipment		378,806			368,955			5–7 years
Elevators		1,139,296			1,139,296			20 years
Swimming pools		235,242			235,242			10 years
Equipment		1,586,591			1,744,006			5–7 years
Motor vehicles		101,657			107,788			5 years
Fences		22,445			22,974			5–10 years
Furniture and fixtures		1,038,136			1,039,439			5–7 years
Smoke alarms		205,091			116,482			5–7 years
Total fixed assets		159,876,368			159,123,799
Less: Accumulated depreciation		(64,440,518	)		(60,199,265	)
	$	95,435,850		$	98,924,534

        Real estate and accumulated depreciation as of December 31, 2012 is as follows:

			Initial Cost to Partnerships(1)				Cost Capitalized Subsequent to Acquisition(2)			Gross Amount at Which Carried at Close of Period
	Encumbrances (First Mortgages)				Buildings Improvements							Buildings Improvements				Accumulated Depreciation(3)
			Land				Improvements			Land				Totals				Date Acquired
Boylston Downtown L.P. Residential Apartments Boston, Massachusetts	$	19,500,000	$	2,112,000	$	8,593,111	$	7,116,107		$	2,112,000	$	15,709,218	$	17,821,218	$	9,086,787		July 1995
Brookside Associates LLC Residential Apartments Woburn, Massachusetts	$	2,723,830	$	684,000	$	3,116,000	$	492,070		$	684,000	$	3,608,070	$	4,292,070	$	1,621,108		Oct. 2000
Courtyard @ Westgate Residential Units Burlington, Massachusetts	$	2,000,000	$	44,965	$	4,478,687	$	253,696		$	44,965	$	4,732,383	$	4,777,348	$	1,465,723		Sep. 2004
Clovelly Apartments L.P. Residential Apartments Nashua, New Hampshire	$	4,160,000	$	177,610	$	1,478,359	$	1,268,279		$	177,610	$	2,746,638	$	2,924,248	$	1,981,658		Sept. 1977
Commonwealth 1137 L.P. Residential Apartments Boston, Massachusetts	$	3,750,000	$	342,000	$	1,367,669	$	933,759		$	342,000	$	2,301,428	$	2,643,428	$	1,251,632		July 1995
Commonwealth 1144 L.P. Residential Apartments Boston, Massachusetts	$	14,780,000	$	1,410,000	$	5,664,816	$	1,616,613		$	1,410,000	$	7,281,429	$	8,691,429	$	4,373,285		July 1995
Condominium Units—Riverside Residential Units Massachusetts	$	—	$	23,346	$	190,807	$	22,428		$	23,346	$	213,235	$	236,581	$	205,326		Sept. 1977
Executive Apartments L.P. Residential Apartments Framingham, Massachusetts	$	2,415,000	$	91,400	$	740,360	$	758,449		$	91,400	$	1,498,809	$	1,590,209	$	1,128,556		Sept. 1977
Hamilton Battle Green LLC Residential Apartments Lexington, Massachusetts	$	4,893,448	$	1,341,737	$	8,457,497	$	31,849		$	1,341,737	$	8,489,346	$	9,831,083	$	612,568		Jun. 2011
Hamilton Cypress LLC Commercial—1031Exchange Brookline, Massachusetts	$	3,686,380	$	2,362,596	$	4,613,985	$	51,823		$	2,362,596	$	4,665,808	$	7,028,404	$	696,283		Oct. 2008
Hamilton Linewt LLC Commercial—1031Exchange Newton, Massachusetts	$	1,528,429	$	884,042	$	2,652,127	$	50,608		$	884,042	$	2,702,735	$	3,586,777	$	353,574		Nov. 2007
Hamilton Oaks Associates LLC Residential Apartments Brockton, Massachusetts	$	11,925,000	$	2,175,000	$	12,325,000	$	1,726,607		$	2,175,000	$	14,051,607	$	16,226,607	$	7,256,645		Dec. 1999
Highland Street Apartments, L.P. Residential Apartments Lowell, Massachusetts	$	1,050,000	$	156,000	$	634,085	$	400,178		$	156,000	$	1,034,263	$	1,190,263	$	569,822		Dec. 1996
Linhart L.P. Residential/Commercial Newton, Massachusetts	$	1,964,119	$	385,000	$	1,540,000	$	1,157,151		$	385,000	$	2,697,151	$	3,082,151	$	1,769,651		Jan. 1995
Nashoba Apartments L.P. Residential Apartments Acton, Massachusetts	$	2,000,000	$	79,650	$	284,548	$	887,277		$	79,650	$	1,171,825	$	1,251,475	$	789,226		Sept. 1977
NERA Dean St. Associates LLC Residential Apartments Norwood, Massachusetts	$	5,213,958	$	1,512,000	$	5,701,480	$	426,220		$	1,512,000	$	6,127,700	$	7,639,700	$	2,477,008		Jun. 2002
North Beacon 140 L.P. Residential Units Boston, Massachusetts	$	6,937,000	$	936,000	$	3,762,013	$	1,490,223		$	936,000	$	5,252,236	$	6,188,236	$	3,120,665		July 1995
Olde English Apartments L.P. Residential Apartments Lowell, Massachusetts	$	3,080,000	$	46,181	$	878,323	$	1,161,011		$	46,181	$	2,039,334	$	2,085,515	$	1,345,108		Sept. 1977
River Drive L.P. Residential Apartments Danvers, Massachusetts	$	3,465,000	$	72,525	$	587,777	$	1,426,304		$	72,525	$	2,014,081	$	2,086,606	$	1,601,231		Sept. 1977
Redwood Hills L.P. Residential Units Worcester, Massachusetts	$	6,743,000	$	1,200,000	$	4,810,604	$	2,117,589		$	1,200,000	$	6,928,193	$	8,128,193	$	4,055,659		July 1995
School St Assoc LLC Residential Apartments Framingham, Massachusetts	$	15,308,474	$	4,686,728	$	18,746,911	$	(1,928,307	)	$	4,686,728	$	16,818,604	$	21,505,332	$	6,112,019		Apr. 2003
Staples Plaza Strip Mall Framingham, Massachusetts	$	6,000,000	$	3,280,000	$	4,920,000	$	36,724		$	3,280,000	$	4,956,724	$	8,236,724	$	2,235,613		May 1999
WCB Associates LLC Residential Apartments Brockton, Massachusetts	$	7,000,000	$	1,335,000	$	7,565,501	$	1,083,048		$	1,335,000	$	8,648,549	$	9,983,549	$	4,552,121		Dec. 1999
Westgate Apartments LLC Residential Apartments Woburn, Massachusetts	$	7,931,885	$	461,300	$	2,424,636	$	6,007,478		$	417,107	$	8,432,114	$	8,849,221	$	5,779,250		Sept. 1977
	$	138,055,522	$	25,799,080	$	105,534,296	$	28,587,184		$	25,754,887	$	134,121,480	$	159,876,368	$	64,440,518

(1)

The initial cost to the Partnerships represents both the balance of mortgages assumed in September 1977, including subsequent adjustments to such amounts, and subsequent acquisitions at cost.

(2)

Net of retirements, which are not significant.

(3)

In 2012, rental properties were depreciated over the following estimated useful lives:

Assets	Life
Buildings and Improvements		15–40 years
Other Categories of Assets		5–20 years

        A reconciliation of rental properties and accumulated depreciation is as follows:

	December 31,
	2012		2011		2010
Rental Properties
Balance, Beginning	$	159,123,799	$	150,818,648	$	150,411,555
Additions:
Buildings, improvements and other assets		2,360,399		12,444,604		2,268,039
		161,484,198		163,263,252		152,679,594
Deduct:
Write-off of retired or disposed assets		1,607,830		2,437,555		1,860,946
Rental properties held for sale and/or sold		—		1,701,898		—
Balance, Ending	$	159,876,368	$	159,123,799	$	150,818,648
Accumulated Depreciation
Balance, Beginning	$	60,199,265	$	58,074,391	$	54,439,618
Add:
Depreciation for the year		5,849,083		5,750,989		5,495,719
		66,048,348		63,825,380		59,935,337
Deduct:
Accumulated depreciation of retired or disposed assets		1,607,830		2,437,555		1,860,946
Accumulated depreciation of rental properties held for sale and/or sold		—		1,188,560		—
Balance, Ending	$	64,440,518	$	60,199,265	$	58,074,391

        On May 18, 2011, the Partnership sold Avon Street Apartments, a 66 unit residential apartment complex located at 130 Avon Street, Malden, Massachusetts. The sales price was $8,750,000, which resulted in a gain of approximately $7,700,000. The net proceeds of the sale, of approximately $5,444,000 were held by a qualified intermediary in order for the Partnership to structure a tax free exchange in accordance with Section 1031 of the IRS code. This tax free exchange was completed with the purchase of Battle Green Apartments described below.

        On June 1, 2011, the Partnership purchased Battle Green Apartments, a 48 unit residential apartment complex located at 34-42 Worthen Road, Lexington, Massachusetts. The purchase price was $10,000,000. The Partnership used cash reserves, the proceeds from the sale of Avon Street and borrowed $3,998,573 from Harold Brown, Treasurer of the General Partner to make this purchase. This loan had an interest rate of 6% and was secured by the Partnership's ownership interest in Battle Green Apartments, LLC. The term of the loan is four years with a provision requiring payment in whole or in part upon demand within six months of notice or prepay without penalty. On July 27, 2011, the Partnership financed Battle Green Apartments with a new $5,000,000 mortgage at 4.95% which matures in August 2026. Principal payments will be made using a 30 year amortization schedule. Deferred financing costs associated with this mortgage totaled approximately $100,000 and accordingly the effective interest rate is 5.07%. After paying off the existing loan of $3,998,573, approximately $1,000,000 was received by the Partnership. The interest paid on this loan to Harold Brown in 2011 was $38,123.

XML

FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2012

FAIR VALUE MEASUREMENTS

Schedule of carrying amounts and estimated fair value of debt

	Carrying Amount		Estimated Fair Value
Mortgage Notes Payable
Partnership Properties
At December 31, 2012	$	138,055,523	$	155,942,880
At December 31, 2011	$	139,161,612	$	158,050,039
Investment Properties
At December 31, 2012	$	138,256,711	$	157,983,030
At December 31, 2011	$	140,159,839	$	160,535,764

XML

RENTAL PROPERTIES (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Rental properties
Total fixed assets	$ 159,876,368	$ 159,123,799
Less: Accumulated depreciation	(64,440,518)	(60,199,265)
Total fixed assets, net	95,435,850	98,924,534
Land, improvements and parking lots
Rental properties
Total fixed assets	27,849,721	27,614,537
Land, improvements and parking lots | Minimum
Rental properties
Useful Life	15 years
Land, improvements and parking lots | Maximum
Rental properties
Useful Life	40 years
Buildings and improvements
Rental properties
Total fixed assets	119,579,923	119,097,186
Buildings and improvements | Minimum
Rental properties
Useful Life	15 years
Buildings and improvements | Maximum
Rental properties
Useful Life	40 years
Kitchen cabinets
Rental properties
Total fixed assets	3,620,196	3,542,249
Kitchen cabinets | Minimum
Rental properties
Useful Life	5 years
Kitchen cabinets | Maximum
Rental properties
Useful Life	10 years
Carpets
Rental properties
Total fixed assets	3,354,593	3,307,499
Carpets | Minimum
Rental properties
Useful Life	5 years
Carpets | Maximum
Rental properties
Useful Life	10 years
Air conditioning
Rental properties
Total fixed assets	764,671	788,146
Air conditioning | Minimum
Rental properties
Useful Life	7 years
Air conditioning | Maximum
Rental properties
Useful Life	10 years
Laundry equipment
Rental properties
Total fixed assets	378,806	368,955
Laundry equipment | Minimum
Rental properties
Useful Life	5 years
Laundry equipment | Maximum
Rental properties
Useful Life	7 years
Elevators
Rental properties
Total fixed assets	1,139,296	1,139,296
Useful Life	20 years
Swimming pools
Rental properties
Total fixed assets	235,242	235,242
Useful Life	10 years
Equipment
Rental properties
Total fixed assets	1,586,591	1,744,006
Equipment | Minimum
Rental properties
Useful Life	5 years
Equipment | Maximum
Rental properties
Useful Life	7 years
Motor vehicles
Rental properties
Total fixed assets	101,657	107,788
Useful Life	5 years
Fences
Rental properties
Total fixed assets	22,445	22,974
Fences | Minimum
Rental properties
Useful Life	5 years
Fences | Maximum
Rental properties
Useful Life	10 years
Furniture and fixtures
Rental properties
Total fixed assets	1,038,136	1,039,439
Furniture and fixtures | Minimum
Rental properties
Useful Life	5 years
Furniture and fixtures | Maximum
Rental properties
Useful Life	7 years
Smoke alarms
Rental properties
Total fixed assets	$ 205,091	$ 116,482
Smoke alarms | Minimum
Rental properties
Useful Life	5 years
Smoke alarms | Maximum
Rental properties
Useful Life	7 years
Residential and mixed-use properties
RENTAL PROPERTIES
Number of units	2,251
Number of properties	20
Residential and mixed-use properties | Partially owned properties
RENTAL PROPERTIES
Number of units	799
Number of properties	9
Residential and mixed-use properties | Partially owned properties | Minimum
RENTAL PROPERTIES
Percentage of ownership interest	40.00%
Residential and mixed-use properties | Partially owned properties | Maximum
RENTAL PROPERTIES
Percentage of ownership interest	50.00%
Condominium
RENTAL PROPERTIES
Number of units	19

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details) (USD $)	12 Months Ended			1 Months Ended	12 Months Ended				1 Months Ended									1 Months Ended						1 Months Ended		1 Months Ended				1 Months Ended				1 Months Ended					1 Months Ended		1 Months Ended					1 Months Ended									12 Months Ended							1 Months Ended	12 Months Ended																																					1 Months Ended							3 Months Ended	12 Months Ended				1 Months Ended							3 Months Ended	12 Months Ended			12 Months Ended			12 Months Ended				12 Months Ended
	Dec. 31, 2012 item	Dec. 31, 2011	Dec. 31, 2010	Oct. 31, 2009 Hamilton Park Towers, LLC	Dec. 31, 2012 Hamilton Park Towers, LLC item	Dec. 31, 2011 Hamilton Park Towers, LLC item	Dec. 31, 2010 Hamilton Park Towers, LLC item	Oct. 28, 2009 Hamilton Park Towers, LLC item	Oct. 31, 2009 Hamilton Park Towers, LLC Mortgage loan	Dec. 31, 2012 Hamilton Park Towers, LLC Mortgage loan	Oct. 28, 2009 Hamilton Park Towers, LLC Mortgage loan	Feb. 03, 2013 Hamilton Bay Apartments, LLC item	Dec. 31, 2012 Hamilton Bay Apartments, LLC item	Dec. 31, 2011 Hamilton Bay Apartments, LLC item	Dec. 31, 2010 Hamilton Bay Apartments, LLC item	Apr. 30, 2008 Hamilton Bay Apartments, LLC item	Oct. 03, 2005 Hamilton Bay Apartments, LLC item	Apr. 30, 2008 Hamilton Bay Apartments, LLC Mortgage loan	Feb. 01, 2013 Hamilton Bay Apartments, LLC Mortgage loan item	Dec. 31, 2012 Hamilton Bay, LLC item	Dec. 31, 2011 Hamilton Bay, LLC item	Dec. 31, 2010 Hamilton Bay, LLC item	Oct. 03, 2005 Hamilton Bay, LLC item	Feb. 28, 2007 Hamilton Bay, LLC Mortgage loan	Mar. 07, 2005 Hamilton Essex Development, LLC and Hamilton Essex 81, LLC	Mar. 31, 2005 Hamilton Essex Development, LLC and Hamilton Essex 81, LLC Mortgage loan	Dec. 31, 2012 Hamilton Essex 81, LLC item	Dec. 31, 2011 Hamilton Essex 81, LLC item	Dec. 31, 2010 Hamilton Essex 81, LLC item	Aug. 31, 2008 Hamilton Essex 81, LLC Mortgage loan	Dec. 31, 2012 Hamilton Essex Development, LLC item	Dec. 31, 2011 Hamilton Essex Development, LLC item	Dec. 31, 2010 Hamilton Essex Development, LLC item	Aug. 31, 2008 Hamilton Essex Development, LLC Mortgage loan	Dec. 31, 2012 Hamilton 1025, LLC item	Dec. 31, 2011 Hamilton 1025, LLC item	Dec. 31, 2010 Hamilton 1025, LLC item	Mar. 02, 2005 Hamilton 1025, LLC item	Mar. 31, 2005 Hamilton 1025, LLC Mortgage loan	Mar. 02, 2005 Hamilton 1025, LLC Mortgage loan	Oct. 31, 2004 Hamilton Minuteman, LLC	Dec. 31, 2012 Hamilton Minuteman, LLC item	Dec. 31, 2011 Hamilton Minuteman, LLC item	Dec. 31, 2010 Hamilton Minuteman, LLC item	Sep. 30, 2004 Hamilton Minuteman, LLC item	Jan. 31, 2007 Hamilton Minuteman, LLC Mortgage loan	Oct. 31, 2004 Hamilton Minuteman, LLC Mortgage loan	Dec. 31, 2012 Hamilton Minuteman, LLC Mortgage loan	Dec. 31, 2006 Hamilton Minuteman, LLC Mortgage loan	Dec. 31, 2012 Hamilton on Main, LLC item	Dec. 31, 2011 Hamilton on Main, LLC item	Dec. 31, 2010 Hamilton on Main, LLC item	May 31, 2008 Hamilton on Main, LLC item	Aug. 31, 2004 Hamilton on Main, LLC item	Dec. 31, 2012 Hamilton on Main Apartments, LLC	Dec. 31, 2005 Hamilton on Main Apartments, LLC Mortgage loan	Dec. 31, 2012 Hamilton on Main Apartments, LLC Mortgage loan	Dec. 31, 2012 345 Franklin, LLC item	Dec. 31, 2011 345 Franklin, LLC item	Dec. 31, 2010 345 Franklin, LLC item	Nov. 30, 2001 345 Franklin, LLC item	Nov. 30, 2001 345 Franklin, LLC Mortgage loan	Dec. 31, 2012 345 Franklin, LLC Mortgage loan	Dec. 31, 2012 Residential buildings Hamilton Park Towers, LLC item	Dec. 31, 2011 Residential buildings Hamilton Park Towers, LLC item	Dec. 31, 2010 Residential buildings Hamilton Park Towers, LLC item	Dec. 31, 2012 Residential buildings Hamilton Bay Apartments, LLC item	Dec. 31, 2011 Residential buildings Hamilton Bay Apartments, LLC item	Dec. 31, 2010 Residential buildings Hamilton Bay Apartments, LLC item	Dec. 31, 2012 Residential buildings Hamilton Bay, LLC item	Dec. 31, 2011 Residential buildings Hamilton Bay, LLC item	Dec. 31, 2010 Residential buildings Hamilton Bay, LLC item	Dec. 31, 2012 Residential buildings Hamilton Essex 81, LLC item	Dec. 31, 2011 Residential buildings Hamilton Essex 81, LLC item	Dec. 31, 2010 Residential buildings Hamilton Essex 81, LLC item	Dec. 31, 2012 Residential buildings Hamilton 1025, LLC item	Dec. 31, 2011 Residential buildings Hamilton 1025, LLC item	Dec. 31, 2010 Residential buildings Hamilton 1025, LLC item	Dec. 31, 2012 Residential buildings Hamilton Minuteman, LLC item	Dec. 31, 2011 Residential buildings Hamilton Minuteman, LLC item	Dec. 31, 2010 Residential buildings Hamilton Minuteman, LLC item	Dec. 31, 2012 Residential buildings Hamilton on Main, LLC item	Dec. 31, 2011 Residential buildings Hamilton on Main, LLC item	Dec. 31, 2010 Residential buildings Hamilton on Main, LLC item	Dec. 31, 2012 Residential buildings 345 Franklin, LLC item	Dec. 31, 2011 Residential buildings 345 Franklin, LLC item	Dec. 31, 2010 Residential buildings 345 Franklin, LLC item	Mar. 07, 2005 Apartment Hamilton Essex Development, LLC and Hamilton Essex 81, LLC item	Mar. 07, 2005 Commercial Hamilton Essex Development, LLC and Hamilton Essex 81, LLC item	Dec. 31, 2012 Commercial Hamilton Essex 81, LLC item	Dec. 31, 2011 Commercial Hamilton Essex 81, LLC item	Dec. 31, 2010 Commercial Hamilton Essex 81, LLC item	Dec. 31, 2012 Commercial Hamilton Essex Development, LLC item	Dec. 31, 2011 Commercial Hamilton Essex Development, LLC item	Dec. 31, 2010 Commercial Hamilton Essex Development, LLC item	Dec. 31, 2012 Commercial Hamilton 1025, LLC item	Dec. 31, 2011 Commercial Hamilton 1025, LLC item	Dec. 31, 2010 Commercial Hamilton 1025, LLC item	Mar. 07, 2005 Car parking lot Hamilton Essex Development, LLC and Hamilton Essex 81, LLC item	Apr. 30, 2012 HBC	Feb. 29, 2012 HBC	Dec. 31, 2011 HBC	Oct. 31, 2011 HBC	Aug. 31, 2011 HBC	Aug. 31, 2010 HBC	Oct. 31, 2009 HBC	Dec. 31, 2010 HBC	Dec. 31, 2012 HBC	Dec. 31, 2011 HBC	Dec. 31, 2010 HBC	Oct. 28, 2009 HBC	Apr. 30, 2012 HBC Hamilton Park Towers, LLC Mortgage loan	Feb. 29, 2012 HBC Hamilton Park Towers, LLC Mortgage loan	Dec. 31, 2011 HBC Hamilton Park Towers, LLC Mortgage loan	Oct. 31, 2011 HBC Hamilton Park Towers, LLC Mortgage loan	Aug. 31, 2011 HBC Hamilton Park Towers, LLC Mortgage loan	Aug. 31, 2010 HBC Hamilton Park Towers, LLC Mortgage loan	Oct. 31, 2009 HBC Hamilton Park Towers, LLC Mortgage loan	Dec. 31, 2010 HBC Hamilton Park Towers, LLC Mortgage loan	Dec. 31, 2012 HBC Hamilton Park Towers, LLC Mortgage loan	Dec. 31, 2011 HBC Hamilton Park Towers, LLC Mortgage loan	Oct. 28, 2009 HBC Hamilton Park Towers, LLC Mortgage loan	Dec. 31, 2012 Management Company item	Dec. 31, 2012 Minimum Mortgage loan	Dec. 31, 2012 Minimum Limited Partnerships	Dec. 31, 2012 Minimum Hamilton on Main Apartments, LLC	Dec. 31, 2012 Minimum Harold Brown	Dec. 31, 2012 Maximum Mortgage loan	Dec. 31, 2012 Maximum Limited Partnerships	Dec. 31, 2012 Maximum Hamilton on Main Apartments, LLC	Dec. 31, 2012 Maximum Harold Brown
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of limited partnerships and limited liability companies in which the entity has invested	9
Number of partnerships investing in commercial property	3
Percentage of ownership interest								40.00%									50.00%								50.00%													50.00%							50.00%									50.00%							50.00%																																																																40.00%		43.20%		50.00%		60.00%
Number of employees having ownership interest																																																																																																																											6
Investments in joint venture	$ 13,986,173	$ 16,780,657						$ 15,925,000									$ 2,500,000								$ 2,000,000													$ 2,352,000							$ 5,075,000									$ 8,000,000							$ 1,533,000
Number of units					409	409	409	409					48	48	48	20	168			120	120	120					49	49	49		1	1	1		176	176	176	176				42	42	42	42					148	148	148		280				40	40	40	40			409	409	409	48	48	48	120	120	120	48	48	48	175	175	175	42	42	42	148	148	148	40	40	40	49		1	1	1	1	1	1	1	1	1
Number of properties																																																																																									1
Purchase price of investments								129,500,000									30,875,000								14,300,000													23,750,000							10,100,000									56,000,000
Borrowings									89,914,000									2,368,000						4,750,000		10,750,000				8,352,000				2,093,000					5,000,000							5,500,000	8,025,000									16,825,000																																																		7,168,000												7,168,000		7,168,000
Interest rate (as a percent)											5.57%							5.75%						5.57%						5.79%										5.67%						5.67%										5.18%						6.90%																																																	6.00%											6.00%
Interest rate (as a percent)																																																																																																																												2.80%				6.90%
Period for which the entity is required to make interest only payments									2 years															5 years															5 years							5 years										3 years
Amortization period of debt									30 years															30 years						30 years									30 years							30 years										30 years						30 years
Outstanding amount of mortgage loan	138,055,522	139,161,612			88,611,686	89,733,192	89,914,000			88,612,000			4,702,087	4,750,000	4,750,000					1,668,000	1,668,000	1,668,000					8,352,317	8,462,041	8,566,871		2,093,184	2,144,796	2,162,000		4,934,741	4,995,487	5,000,000					5,433,472	5,500,000	5,500,000				5,433,000		15,611,045	15,887,203	16,151,526					15,611,000	6,850,179	7,019,119	7,176,827																																										1,668,600							1,668,600					1,668,600							1,668,600
Investments funded using cash reserves				8,757,000
Term of debt																																							10 years							10 years										10 years						12 years																																												4 years												4 years
Notice period for principal paydown of debt																																																																																																										6 months												6 months
Principal amount requested to be repaid																																																																																																									2,500,000												2,500,000
Repayment of loan																																																																																																				918,600							2,500,000					918,600							2,500,000
Principal payments elected to be made																																																																																																					750,000	1,000,000	1,000,000	1,000,000									750,000	1,000,000	1,000,000	1,000,000
Interest paid	7,776,000	8,011,000	8,182,000																																																																																																									18,960	238,673	414,740										18,960	238,673
Amortization period of intangible assets					12 months
Number of units retained for long-term investment					409	409	409						48	48	48								48				49	49	49		1	1	1		49	49	49	49				42	42	42						148	148	148						40	40	40
Number of units sold												105							105	105	105	105													127	127	127	127															137
Capacity of real estate property (in cars per lot)																																																																																																			50
Margin over basis of interest rate (as a percent)																																		2.25%
Basis of interest rate																																		Libor
Notional margin over basis of interest rate (as a percent)																																		0.21%
Principal amount of debt to be paid per month																																		4,301
Cost associated with loan extension																																		6,000
Amount returned to partnership																																									3,775,000
Cash contribution by the entity towards loan																																																	1,250,000
Ownership percentage in third party entity by majority shareholder of the General Partner																																																							31.00%
Ownership percentage in third party entity by President of management company																																																							5.00%
Percentage of variable commission on each sale																																																																																																																														3.00%				5.00%
Term excluding period for which interest only payments to be made																																																								7 years
Net proceeds after funding escrow accounts and closing costs																																																								16,700,000
Fee for early extinguishment of debt																																																								400,000
Final payment due on the maturity date																																																															$ 6,000,000

XML

CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2012	Dec. 31, 2011
ASSETS
Rental Properties	$ 95,435,850	$ 98,924,534
Cash and Cash Equivalents	6,981,906	4,050,157
Rents Receivable	475,083	434,252
Real Estate Tax Escrows	449,652	401,325
Prepaid Expenses and Other Assets	3,073,890	3,866,652
Investments in Unconsolidated Joint Ventures	13,986,173	16,780,657
Financing and Leasing Fees	1,135,936	919,187
Total Assets	121,538,490	125,376,764
LIABILITIES AND PARTNERS' CAPITAL
Note Payable		1,668,600
Mortgage Notes Payable	138,055,522	139,161,612
Accounts Payable and Accrued Expenses	2,361,942	2,253,696
Advance Rental Payments and Security Deposits	3,636,704	3,603,708
Total Liabilities	144,054,168	146,687,616
Commitments and Contingent Liabilities (Notes 3 and 9)
Partners' Capital 130,444 and 131,484 units outstanding in 2012 and 2011 respectively	(22,515,677)	(21,310,851)
Total Liabilities and Partners' Capital	$ 121,538,490	$ 125,376,764

XML

MORTGAGE NOTES PAYABLE (Details) (USD $)		12 Months Ended	1 Months Ended		1 Months Ended		12 Months Ended
	Dec. 31, 2012	Dec. 31, 2012 Mortgages payable	Jul. 31, 2011 Mortgages payable Battle Green Apartments	Jul. 27, 2011 Mortgages payable Battle Green Apartments	Jun. 30, 2011 Mortgages payable Battle Green Apartments Harold Brown	Jun. 02, 2011 Mortgages payable Battle Green Apartments Harold Brown	Dec. 31, 2012 Mortgages payable Boylston Street, Westgate Woburn, School Street and Cypress Street
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)				4.95%		6.00%
Amount of monthly installments including principal		$ 742,000
Effective interest rate (as a percent)	5.65%	5.63%		5.07%
Weighted average interest rate (as a percent)		5.53%
Annual maturities of mortgage debt
2013-current maturities	41,275,000
2014	14,669,000
2015	2,184,000
2016	194,000
2017	205,000
Thereafter	79,529,000
Total	138,056,000
Additional disclosures related to mortgages
Borrowings			5,000,000		3,998,573
Amortization period of debt			30 years
Deferred financing cost associated with mortgage				100,000			353,000
Total amount expected to be refinanced							47,000,000
Expected prepayment penalties upon refinancing							$ 250,000

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Cash Flows from Operating Activities
Net income (loss)	$ 3,633,798	$ 9,291,281	$ (1,359,232)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	6,092,725	5,910,746	5,531,509
Loss from investments in joint venture	1,487,484	1,913,800	3,869,996
Depreciation and amortization - discontinued operations		30,132	90,886
(Gain) on the sale of real estate from discontinued operations		(7,720,459)
Change in operating assets and liabilities
(Increase) Decrease in rents receivable	(40,831)	188,692	415,876
Increase (Decrease) in accounts payable and accrued expense	108,246	(186,445)	244,896
(Increase) Decrease in real estate tax escrow	(48,327)	(99,472)	9,729
(Increase) Decrease in prepaid expenses and other assets	685,772	(432,957)	(480,598)
Increase in advance rental payments and security deposits	32,996	195,807	(9,460)
Total Adjustments	8,318,065	(200,156)	9,672,834
Net cash provided by operating activities	11,951,863	9,091,125	8,313,602
Cash Flows Used in Investing Activities
Proceeds from unconsolidated joint ventures	1,366,383	1,408,950	1,140,801
(Investment in) unconsolidated joint ventures	(59,383)	(26,450)	(123,301)
Purchase and improvement of rental properties	(2,360,399)	(2,618,794)	(2,268,039)
Purchase of rental properties		10,041,784
Net proceeds from the sale of rental property		8,297,928
Net cash (used in) investing activities	(1,053,399)	(2,980,150)	(1,250,539)
Cash Flows from Financing Activities
Payment of financing costs	(353,400)	(105,564)	(8,161)
Proceeds of mortgage notes payable		5,000,000	904,122
Proceeds of note payable		3,998,573
Principal payments of mortgage notes payable	(1,106,091)	(3,519,047)	(864,815)
Principal payments of note payable	(1,668,600)	(6,998,573)	(2,500,000)
Stock buyback	(906,214)		(540,911)
Distributions to Partners	(3,932,410)	(3,681,566)	(3,687,600)
Net cash (used in) financing activities	(7,966,715)	(5,306,177)	(6,697,365)
Net Increase in Cash and Cash Equivalents	2,931,749	804,798	365,698
Cash and Cash Equivalents, at beginning of period	4,050,157	3,245,361	2,879,663
Cash and Cash Equivalents, at end of period	$ 6,981,906	$ 4,050,157	$ 3,245,361

XML

SUBSEQUENT EVENTS (Details) (USD $)	3 Months Ended								12 Months Ended			64 Months Ended		0 Months Ended	12 Months Ended			64 Months Ended		0 Months Ended	12 Months Ended			64 Months Ended		3 Months Ended		12 Months Ended			3 Months Ended		12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2012	Dec. 31, 2009	Sep. 17, 2008 Class B	Dec. 31, 2012 Class B	Dec. 31, 2011 Class B	Dec. 31, 2010 Class B	Dec. 31, 2012 Class B	Dec. 31, 2009 Class B	Sep. 17, 2008 General Partnership units	Dec. 31, 2012 General Partnership units	Dec. 31, 2011 General Partnership units	Dec. 31, 2010 General Partnership units	Dec. 31, 2012 General Partnership units	Dec. 31, 2009 General Partnership units	Mar. 31, 2013 Subsequent event	Feb. 04, 2013 Subsequent event	Dec. 31, 2012 Subsequent event 32 unit Nashoba Apartments LP in Acton, Massachusetts	Dec. 31, 2011 Subsequent event 32 unit Nashoba Apartments LP in Acton, Massachusetts	Dec. 31, 2010 Subsequent event 32 unit Nashoba Apartments LP in Acton, Massachusetts	Mar. 31, 2013 Subsequent event Class B	Mar. 31, 2013 Subsequent event General Partnership units	Dec. 31, 2012 Pro Forma
SUBSEQUENT EVENTS
Repurchase of depository receipts (in shares)									24,967		20,688	1,219,927					164	1,921			10		9	101		9,709
Repurchase price of depository receipts (in dollars per share)												$ 24.62														$ 32.24
Repurchase price of units (in dollars per share)																		$ 613.94						$ 613.94		$ 967.20					$ 967.20	$ 967.20
Repurchase of units									$ 906,214		$ 540,911	$ 31,386,000			$ 171,148		$ 102,591				$ 9,008		$ 5,400			$ 321,240					$ 74,335	$ 3,912
Repurchase of units (in shares)									(1,040)		(862)			6,309	198					333											76.86	4.05
Distribution per unit (in dollars per unit)	$ 30.00				$ 28.00				$ 30.00	$ 28.00	$ 28.00	$ 30.00															$ 7.50
Distributions per Depositary Receipt (in dollars per share)	$ 1.00				$ 0.93				$ 1.00	$ 0.93	$ 0.93	$ 1.00															$ 0.25
ASSETS
Rental Properties	95,435,850				98,924,534				95,435,850	98,924,534		95,435,850																1,283,000	1,210,000				95,435,850
Accumulated depreciation																												821,000	743,000
Rental property (net)																												462,000	467,000
Other current assets																												123,000	80,000
Other assets																												2,000	6,000
Total Assets	121,538,490				125,376,764				121,538,490	125,376,764		121,538,490																587,000	553,000				146,478,378
Liabilities:
Mortgage Notes Payable	138,055,522				139,161,612				138,055,522	139,161,612		138,055,522																2,000,000	2,000,000				163,035,536
Other liabilities																												71,000	70,000
Total Liabilities	144,054,168				146,687,616				144,054,168	146,687,616		144,054,168																2,071,000	2,070,000				169,034,182
Partner's equity	(22,515,677)				(21,310,851)				(22,515,677)	(21,310,851)	(26,920,566)	(22,515,677)	(21,332,823)		(4,273,666)	(4,045,782)	(5,111,627)	(4,273,666)	(4,050,138)		(224,929)	(212,935)	(269,033)	(224,929)	(213,165)			(1,484,000)	(1,517,000)				(22,555,804)
Total Liabilities and Partners' Capital	121,538,490				125,376,764				121,538,490	125,376,764		121,538,490																587,000	553,000				146,478,378
Statements of Income
Rental and other Income									35,244,008	33,608,799	31,816,175																	462,000	451,000	450,000			35,244,008
Operating Expenses									3,633,619	4,080,647	3,784,401																	241,000	260,000	261,000			3,633,619
Interest expense									(7,802,999)	(7,965,422)	(8,053,628)																	108,000	108,000	108,000			(7,730,177)
Depreciation									6,092,725	5,910,746	5,531,509																	80,000	72,000	63,000			6,205,673
Total Expenses	5,704,596	5,730,319	5,413,735	5,861,694	5,722,971	5,665,232	5,508,842	5,773,941	22,710,344	22,670,986	21,916,664																	429,000	440,000	432,000			22,823,292
Net Income (loss)	1,185,131	774,453	1,047,261	626,953	568,257	456,926	8,093,285	172,812	3,633,798	9,291,281	(1,359,232)				690,422	1,765,343	(258,254)				36,338	92,913	(13,592)					33,000	11,000	18,000			3,593,672
Cash Flow Information
Distributions from (to) Nashoba																												$ 1,000	$ (72,000)	$ 45,000

XML

DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE (Tables)

12 Months Ended

Dec. 31, 2012

DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

Summary of income from discontinued operations

	Year Ended December 31,
	2012		2011		2010
Total Revenues	$	—	$	348,997	$	910,155
Operating and other expenses		—		237,298		599,402
Depreciation and amortization		—		30,132		90,886
		—		267,430		690,288
Income from discontinued operations	$	—	$	81,567	$	219,867

Avon Street Apartments

DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

Summary of realized gain and loss on sale of rental property

Gain on the sale of Avon Street:
Sale price	$	8,750,000
Net book value		(594,035	)
Expense of sale		(435,506	)
Gain on the sale of real estate	$	7,720,459

XML

DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

12 Months Ended

Dec. 31, 2012

DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

NOTE 16. DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

        The following tables summarize income from discontinued operations and the related realized gain on sale of rental property for the years ended December 31, 2012, 2011 and 2010:

	Year Ended December 31,
	2012		2011		2010
Total Revenues	$	—	$	348,997	$	910,155
Operating and other expenses		—		237,298		599,402
Depreciation and amortization		—		30,132		90,886
		—		267,430		690,288
Income from discontinued operations	$	—	$	81,567	$	219,867

Gain on the sale of Avon Street:
Sale price	$	8,750,000
Net book value		(594,035	)
Expense of sale		(435,506	)
Gain on the sale of real estate	$	7,720,459

XML

QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2012

QUARTERLY FINANCIAL DATA (UNAUDITED)

Schedule of quarterly financial data (unaudited)

	Three Months Ended
	March 31, 2012			June 30, 2012			September 30, 2012			December 31, 2012			Total
Revenue	$	8,852,382		$	8,800,416		$	8,875,596		$	9,104,015		$	35,632,409
Expenses		5,861,694			5,413,735			5,730,319			5,704,596			22,710,344
Income Before Other Income		2,990,688			3,386,681			3,145,277			3,399,419			12,922,065
Other Income (loss)		(2,363,735	)		(2,339,420	)		(2,370,824	)		(2,214,288	)		(9,288,267	)
Net Income	$	626,953		$	1,047,261		$	774,453		$	1,185,131		$	3,633,798
Net Income per Unit before discontinued operations	$	4.77		$	7.97		$	5.90		$	9.07		$	27.69
Income per Unit from discontinued operations		0.00			0.00			0.00			0.00			0.00
Net income per Unit	$	4.77		$	7.97		$	5.90		$	9.07		$	27.69
Income per depositary receipt before discontinued operations		0.16			0.27			0.20			0.30			0.92
Income per depositary receipt from discontinued operations		0.00			0.00			0.00			0.00			0.00
Net Income per depositary receipt	$	0.16		$	0.27		$	0.20		$	0.30		$	0.92

	Three Months Ended
	March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011			Total
Revenue	$	8,280,894		$	8,345,643		$	8,648,526		$	8,760,538		$	34,035,602
Expenses		5,773,941			5,508,842			5,665,232			5,722,971			22,670,986
Income Before Other Income		2,506,953			2,836,801			2,983,294			3,037,567			11,364,616
Income (loss) from discontinued operations		68,599			7,736,789			(3,054	)		(308	)		7,802,026
Other Income (loss)		(2,402,740	)		(2,480,305	)		(2,523,314	)		(2,469,002	)		(9,875,361	)
Net Income	$	172,812		$	8,093,285		$	456,926		$	568,257		$	9,291,281
Net Income per unit before discontinued operations	$	0.79		$	2.71		$	3.50		$	4.33		$	11.33
Income (loss) per unit from discontinued operations		0.52			58.84			(0.02	)		—			59.34
Net income per unit	$	1.31		$	61.55		$	3.48		$	4.33		$	70.67
Income per depositary receipt before discontinued operations		0.02			0.09			0.12			0.15			0.38
Income per depositary receipt from discontinued operations		0.02			1.96			—			—			1.98
Net Income per depositary receipt	$	0.04		$	2.05		$	0.12		$	0.15		$	2.36

XML

SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2012

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 18. SUBSEQUENT EVENTS

        From January 1, 2013 through March 14, 2013, the Partnership purchased a total of 9,709 Depositary Receipts. The average price was $32.24 per receipt or $967.20 per unit. The total cost was $321,240. The Partnership is required to repurchase 76.86 Class B Units and 4.05 General Partnership units at a cost of $74,335 and $3,912, respectively.

        On February 4, 2013, the Partnership announced the approval of a quarterly distribution to its Class A Limited Partners and holders of Depositary Receipts of record as of March 15, 2013 and payable on March 31, 2013 of $7.50 per unit and $0.25 per receipt.

Discontinued Operations

        At the February 4, 2013 meeting of the Advisory Committee, the Committee approved managements plan to seek a sale of the 32 unit Nashoba Apartments LP in Acton, Massachusetts. This complex will be accounted for as a discontinued operation in 2013. There is no assurance that the complex can be sold at an acceptable price. The selling price is expected to be well in excess of its book value and outstanding mortgage. Summary historical information is presented below:

        Financial Statements for Nashoba Apartments LP is as follows:

Nashoba Apartments LP
Balance Sheets
(In Thousands)

	December 31,
	2012			2011
Assets:
Rental property	$	1,283		$	1,210
Accumulated depreciation		821			743
Rental property (net)		462			467
Other current assets		123			80
Other assets		2			6
Total assets	$	587		$	553
Liabilities:
Mortgage note payable	$	2,000		$	2,000
Other liabilities		71			70
Total liabilities		2,071			2,070
Partner's equity		(1,484	)		(1,517	)
Total liabilities & partner's equity	$	587		$	553

Nashoba Apartments LP
Statements of Income
(In Thousands)

	Years ended December 31,
	2012		2011		2010
Rental and other Income	$	462	$	451	$	450
Operating Expenses		241		260		261
Interest Expense		108		108		108
Depreciation		80		72		63
Total Expenses		429		440		432
Net Income	$	33	$	11	$	18

Nashoba Apartments LP
Cash Flow Information
(In Thousands)

	Years ended December 31,
	2012		2011			2010
Distributions from (to) Nashoba	$	1	$	(72	)	$	45

Mortgage Notes Payable—Refinancing

        On February 25, 2013, the Partnership paid off the mortgage of approximately $3,697,000 on Hamilton Cypress LLC. There was no penalty on the early payoff. The funds used to pay off the mortgage were from the Partnerships cash reserves.

        On March 11, 2013, the Partnership refinanced the property located at School Street. The new loan is $15,000,000 with an interest rate of 3.7% due in 2023. The loan calls for interest only for three years followed by principal and interest payments over the remainder of the loan term. The costs associated with this refinancing were approximately $159,000.

        Additionally, the Partnership is anticipating refinancing debt of approximately $28,000,000 in maturing debt for Boylston Downtown LP and Westgate Apartments LLC. In connection with this refinancing, the Partnership may borrow additional debt of approximately $29,000,000. These funds will be used for future acquisitions, repurchase of additional Depositary Receipts, improvements to its properties or other operating items.

Unaudited Pro Forma Financial Information

        Four of the Partnerships mortgaged properties have or will have changes to their mortgage debt during 2013. On February 25, 2013, the Partnership paid off the mortgage of approximately $3,697,000 on Hamilton Cypress LLC. On March 11, 2013, the Partnership refinanced the property held by School Street 9, LLC with a new mortgage loan in the amount of $15,000,000. For the balance of 2013, the Partnership is working towards refinancing the properties held by Boylston Downtown L.P. and Westgate Apartments, LLC. As of March 22, 2013 no firm commitment had been executed with a lender. However, the Partnership anticipates refinancing the existing Boylston Downtown loan of $19,500,000 with a new loan of $40,000,000 and refinancing the existing Westgate Apartments loan of approximately $7,932,000 with a new loan of $17,000,000. The cumulative effects of these financing activities are presented in the following unaudited pro forma financial statements.

        The following unaudited pro forma consolidated balance sheet as of December 31, 2012 has been prepared to give effect to the payoff and refinancing of mortgage debt occurring in the first quarter of 2013 and additional refinancing expected to occur during the balance of the year. The following unaudited pro forma balance sheet does not purport to reflect the actual transactions as the majority have yet to occur.

        The following unaudited pro forma consolidated statement of income for the twelve months ended December 31, 2012 has been prepared to give effect of the payoff and refinancing of mortgage debt occurring in the first quarter of 2013 and additional refinancing expected to occur during the balance of the year.

        The following unaudited pro forma financial statements have been prepared for informational purposes only and are not necessarily indicative of future results or actual results that would have been achieved had the Partnership structured its debt refinancing as presented.

New England Realty Associates Limited Partnership
Pro Forma Consolidated Balance Sheet
As of December 31, 2012
(Unaudited)

				Pro Forma
	Historical NERA			Adjustments Refinancings			Consolidated Totals
ASSETS
Rental Properties	$	95,435,850		$	—		$	95,435,850
Cash and Cash Equivalents		6,981,906	(a)		21,465,693			28,447,599
Rents Receivable		475,083			—			475,083
Real Estate Tax Escrows		449,652			—			449,652
Prepaid Expenses and Other Assets		3,073,890	(b)		2,028,400			5,102,290
Investments in Unconsolidated Joint Ventures		13,986,173			—			13,986,173
Financing and Leasing Fees		1,135,936	(c)		1,445,795			2,581,731
Total Assets	$	121,538,490		$	24,939,888		$	146,478,378
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$	138,055,522	(d)	$	24,980,014		$	163,035,536
Accounts Payable and Accrued Expenses		2,361,942			—			2,361,942
Advance Rental Payments and Security Deposits		3,636,704			—			3,636,704
Total Liabilities	$	144,054,168		$	24,980,014		$	169,034,182
Partners' Capital 130,444 units outstanding in 2012		(22,515,678	)		(40,126	)		(22,555,804	)
Total Liabilities and Partners' Capital	$	121,538,490		$	24,939,888		$	146,478,378

New England Realty Associates Limited Partnership
Pro Forma Consolidated Statement of Income
For the Twelve Months Ended December 31, 2012
(Unaudited)

				Pro Forma
	Historic NERA			Adjustments Refinancing			Consolidated Totals
Revenues
Rental income	$	35,244,008		$	—		$	35,244,008
Laundry and sundry income		388,401			—			388,401
		35,632,409			—			35,632,409
Expenses
Administrative		1,825,951			—			1,825,951
Depreciation and amortization		6,092,725	(e)		112,948			6,205,673
Management fee		1,446,620			—			1,446,620
Operating		3,633,619			—			3,633,619
Renting		183,529			—			183,529
Repairs and maintenance		5,179,408			—			5,179,408
Taxes and insurance		4,348,492			—			4,348,492
		22,710,344			112,948			22,823,292
Income Before Other Income and Discontinued Operations		12,922,065			(112,948	)		12,809,117
Other Income (Loss)
Interest income		2,216			—			2,216
Interest expense		(7,802,999	)(f)		72,822			(7,730,177	)
(Loss) from investments in unconsolidated joint ventures		(1,487,484	)		—			(1,487,484	)
Other		—			—			—
		(9,288,267	)		72,822			(9,215,445	)
Income From Continuing Operations		3,633,798			(40,126	)		3,593,672
Discontinued Operations
Income from discontinued operations		—			—			—
Gain on the sale of real estate from discontinued operations		—			—			—
		—			—			—
Net Income	$	3,633,798		$	(40,126	)	$	3,593,672
Income per Unit
Income before discontinued operations	$	27.69		$	(0.31	)	$	27.38
Income from discontinued operations		—			—			—
Net Income per Unit	$	27.69		$	(0.30	)	$	27.38
Weighted Average Number of Units Outstanding		131,230			131,230			131,230

Notes to unaudited pro forma consolidated balance sheet and consolidated statement of income:

(a)

Cash adjusted for new loan proceeds, existing loan payoff, financing fees, replacement reserves and changes to mortgage debt service.

(b)

Replacement reserves required by new debt agreement

(c)

Change in prepaid financing fees between existing debt and refinanced debt

(d)

Difference between existing debt balance and refinanced debt balance

(e)

Increase in the amortization of the balance of prepaid finance costs for the existing debt and the proportionate share of prepaid finance costs for the refinanced debt

(f)

Decrease in mortgage interest expense between existing mortgage debt and refinanced debt

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SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2012

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

        Line of Business:    New England Realty Associates Limited Partnership ("NERA" or the "Partnership") was organized in Massachusetts in 1977. NERA and its subsidiaries own 24 properties which include 16 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,251 apartment units, 19 condominium units and 110,949 square feet of commercial space. Additionally, the Partnership also owns a 40-50% interest in nine residential and mixed use properties consisting of 799 apartment units, 12,500 square feet of commercial space and a 50 car parking lot. The properties are located in Eastern Massachusetts and Southern New Hampshire.

        Basis of Presentation:    The preparation of the financial statements, in conformity with accounting principles generally accepted in the United State of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Accordingly, actual results could differ from those estimates.

        Principles of Consolidation:    The consolidated financial statements include the accounts of NERA and its subsidiaries. NERA has a 99.67% to 100% ownership interest in each subsidiary except for the nine limited liability companies (the "Investment Properties" or "Joint Ventures") in which the Partnership has a 40 - 50% ownership interest. The consolidated group is referred to as the "Partnership." Minority interests are not recorded, since they are insignificant. All significant intercompany accounts and transactions are eliminated in consolidation. The Partnership accounts for its investment in the above-mentioned Investment Properties using the equity method of consolidation. (See Note 14: Investments in Unconsolidated Joint Ventures).

        The Partnership accounts for its investments in joint ventures using the equity method of accounting. These investments are recorded initially at cost, as Investments in Unconsolidated Joint Ventures, and subsequently adjusted for equity in earnings and cash contributions and distributions. The authoritative guidance on consolidation provides guidance on the identification of entities for which control is achieved through means other than voting rights ("variable interest entities" or "VIEs") and the determination of which business enterprise, if any, should consolidate the VIE (the "primary beneficiary"). Generally, the consideration of whether an entity is a VIE applies when either (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest, (2) the equity investment at risk is insufficient to finance that entity's activities without additional subordinated financial support or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest.

        On January 1, 2010, the Partnership adopted the updated provisions of ASC 810, pursuant to FASB No. 167, which amends FIN 46(R) to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. Additionally, FASB No. 167 amends FIN 46(R) to eliminate the quantitative approach previously required for determining the primary beneficiary of a variable interest entity, which was based on determining which enterprise absorbs the majority of the entity's expected losses, receives a majority of the entity's expected residual returns, or both. FASB No. 167 amends certain guidance in Interpretation 46(R) for determining whether an entity is a variable interest entity. Also, FASB No. 167 amends FIN 46(R) to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise's involvement in a variable interest entity. The enhanced disclosures are required for any enterprise that holds a variable interest in a variable interest entity. The adoption of this guidance did not have a material impact to these financial statements.

        Impairment:    On an annual basis management assesses whether there are any indicators that the value of the Partnership's rental properties or investments in unconsolidated subsidiaries may be impaired. In addition to identifying any specific circumstances which may affect a property or properties, management considers other criteria for determining which properties may require assessment for potential impairment. The criteria considered by management include reviewing low leased percentages, significant near term lease expirations, recently acquired properties, current and historical operating and/or cash flow losses, near term mortgage debt maturities or other factors that might impact the Partnership's intent and ability to hold property. A property's value is impaired only if management's estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the property over the fair value of the property. The Partnership's estimates of aggregate future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter management's assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved. The Partnership has not recognized an impairment loss since 1995.

        Revenue Recognition:    Rental income from residential and commercial properties is recognized over the term of the related lease. For residential tenants, amounts 60 days in arrears are charged against income. The commercial tenants are evaluated on a case by case basis. Certain leases of the commercial properties provide for increasing stepped minimum rents, which are accounted for on a straight-line basis over the term of the lease. Contingent rent for commercial properties are received from tenants for certain costs as provided in the lease agreement. The costs generally include real estate taxes, utilities, insurance, common area maintenance and recoverable costs. Concessions made on residential leases are also accounted for on the straight-line basis.

        Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the differences between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management's estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed-rate renewal options for below-market leases. The capitalized above-market lease values for acquired properties are amortized as a reduction of base rental revenue over the remaining term of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.

        Rental Properties:    Rental properties are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred; improvements and additions which improve or extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost of the asset and related accumulated depreciation is eliminated from the accounts, and any gain or loss on such disposition is included in income. Fully depreciated assets are removed from the accounts. Rental properties are depreciated by both straight-line and accelerated methods over their estimated useful lives. Upon acquisition of rental property, the Partnership estimates the fair value of acquired tangible assets, consisting of land, building and improvements, and identified intangible assets and liabilities assumed, generally consisting of the fair value of (i) above and below market leases, (ii) in-place leases and (iii) tenant relationships. The Partnership allocated the purchase price to the assets acquired and liabilities assumed based on their fair values. The Partnership records goodwill or a gain on bargain purchase (if any) if the net assets acquired/liabilities assumed exceed the purchase consideration of a transaction. In estimating the fair value of the tangible and intangible assets acquired, the Partnership considers information obtained about each property as a result of its due diligence and marketing and leasing activities, and utilizes various valuation methods, such as estimated cash flow projections utilizing appropriate discount and capitalization rates, estimates of replacement costs net of depreciation, and available market information. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant.

        Other intangible assets acquired include amounts for in-place lease values and tenant relationship values, which are based on management's evaluation of the specific characteristics of each tenant's lease and the Partnership's overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant relationships include the nature and extent of the Partnership's existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant's credit quality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles are amortized to expense over the anticipated life of the relationships.

        In the event that facts and circumstances indicate that the carrying value of a rental property may be impaired, an analysis of the value is prepared. The estimated future undiscounted cash flows are compared to the asset's carrying value to determine if a write-down to fair value is required.

        Financing and Leasing Fees:    Financing fees are capitalized and amortized, using the interest method, over the life of the related mortgages. Leasing fees are capitalized and amortized on a straight-line basis over the life of the related lease. Unamortized balances are expensed when the corresponding fee is no longer applicable.

        Income Taxes:    The financial statements have been prepared on the basis that NERA and its subsidiaries are entitled to tax treatment as partnerships. Accordingly, no provision for income taxes have been recorded (See Note 13).

        Cash Equivalents:    The Partnership considers cash equivalents to be all highly liquid instruments purchased with a maturity of three months or less.

        Segment Reporting:    Operating segments are revenue producing components of the Partnership for which separate financial information is produced internally for management. Under the definition, NERA operated, for all periods presented, as one segment.

        Comprehensive Income:    Comprehensive income is defined as changes in partners' equity, exclusive of transactions with owners (such as capital contributions and dividends). NERA did not have any comprehensive income items in 2012, 2011, or 2010 other than net income as reported.

        Income Per Depositary Receipt:    Effective January 3, 2012, the Partnership authorized a 3-for-1 forward split of its Depositary Receipts listed on the NYSE Amex and a concurrent adjustment of the exchange ratio of Depositary Receipts for Class A Units of the Partnership from 10-to-1 to 30-to-1, such that each Depositary Receipt represents one-thirtieth (¹/30) of a Class A Unit of the Partnership. All references to Depositary Receipts in the report are reflective of the 3-for-1 forward split.

        Income Per Unit:    Net income per unit has been calculated based upon the weighted average number of units outstanding during each period presented. The Partnership has no dilutive units and, therefore, basic net income is the same as diluted net income per unit (see Note 7).

        Concentration of Credit Risks and Financial Instruments:    The Partnership's properties are located in New England, and the Partnership is subject to the general economic risks related thereto. No single tenant accounted for more than 5% of the Partnership's revenues in 2012, 2011, or 2010. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At December 31, 2012, substantially all of the Partnership's cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01% to 0.45%. At December 31, 2012 and 2011, respectively approximately $8,000,000 and $5,051,000 of cash and cash equivalents, and security deposits included in prepaid expenses and other assets exceeded federally insured amounts.

        Advertising Expense:    Advertising is expensed as incurred. Advertising expense was $52,084, $88,585 and $70,074 in 2012, 2011 and 2010, respectively.

        Discontinued Operations and Rental Property Held for Sale:    When assets are identified by management as held for sale, the Partnership discontinues depreciating the assets and estimates the sales price, net of selling costs, of such assets. If, in management's opinion, the net sales price of the assets which have been identified as held for sale is less than the net book value of the assets, a valuation allowance is established. Properties identified as held for sale and/or sold are presented in discontinued operations for all periods presented.

        If circumstances arise that previously were considered unlikely and, as a result, the Partnership decides not to sell a property previously classified as held for sale, the property is reclassified as held and used. A property that is reclassified is measured and recorded individually at the lower of (a) its carrying amount before the property was classified as held for sale, adjusted for any depreciation (amortization) expense that would have been recognized had the property been continuously classified as held and used, or (b) the fair value at the date of the subsequent decision not to sell.

        Interest Capitalized:    The Partnership follows the policy of capitalizing interest as a component of the cost of rental property when the time of construction exceeds one year. During the years ended December 31, 2012, 2011 and 2010 there was no capitalized interest.

        Extinguishment of Debt:    When existing mortgages are refinanced with the same lender and it is determined that the refinancing is substantially different then they are recorded as an extinguishment of debt. However if it is determined that the refinancing is substantially the same then they are recorded as an exchange of debt. All refinancing qualify as extinguishment of debt.

        Reclassifications:    Certain reclassifications have been made to prior period amounts in order to conform to current period presentation.

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CONSOLIDATED BALANCE SHEETS (Parenthetical)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
CONSOLIDATED BALANCE SHEETS
Partners' Capital, units outstanding	130,444	131,484	131,484	132,346

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CASH FLOW INFORMATION

12 Months Ended

Dec. 31, 2012

CASH FLOW INFORMATION

CASH FLOW INFORMATION

NOTE 11. CASH FLOW INFORMATION

        During the years ended December 31, 2012, 2011 and 2010, cash paid for interest was approximately $7,776,000, $8,011,000 and $8,182,000 respectively. Cash paid for state income taxes was approximately $48,000, $55,000 and $35,000 during the years ended December 31, 2012, 2011 and 2010 respectively.

XML

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2012	Jun. 30, 2012	Mar. 01, 2013 Class A	Mar. 01, 2013 Class B
Entity Registrant Name	NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP
Entity Central Index Key	0000746514
Document Type	10-K
Document Period End Date	Dec. 31, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float		$ 57,067,931
Entity Common Stock, Shares Outstanding	3,121,176		104,039	24,709
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	FY

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FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2012

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

        At December 31, 2012 and 2011, we do not have any significant financial assets or financial liabilities that are measured at fair value on a recurring basis in our consolidated financial statements.

Financial Assets and Liabilities not Measured at Fair Value

        At December 31, 2012 and 2011 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, and note payable, accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments or, the recent acquisition of these items.

        At December 31, 2012 and 2011, we estimated the fair value of our mortgages payable and other notes based upon quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available. We estimated the fair value of our secured mortgage debt that does not have current quoted market prices available by discounting the future cash flows using rates currently available to us for debt with similar terms and maturities (Level 3). The differences in the fair value of our debt from the carrying value are the result of differences in interest rates and/or borrowing spreads that were available to us at December 31, 2012 and 2011, as compared with those in effect when the debt was issued or acquired. The secured mortgage debt contain pre-payment penalties or yield maintenance provisions that could make the cost of refinancing the debt at lower rates exceed the benefit that would be derived from doing so.

        The following methods and assumptions were used by the Partnership in estimating the fair value of its financial instruments:

• •

  For cash and cash equivalents, accounts receivable, other assets, investment in partnerships, accounts payable, advance rents and security deposits: fair value approximates the carrying value of such assets and liabilities.

  •

  For mortgage notes payable: fair value is generally based on estimated future cash flows, which are discounted using the quoted market rate from an independent source for similar obligations. Refer to the table below for the carrying amount and estimated fair value of such instruments.

        The following table reflects the carrying amounts and estimated fair value of our debt.

	Carrying Amount		Estimated Fair Value
Mortgage Notes Payable
Partnership Properties
At December 31, 2012	$	138,055,523	$	155,942,880
At December 31, 2011	$	139,161,612	$	158,050,039
Investment Properties
At December 31, 2012	$	138,256,711	$	157,983,030
At December 31, 2011	$	140,159,839	$	160,535,764

        Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2012 and December 31, 2011. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2012 and current estimates of fair value may differ significantly from the amounts presented herein.

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CONSOLIDATED STATEMENTS OF INCOME (USD $)	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Revenues
Rental income									$ 35,244,008	$ 33,608,799	$ 31,816,175
Laundry and sundry income									388,401	426,803	439,782
Total Revenues	9,104,015	8,875,596	8,800,416	8,852,382	8,760,538	8,648,526	8,345,643	8,280,894	35,632,409	34,035,602	32,255,957
Expenses
Administrative									1,825,951	1,707,408	1,772,599
Depreciation and amortization									6,092,725	5,910,746	5,531,509
Management fee									1,446,620	1,404,467	1,330,157
Operating									3,633,619	4,080,647	3,784,401
Renting									183,529	365,110	528,686
Repairs and maintenance									5,179,408	5,056,054	4,886,724
Taxes and insurance									4,348,492	4,146,554	4,082,588
Total Expenses	5,704,596	5,730,319	5,413,735	5,861,694	5,722,971	5,665,232	5,508,842	5,773,941	22,710,344	22,670,986	21,916,664
Income Before Other Income (loss) and Discontinued Operations	3,399,419	3,145,277	3,386,681	2,990,688	3,037,567	2,983,294	2,836,801	2,506,953	12,922,065	11,364,616	10,339,293
Other Income (Loss)
Interest income									2,216	3,861	5,932
Interest expense									(7,802,999)	(7,965,422)	(8,053,628)
(Loss) from investments in unconsolidated joint ventures									(1,487,484)	(1,913,800)	(3,869,996)
Other (loss)											(700)
Total Other Income (Expense)	(2,214,288)	(2,370,824)	(2,339,420)	(2,363,735)	(2,469,002)	(2,523,314)	(2,480,305)	(2,402,740)	(9,288,267)	(9,875,361)	(11,918,392)
Income (loss) From Continuing Operations									3,633,798	1,489,255	(1,579,099)
Discontinued Operations
Income from discontinued operations										81,567	219,867
Gain on the sale of real estate										7,720,459
Total Discontinued Operations					(308)	(3,054)	7,736,789	68,599		7,802,026	219,867
Net Income (loss)	$ 1,185,131	$ 774,453	$ 1,047,261	$ 626,953	$ 568,257	$ 456,926	$ 8,093,285	$ 172,812	$ 3,633,798	$ 9,291,281	$ (1,359,232)
Income (loss) per Unit
Income (loss) before discontinued operations (in dollars per unit)	$ 9.07	$ 5.90	$ 7.97	$ 4.77	$ 4.33	$ 3.50	$ 2.71	$ 0.79	$ 27.69	$ 11.33	$ (11.99)
Income from discontinued operations (in dollars per unit)						$ (0.02)	$ 58.84	$ 0.52		$ 59.34	$ 1.67
Net Income per Unit (in dollars per unit)	$ 9.07	$ 5.90	$ 7.97	$ 4.77	$ 4.33	$ 3.48	$ 61.55	$ 1.31	$ 27.69	$ 70.67	$ (10.32)
Weighted Average Number of Units Outstanding (in units)									131,230	131,484	131,696

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ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

12 Months Ended

Dec. 31, 2012

ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

NOTE 6. ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

        The Partnership's residential lease agreements may require tenants to maintain a one-month advance rental payment and/or a security deposit. At December 31, 2012, amounts received for prepaid rents of approximately $1,339,000 are included in cash and cash equivalents, and security deposits of approximately $1,919,000 are included in prepaid expenses and other assets and are restricted cash.

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MORTGAGE NOTES PAYABLE

12 Months Ended

Dec. 31, 2012

MORTGAGE NOTES PAYABLE

MORTGAGE NOTES PAYABLE

NOTE 5. MORTGAGE NOTES PAYABLE

        At December 31, 2012 and 2011, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At December 31, 2012, the interest rates on these loans ranged from 4.25% to 7.07%, payable in monthly installments aggregating approximately $742,000, including principal, to various dates through 2026. The majority of the mortgages are subject to prepayment penalties. At December 31, 2012, the weighted average interest rate on the above mortgages was 5.53%. The effective rate of 5.63% includes the amortization expense of deferred financing costs. See Note 12 for fair value information. The Partnership's mortgage debt and the mortgage debt of its unconsolidated joint ventures generally is non-recourse except for customary exceptions pertaining to misuse of funds and material misrepresentations.

        The Partnership has pledged tenant leases as additional collateral for certain of these loans.

        Approximate annual maturities at December 31, 2012 are as follows:

2013—current maturities	$	41,275,000
2014		14,669,000
2015		2,184,000
2016		194,000
2017		205,000
Thereafter		79,529,000
	$	138,056,000

        On July 27, 2011, the Partnership financed the Battle Green Apartments with a new $5,000,000 mortgage at 4.95% which matures in August 2026. Principal payments will be made using a 30 year amortization schedule. Deferred financing costs associated with this mortgage totaled approximately $100,000 and accordingly the effective interest rate is 5.07%.

        The Partnership is currently in the process of refinancing the mortgages at Boylston Downtown LLC, Westgate Apartments LLC, School Street LLC, and Hamilton Cypress LLC. The total amount expected to be refinanced is approximately $47,000,000. As of December 31, 2012, the Partnership has paid approximately $353,000 of financing costs related to the expected refinancing. This amount is included in financing and leasing fees in consolidated balance sheets. The Partnership may incur prepayment penalties of approximately $250,000 in connection with this refinancing. The Partnership has no lender commitment at this time and anticipates closing on theses mortgages in the first half of 2013.

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QUARTERLY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Dec. 31, 2012

QUARTERLY FINANCIAL DATA (UNAUDITED)

QUARTERLY FINANCIAL DATA (UNAUDITED)

NOTE 17. QUARTERLY FINANCIAL DATA (UNAUDITED)

	Three Months Ended
	March 31, 2012			June 30, 2012			September 30, 2012			December 31, 2012			Total
Revenue	$	8,852,382		$	8,800,416		$	8,875,596		$	9,104,015		$	35,632,409
Expenses		5,861,694			5,413,735			5,730,319			5,704,596			22,710,344
Income Before Other Income		2,990,688			3,386,681			3,145,277			3,399,419			12,922,065
Other Income (loss)		(2,363,735	)		(2,339,420	)		(2,370,824	)		(2,214,288	)		(9,288,267	)
Net Income	$	626,953		$	1,047,261		$	774,453		$	1,185,131		$	3,633,798
Net Income per Unit before discontinued operations	$	4.77		$	7.97		$	5.90		$	9.07		$	27.69
Income per Unit from discontinued operations		0.00			0.00			0.00			0.00			0.00
Net income per Unit	$	4.77		$	7.97		$	5.90		$	9.07		$	27.69
Income per depositary receipt before discontinued operations		0.16			0.27			0.20			0.30			0.92
Income per depositary receipt from discontinued operations		0.00			0.00			0.00			0.00			0.00
Net Income per depositary receipt	$	0.16		$	0.27		$	0.20		$	0.30		$	0.92

	Three Months Ended
	March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011			Total
Revenue	$	8,280,894		$	8,345,643		$	8,648,526		$	8,760,538		$	34,035,602
Expenses		5,773,941			5,508,842			5,665,232			5,722,971			22,670,986
Income Before Other Income		2,506,953			2,836,801			2,983,294			3,037,567			11,364,616
Income (loss) from discontinued operations		68,599			7,736,789			(3,054	)		(308	)		7,802,026
Other Income (loss)		(2,402,740	)		(2,480,305	)		(2,523,314	)		(2,469,002	)		(9,875,361	)
Net Income	$	172,812		$	8,093,285		$	456,926		$	568,257		$	9,291,281
Net Income per unit before discontinued operations	$	0.79		$	2.71		$	3.50		$	4.33		$	11.33
Income (loss) per unit from discontinued operations		0.52			58.84			(0.02	)		—			59.34
Net income per unit	$	1.31		$	61.55		$	3.48		$	4.33		$	70.67
Income per depositary receipt before discontinued operations		0.02			0.09			0.12			0.15			0.38
Income per depositary receipt from discontinued operations		0.02			1.96			—			—			1.98
Net Income per depositary receipt	$	0.04		$	2.05		$	0.12		$	0.15		$	2.36

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TAXABLE INCOME AND TAX BASIS

12 Months Ended

Dec. 31, 2012

TAXABLE INCOME AND TAX BASIS

TAXABLE INCOME AND TAX BASIS

NOTE 13. TAXABLE INCOME AND TAX BASIS

        Taxable income reportable by the Partnership and includable in its partners' tax returns is different than financial statement income because of tax free exchanges, accelerated depreciation, different tax lives, and timing differences related to prepaid rents, allowances and intangible assets at significant acquisitions. Taxable income was approximately $530,000 greater than statement income for the year ended December 31, 2012. The primary reason for the increase is reduced tax depreciation due to tax free exchanges and accelerated depreciation in prior years. The cumulative tax basis of the Partnership's real estate at December 31, 2012 is approximately $12,000,000, less than the statement basis. The primary reasons for the lower tax basis are tax free exchanges, and accelerated depreciation. The Partnership's tax basis in its joint venture investments is approximately $1,700,000 less than statement basis because of accelerated depreciation.

        Certain entities included in the Partnership's consolidated financial statements are subject to certain state taxes. These taxes are not significant and are recorded as operating expenses in the accompanying consolidates financial statements.

        The following reconciles GAAP net income to taxable income:

	For the year ended December 31,
	2012			2011			2010
	(in thousands)
Financial statement ("book") net income (loss)	$	3,634		$	9,291		$	(1,359	)
Book/Tax differences from depreciation and amortization		51			(1,024	)		(643	)
Book/Tax differences on tax free exchanges		266			(7,707	)		—
Book/Tax differences from Investment Properties		198			(161	)		403
Increase (Decrease) in prepaid rent and allowances		(40	)		29			(204	)
Other		57			7			—
Taxable income (loss)	$	4,166		$	435		$	(1,803	)

        Allowable accelerated depreciation deductions have been reduced for 2013. This may result in higher taxable income in future years. Future tax law changes may significantly affect taxable income.

        The Partnership adopted the amended provisions related to uncertain tax provisions of ASC 740, Income Taxes. As a result of the implementation of the guidance, the Partnership recognized no material adjustments regarding its tax accounting treatment. The Partnership expects to recognize interest and penalties related to uncertain tax positions, if any, as income tax expense, which would be included in general and administrative expense.

        In the normal course of business the Partnership or one of its subsidiaries is subject to examination by federal, state and local jurisdictions in which it operates, where applicable. As of December 31, 2012, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2004 forward.

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COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2012

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 9. COMMITMENTS AND CONTINGENCIES

        From time to time, the Partnership is involved in various ordinary routine litigation incidental to their business. The Partnership either has insurance coverage or provides for any uninsured claims when appropriate. The Partnership is not involved in any material pending legal proceedings.

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SUBSEQUENT EVENTS (Details 2) (USD $)	3 Months Ended								12 Months Ended				12 Months Ended		0 Months Ended					12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2012 Historical	Dec. 31, 2012 Subsequent event item	Feb. 25, 2013 Subsequent event Mortgage Notes Payable Hamilton Cypress LLC Commercial-1031Exchange Brookline, Massachusetts	Mar. 11, 2013 Subsequent event Mortgage Notes Payable Property located at School Street	Mar. 11, 2013 Subsequent event Mortgage Notes Payable Boylston Downtown LP and Westgate Apartments LLC	Mar. 22, 2013 Subsequent event Mortgage Notes Payable Boylston Downtown	Mar. 22, 2013 Subsequent event Mortgage Notes Payable Westgate Apartments LLC	Dec. 31, 2012 Pro Forma	Dec. 31, 2012 Pro Forma Adjustments Refinancing
SUBSEQUENT EVENTS
Amount of mortgage paid off															$ 3,697,000
Amount of new loan																15,000,000
Interest rate (as a percent)																3.70%
Period of interest on loans																3 years
Deferred financing cost associated with mortgage																159,000
Total amount expected to be refinanced																	28,000,000	19,500,000	7,932,000
Additional debt that entity can borrow																	29,000,000
Change in mortgage debt related to number of mortgaged properties														4
Expected amount of new loan																		40,000,000	17,000,000
ASSETS
Rental Properties	95,435,850				98,924,534				95,435,850	98,924,534			95,435,850							95,435,850
Cash and Cash Equivalents	6,981,906				4,050,157				6,981,906	4,050,157	3,245,361	2,879,663	6,981,906							28,447,599	21,465,693
Rents Receivable	475,083				434,252				475,083	434,252			475,083							475,083
Real Estate Tax Escrows	449,652				401,325				449,652	401,325			449,652							449,652
Prepaid Expenses and Other Assets	3,073,890				3,866,652				3,073,890	3,866,652			3,073,890							5,102,290	2,028,400
Investments in Unconsolidated Joint Ventures	13,986,173				16,780,657				13,986,173	16,780,657			13,986,173							13,986,173
Financing and Leasing Fees	1,135,936				919,187				1,135,936	919,187			1,135,936							2,581,731	1,445,795
Total Assets	121,538,490				125,376,764				121,538,490	125,376,764			121,538,490							146,478,378	24,939,888
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	138,055,522				139,161,612				138,055,522	139,161,612			138,055,522							163,035,536	24,980,014
Accounts Payable and Accrued Expenses	2,361,942				2,253,696				2,361,942	2,253,696			2,361,942							2,361,942
Advance Rental Payments and Security Deposits	3,636,704				3,603,708				3,636,704	3,603,708			3,636,704							3,636,704
Total Liabilities	144,054,168				146,687,616				144,054,168	146,687,616			144,054,168							169,034,182	24,980,014
Partners' Capital 130,444 units outstanding in 2012	(22,515,677)				(21,310,851)				(22,515,677)	(21,310,851)	(26,920,566)	(21,332,823)	(22,515,678)							(22,555,804)	(40,126)
Total Liabilities and Partners' Capital	121,538,490				125,376,764				121,538,490	125,376,764			121,538,490							146,478,378	24,939,888
Partners' Capital, units outstanding	130,444				131,484				130,444	131,484	131,484	132,346								130,444
Revenues
Rental income									35,244,008	33,608,799	31,816,175		35,244,008							35,244,008
Laundry and sundry income									388,401	426,803	439,782		388,401							388,401
Total Revenues	9,104,015	8,875,596	8,800,416	8,852,382	8,760,538	8,648,526	8,345,643	8,280,894	35,632,409	34,035,602	32,255,957		35,632,409							35,632,409
Expenses
Administrative									1,825,951	1,707,408	1,772,599		1,825,951							1,825,951
Depreciation and amortization									6,092,725	5,910,746	5,531,509		6,092,725							6,205,673	112,948
Management fee									1,446,620	1,404,467	1,330,157		1,446,620							1,446,620
Operating									3,633,619	4,080,647	3,784,401		3,633,619							3,633,619
Renting									183,529	365,110	528,686		183,529							183,529
Repairs and maintenance									5,179,408	5,056,054	4,886,724		5,179,408							5,179,408
Taxes and insurance									4,348,492	4,146,554	4,082,588		4,348,492							4,348,492
Total Expenses	5,704,596	5,730,319	5,413,735	5,861,694	5,722,971	5,665,232	5,508,842	5,773,941	22,710,344	22,670,986	21,916,664		22,710,344							22,823,292	112,948
Income Before Other Income and Discontinued Operations	3,399,419	3,145,277	3,386,681	2,990,688	3,037,567	2,983,294	2,836,801	2,506,953	12,922,065	11,364,616	10,339,293		12,922,065							12,809,117	(112,948)
Other Income (Loss)
Interest income									2,216	3,861	5,932		2,216							2,216
Interest expense									(7,802,999)	(7,965,422)	(8,053,628)		(7,802,999)							(7,730,177)	72,822
(Loss) from investments in unconsolidated joint ventures									(1,487,484)	(1,913,800)	(3,869,996)		(1,487,484)							(1,487,484)
Other (loss)											(700)
Total Other Income (Expense)	(2,214,288)	(2,370,824)	(2,339,420)	(2,363,735)	(2,469,002)	(2,523,314)	(2,480,305)	(2,402,740)	(9,288,267)	(9,875,361)	(11,918,392)		(9,288,267)							(9,215,445)	72,822
Income (loss) from Continuing Operations									3,633,798	1,489,255	(1,579,099)		3,633,798							3,593,672	(40,126)
Discontinued Operations
Income from discontinued operations										81,567	219,867
(Gain) on sale of real estate from discontinued operations										(7,720,459)
Total Discontinued Operations					(308)	(3,054)	7,736,789	68,599		7,802,026	219,867
Net Income (loss)	$ 1,185,131	$ 774,453	$ 1,047,261	$ 626,953	$ 568,257	$ 456,926	$ 8,093,285	$ 172,812	$ 3,633,798	$ 9,291,281	$ (1,359,232)		$ 3,633,798							$ 3,593,672	$ (40,126)
Income (loss) per Unit
Income (loss) before discontinued operations (in dollars per unit)	$ 9.07	$ 5.90	$ 7.97	$ 4.77	$ 4.33	$ 3.50	$ 2.71	$ 0.79	$ 27.69	$ 11.33	$ (11.99)		$ 27.69							$ 27.38	$ (0.31)
Income from discontinued operations (in dollars per unit)						$ (0.02)	$ 58.84	$ 0.52		$ 59.34	$ 1.67
Net Income per Unit (in dollars per unit)	$ 9.07	$ 5.90	$ 7.97	$ 4.77	$ 4.33	$ 3.48	$ 61.55	$ 1.31	$ 27.69	$ 70.67	$ (10.32)		$ 27.69							$ 27.38	$ (0.30)
Weighted Average Number of Units Outstanding (in units)									131,230	131,484	131,696		131,230							131,230	131,230

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PARTNERS' CAPITAL

12 Months Ended

Dec. 31, 2012

PARTNERS' CAPITAL

PARTNERS' CAPITAL

NOTE 7. PARTNERS' CAPITAL

        The Partnership has two classes of Limited Partners (Class A and B) and one category of General Partner. Under the terms of the Partnership Agreement, distributions to holders of Class B Units and General Partnership Units must represent 19% and 1%, respectively, of the total units outstanding. All classes have equal profit sharing and distribution rights, in proportion to their ownership interests.

        Effective January 3, 2012, the Partnership authorized a 3-for-1 forward split of its Depositary Receipts listed on the NYSE Amex and a concurrent adjustment of the exchange ratio of Depositary Receipts for Class A Units of the Partnership from 10-to-1 to 30-to-1, such that each Depositary Receipt represents one-thirtieth (¹/30) of a Class A Unit of the Partnership.

        On February 4, 2013, the Partnership announced the approval of a quarterly distribution of its Class A Limited Partners and holders of Depositary Receipts of record as of March 15, 2013 and payable on March 31, 2013, $7.50 per unit and $0.25 per receipt.

        In 2012, the Partnership paid quarterly distributions of $7.50 per unit ($0.25 per receipt) in March, June, September, and December for a total distribution of $30.00 per unit ($1.00 per receipt). In 2011 and 2010 the Partnership paid quarterly distributions of $7.00 per unit ($0.23 per receipt) in March, June, September, and December for a total distribution of $28.00 per unit ($0.93 per receipt) each year.

        The Partnership has entered into a deposit agreement with an agent to facilitate public trading of limited partners' interests in Class A Units. Under the terms of this agreement, the holders of Class A Units have the right to exchange each Class A Unit for 30 Depositary Receipts. The following is information per Depositary Receipt:

	Year Ended December 31,
	2012		2011
Income per Depositary Receipt before Discontinued Operations	$	0.92	$	0.38
Income from Discontinued Operations		0		1.98
Net Income per Depositary Receipt after Discontinued Operations	$	0.92	$	2.36
Distributions per Depositary Receipt	$	1.00	$	0.93

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TREASURY UNITS

12 Months Ended

Dec. 31, 2012

TREASURY UNITS

TREASURY UNITS

NOTE 8. TREASURY UNITS

        Treasury Units at December 31, 2012 are as follows:

Class A	39,825
Class B	9,458
General Partnership	498
	49,781

        On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program ("Repurchase Program") under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one-tenth of a Class A Unit). On January 15, 2008, the General Partner authorized an increase in the Repurchase Program from 300,000 to 600,000 Depositary Receipts. On January 30, 2008 the General Partner authorized an increase the Repurchase Program from 600,000 to 900,000 Depositary Receipts. On March 6, 2008, the General Partner authorized the increase in the total number of Depositary Receipts that could be repurchased pursuant to the Repurchase Program from 900,000 to1, 500,000. On August 8, 2008, the General Partner re-authorized and renewed the Repurchase Program for an additional 12-month period ended August 19, 2009. On March 22, 2010, the General Partner re-authorized and renewed the Repurchase Program that expired on August 19, 2009. Under the terms of the renewed Repurchase Program, the Partnership may purchase up to 1,500,000 Depositary Receipts from the start of the program in 2007 through March 31, 2015. The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership's Second Amended and Restate Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through December 31, 2012, the Partnership has repurchased 1,219,927 Depositary Receipts at an average price of $24.62 per receipt (or $738.60 per underlying Class A Unit), 1,921 Class B Units and 101 General Partnership Units, both at an average price of $613.94 per Unit, totaling approximately $31,386,000 including brokerage fees paid by the Partnership.

        On September 17, 2008, the Partnership completed the issuance of an aggregate of 6,642 Class A Units held in treasury to current holders of Class B and General Partner Units upon the simultaneous retirement to treasury of 6,309 Class B Units and 333 General Partner Units pursuant to an equity distribution plan authorized by the Board of Directors of the General Partner on August 8, 2008 and as further described under Item 3.02 of the Partnership's Current Report on Form 8-K as filed with the Securities and Exchange Commission on September 18, 2008, which is incorporated herein by reference. Harold Brown, the treasurer of the General Partner, owns 75% of the issued and outstanding Class B Units of the Partnership and 75% of the issued and outstanding equity of the General Partner, Ronald Brown, the brother of Harold Brown and the president of the General Partner, owns 25% of the issued and outstanding Class B Units of the Partnership and 25% of the issued and outstanding equity of the General Partner.

        During the year ended December 31, 2012, the Partnership purchased 24,967 Depositary Receipts for a cost of $726,058, 198 Class B Units for a cost of $171,148 and 10 General Partnership Units for a cost of $9,008 for a total cost of $906,214.

        From January 1, 2013 through March 14, 2013, the Partnership purchased a total of 9,709 Depositary Receipts. The average price was $32.24 per receipt or $967.20 per unit. The total cost was $321,240. The Partnership is required to repurchase76.86 Class B Units and 4.05 General Partnership units at a cost of $74,335 and $3,912, respectively.

        The Partnership did not purchase any Depositary Receipts during the year ended December 31, 2011.

        During the year ended December 31, 2010, the Partnership purchased 20,688 receipts for $432,920, 164 Class B Units for $102,591 and 9 General Partnership units for $5,400.

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RENTAL INCOME

12 Months Ended

Dec. 31, 2012

RENTAL INCOME

RENTAL INCOME

NOTE 10. RENTAL INCOME

        During the year ended December 31, 2012, approximately 90% of rental income was related to residential apartments and condominium units with leases of one year or less. The majority of these leases expire in June, July and August. Approximately 10% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at December 31, 2012 as follows:

	Commercial Property Leases
2013	$	2,384,000
2014		2,011,000
2015		1,583,000
2016		1,165,000
2017		485,000
Thereafter		775,000
	$	8,403,000

        The aggregate minimum future rental income does not include contingent rentals that may be received under various leases in connection with common area charges and real estate taxes. Aggregate contingent rentals from continuing operations were approximately $661,000, $633,000 and $653,000 for the years ended December 31, 2012, 2011 and 2010 respectively.

        The following information is provided for commercial leases:

Thru December 31,	Annual base rent for expiring leases		Total square feet for expiring leases		Total number of leases expiring		Percentage of Annual base rent for expiring leases
2013	$	470,463		23,773		11		17	%
2014		588,422		29,523		10		22	%
2015		266,098		8,471		8		10	%
2016		593,346		27,073		3		22	%
2017		448,101		11,997		6		16	%
2018		58,050		1,262		1		2	%
2019		200,375		5,800		2		7	%
2020		64,657		1,106		1		2	%
2021		64,800		1,800		1		2	%
2022		0		—		—		0	%
Totals	$	2,754,312		110,805		43		100	%

        Rents receivable are net of an allowance for doubtful accounts of approximately $381,000 and $448,000. at December 31, 2012 and 2011. Included in rents receivable at December 31, 2012 is approximately $268,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis. The majority of this amount is for long-term leases with Staples and Trader Joe's at Staples Plaza in Framingham, Massachusetts.

        Rents receivable at December 31, 2012 also includes approximately $25,000 representing the deferral of rental concession primarily related to the residential properties.

        For the year ended December 31, 2012 rent at the commercial properties includes approximately $4,100 of amortization of deferred rents arising from the fair values assigned to in-place leases upon the purchase of Cypress Street in Brookline, Massachusetts.

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables)

12 Months Ended

Dec. 31, 2012

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

Summary of financial position relating to investment in unconsolidated joint ventures

Summary financial information for the year ended December 31, 2012

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay Apts		Hamilton Minuteman Apts		Hamilton on Main Apts		Dexter Park		Total
ASSETS
Rental Properties	$	9,103,858	$	2,610,574	$	7,885,745	$	5,621,970	$	1,844,219	$	6,975,854	$	7,020,471	$	21,148,813	$	107,496,918	$	169,708,422
Cash & Cash Equivalents		27,848		20,214		3,533		2,706		20,695		62,473		44,170		103,990		941,391		1,227,018
Rent Receivable		44,005		—		600		7,283		2,200		2,686		2,626		11,108		35,250		105,758
Real Estate Tax Escrow		49,793		—		20,242		74,443		—		41,225		43,612		70,364		424,159		723,838
Prepaid Expenses & Other Assets		61,895		505		75,222		33,659		127,530		14,345		48,715		154,396		1,367,274		1,883,541
Financing & Leasing Fees		64,116		4,325		8,164		19,645		5,505		26,243		15,950		14,581		399,678		558,206
Total Assets	$	9,351,515	$	2,635,617	$	7,993,505	$	5,759,706	$	2,000,148	$	7,122,825	$	7,175,545	$	21,503,252	$	110,664,670	$	174,206,783
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$	8,352,317	$	2,093,184	$	6,850,179	$	4,934,741	$	1,668,000	$	4,702,087	$	5,433,472	$	15,611,045	$	88,611,686	$	138,256,711
Accounts Payable & Accrued Expense		34,673		6,319		93,810		49,566		7,481		49,690		58,378		204,413		843,422		1,347,752
Advance Rental Pmts& Security Deposits		175,871		—		140,759		80,264		25,147		86,028		71,025		273,302		1,919,573		2,771,968
Total Liabilities		8,562,861		2,099,503		7,084,748		5,064,570		1,700,628		4,837,806		5,562,875		16,088,760		91,374,681		142,376,432
Partners' Capital		788,654		536,114		908,757		695,135		299,520		2,285,019		1,612,669		5,414,492		19,289,989		31,830,352
Total Liabilities and Capital	$	9,351,515	$	2,635,617	$	7,993,505	$	5,759,706	$	2,000,148	$	7,122,825	$	7,175,545	$	21,503,252	$	110,664,670	$	174,206,783
Partners' Capital—NERA 50%	$	394,327	$	268,057	$	454,379	$	347,568	$	149,760	$	1,142,510	$	806,335	$	2,707,246				6,270,181
Partners' Capital—NERA 40%																	$	7,715,996		7,715,996
																			$	13,986,177
Total units/condominiums
Apartments		48		—		40		175		120		48		42		148		409		1,030
Commercial		1		1		—		1		—		—		—		—		—		3
Total		49		1		40		176		120		48		42		148		409		1,033
Units to be retained		49		1		40		49		—		48		42		148		409		786
Units to be sold		—		—		—		127		120		—		—		—		—		247
Units sold through March 1, 2013		—		—		—		127		105		—		—		—		—		232
Unsold units		—		—		—		—		15		—		—		—		—		15
Unsold units with deposits for future sale as of March 1, 2013		—		—		—		—		—		—		—		—		—		—

Summary financial information for the year ended December 31, 2011

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay		Hamilton Minuteman		Hamilton on Main		Dexter Park		Total
ASSETS
Rental Properties		9,454,959		2,613,064		8,229,651		5,863,176		1,916,445		7,257,981		7,256,528		21,939,796		112,921,940		177,453,541
Cash & Cash Equivalents		47,526		1,529		17,027		1,848		19,416		5,026		31,125		90,940		836,347		1,050,783
Rent Receivable		73,459		—		—		15,682		—		2,512		7,457		8,593		86,722		194,425
Real Estate Tax Escrow		98,610		—		18,360		64,464		—		89,760		43,864		104,505		582,028		1,001,592
Prepaid Expenses & Other Assets		59,508		493		54,276		88,524		167,811		95,190		54,023		180,899		1,216,214		1,916,937
Financing & Leasing Fees		71,108		6,987		16,330		24,672		6,570		32,605		19,918		21,442		458,995		658,626
Total Assets		9,805,169		2,622,073		8,335,644		6,058,364		2,110,241		7,483,074		7,412,916		22,346,175		116,102,247		182,275,903
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		8,462,041		2,144,796		7,019,119		4,995,487		1,668,000		4,750,000		5,500,000		15,887,203		89,733,192		140,159,839
Accounts Payable & Accrued Expense		32,238		6,309		15,323		48,236		12,682		28,690		58,596		212,224		820,603		1,234,900
Advance Rental Pmts & Security Dep		152,940		—		114,179		69,970		20,027		85,575		69,592		257,780		1,800,113		2,570,176
Total Liabilities		8,647,219		2,151,105		7,148,621		5,113,694		1,700,709		4,864,265		5,628,188		16,357,207		92,353,908		143,964,915
Partners' Capital		1,157,950		470,968		1,187,023		944,670		409,532		2,618,809		1,784,728		5,988,968		23,748,339		38,310,988
Total Liabilities & Capital		9,805,169		2,622,073		8,335,644		6,058,364		2,110,241		7,483,074		7,412,916		22,346,175		116,102,247		182,275,903
Partners' Capital—NERA 50%		578,975		235,484		593,512		472,335		204,766		1,309,404		892,364		2,994,484				7,281,325
NERA 40%																		9,499,335		9,499,335
																				16,780,660
Total units/ condominiums
Apartments		48		—		40		175		120		48		42		148		409		1,030
Commercial		1		1		—		1		—		—		—		—		—		3
Total		49		1		40		176		120		48		42		148		409		1,033
Units to be retained		49		1		40		49		—		48		42		148		409		786
Units to be sold		—		—		—		127		120		—		—		—		—		247
Units sold through January 25, 2012		—		—		—		127		105		—		—		—		—		232
Unsold units		—		—		—		—		15		—		—		—		—		15
Unsold units with deposits for future sale as of February 1, 2012		—		—		—		—		—		—		—		—		—		—

Summary financial information for the year ended December 31, 2010

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay		Hamilton Minuteman		Hamilton on Main		Dexter Park		Total
ASSETS
Rental Properties		9,827,917		2,595,266		8,648,591		6,078,526		2,006,989		7,569,060		7,582,687		22,822,785		118,468,247		185,600,068
Cash & Cash Equivalents		2,833		29,596		25,617		736		48,053		57,956		51,637		19,325		754,066		989,818
Rent Receivable		24,062		—		8,887		10,088		2,224		2,295		683		10,686		125,475		184,400
Real Estate Tax Escrow		85,348		—		18,649		58,089		—		82,370		34,331		98,036		484,566		861,390
Prepaid Expenses & Other Assets		49,518		480		50,720		76,810		209,610		94,181		43,655		418,289		1,089,897		2,033,161
Financing & Leasing Fees		96,105		4,175		24,496		29,698		11,634		38,966		23,887		28,304		518,395		775,660
Total Assets		10,085,783		2,629,517		8,776,960		6,253,948		2,278,510		7,844,829		7,736,879		23,397,425		121,440,647		190,444,498
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		8,566,871		2,162,000		7,176,827		5,000,000		1,668,000		4,750,000		5,500,000		16,151,526		89,914,000		140,889,224
Accounts Payable & Accrued Expense		33,190		6,239		36,027		43,541		6,346		5,693		65,588		206,997		787,584		1,191,205
Advance Rental Pmts & Security Dep		132,044		—		129,188		63,965		20,044		80,772		61,762		226,689		1,684,843		2,399,308
Total Liabilities		8,732,105		2,168,239		7,342,042		5,107,506		1,694,390		4,836,465		5,627,350		16,585,212		92,386,428		144,479,737
Partners' Capital		1,353,679		461,278		1,434,918		1,146,442		584,119		3,008,364		2,109,529		6,812,213		29,054,219		45,964,761
Total Liabilities & Capital		10,085,783		2,629,517		8,776,960		6,253,948		2,278,510		7,844,829		7,736,879		23,397,425		121,440,647		190,444,498
Partners' Capital—NERA 50%		676,839		230,639		717,459		573,221		292,060		1,504,182		1,054,765		3,406,107				8,455,271
NERA 40%																		11,621,688		11,621,688
																				20,076,959
Total units/ condominiums
Apartments		48		—		40		175		120		48		42		148		409		1,030
Commercial		1		1		—		1		—		—		—		—		—		3
Total		49		1		40		176		120		48		42		148		409		1,033
Units to be retained		49		1		40		49		—		48		42		148		409		786
Units to be sold		—		—		—		127		120		—		—		—		—		247
Units sold through January 25, 2010		—		—		—		127		105		—		—		—		—		232
Unsold units		—		—		—		—		15		—		—		—		—		15
Unsold units with deposits for future sale as of February 1, 2011		—		—		—		—		0		—		—		—		—		—

Summary of income statement relating to investment in unconsolidated joint ventures

Year ended December 31, 2012

	Hamilton Essex 81			Hamilton Essex Development			345 Franklin			Hamilton 1025			Hamilton Bay Sales			Hamilton Bay Apts			Hamilton Minuteman Apts			Hamilton on Main Apts			Dexter Park			Total
Revenues
Rental Income	$	1,270,141		$	287,537		$	1,178,712		$	861,998		$	235,061		$	886,122		$	809,707		$	2,623,994		$	12,202,615		$	20,355,887
Laundry and Sundry Income		15,363			—			1,206			—			—			—			2,435			20,952			98,042			137,999
		1,285,504			287,537			1,179,918			861,998			235,061			886,122			812,142			2,644,946			12,300,657			20,493,885
Expenses
Administrative		15,237			1,749			27,942			5,142			7,553			34,600			7,825			46,400			219,218			365,666
Depreciation and Amortization		409,488			11,638			441,704			256,696			82,287			297,737			317,231			957,452			5,733,920			8,508,153
Management Fees		55,308			11,502			48,596			34,517			9,894			34,659			32,615			104,807			261,355			593,253
Operating		112,172			—			62,277			816			1,251			1,190			73,092			341,054			1,006,570			1,598,421
Renting		18,350			—			5,326			6,815			1,894			4,053			3,538			10,974			74,705			125,655
Repairs and Maintenance		118,786			5,475			82,052			320,997			70,812			273,652			57,448			380,605			880,103			2,189,930
Taxes and Insurance		197,566			49,237			106,785			145,755			46,017			161,137			102,505			337,256			1,485,297			2,631,555
		926,908			79,600			774,681			770,738			219,707			807,027			594,254			2,178,549			9,661,169			16,012,632
Income Before Other Income		358,596			207,937			405,237			91,260			15,354			79,095			217,888			466,397			2,639,488			4,481,253
Other Income (Loss)
Interest Expense		(497,631	)		(60,451	)		(486,051	)		(288,470	)		(98,361	)		(271,283	)		(317,448	)		(840,874	)		(5,092,838	)		(7,953,407	)
Interest Income		—			—			48			74			215			—			—			—			—			337
Interest Income from Note		—			—			—			—			6,180			—			—			—			—			6,180
		(497,631	)		(60,451	)		(486,003	)		(288,395	)		(91,966	)		(271,283	)		(317,448	)		(840,874	)		(5,092,838	)		(7,946,890	)
Net Income (Loss)	$	(139,035	)	$	147,486		$	(80,766	)	$	(197,135	)	$	(76,612	)	$	(192,188	)	$	(99,560	)	$	(374,477	)	$	(2,453,350	)	$	(3,465,636	)
Net Income (Loss)—NERA 50%	$	(69,517	)	$	73,743		$	(40,383	)	$	(98,567	)	$	(38,306	)	$	(96,094	)	$	(49,780	)	$	(187,239	)					(506,143	)
Net Income (Loss)—NERA 40%																									$	(981,340	)		(981,340	)
																												$	(1,487,483	)

Year ended December 31, 2011

	Hamilton Essex 81			Hamilton Essex Development			345 Franklin			Hamilton 1025			Hamilton Bay Sales			Hamilton Bay			Hamilton Minuteman			Hamilton on Main			Dexter Park			Total
Revenues
Rental Income		1,244,322			255,050			1,136,831			816,015			232,938			863,657			789,897			2,491,957			11,559,414			19,390,080
Laundry and Sundry Income		16,589			—			2,367			—			—			—			1,362			20,599			97,275			138,193
		1,260,911			255,050			1,139,198			816,015			232,938			863,657			791,258			2,512,556			11,656,690			19,528,273
Expenses
Administrative		20,839			1,339			24,424			11,258			5,396			18,625			10,249			36,155			163,511			291,796
Depreciation and Amortization		424,695			8,498			443,055			257,961			103,536			329,930			322,216			965,324			5,698,657			8,553,872
Management Fees		49,677			11,040			45,829			32,120			9,486			33,916			31,666			100,581			251,071			565,386
Operating		121,521			—			66,278			1,733			239			732			54,650			371,687			929,543			1,546,382
Renting		8,058			—			19,206			13,322			1,750			8,927			3,559			15,140			144,149			214,111
Repairs and Maintenance		127,528			3,050			71,479			300,534			78,167			316,782			98,904			371,109			935,839			2,303,393
Taxes and Insurance		184,119			47,709			97,028			143,002			45,303			155,681			92,300			325,868			1,300,995			2,392,005
		936,438			71,636			767,299			759,930			243,877			864,593			613,544			2,185,864			9,423,765			15,866,945
Income Before Other Income		324,473			183,414			371,899			56,085			(10,939	)		(936	)		177,714			326,693			2,232,924			3,661,328
Other Income (Loss)
Interest Expense		(503,102	)		(61,593	)		(494,468	)		(289,222	)		(98,010	)		(271,348	)		(317,927	)		(848,786	)		(5,113,523	)		(7,997,979	)
Interest Income		—			—			49			88			457			—			—			—			3,219			3,814
Interest Income from Note		—			—			—			—			8,904			—			—			—			—			8,904
Gain on Sale of Real Estate		—			—			—			—			—			—			—			—			—			—
Other Income (Expenses)		(2,331	)		—			(5,375	)		(3,621	)		—			(2,271	)		(61,589	)		(1,152	)		(3,500	)		(79,839	)
		(505,433	)		(61,593	)		(499,793	)		(292,756	)		(88,649	)		(273,619	)		(379,515	)		(849,938	)		(5,113,804	)		(8,065,100	)
Net Income (loss)		(180,960	)		121,821			(127,894	)		(236,671	)		(99,588	)		(274,555	)		(201,801	)		(523,245	)		(2,880,880	)		(4,403,772	)
Net Income (loss)—NERA 50%		(90,480	)		60,911			(63,947	)		(118,335	)		(49,794	)		(137,277	)		(100,900	)		(261,622	)					(761,446	)
NERA 40%																										(1,152,352	)		(1,152,352	)
																													(1,913,798	)

Year ended December 31, 2010

	Hamilton Essex 81			Hamilton Essex Development			345 Franklin			Hamilton 1025			Hamilton Bay Sales			Hamilton Bay			Hamilton Minuteman			Hamilton on Main			Dexter Park			Total
Revenues
Rental Income		1,122,915			275,950			1,097,957			794,993			221,191			839,361			765,509			2,455,222			11,019,862			18,592,960
Laundry and Sundry Income		16,184			—			2,436			—			—			—			762			19,780			97,902			137,063
		1,139,099			275,950			1,100,393			794,993			221,191			839,361			766,271			2,475,002			11,117,764			18,730,023
Expenses
Administrative		13,709						30,904			13,038			7,073			17,324			10,288			39,289			148,097			279,724
Depreciation and Amortization		425,450			6,254			439,666			269,475			98,678			359,727			320,553			981,881			9,428,284			12,329,966
Management Fees		46,734			11,040			45,559			31,795			9,245			33,345			31,563			97,239			244,178			550,698
Operating		134,016						62,994			1,777						411			63,841			358,827			960,328			1,582,193
Renting		24,785			—			49,517			8,576			375			6,213			3,770			15,361			281,545			390,142
Repairs and Maintenance		134,941			—			80,190			376,560			76,510			344,852			99,553			342,310			859,088			2,314,005
Taxes and Insurance		179,939			46,658			98,151			127,637			42,465			132,188			96,213			318,150			1,451,017			2,492,417
		959,574			63,952			806,981			828,857			234,346			894,061			625,780			2,153,057			13,372,537			19,939,145
Income Before Other Income		179,525			211,998			293,412			(33,864	)		(13,155	)		(54,700	)		140,491			321,944			(2,254,773	)		(1,209,122	)
Other Income (Loss)
Interest Expense		(507,425	)		(62,694	)		(504,667	)		(289,042	)		(97,909	)		(271,389	)		(317,360	)		(860,500	)		(5,116,598	)		(8,027,583	)
Interest Income		3			2			47			90			569			2			1,780			8			5			2,505
Interest Income from Note		—			—			—			—			11,445			—			—			—			—			11,445
Gain on Sale of Real Estate		—			—			—			—									—			—			—
Other Income (Expenses)		—			—			—			—			11,021			9,478			—			2,168			(17,720	)		4,947
		(507,422	)		(62,692	)		(504,619	)		(288,952	)		(74,874	)		(261,909	)		(315,581	)		(858,323	)		(5,134,313	)		(8,008,686	)
Net Income (loss)		(327,897	)		149,305			(211,208	)		(322,816	)		(88,029	)		(316,608	)		(175,090	)		(536,379	)		(7,389,086	)		(9,217,808	)
Net Income (loss)—NERA 50%		(163,948	)		74,653			(105,604	)		(161,408	)		(44,015	)		(158,304	)		(87,545	)		(268,189	)					(914,361	)
NERA 40%																										(2,955,635	)		(2,955,635	)
																													(3,869,995	)

Schedule of future annual mortgage maturities

	Hamilon Essex 81		Hamilton Essex 81 Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay Apts		Hamilton Minuteman		Hamilton on Main Apts		Dexter Park
Period End	March 2005		March 2005		November 2001		March 2005		October 2005		October 2005		August 2004		August 2004		October 2009		Total
12/31/2013		125,660		2,093,184		165,412		65,157		1,668,000		66,163		71,363		293,222		1,275,835		7,082,229
12/31/2014		133,132				6,684,767		69,003				69,944		75,575		309,178		1,348,741		10,020,473
12/31/2015		141,048						73,077				73,941		80,036		15,008,646		1,425,814		18,208,704
12/31/2016		7,952,477						4,727,503				78,166		77,128				1,507,291		15,829,060
12/31/2017												4,413,873		5,129,371				1,593,424		12,708,108
Thereafter																		81,460,581		163,299,264
	$	8,352,317	$	2,093,184	$	6,850,179	$	4,934,741	$	1,668,000	$	4,702,087	$	5,433,472	$	15,611,045	$	88,611,686	$	138,256,711

XML

FAIR VALUE MEASUREMENTS (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Mortgage Notes Payable
Carrying Amount	$ 138,055,522	$ 139,161,612
Partnership Properties
Mortgage Notes Payable
Carrying Amount	138,055,523	139,161,612
Estimated Fair Value	155,942,880	158,050,039
Investment Properties
Mortgage Notes Payable
Carrying Amount	138,256,711	140,159,839
Estimated Fair Value	$ 157,983,030	$ 160,535,764

XML

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

12 Months Ended

Dec. 31, 2012

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

        In May 2011, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2011-04, (Fair Value Measurement Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U. S. GAAP and IFRS. ASU 2011-04 clarifies some existing concepts, eliminates wording differences between U.S. GAAP and International Financial Reporting Standards ("IFRS"), and in some limited cases, changes some principals to achieve convergence between U.S. GAAP and IFRS. ASU 2011-04 results in a consistent definition of fair value and common requirements for measurementof and disclosure about fair value between GAAP and IFRS. ASU 2011-04 also expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. ASU 2011-04 was effective for us as of January 1, 2012. The adoption of this pronouncement did not materially impact our consolidated financial statements.

        In June 2011, the FASB issued ASU 2011-05, Presentation of Comprehensive Income, which requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statements. ASU 2011-05 eliminates the option to present components of other comprehensive income as part of the statement of equity. ASU 2011-05 was effective for us as of January 1, 2012. The adoption of this pronouncement did not materially impact our consolidated financial statements.

        In August 2012, the FASB issued ASU 2012-03, Technical Amendments and Corrections to SEC Sections: Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin (SAB) No. 114, Technical Amendments Pursuant to SEC Release No. 33-950, and Corrections Related to FASB Accounting Standards Update 2010-22 (SEC Update). This update amends a number of SEC sections in the FASB Accounting Standards Codification as a result of (1) the issuance of SAB 114, (2) the issuance of SEC Final Rule 33-9250, and (3) corrections related to ASU 2010-22. ASU 2012-03 was effective upon issuance. The adoption of this pronouncement did not have a material impact on our consolidated financial statements.

        In October 2012, the FASB issued ASU 2012-04, Technical Corrections and Improvements. The amendments in this update cover a wide range of topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. ASU 2012-04 will be effective for us as of January 1, 2013. The adoption of this pronouncement did not have a material impact on our consolidated financial statements.

XML

SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2012

SIGNIFICANT ACCOUNTING POLICIES

Line of Business

Line of Business:    New England Realty Associates Limited Partnership ("NERA" or the "Partnership") was organized in Massachusetts in 1977. NERA and its subsidiaries own 24 properties which include 16 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,251 apartment units, 19 condominium units and 110,949 square feet of commercial space. Additionally, the Partnership also owns a 40-50% interest in nine residential and mixed use properties consisting of 799 apartment units, 12,500 square feet of commercial space and a 50 car parking lot. The properties are located in Eastern Massachusetts and Southern New Hampshire.

Basis of Presentation

Basis of Presentation:    The preparation of the financial statements, in conformity with accounting principles generally accepted in the United State of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Accordingly, actual results could differ from those estimates.

Principles of Consolidation

Principles of Consolidation:    The consolidated financial statements include the accounts of NERA and its subsidiaries. NERA has a 99.67% to 100% ownership interest in each subsidiary except for the nine limited liability companies (the "Investment Properties" or "Joint Ventures") in which the Partnership has a 40 - 50% ownership interest. The consolidated group is referred to as the "Partnership." Minority interests are not recorded, since they are insignificant. All significant intercompany accounts and transactions are eliminated in consolidation. The Partnership accounts for its investment in the above-mentioned Investment Properties using the equity method of consolidation. (See Note 14: Investments in Unconsolidated Joint Ventures).

        The Partnership accounts for its investments in joint ventures using the equity method of accounting. These investments are recorded initially at cost, as Investments in Unconsolidated Joint Ventures, and subsequently adjusted for equity in earnings and cash contributions and distributions. The authoritative guidance on consolidation provides guidance on the identification of entities for which control is achieved through means other than voting rights ("variable interest entities" or "VIEs") and the determination of which business enterprise, if any, should consolidate the VIE (the "primary beneficiary"). Generally, the consideration of whether an entity is a VIE applies when either (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest, (2) the equity investment at risk is insufficient to finance that entity's activities without additional subordinated financial support or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest.

        On January 1, 2010, the Partnership adopted the updated provisions of ASC 810, pursuant to FASB No. 167, which amends FIN 46(R) to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity. Additionally, FASB No. 167 amends FIN 46(R) to eliminate the quantitative approach previously required for determining the primary beneficiary of a variable interest entity, which was based on determining which enterprise absorbs the majority of the entity's expected losses, receives a majority of the entity's expected residual returns, or both. FASB No. 167 amends certain guidance in Interpretation 46(R) for determining whether an entity is a variable interest entity. Also, FASB No. 167 amends FIN 46(R) to require enhanced disclosures that will provide users of financial statements with more transparent information about an enterprise's involvement in a variable interest entity. The enhanced disclosures are required for any enterprise that holds a variable interest in a variable interest entity. The adoption of this guidance did not have a material impact to these financial statements.

Impairment

Impairment:    On an annual basis management assesses whether there are any indicators that the value of the Partnership's rental properties or investments in unconsolidated subsidiaries may be impaired. In addition to identifying any specific circumstances which may affect a property or properties, management considers other criteria for determining which properties may require assessment for potential impairment. The criteria considered by management include reviewing low leased percentages, significant near term lease expirations, recently acquired properties, current and historical operating and/or cash flow losses, near term mortgage debt maturities or other factors that might impact the Partnership's intent and ability to hold property. A property's value is impaired only if management's estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the property over the fair value of the property. The Partnership's estimates of aggregate future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter management's assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved. The Partnership has not recognized an impairment loss since 1995.

Revenue Recognition

Revenue Recognition:    Rental income from residential and commercial properties is recognized over the term of the related lease. For residential tenants, amounts 60 days in arrears are charged against income. The commercial tenants are evaluated on a case by case basis. Certain leases of the commercial properties provide for increasing stepped minimum rents, which are accounted for on a straight-line basis over the term of the lease. Contingent rent for commercial properties are received from tenants for certain costs as provided in the lease agreement. The costs generally include real estate taxes, utilities, insurance, common area maintenance and recoverable costs. Concessions made on residential leases are also accounted for on the straight-line basis.

        Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the differences between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management's estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed-rate renewal options for below-market leases. The capitalized above-market lease values for acquired properties are amortized as a reduction of base rental revenue over the remaining term of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.

Rental Properties

Rental Properties:    Rental properties are stated at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred; improvements and additions which improve or extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost of the asset and related accumulated depreciation is eliminated from the accounts, and any gain or loss on such disposition is included in income. Fully depreciated assets are removed from the accounts. Rental properties are depreciated by both straight-line and accelerated methods over their estimated useful lives. Upon acquisition of rental property, the Partnership estimates the fair value of acquired tangible assets, consisting of land, building and improvements, and identified intangible assets and liabilities assumed, generally consisting of the fair value of (i) above and below market leases, (ii) in-place leases and (iii) tenant relationships. The Partnership allocated the purchase price to the assets acquired and liabilities assumed based on their fair values. The Partnership records goodwill or a gain on bargain purchase (if any) if the net assets acquired/liabilities assumed exceed the purchase consideration of a transaction. In estimating the fair value of the tangible and intangible assets acquired, the Partnership considers information obtained about each property as a result of its due diligence and marketing and leasing activities, and utilizes various valuation methods, such as estimated cash flow projections utilizing appropriate discount and capitalization rates, estimates of replacement costs net of depreciation, and available market information. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant.

        Other intangible assets acquired include amounts for in-place lease values and tenant relationship values, which are based on management's evaluation of the specific characteristics of each tenant's lease and the Partnership's overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant relationships include the nature and extent of the Partnership's existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant's credit quality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles are amortized to expense over the anticipated life of the relationships.

        In the event that facts and circumstances indicate that the carrying value of a rental property may be impaired, an analysis of the value is prepared. The estimated future undiscounted cash flows are compared to the asset's carrying value to determine if a write-down to fair value is required.

Financing and Leasing Fees

Financing and Leasing Fees:    Financing fees are capitalized and amortized, using the interest method, over the life of the related mortgages. Leasing fees are capitalized and amortized on a straight-line basis over the life of the related lease. Unamortized balances are expensed when the corresponding fee is no longer applicable.

Income Taxes

Income Taxes:    The financial statements have been prepared on the basis that NERA and its subsidiaries are entitled to tax treatment as partnerships. Accordingly, no provision for income taxes have been recorded (See Note 13).

Cash Equivalents

Cash Equivalents:    The Partnership considers cash equivalents to be all highly liquid instruments purchased with a maturity of three months or less.

Segment Reporting

Segment Reporting:    Operating segments are revenue producing components of the Partnership for which separate financial information is produced internally for management. Under the definition, NERA operated, for all periods presented, as one segment.

Comprehensive Income

Comprehensive Income:    Comprehensive income is defined as changes in partners' equity, exclusive of transactions with owners (such as capital contributions and dividends). NERA did not have any comprehensive income items in 2012, 2011, or 2010 other than net income as reported.

Income Per Depositary Receipt

Income Per Depositary Receipt:    Effective January 3, 2012, the Partnership authorized a 3-for-1 forward split of its Depositary Receipts listed on the NYSE Amex and a concurrent adjustment of the exchange ratio of Depositary Receipts for Class A Units of the Partnership from 10-to-1 to 30-to-1, such that each Depositary Receipt represents one-thirtieth (¹/30) of a Class A Unit of the Partnership. All references to Depositary Receipts in the report are reflective of the 3-for-1 forward split.

Income Per Unit

Income Per Unit:    Net income per unit has been calculated based upon the weighted average number of units outstanding during each period presented. The Partnership has no dilutive units and, therefore, basic net income is the same as diluted net income per unit (see Note 7).

Concentration of Credit Risks and Financial Instruments

Concentration of Credit Risks and Financial Instruments:    The Partnership's properties are located in New England, and the Partnership is subject to the general economic risks related thereto. No single tenant accounted for more than 5% of the Partnership's revenues in 2012, 2011, or 2010. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At December 31, 2012, substantially all of the Partnership's cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01% to 0.45%. At December 31, 2012 and 2011, respectively approximately $8,000,000 and $5,051,000 of cash and cash equivalents, and security deposits included in prepaid expenses and other assets exceeded federally insured amounts.

Advertising Expense

Advertising Expense:    Advertising is expensed as incurred. Advertising expense was $52,084, $88,585 and $70,074 in 2012, 2011 and 2010, respectively.

Discontinued Operations and Rental Property Held for Sale

Discontinued Operations and Rental Property Held for Sale:    When assets are identified by management as held for sale, the Partnership discontinues depreciating the assets and estimates the sales price, net of selling costs, of such assets. If, in management's opinion, the net sales price of the assets which have been identified as held for sale is less than the net book value of the assets, a valuation allowance is established. Properties identified as held for sale and/or sold are presented in discontinued operations for all periods presented.

        If circumstances arise that previously were considered unlikely and, as a result, the Partnership decides not to sell a property previously classified as held for sale, the property is reclassified as held and used. A property that is reclassified is measured and recorded individually at the lower of (a) its carrying amount before the property was classified as held for sale, adjusted for any depreciation (amortization) expense that would have been recognized had the property been continuously classified as held and used, or (b) the fair value at the date of the subsequent decision not to sell.

Interest Capitalized

Interest Capitalized:    The Partnership follows the policy of capitalizing interest as a component of the cost of rental property when the time of construction exceeds one year. During the years ended December 31, 2012, 2011 and 2010 there was no capitalized interest.

Extinguishment of Debt

Extinguishment of Debt:    When existing mortgages are refinanced with the same lender and it is determined that the refinancing is substantially different then they are recorded as an extinguishment of debt. However if it is determined that the refinancing is substantially the same then they are recorded as an exchange of debt. All refinancing qualify as extinguishment of debt.

Reclassifications

Reclassifications:    Certain reclassifications have been made to prior period amounts in order to conform to current period presentation.

XML

RENTAL INCOME (Details) (USD $)	12 Months Ended
	Dec. 31, 2012 sqft item	Dec. 31, 2011	Dec. 31, 2010
RENTAL INCOME
Percentage of rental income related to residential apartments and condominium units with leases of one year or less	90.00%
Maximum period of non-cancellable operating lease	1 year
Percentage of rental income related to commercial properties	10.00%
Minimum future rental income
2013	$ 2,384,000
2014	2,011,000
2015	1,583,000
2016	1,165,000
2017	485,000
Thereafter	775,000
Commercial Property Leases	8,403,000
Aggregate contingent rentals from continuing operations	661,000	633,000	653,000
RENTAL INCOME
Annual base rent for expiring leases	2,754,312
Total square feet for expiring leases	110,805
Total number of leases expiring	43
Percentage of annual base rent for expiring leases	100.00%
Allowance for doubtful rent receivable	381,000	448,000
Recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis	268,000
Deferred rental concession	25,000
Amortization of deferred rents	4,100
Through December 31, 2013
RENTAL INCOME
Annual base rent for expiring leases	470,463
Total square feet for expiring leases	23,773
Total number of leases expiring	11
Percentage of annual base rent for expiring leases	17.00%
Through December 31, 2014
RENTAL INCOME
Annual base rent for expiring leases	588,422
Total square feet for expiring leases	29,523
Total number of leases expiring	10
Percentage of annual base rent for expiring leases	22.00%
Through December 31, 2015
RENTAL INCOME
Annual base rent for expiring leases	266,098
Total square feet for expiring leases	8,471
Total number of leases expiring	8
Percentage of annual base rent for expiring leases	10.00%
Through December 31, 2016
RENTAL INCOME
Annual base rent for expiring leases	593,346
Total square feet for expiring leases	27,073
Total number of leases expiring	3
Percentage of annual base rent for expiring leases	22.00%
Through December 31, 2017
RENTAL INCOME
Annual base rent for expiring leases	448,101
Total square feet for expiring leases	11,997
Total number of leases expiring	6
Percentage of annual base rent for expiring leases	16.00%
Through December 31, 2018
RENTAL INCOME
Annual base rent for expiring leases	58,050
Total square feet for expiring leases	1,262
Total number of leases expiring	1
Percentage of annual base rent for expiring leases	2.00%
Through December 31, 2019
RENTAL INCOME
Annual base rent for expiring leases	200,375
Total square feet for expiring leases	5,800
Total number of leases expiring	2
Percentage of annual base rent for expiring leases	7.00%
Through December 31, 2020
RENTAL INCOME
Annual base rent for expiring leases	64,657
Total square feet for expiring leases	1,106
Total number of leases expiring	1
Percentage of annual base rent for expiring leases	2.00%
Through December 31, 2021
RENTAL INCOME
Annual base rent for expiring leases	64,800
Total square feet for expiring leases	1,800
Total number of leases expiring	1
Percentage of annual base rent for expiring leases	2.00%
Through December 31, 2022
RENTAL INCOME
Annual base rent for expiring leases	$ 0
Percentage of annual base rent for expiring leases	0.00%

XML

RENTAL PROPERTIES (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	$ 138,055,522
Initial Cost to Partnerships
Land	25,799,080
Building Improvements	105,534,296
Cost Capitalized Subsequent to Acquisition
Improvements	28,587,184
Gross Amount at Which Carried at Close of Period
Land	25,754,887
Building Improvements	134,121,480
Totals	159,876,367
Accumulated Depreciation	64,440,518
Rental Properties
Balance, Beginning	159,123,799	150,818,648	150,411,555
Additions:
Buildings, improvements and other assets	2,360,399	12,444,604	2,268,039
Balance before deductions	161,484,198	163,263,252	152,679,594
Deduct:
Write-off of retired or disposed assets	1,607,830	2,437,555	1,860,946
Rental properties held for sale and/or sold		1,701,898
Balance, Ending	159,876,368	159,123,799	150,818,648
Accumulated Depreciation
Balance, Beginning	60,199,265	58,074,391	54,439,618
Add:
Depreciation for the year	5,849,083	5,750,989	5,495,719
Total additions	66,048,348	63,825,380	59,935,337
Deduct:
Accumulated depreciation of retired or disposed assets	1,607,830	2,437,555	1,860,946
Accumulated depreciation of rental properties held for sale and/or sold		1,188,560
Balance, Ending	64,440,518	60,199,265	58,074,391
Buildings and Improvements | Minimum
Gross Amount at Which Carried at Close of Period
Estimated useful lives	10 years
Buildings and Improvements | Maximum
Gross Amount at Which Carried at Close of Period
Estimated useful lives	39 years
Other Categories of Assets | Minimum
Gross Amount at Which Carried at Close of Period
Estimated useful lives	5 years
Other Categories of Assets | Maximum
Gross Amount at Which Carried at Close of Period
Estimated useful lives	20 years
Boylston Downtown L.P. Residential Apartments Boston, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	19,500,000
Initial Cost to Partnerships
Land	2,112,000
Building Improvements	8,593,111
Cost Capitalized Subsequent to Acquisition
Improvements	7,116,107
Gross Amount at Which Carried at Close of Period
Land	2,112,000
Building Improvements	15,709,218
Totals	17,821,218
Accumulated Depreciation	9,086,787
Brookside Associates LLC Residential Apartments Woburn, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	2,723,830
Initial Cost to Partnerships
Land	684,000
Building Improvements	3,116,000
Cost Capitalized Subsequent to Acquisition
Improvements	492,070
Gross Amount at Which Carried at Close of Period
Land	684,000
Building Improvements	3,608,070
Totals	4,292,070
Accumulated Depreciation	1,621,108
Courtyard @ Westgate Residential Units Burlington, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	2,000,000
Initial Cost to Partnerships
Land	44,965
Building Improvements	4,478,687
Cost Capitalized Subsequent to Acquisition
Improvements	253,696
Gross Amount at Which Carried at Close of Period
Land	44,965
Building Improvements	4,732,383
Totals	4,777,348
Accumulated Depreciation	1,465,723
Clovelly Apartments L.P. Residential Apartments Nashua, New Hampshire
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	4,160,000
Initial Cost to Partnerships
Land	177,610
Building Improvements	1,478,359
Cost Capitalized Subsequent to Acquisition
Improvements	1,268,279
Gross Amount at Which Carried at Close of Period
Land	177,610
Building Improvements	2,746,638
Totals	2,924,248
Accumulated Depreciation	1,981,658
Commonwealth 1137 L.P. Residential Apartments Boston, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	3,750,000
Initial Cost to Partnerships
Land	342,000
Building Improvements	1,367,669
Cost Capitalized Subsequent to Acquisition
Improvements	933,759
Gross Amount at Which Carried at Close of Period
Land	342,000
Building Improvements	2,301,428
Totals	2,643,428
Accumulated Depreciation	1,251,632
Commonwealth 1144 L.P. Residential Apartments Boston, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	14,780,000
Initial Cost to Partnerships
Land	1,410,000
Building Improvements	5,664,816
Cost Capitalized Subsequent to Acquisition
Improvements	1,616,613
Gross Amount at Which Carried at Close of Period
Land	1,410,000
Building Improvements	7,281,429
Totals	8,691,429
Accumulated Depreciation	4,373,285
Condominium Units-Riverside Residential Units Massachusetts
Initial Cost to Partnerships
Land	23,346
Building Improvements	190,807
Cost Capitalized Subsequent to Acquisition
Improvements	22,428
Gross Amount at Which Carried at Close of Period
Land	23,346
Building Improvements	213,235
Totals	236,581
Accumulated Depreciation	205,326
Executive Apartments L.P. Residential Apartments Framingham, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	2,415,000
Initial Cost to Partnerships
Land	91,400
Building Improvements	740,360
Cost Capitalized Subsequent to Acquisition
Improvements	758,449
Gross Amount at Which Carried at Close of Period
Land	91,400
Building Improvements	1,498,809
Totals	1,590,209
Accumulated Depreciation	1,128,556
Hamilton Battle Green LLC Residential Apartments Lexington, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	4,893,448
Initial Cost to Partnerships
Land	1,341,737
Building Improvements	8,457,497
Cost Capitalized Subsequent to Acquisition
Improvements	31,849
Gross Amount at Which Carried at Close of Period
Land	1,341,737
Building Improvements	8,489,346
Totals	9,831,083
Accumulated Depreciation	612,568
Hamilton Cypress LLC Commercial-1031Exchange Brookline, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	3,686,380
Initial Cost to Partnerships
Land	2,362,596
Building Improvements	4,613,985
Cost Capitalized Subsequent to Acquisition
Improvements	51,823
Gross Amount at Which Carried at Close of Period
Land	2,362,596
Building Improvements	4,665,808
Totals	7,028,404
Accumulated Depreciation	696,283
Hamilton Linewt LLC Commercial-1031Exchange Newton, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	1,528,429
Initial Cost to Partnerships
Land	884,042
Building Improvements	2,652,127
Cost Capitalized Subsequent to Acquisition
Improvements	50,608
Gross Amount at Which Carried at Close of Period
Land	884,042
Building Improvements	2,702,735
Totals	3,586,777
Accumulated Depreciation	353,574
Hamilton Oaks Associates LLC Residential Apartments Brockton, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	11,925,000
Initial Cost to Partnerships
Land	2,175,000
Building Improvements	12,325,000
Cost Capitalized Subsequent to Acquisition
Improvements	1,726,607
Gross Amount at Which Carried at Close of Period
Land	2,175,000
Building Improvements	14,051,607
Totals	16,226,607
Accumulated Depreciation	7,256,645
Highland Street Apartment, L.P. Residential Apartments Lowell, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	1,050,000
Initial Cost to Partnerships
Land	156,000
Building Improvements	634,085
Cost Capitalized Subsequent to Acquisition
Improvements	400,178
Gross Amount at Which Carried at Close of Period
Land	156,000
Building Improvements	1,034,263
Totals	1,190,263
Accumulated Depreciation	569,822
Linhart L.P. Residential/Commercial Newton, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	1,964,119
Initial Cost to Partnerships
Land	385,000
Building Improvements	1,540,000
Cost Capitalized Subsequent to Acquisition
Improvements	1,157,151
Gross Amount at Which Carried at Close of Period
Land	385,000
Building Improvements	2,697,151
Totals	3,082,151
Accumulated Depreciation	1,769,651
Nashoba Apartments L.P. Residential Apartments Acton, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	2,000,000
Initial Cost to Partnerships
Land	79,650
Building Improvements	284,548
Cost Capitalized Subsequent to Acquisition
Improvements	887,277
Gross Amount at Which Carried at Close of Period
Land	79,650
Building Improvements	1,171,825
Totals	1,251,475
Accumulated Depreciation	789,226
NERA Dean St. Associates LLC Residential Apartments Norwood, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	5,213,958
Initial Cost to Partnerships
Land	1,512,000
Building Improvements	5,701,480
Cost Capitalized Subsequent to Acquisition
Improvements	426,220
Gross Amount at Which Carried at Close of Period
Land	1,512,000
Building Improvements	6,127,700
Totals	7,639,700
Accumulated Depreciation	2,477,008
North Beacon 140 L.P. Residential Units Boston, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	6,937,000
Initial Cost to Partnerships
Land	936,000
Building Improvements	3,762,013
Cost Capitalized Subsequent to Acquisition
Improvements	1,490,223
Gross Amount at Which Carried at Close of Period
Land	936,000
Building Improvements	5,252,236
Totals	6,188,236
Accumulated Depreciation	3,120,665
Olde English Apartments L.P. Residential Apartments Lowell, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	3,080,000
Initial Cost to Partnerships
Land	46,181
Building Improvements	878,323
Cost Capitalized Subsequent to Acquisition
Improvements	1,161,011
Gross Amount at Which Carried at Close of Period
Land	46,181
Building Improvements	2,039,334
Totals	2,085,515
Accumulated Depreciation	1,345,108
River Drive L.P. Residential Apartments Danvers, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	3,465,000
Initial Cost to Partnerships
Land	72,525
Building Improvements	587,777
Cost Capitalized Subsequent to Acquisition
Improvements	1,426,304
Gross Amount at Which Carried at Close of Period
Land	72,525
Building Improvements	2,014,081
Totals	2,086,606
Accumulated Depreciation	1,601,231
Redwood Hills L.P. Residential Units Worcester, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	6,743,000
Initial Cost to Partnerships
Land	1,200,000
Building Improvements	4,810,604
Cost Capitalized Subsequent to Acquisition
Improvements	2,117,589
Gross Amount at Which Carried at Close of Period
Land	1,200,000
Building Improvements	6,928,193
Totals	8,128,193
Accumulated Depreciation	4,055,659
School St Assoc LLC Residential Apartments Framingham, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	15,308,474
Initial Cost to Partnerships
Land	4,686,728
Building Improvements	18,746,911
Cost Capitalized Subsequent to Acquisition
Improvements	(1,928,307)
Gross Amount at Which Carried at Close of Period
Land	4,686,728
Building Improvements	16,818,604
Totals	21,505,332
Accumulated Depreciation	6,112,019
Staples Plaza Strip Mall Framingham, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	6,000,000
Initial Cost to Partnerships
Land	3,280,000
Building Improvements	4,920,000
Cost Capitalized Subsequent to Acquisition
Improvements	36,724
Gross Amount at Which Carried at Close of Period
Land	3,280,000
Building Improvements	4,956,724
Totals	8,236,724
Accumulated Depreciation	2,235,613
WCB Associates LLC Residential Apartments Brockton, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	7,000,000
Initial Cost to Partnerships
Land	1,335,000
Building Improvements	7,565,501
Cost Capitalized Subsequent to Acquisition
Improvements	1,083,048
Gross Amount at Which Carried at Close of Period
Land	1,335,000
Building Improvements	8,648,549
Totals	9,983,549
Accumulated Depreciation	4,552,121
Westgate Apartments LLC Residential Apartments Woburn, Massachusetts
Real estate and accumulated depreciation
Encumbrances (First Mortgages)	7,931,885
Initial Cost to Partnerships
Land	461,300
Building Improvements	2,424,636
Cost Capitalized Subsequent to Acquisition
Improvements	6,007,478
Gross Amount at Which Carried at Close of Period
Land	417,107
Building Improvements	8,432,114
Totals	8,849,221
Accumulated Depreciation	$ 5,779,250

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CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (USD $)	Total USD ($)	Subtotal	Class A USD ($)	Class B USD ($)	General Partnership USD ($)	Treasury Units
Balance at Dec. 31, 2009	$ (21,332,823)		$ (17,069,520)	$ (4,050,138)	$ (213,165)
Balance (in units) at Dec. 31, 2009	132,346	180,225	144,180	34,243	1,802	47,879
Increase (Decrease) in Partners' Capital
Distributions to Partners	(3,687,600)		(2,950,080)	(700,644)	(36,876)
Stock buyback	(540,911)		(432,920)	(102,591)	(5,400)
Stock Buyback (in units)	(862)					862
Net income (loss)	(1,359,232)		(1,087,386)	(258,254)	(13,592)
Balance at Dec. 31, 2010	(26,920,566)		(21,539,906)	(5,111,627)	(269,033)
Balance (in units) at Dec. 31, 2010	131,484	180,225	144,180	34,243	1,802	48,741
Increase (Decrease) in Partners' Capital
Distributions to Partners	(3,681,566)		(2,945,253)	(699,498)	(36,815)
Net income (loss)	9,291,281		7,433,025	1,765,343	92,913
Balance at Dec. 31, 2011	(21,310,851)		(17,052,134)	(4,045,782)	(212,935)
Balance (in units) at Dec. 31, 2011	131,484	180,225	144,180	34,243	1,802	48,741
Increase (Decrease) in Partners' Capital
Distributions to Partners	(3,932,410)		(3,145,928)	(747,158)	(39,324)
Stock buyback	(906,214)		(726,058)	(171,148)	(9,008)
Stock Buyback (in units)	(1,040)			198		1,040
Net income (loss)	3,633,798		2,907,038	690,422	36,338
Balance at Dec. 31, 2012	$ (22,515,677)		$ (18,017,082)	$ (4,273,666)	$ (224,929)
Balance (in units) at Dec. 31, 2012	130,444	180,225	144,180	34,243	1,802	49,781

XML

OTHER ASSETS

12 Months Ended

Dec. 31, 2012

OTHER ASSETS

OTHER ASSETS

NOTE 4. OTHER ASSETS

        Approximately $1,919,000 and $1,879,000 of security deposits are included in prepaid expenses and other assets at December 31, 2012 and December 31, 2011, respectively. The security deposits and escrow accounts are restricted cash.

        Included in prepaid expenses and other assets at December 31, 2012 and December 31, 2011 is approximately $420,000 and $1,014,000, respectively, held in escrow to fund future capital improvements.

        Financing fees of approximately $1,136,000 and $919,000 are net of accumulated amortization of approximately $772,000 and $636,000 at December 31, 2012 and December 31, 2011, respectively.

XML

QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) (USD $)	3 Months Ended								12 Months Ended
	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2011	Sep. 30, 2011	Jun. 30, 2011	Mar. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
QUARTERLY FINANCIAL DATA (UNAUDITED)
Revenue	$ 9,104,015	$ 8,875,596	$ 8,800,416	$ 8,852,382	$ 8,760,538	$ 8,648,526	$ 8,345,643	$ 8,280,894	$ 35,632,409	$ 34,035,602	$ 32,255,957
Expenses	5,704,596	5,730,319	5,413,735	5,861,694	5,722,971	5,665,232	5,508,842	5,773,941	22,710,344	22,670,986	21,916,664
Income Before Other Income (loss) and Discontinued Operations	3,399,419	3,145,277	3,386,681	2,990,688	3,037,567	2,983,294	2,836,801	2,506,953	12,922,065	11,364,616	10,339,293
Income (loss) from discontinued operations					(308)	(3,054)	7,736,789	68,599		7,802,026	219,867
Other Income (loss)	(2,214,288)	(2,370,824)	(2,339,420)	(2,363,735)	(2,469,002)	(2,523,314)	(2,480,305)	(2,402,740)	(9,288,267)	(9,875,361)	(11,918,392)
Net Income (loss)	$ 1,185,131	$ 774,453	$ 1,047,261	$ 626,953	$ 568,257	$ 456,926	$ 8,093,285	$ 172,812	$ 3,633,798	$ 9,291,281	$ (1,359,232)
Net Income (loss) per Unit before discontinued operations (in dollars per unit)	$ 9.07	$ 5.90	$ 7.97	$ 4.77	$ 4.33	$ 3.50	$ 2.71	$ 0.79	$ 27.69	$ 11.33	$ (11.99)
Income (loss) per Unit from discontinued operations (in dollars per unit)						$ (0.02)	$ 58.84	$ 0.52		$ 59.34	$ 1.67
Net Income per Unit (in dollars per unit)	$ 9.07	$ 5.90	$ 7.97	$ 4.77	$ 4.33	$ 3.48	$ 61.55	$ 1.31	$ 27.69	$ 70.67	$ (10.32)
Income per depositary receipt before discontinued operations (in dollars per share)	$ 0.30	$ 0.20	$ 0.27	$ 0.16	$ 0.15	$ 0.12	$ 0.09	$ 0.02	$ 0.92	$ 0.38
Income per depositary receipt from discontinued operations (in dollars per share)	$ 0.00	$ 0.00	$ 0.00	$ 0.00			$ 1.96	$ 0.02	$ 0.00	$ 1.98
Net Income (loss) per Depositary Receipt after Discontinued Operations (in dollars per share)					$ 0.15	$ 0.12	$ 2.05	$ 0.04	$ 0.92	$ 2.36
Net Income per depositary receipt	$ 0.30	$ 0.20	$ 0.27	$ 0.16					$ 0.92

XML

RENTAL PROPERTIES (Tables)

12 Months Ended

Dec. 31, 2012

RENTAL PROPERTIES

Schedule of rental properties

	December 31, 2012			December 31, 2011			Useful Life
Land, improvements and parking lots	$	27,849,721		$	27,614,537			15–40 years
Buildings and improvements		119,579,923			119,097,186			15–40 years
Kitchen cabinets		3,620,196			3,542,249			5–10 years
Carpets		3,354,593			3,307,499			5–10 years
Air conditioning		764,671			788,146			7–10 years
Laundry equipment		378,806			368,955			5–7 years
Elevators		1,139,296			1,139,296			20 years
Swimming pools		235,242			235,242			10 years
Equipment		1,586,591			1,744,006			5–7 years
Motor vehicles		101,657			107,788			5 years
Fences		22,445			22,974			5–10 years
Furniture and fixtures		1,038,136			1,039,439			5–7 years
Smoke alarms		205,091			116,482			5–7 years
Total fixed assets		159,876,368			159,123,799
Less: Accumulated depreciation		(64,440,518	)		(60,199,265	)
	$	95,435,850		$	98,924,534

Schedule of real estate and accumulated depreciation

			Initial Cost to Partnerships(1)				Cost Capitalized Subsequent to Acquisition(2)			Gross Amount at Which Carried at Close of Period
	Encumbrances (First Mortgages)				Buildings Improvements							Buildings Improvements				Accumulated Depreciation(3)
			Land				Improvements			Land				Totals				Date Acquired
Boylston Downtown L.P. Residential Apartments Boston, Massachusetts	$	19,500,000	$	2,112,000	$	8,593,111	$	7,116,107		$	2,112,000	$	15,709,218	$	17,821,218	$	9,086,787		July 1995
Brookside Associates LLC Residential Apartments Woburn, Massachusetts	$	2,723,830	$	684,000	$	3,116,000	$	492,070		$	684,000	$	3,608,070	$	4,292,070	$	1,621,108		Oct. 2000
Courtyard @ Westgate Residential Units Burlington, Massachusetts	$	2,000,000	$	44,965	$	4,478,687	$	253,696		$	44,965	$	4,732,383	$	4,777,348	$	1,465,723		Sep. 2004
Clovelly Apartments L.P. Residential Apartments Nashua, New Hampshire	$	4,160,000	$	177,610	$	1,478,359	$	1,268,279		$	177,610	$	2,746,638	$	2,924,248	$	1,981,658		Sept. 1977
Commonwealth 1137 L.P. Residential Apartments Boston, Massachusetts	$	3,750,000	$	342,000	$	1,367,669	$	933,759		$	342,000	$	2,301,428	$	2,643,428	$	1,251,632		July 1995
Commonwealth 1144 L.P. Residential Apartments Boston, Massachusetts	$	14,780,000	$	1,410,000	$	5,664,816	$	1,616,613		$	1,410,000	$	7,281,429	$	8,691,429	$	4,373,285		July 1995
Condominium Units—Riverside Residential Units Massachusetts	$	—	$	23,346	$	190,807	$	22,428		$	23,346	$	213,235	$	236,581	$	205,326		Sept. 1977
Executive Apartments L.P. Residential Apartments Framingham, Massachusetts	$	2,415,000	$	91,400	$	740,360	$	758,449		$	91,400	$	1,498,809	$	1,590,209	$	1,128,556		Sept. 1977
Hamilton Battle Green LLC Residential Apartments Lexington, Massachusetts	$	4,893,448	$	1,341,737	$	8,457,497	$	31,849		$	1,341,737	$	8,489,346	$	9,831,083	$	612,568		Jun. 2011
Hamilton Cypress LLC Commercial—1031Exchange Brookline, Massachusetts	$	3,686,380	$	2,362,596	$	4,613,985	$	51,823		$	2,362,596	$	4,665,808	$	7,028,404	$	696,283		Oct. 2008
Hamilton Linewt LLC Commercial—1031Exchange Newton, Massachusetts	$	1,528,429	$	884,042	$	2,652,127	$	50,608		$	884,042	$	2,702,735	$	3,586,777	$	353,574		Nov. 2007
Hamilton Oaks Associates LLC Residential Apartments Brockton, Massachusetts	$	11,925,000	$	2,175,000	$	12,325,000	$	1,726,607		$	2,175,000	$	14,051,607	$	16,226,607	$	7,256,645		Dec. 1999
Highland Street Apartments, L.P. Residential Apartments Lowell, Massachusetts	$	1,050,000	$	156,000	$	634,085	$	400,178		$	156,000	$	1,034,263	$	1,190,263	$	569,822		Dec. 1996
Linhart L.P. Residential/Commercial Newton, Massachusetts	$	1,964,119	$	385,000	$	1,540,000	$	1,157,151		$	385,000	$	2,697,151	$	3,082,151	$	1,769,651		Jan. 1995
Nashoba Apartments L.P. Residential Apartments Acton, Massachusetts	$	2,000,000	$	79,650	$	284,548	$	887,277		$	79,650	$	1,171,825	$	1,251,475	$	789,226		Sept. 1977
NERA Dean St. Associates LLC Residential Apartments Norwood, Massachusetts	$	5,213,958	$	1,512,000	$	5,701,480	$	426,220		$	1,512,000	$	6,127,700	$	7,639,700	$	2,477,008		Jun. 2002
North Beacon 140 L.P. Residential Units Boston, Massachusetts	$	6,937,000	$	936,000	$	3,762,013	$	1,490,223		$	936,000	$	5,252,236	$	6,188,236	$	3,120,665		July 1995
Olde English Apartments L.P. Residential Apartments Lowell, Massachusetts	$	3,080,000	$	46,181	$	878,323	$	1,161,011		$	46,181	$	2,039,334	$	2,085,515	$	1,345,108		Sept. 1977
River Drive L.P. Residential Apartments Danvers, Massachusetts	$	3,465,000	$	72,525	$	587,777	$	1,426,304		$	72,525	$	2,014,081	$	2,086,606	$	1,601,231		Sept. 1977
Redwood Hills L.P. Residential Units Worcester, Massachusetts	$	6,743,000	$	1,200,000	$	4,810,604	$	2,117,589		$	1,200,000	$	6,928,193	$	8,128,193	$	4,055,659		July 1995
School St Assoc LLC Residential Apartments Framingham, Massachusetts	$	15,308,474	$	4,686,728	$	18,746,911	$	(1,928,307	)	$	4,686,728	$	16,818,604	$	21,505,332	$	6,112,019		Apr. 2003
Staples Plaza Strip Mall Framingham, Massachusetts	$	6,000,000	$	3,280,000	$	4,920,000	$	36,724		$	3,280,000	$	4,956,724	$	8,236,724	$	2,235,613		May 1999
WCB Associates LLC Residential Apartments Brockton, Massachusetts	$	7,000,000	$	1,335,000	$	7,565,501	$	1,083,048		$	1,335,000	$	8,648,549	$	9,983,549	$	4,552,121		Dec. 1999
Westgate Apartments LLC Residential Apartments Woburn, Massachusetts	$	7,931,885	$	461,300	$	2,424,636	$	6,007,478		$	417,107	$	8,432,114	$	8,849,221	$	5,779,250		Sept. 1977
	$	138,055,522	$	25,799,080	$	105,534,296	$	28,587,184		$	25,754,887	$	134,121,480	$	159,876,368	$	64,440,518

(1)

The initial cost to the Partnerships represents both the balance of mortgages assumed in September 1977, including subsequent adjustments to such amounts, and subsequent acquisitions at cost.

(2)

Net of retirements, which are not significant.

(3)

In 2012, rental properties were depreciated over the following estimated useful lives:

Schedule of estimated useful lives of rental properties

Assets	Life
Buildings and Improvements		15–40 years
Other Categories of Assets		5–20 years

Schedule of reconciliation of rental properties and accumulated depreciation

	December 31,
	2012		2011		2010
Rental Properties
Balance, Beginning	$	159,123,799	$	150,818,648	$	150,411,555
Additions:
Buildings, improvements and other assets		2,360,399		12,444,604		2,268,039
		161,484,198		163,263,252		152,679,594
Deduct:
Write-off of retired or disposed assets		1,607,830		2,437,555		1,860,946
Rental properties held for sale and/or sold		—		1,701,898		—
Balance, Ending	$	159,876,368	$	159,123,799	$	150,818,648
Accumulated Depreciation
Balance, Beginning	$	60,199,265	$	58,074,391	$	54,439,618
Add:
Depreciation for the year		5,849,083		5,750,989		5,495,719
		66,048,348		63,825,380		59,935,337
Deduct:
Accumulated depreciation of retired or disposed assets		1,607,830		2,437,555		1,860,946
Accumulated depreciation of rental properties held for sale and/or sold		—		1,188,560		—
Balance, Ending	$	64,440,518	$	60,199,265	$	58,074,391

XML

SIGNIFICANT ACCOUNTING POLICIES (Details)	Dec. 31, 2012 item
Residential and mixed-use properties
Line of Business
Number of properties	20
Number of units	2,251
Condominium
Line of Business
Number of units	19
Wholly owned properties
Line of Business
Number of properties	24
Wholly owned properties | Residential buildings
Line of Business
Number of properties	16
Number of units	2,251
Wholly owned properties | Mixed use residential, retail and office buildings
Line of Business
Number of properties	4
Wholly owned properties | Commercial
Line of Business
Number of properties	3
Area of property (in square feet)	110,949
Wholly owned properties | Condominium
Line of Business
Number of properties	1
Number of units	19
Partially owned properties | Residential and mixed-use properties
Line of Business
Number of properties	9
Number of units	799
Area of property (in square feet)	12,500
Partially owned properties | Residential and mixed-use properties | Minimum
Line of Business
Percentage of ownership interest	40.00%
Partially owned properties | Residential and mixed-use properties | Maximum
Line of Business
Percentage of ownership interest	50.00%
Partially owned properties | Car parking lot
Line of Business
Capacity of real estate property (in cars per lot)	50

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

12 Months Ended

Dec. 31, 2012

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

        Since November 2001, the Partnership has invested in nine limited partnerships and limited liability companies, the majority of which have invested in residential apartment complexes, with three partnerships investing in commercial property. The Partnership has between a 40%-50% ownership interests in each investment. The other investors are Harold Brown, the President of the Management Company and five other employees of the Management Company. Harold Brown's ownership interest is between 43.2% and 57%, with the balance owned by the others. A description of each investment is as follows:

        On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, referred to as Dexter Park, is a 409 unit residential complex. The purchase price was $129,500,000. The total mortgage was $89,914,000 with an interest rate of 5.57% and it matures in 2019. The mortgage calls for interest only payments for the first two years of the loan and amortized over 30 years thereafter. The balance of this mortgage is approximately $88,612,000 at December 31, 2012. In order to fund this investment, the Partnership used approximately $8,757,000 of its cash reserves and borrowed approximately $7,168,000 with an interest rate of 6% from HBC Holdings, LLC, an entity owned by Harold Brown and his affiliates ("HBC"). The term of the loan was four years with a provision requiring payment in whole or in part upon demand by HBC with six months notice. On August 17, 2010, HBC gave six months written notice to the Partnership requesting a principal pay down of $2,500,000. During the fourth quarter of 2010, the Partnership paid HBC $2,500,000 as requested. During 2011, the Partnership elected to make principal payments of $1,000,000 on August 1, 2011, $1,000,000 on October 1, 2011, and an additional $1,000,000 on December 15, 2011 reducing the loan balance to $1,668,600 at December 31, 2011. In February 2012, the Partnership elected to make an additional principal payment of $750,000 to HBC Holdings and the balance of $918,600 was paid in April 2012. The interest paid during the year ended December 31, 2012 and 2011 was $18,960 and $238,673, respectively. A majority of the apartments were leased at the time of the acquisition. As a result, the Partnership amortized the intangible assets associated with the "in place" leases over a 12 month period which began in November 2009. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

        On October 3, 2005, the Partnership invested $2,500,000 for a 50% ownership interest in a 168-unit apartment complex in Quincy, Massachusetts. The purchase price was $30,875,000. The Partnership plans to sell the majority of units as condominium and retain 48 units for long-term investment. Gains from the sales of units were taxed at ordinary income rates. In February 2007, the Partnership refinanced the 48 units with a new mortgage in the amount of $4,750,000 with an interest rate of 5.57%, interest only for five years. The loan will be amortized over 30 years thereafter and matures in March 2017. As of December 31, 2012, the balance of the mortgage is approximately $4,702,000. This investment is referred to as Hamilton Bay Apartments, LLC. In April 2008, the Partnership refinanced an additional 20 units and obtained a new mortgage in the amount of $2,368,000 with interest at 5.75%, interest only, which matures in 2013. We are working on refinancing the property with the current lender. At December 31, 2012, 15 of the 20 units are still owned by the Partnership. As of February 1, 2013, 105 units have been sold, the proceeds of which went to pay down the mortgage on the property. No unit was sold during the year ended December 31, 2012. The balance on the new mortgage is approximately $1,668,000 at December 31, 2012. This investment is referred to as Hamilton Bay, LLC.

        On March 7, 2005, the Partnership invested $2,000,000 for a 50% ownership interest in a building comprising 49 apartments, one commercial space and a 50-car surface parking lot located in Boston, Massachusetts. The purchase price was $14,300,000, with a $10,750,000 mortgage. The Partnership plans to operate the building and initiate development of the parking lot. In June 2007, the Partnership separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Partnership restructured the mortgages on both parcels at Essex 81 and transferred the residential apartments to Hamilton Essex 81, LLC. The mortgage on Hamilton Essex 81, LLC is approximately $8,352,000 amortizing over 30 years at 5.79% due in August 2016. The mortgage on Essex Development, LLC, or the parking lot is approximately $2,093,000 with a variable interest rate of 2.25% over the daily Libor rate (0.21% at December 31, 2012). This loan was extended to August 2013 with the same conditions except for the addition of fixed principal payments in the amount of $4,301 per month. The cost associated with the extension was approximately $6,000. Harold Brown has issued a personal guaranty up to $1,000,000 of this mortgage. In the event that he is obligated to make payments to the lender as a result of this guaranty, the Partnership and other investors have, in turn, agreed to indemnify him for their proportionate share of any such payments. The investment in the parking lot is referred to as Hamilton Essex Development, LLC; the investment in the apartments is referred to as Hamilton Essex 81, LLC.

        On March 2, 2005, the Partnership invested $2,352,000 for a 50% ownership interest in a 176-unit apartment complex with an additional small commercial building located in Quincy, Massachusetts. The purchase price was $23,750,000. The Partnership sold 127 of the units as condominiums and retained 49 units for long-term investment. The Partnership obtained a new 10-year mortgage in the amount of $5,000,000 on the units to be retained by the Partnership. The interest on the new loan is 5.67% fixed for the 10 year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan term. The balance of this mortgage is approximately $4,935,000 at December 31, 2012. This investment is referred to as Hamilton 1025, LLC.

        In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. In October 2004, the Partnership obtained a mortgage on the property in the amount of $8,025,000 and returned $3,775,000 to the Partnership. The Partnership obtained a new 10-year mortgage in the amount of $5,500,000 in January 2007. The interest on the new loan is 5.67% fixed for the ten year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan. This loan required a cash contribution by the Partnership of $1,250,000 in December 2006. At December 31, 2012, the balance of this mortgage is approximately $5,433,000. This investment is referred to as Hamilton Minuteman, LLC.

        In August 2004, the Partnership invested $8,000,000 for a 50% ownership interest in a 280-unit apartment complex located in Watertown, Massachusetts. The total purchase price was $56,000,000. As of May 2008, the Partnership sold 137 units as condominiums. Gains from these sales were taxed as ordinary income. The majority of the sales proceeds were applied to reduce the mortgage with the final payment made during the second quarter of 2007. With the sale of the units and the payments of the liabilities, the assets were combined with Hamilton on Main Apartments, LLC. An entity partially owned by the majority shareholder of the General Partner and the President of the management company, 31% and 5%, respectively, was the sales agent and received a variable commission on each sale of 3% to 5%. Hamilton on Main Apartments, LLC is known as Hamilton Place.

        In 2005, Hamilton on Main Apartments, LLC obtained a ten year mortgage on the three buildings to be retained. The mortgage was $16,825,000, with interest only of 5.18% for three years and amortizing on a 30 year schedule for the remaining seven years when the balance is due. The net proceeds after funding escrow accounts and closing costs on the mortgage were approximately $16,700,000, which were used to reduce the existing mortgage. Hamilton on Main LLC paid a fee of approximately $400,000 in connection with this early extinguishment of debt. At December 31, 2012, the remaining balance on the mortgage is approximately $15,611,000.

        In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts. This property has a 12-year mortgage, with a remaining balance at December 31, 2012 of approximately $6,850,000 at 6.9% which is amortized on a 30-year schedule, with a final payment of approximately $6,000,000 in 2014. This investment is referred to as 345 Franklin, LLC.

Summary financial information for the year ended December 31, 2012

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay Apts		Hamilton Minuteman Apts		Hamilton on Main Apts		Dexter Park		Total
ASSETS
Rental Properties	$	9,103,858	$	2,610,574	$	7,885,745	$	5,621,970	$	1,844,219	$	6,975,854	$	7,020,471	$	21,148,813	$	107,496,918	$	169,708,422
Cash & Cash Equivalents		27,848		20,214		3,533		2,706		20,695		62,473		44,170		103,990		941,391		1,227,018
Rent Receivable		44,005		—		600		7,283		2,200		2,686		2,626		11,108		35,250		105,758
Real Estate Tax Escrow		49,793		—		20,242		74,443		—		41,225		43,612		70,364		424,159		723,838
Prepaid Expenses & Other Assets		61,895		505		75,222		33,659		127,530		14,345		48,715		154,396		1,367,274		1,883,541
Financing & Leasing Fees		64,116		4,325		8,164		19,645		5,505		26,243		15,950		14,581		399,678		558,206
Total Assets	$	9,351,515	$	2,635,617	$	7,993,505	$	5,759,706	$	2,000,148	$	7,122,825	$	7,175,545	$	21,503,252	$	110,664,670	$	174,206,783
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$	8,352,317	$	2,093,184	$	6,850,179	$	4,934,741	$	1,668,000	$	4,702,087	$	5,433,472	$	15,611,045	$	88,611,686	$	138,256,711
Accounts Payable & Accrued Expense		34,673		6,319		93,810		49,566		7,481		49,690		58,378		204,413		843,422		1,347,752
Advance Rental Pmts& Security Deposits		175,871		—		140,759		80,264		25,147		86,028		71,025		273,302		1,919,573		2,771,968
Total Liabilities		8,562,861		2,099,503		7,084,748		5,064,570		1,700,628		4,837,806		5,562,875		16,088,760		91,374,681		142,376,432
Partners' Capital		788,654		536,114		908,757		695,135		299,520		2,285,019		1,612,669		5,414,492		19,289,989		31,830,352
Total Liabilities and Capital	$	9,351,515	$	2,635,617	$	7,993,505	$	5,759,706	$	2,000,148	$	7,122,825	$	7,175,545	$	21,503,252	$	110,664,670	$	174,206,783
Partners' Capital—NERA 50%	$	394,327	$	268,057	$	454,379	$	347,568	$	149,760	$	1,142,510	$	806,335	$	2,707,246				6,270,181
Partners' Capital—NERA 40%																	$	7,715,996		7,715,996
																			$	13,986,177
Total units/condominiums
Apartments		48		—		40		175		120		48		42		148		409		1,030
Commercial		1		1		—		1		—		—		—		—		—		3
Total		49		1		40		176		120		48		42		148		409		1,033
Units to be retained		49		1		40		49		—		48		42		148		409		786
Units to be sold		—		—		—		127		120		—		—		—		—		247
Units sold through March 1, 2013		—		—		—		127		105		—		—		—		—		232
Unsold units		—		—		—		—		15		—		—		—		—		15
Unsold units with deposits for future sale as of March 1, 2013		—		—		—		—		—		—		—		—		—		—

Year ended December 31, 2012

	Hamilton Essex 81			Hamilton Essex Development			345 Franklin			Hamilton 1025			Hamilton Bay Sales			Hamilton Bay Apts			Hamilton Minuteman Apts			Hamilton on Main Apts			Dexter Park			Total
Revenues
Rental Income	$	1,270,141		$	287,537		$	1,178,712		$	861,998		$	235,061		$	886,122		$	809,707		$	2,623,994		$	12,202,615		$	20,355,887
Laundry and Sundry Income		15,363			—			1,206			—			—			—			2,435			20,952			98,042			137,999
		1,285,504			287,537			1,179,918			861,998			235,061			886,122			812,142			2,644,946			12,300,657			20,493,885
Expenses
Administrative		15,237			1,749			27,942			5,142			7,553			34,600			7,825			46,400			219,218			365,666
Depreciation and Amortization		409,488			11,638			441,704			256,696			82,287			297,737			317,231			957,452			5,733,920			8,508,153
Management Fees		55,308			11,502			48,596			34,517			9,894			34,659			32,615			104,807			261,355			593,253
Operating		112,172			—			62,277			816			1,251			1,190			73,092			341,054			1,006,570			1,598,421
Renting		18,350			—			5,326			6,815			1,894			4,053			3,538			10,974			74,705			125,655
Repairs and Maintenance		118,786			5,475			82,052			320,997			70,812			273,652			57,448			380,605			880,103			2,189,930
Taxes and Insurance		197,566			49,237			106,785			145,755			46,017			161,137			102,505			337,256			1,485,297			2,631,555
		926,908			79,600			774,681			770,738			219,707			807,027			594,254			2,178,549			9,661,169			16,012,632
Income Before Other Income		358,596			207,937			405,237			91,260			15,354			79,095			217,888			466,397			2,639,488			4,481,253
Other Income (Loss)
Interest Expense		(497,631	)		(60,451	)		(486,051	)		(288,470	)		(98,361	)		(271,283	)		(317,448	)		(840,874	)		(5,092,838	)		(7,953,407	)
Interest Income		—			—			48			74			215			—			—			—			—			337
Interest Income from Note		—			—			—			—			6,180			—			—			—			—			6,180
		(497,631	)		(60,451	)		(486,003	)		(288,395	)		(91,966	)		(271,283	)		(317,448	)		(840,874	)		(5,092,838	)		(7,946,890	)
Net Income (Loss)	$	(139,035	)	$	147,486		$	(80,766	)	$	(197,135	)	$	(76,612	)	$	(192,188	)	$	(99,560	)	$	(374,477	)	$	(2,453,350	)	$	(3,465,636	)
Net Income (Loss)—NERA 50%	$	(69,517	)	$	73,743		$	(40,383	)	$	(98,567	)	$	(38,306	)	$	(96,094	)	$	(49,780	)	$	(187,239	)					(506,143	)
Net Income (Loss)—NERA 40%																									$	(981,340	)		(981,340	)
																												$	(1,487,483	)

Future annual mortgage maturities at December 31, 2012 are as follows:

	Hamilon Essex 81		Hamilton Essex 81 Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay Apts		Hamilton Minuteman		Hamilton on Main Apts		Dexter Park
Period End	March 2005		March 2005		November 2001		March 2005		October 2005		October 2005		August 2004		August 2004		October 2009		Total
12/31/2013		125,660		2,093,184		165,412		65,157		1,668,000		66,163		71,363		293,222		1,275,835		7,082,229
12/31/2014		133,132				6,684,767		69,003				69,944		75,575		309,178		1,348,741		10,020,473
12/31/2015		141,048						73,077				73,941		80,036		15,008,646		1,425,814		18,208,704
12/31/2016		7,952,477						4,727,503				78,166		77,128				1,507,291		15,829,060
12/31/2017												4,413,873		5,129,371				1,593,424		12,708,108
Thereafter																		81,460,581		163,299,264
	$	8,352,317	$	2,093,184	$	6,850,179	$	4,934,741	$	1,668,000	$	4,702,087	$	5,433,472	$	15,611,045	$	88,611,686	$	138,256,711

        At December 31, 2012 the weighted average interest rate on the above mortgages was 5.65%. The effective rate was 5.65% including the amortization expense of deferred financing costs.

Summary financial information for the year ended December 31, 2011

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay		Hamilton Minuteman		Hamilton on Main		Dexter Park		Total
ASSETS
Rental Properties		9,454,959		2,613,064		8,229,651		5,863,176		1,916,445		7,257,981		7,256,528		21,939,796		112,921,940		177,453,541
Cash & Cash Equivalents		47,526		1,529		17,027		1,848		19,416		5,026		31,125		90,940		836,347		1,050,783
Rent Receivable		73,459		—		—		15,682		—		2,512		7,457		8,593		86,722		194,425
Real Estate Tax Escrow		98,610		—		18,360		64,464		—		89,760		43,864		104,505		582,028		1,001,592
Prepaid Expenses & Other Assets		59,508		493		54,276		88,524		167,811		95,190		54,023		180,899		1,216,214		1,916,937
Financing & Leasing Fees		71,108		6,987		16,330		24,672		6,570		32,605		19,918		21,442		458,995		658,626
Total Assets		9,805,169		2,622,073		8,335,644		6,058,364		2,110,241		7,483,074		7,412,916		22,346,175		116,102,247		182,275,903
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		8,462,041		2,144,796		7,019,119		4,995,487		1,668,000		4,750,000		5,500,000		15,887,203		89,733,192		140,159,839
Accounts Payable & Accrued Expense		32,238		6,309		15,323		48,236		12,682		28,690		58,596		212,224		820,603		1,234,900
Advance Rental Pmts & Security Dep		152,940		—		114,179		69,970		20,027		85,575		69,592		257,780		1,800,113		2,570,176
Total Liabilities		8,647,219		2,151,105		7,148,621		5,113,694		1,700,709		4,864,265		5,628,188		16,357,207		92,353,908		143,964,915
Partners' Capital		1,157,950		470,968		1,187,023		944,670		409,532		2,618,809		1,784,728		5,988,968		23,748,339		38,310,988
Total Liabilities & Capital		9,805,169		2,622,073		8,335,644		6,058,364		2,110,241		7,483,074		7,412,916		22,346,175		116,102,247		182,275,903
Partners' Capital—NERA 50%		578,975		235,484		593,512		472,335		204,766		1,309,404		892,364		2,994,484				7,281,325
NERA 40%																		9,499,335		9,499,335
																				16,780,660
Total units/ condominiums
Apartments		48		—		40		175		120		48		42		148		409		1,030
Commercial		1		1		—		1		—		—		—		—		—		3
Total		49		1		40		176		120		48		42		148		409		1,033
Units to be retained		49		1		40		49		—		48		42		148		409		786
Units to be sold		—		—		—		127		120		—		—		—		—		247
Units sold through January 25, 2012		—		—		—		127		105		—		—		—		—		232
Unsold units		—		—		—		—		15		—		—		—		—		15
Unsold units with deposits for future sale as of February 1, 2012		—		—		—		—		—		—		—		—		—		—

Year ended December 31, 2011

	Hamilton Essex 81			Hamilton Essex Development			345 Franklin			Hamilton 1025			Hamilton Bay Sales			Hamilton Bay			Hamilton Minuteman			Hamilton on Main			Dexter Park			Total
Revenues
Rental Income		1,244,322			255,050			1,136,831			816,015			232,938			863,657			789,897			2,491,957			11,559,414			19,390,080
Laundry and Sundry Income		16,589			—			2,367			—			—			—			1,362			20,599			97,275			138,193
		1,260,911			255,050			1,139,198			816,015			232,938			863,657			791,258			2,512,556			11,656,690			19,528,273
Expenses
Administrative		20,839			1,339			24,424			11,258			5,396			18,625			10,249			36,155			163,511			291,796
Depreciation and Amortization		424,695			8,498			443,055			257,961			103,536			329,930			322,216			965,324			5,698,657			8,553,872
Management Fees		49,677			11,040			45,829			32,120			9,486			33,916			31,666			100,581			251,071			565,386
Operating		121,521			—			66,278			1,733			239			732			54,650			371,687			929,543			1,546,382
Renting		8,058			—			19,206			13,322			1,750			8,927			3,559			15,140			144,149			214,111
Repairs and Maintenance		127,528			3,050			71,479			300,534			78,167			316,782			98,904			371,109			935,839			2,303,393
Taxes and Insurance		184,119			47,709			97,028			143,002			45,303			155,681			92,300			325,868			1,300,995			2,392,005
		936,438			71,636			767,299			759,930			243,877			864,593			613,544			2,185,864			9,423,765			15,866,945
Income Before Other Income		324,473			183,414			371,899			56,085			(10,939	)		(936	)		177,714			326,693			2,232,924			3,661,328
Other Income (Loss)
Interest Expense		(503,102	)		(61,593	)		(494,468	)		(289,222	)		(98,010	)		(271,348	)		(317,927	)		(848,786	)		(5,113,523	)		(7,997,979	)
Interest Income		—			—			49			88			457			—			—			—			3,219			3,814
Interest Income from Note		—			—			—			—			8,904			—			—			—			—			8,904
Gain on Sale of Real Estate		—			—			—			—			—			—			—			—			—			—
Other Income (Expenses)		(2,331	)		—			(5,375	)		(3,621	)		—			(2,271	)		(61,589	)		(1,152	)		(3,500	)		(79,839	)
		(505,433	)		(61,593	)		(499,793	)		(292,756	)		(88,649	)		(273,619	)		(379,515	)		(849,938	)		(5,113,804	)		(8,065,100	)
Net Income (loss)		(180,960	)		121,821			(127,894	)		(236,671	)		(99,588	)		(274,555	)		(201,801	)		(523,245	)		(2,880,880	)		(4,403,772	)
Net Income (loss)—NERA 50%		(90,480	)		60,911			(63,947	)		(118,335	)		(49,794	)		(137,277	)		(100,900	)		(261,622	)					(761,446	)
NERA 40%																										(1,152,352	)		(1,152,352	)
																													(1,913,798	)

Summary financial information for the year ended December 31, 2010

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay		Hamilton Minuteman		Hamilton on Main		Dexter Park		Total
ASSETS
Rental Properties		9,827,917		2,595,266		8,648,591		6,078,526		2,006,989		7,569,060		7,582,687		22,822,785		118,468,247		185,600,068
Cash & Cash Equivalents		2,833		29,596		25,617		736		48,053		57,956		51,637		19,325		754,066		989,818
Rent Receivable		24,062		—		8,887		10,088		2,224		2,295		683		10,686		125,475		184,400
Real Estate Tax Escrow		85,348		—		18,649		58,089		—		82,370		34,331		98,036		484,566		861,390
Prepaid Expenses & Other Assets		49,518		480		50,720		76,810		209,610		94,181		43,655		418,289		1,089,897		2,033,161
Financing & Leasing Fees		96,105		4,175		24,496		29,698		11,634		38,966		23,887		28,304		518,395		775,660
Total Assets		10,085,783		2,629,517		8,776,960		6,253,948		2,278,510		7,844,829		7,736,879		23,397,425		121,440,647		190,444,498
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		8,566,871		2,162,000		7,176,827		5,000,000		1,668,000		4,750,000		5,500,000		16,151,526		89,914,000		140,889,224
Accounts Payable & Accrued Expense		33,190		6,239		36,027		43,541		6,346		5,693		65,588		206,997		787,584		1,191,205
Advance Rental Pmts & Security Dep		132,044		—		129,188		63,965		20,044		80,772		61,762		226,689		1,684,843		2,399,308
Total Liabilities		8,732,105		2,168,239		7,342,042		5,107,506		1,694,390		4,836,465		5,627,350		16,585,212		92,386,428		144,479,737
Partners' Capital		1,353,679		461,278		1,434,918		1,146,442		584,119		3,008,364		2,109,529		6,812,213		29,054,219		45,964,761
Total Liabilities & Capital		10,085,783		2,629,517		8,776,960		6,253,948		2,278,510		7,844,829		7,736,879		23,397,425		121,440,647		190,444,498
Partners' Capital—NERA 50%		676,839		230,639		717,459		573,221		292,060		1,504,182		1,054,765		3,406,107				8,455,271
NERA 40%																		11,621,688		11,621,688
																				20,076,959
Total units/ condominiums
Apartments		48		—		40		175		120		48		42		148		409		1,030
Commercial		1		1		—		1		—		—		—		—		—		3
Total		49		1		40		176		120		48		42		148		409		1,033
Units to be retained		49		1		40		49		—		48		42		148		409		786
Units to be sold		—		—		—		127		120		—		—		—		—		247
Units sold through January 25, 2010		—		—		—		127		105		—		—		—		—		232
Unsold units		—		—		—		—		15		—		—		—		—		15
Unsold units with deposits for future sale as of February 1, 2011		—		—		—		—		0		—		—		—		—		—

Year ended December 31, 2010

	Hamilton Essex 81			Hamilton Essex Development			345 Franklin			Hamilton 1025			Hamilton Bay Sales			Hamilton Bay			Hamilton Minuteman			Hamilton on Main			Dexter Park			Total
Revenues
Rental Income		1,122,915			275,950			1,097,957			794,993			221,191			839,361			765,509			2,455,222			11,019,862			18,592,960
Laundry and Sundry Income		16,184			—			2,436			—			—			—			762			19,780			97,902			137,063
		1,139,099			275,950			1,100,393			794,993			221,191			839,361			766,271			2,475,002			11,117,764			18,730,023
Expenses
Administrative		13,709						30,904			13,038			7,073			17,324			10,288			39,289			148,097			279,724
Depreciation and Amortization		425,450			6,254			439,666			269,475			98,678			359,727			320,553			981,881			9,428,284			12,329,966
Management Fees		46,734			11,040			45,559			31,795			9,245			33,345			31,563			97,239			244,178			550,698
Operating		134,016						62,994			1,777						411			63,841			358,827			960,328			1,582,193
Renting		24,785			—			49,517			8,576			375			6,213			3,770			15,361			281,545			390,142
Repairs and Maintenance		134,941			—			80,190			376,560			76,510			344,852			99,553			342,310			859,088			2,314,005
Taxes and Insurance		179,939			46,658			98,151			127,637			42,465			132,188			96,213			318,150			1,451,017			2,492,417
		959,574			63,952			806,981			828,857			234,346			894,061			625,780			2,153,057			13,372,537			19,939,145
Income Before Other Income		179,525			211,998			293,412			(33,864	)		(13,155	)		(54,700	)		140,491			321,944			(2,254,773	)		(1,209,122	)
Other Income (Loss)
Interest Expense		(507,425	)		(62,694	)		(504,667	)		(289,042	)		(97,909	)		(271,389	)		(317,360	)		(860,500	)		(5,116,598	)		(8,027,583	)
Interest Income		3			2			47			90			569			2			1,780			8			5			2,505
Interest Income from Note		—			—			—			—			11,445			—			—			—			—			11,445
Gain on Sale of Real Estate		—			—			—			—									—			—			—
Other Income (Expenses)		—			—			—			—			11,021			9,478			—			2,168			(17,720	)		4,947
		(507,422	)		(62,692	)		(504,619	)		(288,952	)		(74,874	)		(261,909	)		(315,581	)		(858,323	)		(5,134,313	)		(8,008,686	)
Net Income (loss)		(327,897	)		149,305			(211,208	)		(322,816	)		(88,029	)		(316,608	)		(175,090	)		(536,379	)		(7,389,086	)		(9,217,808	)
Net Income (loss)—NERA 50%		(163,948	)		74,653			(105,604	)		(161,408	)		(44,015	)		(158,304	)		(87,545	)		(268,189	)					(914,361	)
NERA 40%																										(2,955,635	)		(2,955,635	)
																													(3,869,995	)