10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2013

OR

oTRANSITION 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	04-2619298
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)
39 Brighton Avenue, Allston, Massachusetts	02134
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (617) 783-0039

Securities registered pursuant to Section 12(b) of the Act:

Depositary Receipts	NYSE AMEX
(Title of each Class)	(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 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 x  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 x  No o

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 x

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

As of June 30, 2013, there were 104,032 of the registrant’s Class A units (3,120,952 Depositary Receipts) of limited partnership issued and outstanding and 24,708 Class B units issued and outstanding.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP

INDEX

	PART I—FINANCIAL INFORMATION	3
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets as of June 30, 2013 and December 31, 2012	3
	Consolidated Statements of Income for the Three Months and Six Months Ended June 30, 2013 and 2012	4
	Consolidated Statements of Changes in Partners’ Capital for the Six Months Ended June 30, 2013 and 2012	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2013 and 2012	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35
	PART II—OTHER INFORMATION	36
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosure	36
Item 5.	Other Information	36
Item 6.	Exhibits	36
SIGNATURES		37
EXHIBIT INDEX		38

2

NEW ENGLAND REALTY ASSOCIATES, L.P.

PART 1 — FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying unaudited consolidated balance sheets, statements of income, changes in partners’ capital, and cash flows and related notes thereto, have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”).  Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements.  The financial statements reflect all adjustments consisting only of normal, recurring adjustments, which are in the opinion of management, necessary for a fair presentation for the interim periods.

The consolidated balance sheet as of December 31, 2012 has been derived from the audited consolidated balance sheet at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

The aforementioned financial statements should be read in conjunction with the notes to the aforementioned financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in New England Realty Associates L.P.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

The results of operations for the six month period ended June 30, 2013 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2013			2012
	Unaudited
ASSETS
Rental Properties	$	94,292,069		$	94,973,600
Property Held for Sale	0			462,250
Cash and Cash Equivalents	3,291,685			6,981,906
Rents Receivable	429,492			475,083
Real Estate Tax Escrows	347,420			449,652
Prepaid Expenses and Other Assets	2,767,011			3,073,890
Deposit and Escrow Held for the Acquisition of Real Estate	4,103,906			—
Investments in Unconsolidated Joint Ventures	11,137,984			13,986,173
Financing and Leasing Fees	1,770,603			1,135,936
Total Assets	$	118,140,170		$	121,538,490
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	131,671,632		$	138,055,522
Accounts Payable and Accrued Expenses	2,018,815			2,361,942
Advance Rental Payments and Security Deposits	3,944,741			3,636,704
Total Liabilities	137,635,188			144,054,168
Commitments and Contingent Liabilities (Notes 3 and 9)	—			—
Partners’ Capital 130,040 and 130,444 units outstanding in 2013 and 2012 respectively	(19,495,018		)	(22,515,678		)
Total Liabilities and Partners’ Capital	$	118,140,170		$	121,538,490

See notes to consolidated financial statements

3

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2013			2012			2013			2012
Revenues
Rental income	$	8,904,762		$	8,594,881		$	17,828,769		$	17,235,744
Laundry and sundry income	98,000			96,955			193,686			189,094
	9,002,762			8,691,836			18,022,455			17,424,838
Expenses
Administrative	697,238			406,665			1,149,855			892,158
Depreciation and amortization	1,479,860			1,534,033			2,933,991			3,037,517
Management fee	374,622			361,608			743,874			708,789
Operating	814,609			702,327			2,246,784			1,928,077
Renting	26,815			52,979			56,666			99,362
Repairs and maintenance	1,515,934			1,274,441			2,597,213			2,326,786
Taxes and insurance	1,204,862			1,022,677			2,365,792			2,152,870
	6,113,940			5,354,730			12,094,175			11,145,559
Income Before Other Income and Discontinued Operations	2,888,822			3,337,106			5,928,280			6,279,279
Other Income (Expense)
Interest income	351			553			715			1,192
Interest expense	(1,762,647		)	(1,911,952		)	(3,603,716		)	(3,846,413		)
(Loss) from investments in unconsolidated joint ventures	(336,332		)	(401,226		)	(653,189		)	(804,344		)
	(2,098,628		)	(2,312,625		)	(4,256,190		)	(4,649,565		)
Income From Continuing Operations	790,194			1,024,481			1,672,090			1,629,714
Discontinued Operations
Income from discontinued operations	143			22,781			19,873			44,500
Gain on the sale of real estate	3,678,779			—			3,678,779			—
	3,678,922			22,781			3,698,652			44,500
Net Income	$	4,469,116		$	1,047,262		$	5,370,742		$	1,674,214
Income per Unit
Income before discontinued operations	$	6.08		$	7.80		$	12.85		$	12.39
Income from discontinued operations	28.29			0.17			28.43			0.34
Net Income per Unit	$	34.37		$	7.97		$	41.28		$	12.73
Weighted Average Number of Units Outstanding	130,040			131,469			130,114			131,477

See notes to consolidated financial statements.

4

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

(Unaudited)

	Units							Partners’s Capital
	Limited		General		Treasury			Limited						General
	Class A	Class B	Partnership	Subtotal	Units	Total		Class A			Class B			Partnership			Total
Balance January 1, 2012	144,180	34,243	1,802	180,225	48,741	131,484		$	(17,052,134	)	$	(4,045,783	)	$	(212,935	)	$	(21,310,852	)
Distribution to Partners	—	—	—	—	—	—		(1,577,351		)	(374,621		)	(19,717		)	(1,971,689		)
Stock Buyback					86	(86	)	(55,778		)	(12,921		)	(680		)	(69,379		)
Net Income	—	—	—	—	—	—		1,339,372			318,101			16,742			1,674,215
Balance June 30, 2012	144,180	34,243	1,802	180,225	48,827	131,398		$	(17,345,891	)	$	(4,115,224	)	$	(216,590	)	$	(21,677,705	)
Balance January 1, 2013	144,180	34,243	1,802	180,225	49,781	130,444		$	(18,017,082	)	$	(4,273,666	)	$	(224,929	)	$	(22,515,677	)
Distribution to Partners	—	—	—	—	—	—		(1,560,476		)	(370,614		)	(19,506		)	(1,950,596		)
Stock Buyback	—	—	—	—	404	(404	)	(321,240		)	(74,335		)	(3,912		)	(399,487		)
Net Income	—	—	—	—	—	—		4,296,594			1,020,441			53,707			5,370,742
Balance June 30, 2013	144,180	34,243	1,802	180,225	50,185	130,040		$	(15,602,204	)	$	(3,698,174	)	$	(194,640	)	$	(19,495,018	)

See notes to consolidated financial statements.

5

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2013			2012
Cash Flows from Operating Activities
Net income	$	5,370,742		$	1,674,214
Adjustments to reconcile net income to net cash provided
by operating activities
Gain on the sale of real estate	(3,678,779		)	—
Depreciation and amortization	2,933,991			3,037,517
Loss from investments in joint venture	653,189			804,344
Depreciation and amortization - discontinued operations	2,111			22,714
Change in operating assets and liabilities
Decrease(Increase) in rents receivable	45,591			(12,524		)
(Decrease)in accounts payable and accrued expense	(343,127		)	(147,163		)
(Increase) Decrease in real estate tax escrow	102,232			(30,994		)
(Increase) Decrease in prepaid expenses and other assets	(265,100		)	212,405
Increase in advance rental payments and security deposits	308,037			170,641
Total Adjustments	(241,855		)	4,056,940
Net cash provided by operating activities	5,128,887			5,731,154
Cash Flows from Investing Activities
Proceeds from unconsolidated joint ventures	2,205,880			677,500
Net proceeds from the sale of real estate	2,155,546			—
(Investment in) unconsolidated joint ventures	(10,880		)	—
Deposit and escrow held for the acquisition of real estate	(4,103,906		)
Improvement of rental properties	(2,189,413		)	(829,017		)
Net cash (used in) investing activities	(1,942,773		)	(151,517		)
Cash Flows from Financing Activities
Payment of financing costs	(142,362		)	(187,973		)
Principal payments of note payable	—			(1,668,600		)
Proceeds of mortgage notes payable	15,000,000			—
Principal payments and payoffs of mortgage notes payable	(19,383,890		)	(550,319		)
Stock buyback	(399,487		)	(69,379		)
Distributions to partners	(1,950,596		)	(1,971,689		)
Net cash (used in) financing activities	(6,876,335		)	(4,447,960		)
Net (Decrease) Increase in Cash and Cash Equivalents	(3,690,221		)	1,131,677
Cash and Cash Equivalents, at beginning of period	6,981,906			4,050,157
Cash and Cash Equivalents, at end of period	$	3,291,685		$	5,181,834

See notes to consolidated financial statements

6

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2013

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 23 properties which include 15 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex.   These properties total 2,219 apartment units, 19 condominium units and 110,949 square feet of commercial space.  Additionally, the Partnership also owns a 40-50% interest in 9 residential and mixed use properties consisting of 798 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.

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

7

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).

8

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 2013 and 2012 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 2013 and 2012. The Partnership makes its temporary cash investments with high-credit quality financial institutions.  At June 30, 2013, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.0% to 0.45%.  At June 30, 2013 and 2012, respectively approximately $4,330,000 and $6,253,000 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 $16,167 and $34,544 for the six months ended June 30, 2013 and 2012, 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 six months ended June 30, 2013 and 2012 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.

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

9

NOTE 2. RENTAL PROPERTIES

As of June 30, 2013, the Partnership and its Subsidiary Partnerships owned 2,219 residential apartment units in 19 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 June 30, 2013, the Partnership and its 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 June 30, 2013 with a total of 798 units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

Rental properties consist of the following:

	June 30, 2013			December 31, 2012			Useful Life
Land, improvements and parking lots	$	27,799,184		$	27,743,726		15—40 years
Buildings and improvements	119,862,255			118,739,283			15—40 years
Kitchen cabinets	3,963,114			3,544,868			5—10 years
Carpets	3,499,777			3,218,975			5—10 years
Air conditioning	761,371			746,043			5—10 years
Laundry equipment	429,571			378,806			5—7 years
Elevators	1,139,296			1,139,296			20-40 years
Swimming pools	241,772			235,242			10-30 years
Equipment	1,631,336			1,529,904			5—7 years
Motor vehicles	101,657			101,657			5 years
Fences	28,295			22,445			5—15 years
Furniture and fixtures	1,143,141			1,031,348			5—7 years
Smoke alarms	199,021			193,298			5—7 years
Total fixed assets	160,799,789			158,624,893
Less: Accumulated depreciation	(66,507,720		)	(63,651,293		)
	$	94,292,069		$	94,973,600

On April 8, 2013, the Partnership entered into a purchase and sales agreement to sell the Nashoba Apartments in Acton, Massachusetts.  On May 29, 2013 this agreement was successfully completed for the sale price of $4,300,000.  The net proceeds of approximately $2,100,000 were transferred to Investment Property, Exchange Services, Inc. a Qualified Intermediary.  These funds were held by the intermediary in order to maintain the Partnership’s ability to structure a tax free exchange in accordance with the Internal Revenue Service’s rules under Sec. 1031.  The gain on the sale in accordance with GAAP is approximately $3,679,000.

On July 15, 2013, Hamilton Green Apartments, LLC, a newly formed subsidiary of the Partnership, purchased Windsor Green at Andover, a 193 unit apartment complex located at 311 and 319 Lowell Street, Andover, Massachusetts.  The purchase price was $62,500,000.  See Note 16 — Subsequent Events.

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, LLC.  Total fees paid including discontinued operations were approximately $752,000 and $718,000 during the six months ended June 30, 2013 and 2012.

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. During the six months ended June 30, 2013 and 2012, approximately $453,000 and $328,000 was charged to NERA for legal, accounting, construction, maintenance, rental and architectural services and supervision of capital improvements.  Of the 2013 expenses referred to above, approximately $154,000 consisted of repairs and maintenance and $184,000 of administrative expense.  Approximately $115,000 of expenses

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for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2013, the Hamilton Company received approximately $373,000 from the Investment Properties of which approximately $301,000 was the management fee, approximately $7,000 was for construction, architectural services and supervision of capital projects, approximately $37,000 was for maintenance services and approximately $28,000 was for administrative services. The management fee is equal to 4% of gross receipts of 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 $1,388,000, and $1,247,000 for the six months ended June 30, 2013 and 2012, 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 2013 and 2012.

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 six months ended June 30, 2013 and 2012 the Management Company charged the Partnership $62,500 ($125,000 per year) 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 each of the six months ended June30, 2013 and 2012 this individual received fees of $37,500.

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 57%. See Note 14 for a description of the properties and their operations.

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 was $18,960.

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

NOTE 4. OTHER ASSETS & DEPOSIT AND ESCROW HELD FOR ACQUISITION OF REAL ESTATE

Approximately $1,962,000 and $1,919,000 of security deposits are included in prepaid expenses and other assets at June 30, 2013 and December 31, 2012, respectively. The security deposits and escrow accounts are restricted cash.

Included in prepaid expenses and other assets at June 30, 2013 and December 31, 2012 is approximately $132,000 and $420,000, respectively, held in escrow to fund future capital improvements.

Financing fees of approximately $1,771,000 and $1,136,000 are net of accumulated amortization of approximately $739,000 and $772,000 at June 30, 2013 and December 31, 2012, respectively.

Included in deposit and escrow held for acquisition of real estate  is approximately $2,100,000 held by an intermediary in connection with the sale of Nashoba Apartments as well as a deposit of approximately $2,000,000 in connection with the purchase of Windsor Green Apartments in Andover, Massachusetts.  See Note 16 — Subsequent Events.

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NOTE 5. MORTGAGE NOTES PAYABLE

At June 30, 2013 and December 31, 2012, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At June 30, 2013, the interest rates on these loans ranged from 3.25% to 7.07%, payable in monthly installments aggregating approximately $656,000, including principal, to various dates through 2026. The majority of the mortgages are subject to prepayment penalties.  At June 30, 2013, the weighted average interest rate on the above mortgages was 5.3%. The effective rate of 5.4% 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 June 30, 2013 are as follows:

2014—current maturities	$	27,517,000
2015	9,160,000
2016	267,000
2017	486,000
2018	1,709,000
Thereafter	92,532,000
	$	131,671,000

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.

On June 30, 2013, the Partnership was in the process of refinancing the mortgages at Boylston Downtown, LLC and Westgate Apartments LLC.  The total amount expected to be refinanced is approximately $27,000,000.  The amount of the new loans will total approximately $55,000,000 resulting in additional debt of approximately $28,000,000.   As of June 30, 2013, the Partnership has paid approximately $67,000 of financing costs related to the expected refinancing.  This amount is included in financing and leasing fees in the consolidated balance sheet.  The Partnership may incur prepayment penalties of approximately $125,000 in connection with this refinancing.  The Partnership has no lender commitment at this time for Westgate Apartments, LLC and anticipates closing on this mortgage by the end of the third quarter of 2013.  The Partnership refinanced Boylston Downtown, LLC in July 2013.  See Note 16 — Subsequent Events for the details of this refinancing.

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 June 30, 2013, amounts received for prepaid rents of approximately $1,449,000 are included in cash and cash equivalents, and security deposits of approximately $1,962,000 are included in prepaid expenses and other assets and are restricted cash.

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.

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The Partnership approved a quarterly distribution of $7.50 per unit and $0.25 per receipt to its Class A Limited Partners and holders of Depositary Receipts of record as of June 14, 2013 and payable on June 28, 2013.  In August 2013, the Partnership approved a quarterly distribution of $7.50 per unit ($0.25 per receipt) payable on September 30, 2013.

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).

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:

	Six Months Ended June 30,
	2013		2012
Income per Depositary Receipt before Discontinued Operations	$	0.43	$	0.41
Income from Discontinued Operations	0.95		0.01
Net Income per Depositary Receipt after Discontinued Operations	$	1.38	$	0.42
Distributions per Depositary Receipt	$	0.50	$	0.50

NOTE 8. TREASURY UNITS

Treasury Units at June 30, 2013 are as follows:

Class A	40,148
Class B	9,535
General Partnership	502
	50,185

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 Restated 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 June 30, 2013, the Partnership has repurchased 1,229,636 Depositary Receipts at an average price of $24.68 per receipt (or $740.40 per underlying Class A Unit), 1,998 Class B Units and 105 General Partnership Units, both at an average price of $627.53 per Unit, totaling approximately $31,786,000 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

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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 six months ended June 30, 2013, the Partnership purchased 9,709 Depositary Receipts for a cost of $321,240; 77 Class B Units for a cost of $74,335 and 4 General Partnership Units for a cost of $3,912 for a total cost of $399,487.

From July 1, 2013 through August 9, 2013, the Partnership purchased a total of 12,000 Depositary Receipts.  The price was $41.50 per receipt or $1,245.00 Class A unit.  The total cost was $498,000.  The Partnership is required to repurchase approximately 95 Class B Units and 5 General Partner units at a cost of $118,275 and $6,225, respectively.

NOTE 9. COMMITMENTS AND CONTINGENCIES

From time to time, the Partnership is involved in various ordinary routine litigation incidentals 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 six months ended June 30, 2013, approximately 91% 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 9% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30, 2013 as follows:

	Commercial Property Leases
2014	$	2,441,000
2015	1,915,000
2016	1,698,000
2017	938,000
2018	589,000
Thereafter	583,000
	$	8,164,000

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 $345,000 and $310,000 for the six months ended June 30, 2013 and 2012, respectively.

The following information is provided for commercial leases.

					Percentage of
	Annual base rent		Total square feet	Total number	annual base rent for
	for expiring leases		for expiring leases	of leases expiring	expiring leases
Through June 30,
2014	$	150,282	6,462	7	6	%
2015	569,499		28,181	10	23	%
2016	680,253		25,894	7	28	%
2017	476,797		16,272	5	19	%
2018	266,841		8,567	7	11	%
2019	0		0	0	0	%
2020	265,032		6,906	3	11	%
2021	64,800		1,800	1	2	%
2022	0		0	0	0	%
2023	0		0	0	0	%
Totals	$	2,473,504	94,082	40	100	%

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Rents receivable are net of an allowance for doubtful accounts of approximately $515,000 and $381,000 at June 30, 2013 and December 31, 2012.  Included in rents receivable at June 30, 2013 is approximately $250,000 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 June 30, 2013 also includes approximately $21,000 representing the deferral of rental concession primarily related to the residential properties.

For the six months ended June 30, 2013 rent at the commercial properties includes approximately $1,100 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 six months ended June 30, 2013 and 2012, cash paid for interest was approximately $3,652,000, and $3,900,000 respectively.  Cash paid for state income taxes was approximately $48,000, and $44,000 during the six months ended June 30, 2013 and 2012 respectively.

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At June 30, 2013 and December 31, 2012, 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 June 30, 2013 and December 31, 2012 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable,  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 June 30, 2013 and December 31, 2012, 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 June 30, 2013 and December 31, 2012, 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.

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	Carrying Amount		Estimated Fair Value
Mortgage Notes Payable
Partnership Properties
At June 30, 2013	$	131,671,632	$	140,763,628
At December 31, 2012	$	138,055,522	$	155,942,880
Investment Properties
At June 30, 2013	$	140,458,521	$	151,279,690
At December 31, 2012	$	138,256,711	$	157,983,030

Disclosure about fair value of financial instruments is based on pertinent information available to management as of June 30, 2013 and December 31, 2012. 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 June 30, 2013 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.  In May 2013, the Partnership sold the Nashoba Apartments in Acton, Massachusetts for $4,300,000 and had a book gain of approximately $3,679,000.  The Partnership structured a tax free exchange in accordance with the Internal Revenue Service’s rule under Sec. 1031 of the Internal Revenue Code.  The gain will be deferred for 2013 for income tax purposes.

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 consolidated financial statements.

Allowable accelerated depreciation deductions have been reduced for 2013.  This may result in higher taxable income. 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 June 30, 2013, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2007 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.  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,

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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 three months ended March 31, 2012 was $18,807.  There was no interest paid on this loan in 2013.  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 balance of the mortgage at June 30, 2013 is approximately $88,000,000.  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 condominiums 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 June 30, 2013, the balance of the mortgage is approximately $ 4,670,000.  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.  At June 30, 2013, 15 of the 20 units are still owned by the Partnership.  As of August 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 six months ended June 30, 2013. The balance on the new mortgage is approximately $1,668,000 at June 30, 2013. On August 1, 2013, Hamilton Bay Unit Sales paid down $350,000 of its outstanding mortgage.  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 balance on Hamilton Essex 81, LLC on June 30, 2013 is approximately $8,292,000 amortizing over 30 years at 5.79% due in August 2016.  The mortgage balance on Essex Development, LLC, at June 30, 2013 and the parking lot is approximately $2,067,000 with a variable interest rate of 2.25% over the daily Libor rate (0.1947% at June 30, 2013). This loan was extended to August 2014 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 $4,901,000 at June 30, 2013.  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 June 30, 2013, the balance of this mortgage is approximately $5,397,000.  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

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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.

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 June 30, 2013, the remaining balance on the mortgage is approximately $15,463,000.

In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts.  In June 2013, the property was refinanced with a 15 year mortgage in the amount of $10,000,000 at 3.87%,  interest only for 3 years and is amortized on a 30-year schedule for the balance of the term. At June 30, 2013, the mortgage balance is $10,000,000.  This investment is referred to as 345 Franklin, LLC.

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Summary financial information as of June 30, 2013

			Hamilton								Hamilton	Hamilton
	Hamilton		Essex	345		Hamilton		Hamilton		Hamilton	Minuteman	on Main	Dexter
	Essex 81		Development	Franklin		1025		Bay Sales		Bay Apts	Apts	Apts	Park		Total
ASSETS
Rental Properties*	8,947,591		2,616,965	7,686,993		5,505,467		1,805,125		6,827,232	6,919,386	20,659,589	104,817,498		165,785,845
Cash & Cash Equivalents	3,147		29,108	231,329		9,023		23,732		10,077	25,303	174,000	659,245		1,164,964
Rent Receivable	51,080		—	8,863		6,872		4,062		4,887	9,600	10,730	104,164		200,257
Real Estate Tax Escrow	83,964		—	23,711		74,507		—		53,440	34,783	68,934	420,641		759,979
Due From Investment Properties	—		—	—		—		—		—	—	—	—		—
Investors Partner Loan Receivables	97,138		—	61,036		4,572		153,336		—	—	—	1,149,915		1,465,997
- Contra Investors Partner Loan	(97,138	)	—	(61,036	)	(4,572	)	(153,336	)	—	—	—	(1,149,915	)	(1,465,997	)
Prepaid Expenses & Other Assets***	75,717		1,153	27,615		42,202		123,516		24,192	51,529	228,073	1,464,682		2,038,677
Financing & Leasing Fees	55,373		1,081	99,877		17,132		4,000		23,062	13,965	11,150	370,020		595,661
Total Assets	9,216,871		2,648,307	8,078,388		5,655,204		1,960,434		6,942,889	7,054,565	21,152,475	107,836,250		170,545,384
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	8,292,287		2,067,378	10,000,000		4,901,467		1,668,000		4,670,319	5,397,023	15,462,916	87,999,131		140,458,521
Due to Investment Properties	—		—	—		—		—		—	—	—	—		—
Investors Partner Loan Payables	97,138		—	61,036		4,572		153,336		—	—	—	1,149,915		1,465,997
- Contra Investors Partner Loan	(97,138	)	—	(61,036	)	(4,572	)	(153,336	)	—	—	—	(1,149,915	)	(1,465,997	)
Accounts Payable& Accrued Exp***	50,228		5,461	19,140		51,107		18,669		8,192	71,192	196,455	1,019,021		1,439,465
Advance Rental Pymts& Security Dep	176,827		—	175,850		93,472		29,033		96,673	66,703	321,725	2,059,402		3,019,685
Total Liabilities	8,519,343		2,072,839	10,194,990		5,046,047		1,715,701		4,775,184	5,534,918	15,981,097	91,077,554		144,917,671
Partners’ Capital**	697,529		575,469	(2,116,602	)	609,157		244,733		2,167,705	1,519,648	5,171,379	16,758,697		25,627,712
Total Liabilities and Capital	9,216,871		2,648,307	8,078,388		5,655,204		1,960,434		6,942,889	7,054,565	21,152,475	107,836,250		170,545,384
Partners’ Capital - NERA 50%	348,764		287,734	(1,058,301	)	304,578		122,366		1,083,852	759,824	2,585,689			4,434,508
NERA 40%													6,703,479		6,703,479
															11,137,986

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 August 1, 2013	—	—	—	127	105	—	—	—	—	232
Unsold units	—	—	—	—	15	—	—	—	—	15
Unsold units with deposits for future sale as of August 1, 2013	—	—	—	—	—	—	—	—	—	—

19

Financial information for the six months ended June 30, 2013

			Hamilton										Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	663,919		143,792		616,034		441,883		121,472		441,443		432,789		1,353,188		6,331,670		10,546,189
Laundry and Sundry Income	8,997		—		1,933		—		—		—		675		17,281		46,429		75,316
	672,916		143,792		617,968		441,883		121,472		441,443		433,464		1,370,469		6,378,099		10,621,505
Expenses
Administrative	9,928		703		14,431		3,805		3,586		7,551		2,465		18,408		113,724		174,601
Depreciation and Amortization**	212,066		4,488		215,739		120,215		41,098		153,638		157,933		488,767		2,878,479		4,272,422
Management Fees	26,015		5,752		25,782		18,186		4,987		17,887		17,076		57,339		133,507		306,530
Operating	63,549		—		40,044		712		1,962		617		41,947		191,181		564,660		904,672
Renting	9,550		—		1,788		3,925		1,425		7,250		4,042		3,305		26,654		57,939
Repairs and Maintenance	64,094		3,700		38,179		157,409		45,986		147,694		25,537		165,706		454,017		1,102,323
Taxes and Insurance	111,759		24,407		56,255		77,131		20,619		71,147		61,948		169,290		742,955		1,335,512
	496,961		39,051		392,218		381,383		119,663		405,784		310,947		1,093,996		4,913,995		8,153,999
Income Before Other Income	175,955		104,741		225,750		60,499		1,809		35,658		122,516		276,473		1,464,104		2,467,506
Other Income (Loss)
Interest Expense	(243,202	)	(29,266	)	(257,547	)	(141,481	)	(48,689	)	(132,973	)	(155,538	)	(409,587	)	(2,495,453	)	(3,913,736	)
Interest Income	—		—		26		2		86		—		—		—		57		171
Interest Income from Note	—		—		—		—		2,007		—		—		—		—		2,007
Gain on Sale of Real Estate	—		—		—		—		—		—		—		—		—		—
Other Income (Expenses)	—		—		(68,588	)	—		—		—		—		—		—		(68,588	)
	(243,202	)	(29,266	)	(326,109	)	(141,478	)	(46,596	)	(132,973	)	(155,538	)	(409,587	)	(2,495,396	)	(3,980,146	)
Net Income (Loss)	(67,247	)	75,475		(100,359	)	(80,979	)	(44,787	)	(97,315	)	(33,022	)	(133,114	)	(1,031,292	)	(1,512,639	)
Net Income (Loss) - NERA 50%	(33,623	)	37,737		(50,180	)	(40,489	)	(22,393	)	(48,657	)	(16,511	)	(66,557	)			(240,673	)
NERA 40%																	(412,517	)	(412,517	)
																			(653,190	)

20

Financial information for the three months ended June 30, 2013

			Hamilton										Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	335,464		71,896		311,745		221,666		61,864		222,162		216,932		676,242		3,171,661		5,289,631
Laundry and Sundry Income	5,151		—		1,288		—		—		—		464		7,510		24,997		39,411
	340,615		71,896		313,033		221,666		61,864		222,162		217,396		683,752		3,196,658		5,329,041
Expenses
Administrative	6,074		386		8,699		2,124		2,813		3,669		2,042		9,769		66,845		102,422
Depreciation and Amortization**	106,494		2,245		110,055		60,128		20,035		76,840		79,225		244,233		1,440,022		2,139,276
Management Fees	13,762		2,876		12,707		9,227		2,649		9,422		8,538		28,298		68,497		155,978
Operating	28,483		—		14,190		452		382		195		18,737		77,185		235,835		375,460
Renting	200		—		23		3,220		1,425		6,845		1,703		1,994		15,098		30,508
Repairs and Maintenance	41,851		3,150		24,593		81,300		23,216		72,781		15,442		79,801		272,433		614,565
Taxes and Insurance	55,878		12,209		28,069		38,381		10,389		35,468		31,082		84,473		346,742		642,690
	252,742		20,865		198,337		194,832		60,909		205,220		156,769		525,753		2,445,472		4,060,899
Income Before Other Income	87,873		51,031		114,696		26,834		955		16,941		60,627		157,999		751,186		1,268,143
Other Income (Loss)
Interest Expense	(122,047	)	(14,668	)	(138,605	)	(70,998	)	(24,507	)	(66,707	)	(78,076	)	(205,633	)	(1,252,195	)	(1,973,436	)
Interest Income	—		—		13		2		41		—		—		—		57		113
Interest Income from Note	—		—		—		—		911		—		—		—		—		911
Gain on Sale of Real Estate	—		—		—		—		—		—		—		—		—		—
Other Income (Expenses)	—		—		(68,588	)	—		—		—		—		—		—		(68,588	)
	(122,047	)	(14,668	)	(207,180	)	(70,996	)	(23,555	)	(66,707	)	(78,076	)	(205,633	)	(1,252,138	)	(2,041,000	)
Net Income (Loss)	(34,174	)	36,362		(92,484	)	(44,162	)	(22,600	)	(49,765	)	(17,449	)	(47,633	)	(500,951	)	(772,857	)
Net Income (Loss) - NERA 50%	(17,087	)	18,181		(46,242	)	(22,081	)	(11,300	)	(24,883	)	(8,725	)	(23,817	)			(135,953	)
NERA 40%																	(200,380	)	(200,380	)
																			(336,333	)

21

Future annual mortgage maturities at June 30, 2013 are as follows:

			Hamilton
	Hamilon		Essex 81		345		Hamilton		Hamilton		Hamilton		Hamilton		Hamilton on		Dexter
	Essex 81		Development		Franklin		1025		Bay Sales		Bay Apts		Minuteman		Main Apts		Park
	March		March		November		March		October		October		August		August		October
Period End	2005		2005		2001		2005		2005		2005		2004		2004		2009		Total
3/31/2014	129,342		2,067,378				67,037		1,668,000		68,027		73,421		300,942		1,311,782		5,685,930
3/31/2015	137,033						70,994				71,915		77,755		15,161,974		1,386,742		16,906,414
3/31/2016	145,181						74,427				76,024		81,510				1,465,987		1,843,129
3/31/2017	7,880,731				177,340		4,689,009				4,454,353		5,164,338				1,549,759		23,915,528
3/31/2018					187,209												1,638,319		1,825,528
Thereafter					9,635,451												80,646,542		90,281,993
	$	8,292,287	$	2,067,378	$	10,000,000	$	4,901,467	$	1,668,000	$	4,670,319	$	5,397,024	$	15,462,916	$	87,999,131	$	140,458,522

At June 30, 2013 the weighted average interest rate on the above mortgages was 5.39%.  The effective rate was 5.47% including the amortization expense of deferred financing costs.

Summary financial information as of June 30, 2012

	Hamilton Essex 81	Hamilton Essex Development	345 Franklin	Hamilton 1025	Hamilton Bay Sales	Hamilton Bay Apts	Hamilton Minuteman	Hamilton on Main  Apts	Dexter Park	Total
ASSETS
Rental Properties	9,261,771	2,611,819	8,049,593	5,744,197	1,882,240	7,118,237	7,152,206	21,534,347	110,257,477	173,611,888
Cash & Cash Equivalents	58,404	24,262	26,170	296	24,634	17,487	18,057	51,045	577,044	797,399
Rent Receivable	70,337	—	9,048	12,082	2,563	5,692	4,380	10,138	132,465	246,705
Real Estate Tax Escrow	49,442	—	21,015	69,257	—	93,063	42,103	107,470	483,938	866,288
Prepaid Expenses & Other Assets	85,426	1,110	91,415	97,825	161,820	104,087	76,573	273,435	1,306,813	2,198,503
Financing & Leasing Fees	65,493	1,747	12,247	22,159	4,037	29,424	17,934	18,012	429,336	600,388
Total Assets	9,590,873	2,638,938	8,209,487	5,945,816	2,075,295	7,367,990	7,311,253	21,994,446	113,187,073	178,321,171
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	8,406,631	2,118,990	6,936,102	4,964,768	1,668,000	4,730,815	5,466,352	15,748,668	89,166,547	139,206,873
Accounts Payable & Accrued Expense	61,165	5,811	118,416	49,520	18,661	54,146	85,621	211,249	884,807	1,489,395
Advance Rental Pmts & Security Dep	187,355	—	147,570	85,841	24,499	87,189	68,827	262,993	1,919,814	2,784,087
Total Liabilities	8,655,151	2,124,801	7,202,087	5,100,129	1,711,161	4,872,149	5,620,800	16,222,911	91,971,168	143,480,356
Partners’ Capital	935,722	514,137	1,007,400	845,687	364,134	2,495,641	1,690,453	5,771,535	21,215,906	34,840,816
Total Liabilities & Capital	9,590,873	2,638,938	8,209,487	5,945,816	2,075,295	7,367,990	7,311,253	21,994,446	113,187,073	178,321,171
Partners’ Capital — NERA 50%	467,861	257,068	503,700	422,844	182,067	1,247,920	845,227	2,885,768
NERA 40%									8,486,362	8,486,362
										15,298,817
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 August 1, 2012	—	—	—	127	105	—	—	—	—	232
Unsold units	—	—	—	—	15	—	—	—	—	15
Unsold units with deposits for future sale as of August 1, 2012	—	—	—	—	—	—	—	—	—	—

22

Summary financial information for the six months ended June 30, 2012

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay Apts		Hamilton Minuteman		Hamilton on Main Apts		Dexter Park		Total
Revenues
Rental Income	626,002		144,092		578,703		421,727		111,192		436,161		398,676		1,297,371		6,062,838		10,076,761
Laundry and Sundry Income	7,073		—		1,188		—		—		—		491		9,980		43,855		62,587
	633,075		144,092		579,891		421,727		111,192		436,161		399,167		1,307,350		6,106,693		10,139,348
Expenses
Administrative	7,606		1,114		15,366		2,480		4,103		23,711		2,931		26,098		109,434		192,842
Depreciation and Amortization	206,865		6,485		222,140		126,593		39,472		149,087		158,546		476,667		2,870,999		4,256,855
Management Fees	27,026		5,764		24,116		16,885		4,587		16,992		16,016		52,207		129,568		293,161
Operating	53,132		—		29,481		635		927		905		37,721		178,324		547,102		848,227
Renting	2,090		—		141		2,328		1,450		3,271		1,993		6,580		41,798		59,652
Repairs and Maintenance	54,878		4,525		44,319		146,192		32,177		133,219		29,497		197,892		429,952		1,072,650
Taxes and Insurance	100,878		25,186		50,561		73,592		23,560		81,677		50,868		168,309		744,643		1,319,275
	452,475		43,074		386,125		368,706		106,276		408,862		297,573		1,106,077		4,873,495		8,042,662
Income Before Other Income	180,601		101,018		193,766		53,021		4,916		27,299		101,594		201,274		1,233,197		2,096,686
Other Income (Loss)
Interest Expense	(248,551	)	(30,327	)	(245,913	)	(143,846	)	(48,871	)	(135,267	)	(158,370	)	(418,707	)	(2,540,630	)	(3,970,481	)
Interest Income	—		—		24		41		114		—		—		—		—		178
Interest Income from Note	—		—		—		—		3,442		—		—		—		—		3,442
	(248,551	)	(30,327	)	(245,889	)	(143,805	)	(45,315	)	(135,267	)	(158,370	)	(418,707	)	(2,540,630	)	(3,966,860	)
Net Income (loss)	(67,950	)	70,691		(52,123	)	(90,784	)	(40,398	)	(107,968	)	(56,776	)	(217,433	)	(1,307,433	)	(1,870,174	)
Net Income (loss) - NERA 50%	(33,975	)	35,345		(26,061	)	(45,392	)	(20,199	)	(53,984	)	(28,388	)	(108,717	)			(281,371	)
NERA 40%																	(522,973	)	(522,973	)
																			(804,344	)

Summary financial information for the three months ended June 30, 2012

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay Apts		HamiltonMinuteman		Hamilton on Main Apts		Dexter Park		Total
Revenues
Rental Income	333,509		72,046		287,052		211,699		59,714		216,498		201,973		649,487		3,051,260		5,083,238
Laundry and Sundry Income	3,540		—		600		—		—		—		83		4,617		21,355		30,195
	337,049		72,046		287,652		211,699		59,714		216,498		202,056		654,104		3,072,615		5,113,433
Expenses
Administrative	4,330		547		8,864		2,189		1,895		15,351		1,982		12,303		66,572		114,031
Depreciation and Amortization	103,742		3,243		112,159		63,477		19,736		74,723		79,613		240,010		1,438,955		2,135,656
Management Fees	14,208		2,882		12,115		8,333		2,537		8,599		7,978		26,698		66,306		149,656
Operating	22,810		—		14,338		570		256		217		13,014		73,937		243,755		368,896
Renting	150		—		—		659		535		2,377		1,083		4,556		10,807		20,169
Repairs and Maintenance	32,326		4,150		28,474		76,398		15,410		68,837		17,521		103,533		285,183		631,833
Taxes and Insurance	50,693		12,844		25,296		36,671		11,918		40,902		25,458		83,186		364,513		651,482
	228,259		23,666		201,245		188,296		52,287		211,006		146,648		544,223		2,476,092		4,071,723
Income Before Other Income	108,790		48,380		86,406		23,403		7,426		5,492		55,408		109,981		596,522		1,041,709
Other Income (Loss)
Interest expense	(124,068	)	(15,034	)	(121,314	)	(71,826	)	(24,445	)	(67,577	)	(79,013	)	(208,988	)	(1,267,892	)	(1,980,156	)
Interest income	—		—		12		21		53		—		—		—		—		86
Interest income from Note	—		—		—		—		1,635		—		—		—		—		1,635
	(124,068	)	(15,034	)	(121,302	)	(71,805	)	(22,757	)	(67,577	)	(79,013	)	(208,988	)	(1,267,892	)	(1,978,435	)
Net Income (Loss)	(15,278	)	33,346		(34,895	)	(48,402	)	(15,331	)	(62,085	)	(23,605	)	(99,107	)	(671,370	)	(936,726	)
Net Loss - NERA 50%	(7,639	)	16,673		(17,448	)	(24,201	)	(7,665	)	(31,043	)	(11,802	)	(49,553	)			(132,678	)
NERA 40%																	(268,548	)	(268,548	)
																			(401,226	)

23

NOTE 15. DISCONTINUED OPERATIONS

The following tables summarize income from discontinued operations for the property held for sale for the six months ended June 30, 2013 and 2012.

	June 30,		June 30,
	2013		2012
Total Revenues	$	193,274	$	227,960
Operating and other expenses	171,290		160,746
Depreciation and amortization	2,111		22,714
	173,401		183,460
Income from discontinued operations	$	19,873	$	44,500

Gain on the Sale of Nashoba in the second quarter of 2013:

Sale price	$	4,300,000
Net book value	476,766
Expense of sale	144,455
Gain on the sale of real estate	$	3,678,779

NOTE 16.  SUBSEQUENT EVENTS

On July 7, 2013, Boylston Downtown LP, a wholly owned subsidiary of the Partnership, refinanced the property located at 62 Boylston Street, Boston, Massachusetts.  The new $40,000,000 mortgage has an interest rate of 3.97%.  The terms of the loan are interest only for the first three years, with a 30 year amortization thereafter until maturity in August 2028.  Approximately $19,500,000 of loan proceeds was used to pay off the existing mortgage.  The balance of the funds, approximately $20,000,000, after closing costs, is included in the Partnership’s cash reserves.

On July 15, 2013, Hamilton Green Apartments, LLC, a newly formed subsidiary of the Partnership, purchased Windsor Green at Andover, a 193 unit apartment complex located at 311 and 319 Lowell Street, Andover, Massachusetts.  The purchase price was $62,500,000.  To fund this purchase, the Partnership obtained short term financing of approximately $40,000,000, used the funds of approximately $2,100,000 from the like kind exchange of the Nashoba Apartments, and the

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balance from the Partnership’s cash reserves.  The mortgage has a maturity date of October 15, 2013; and is interest only with an interest rate of LIBOR plus 225 points (currently 2.45%).  The Partnership is currently working on long term financing.

On August 1, 2013, Hamilton Bay Unit Sales paid down $350,000 of its outstanding mortgage.  This entity intends to pay off the remaining balance of $1,318,000 by the end of September 2013.  The Partnership will need to contribute approximately $800,000 to complete this transaction.

Through August 9, 2013, the Partnership purchased a total of 12,000 Depositary Receipts.  The price was $41.50 per receipt or $1,245.00 Class A unit.  The total cost was $498,000.  The Partnership is required to repurchase approximately 95 Class B Units and 5 General Partner units at a cost of $118,275 and $6,225, respectively.  There were no repurchases during the fiscal quarter ended June 30, 2013.

ITEM 2.  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 2013 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.

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.

The financial results for the second quarter continue to reflect strong renewal rates and upward pressure on residential rents for the available units.   Revenues from residential properties are 4.4% higher compared to the same quarter in 2012.  The primary residential leasing season, May through August, continues to remain robust with little to no concessions given and the majority of the commission burden being born by the resident.  The revenue gains achieved last fall continue to show results and are occurring again during this new leasing season.  Management anticipates that the third quarter revenue will be similar to the second quarter and that additional revenue gains will appear in the fourth quarter due to the number of leases expected to renew at higher rates during the months of June, July and August.  We believe the supply and demand imbalance in the residential rental market continues to favor landlords, further strengthened by increasing enrollment in local universities and strong local employment. We believe the recent spike in interest rates will likely keep consumer sentiment shifted toward rental housing for at least another 12 months.  Until the trend toward renting changes, management anticipates that upward pressure on rental rates will continue resulting in another year of positive revenue growth and sustained high occupancy.  The increase of approximately $1,070,000 (13%) in operating  expenses including discontinued operations and excluding depreciation and amortization, for the first six months of 2013 is primarily the result of extraordinary snow removal costs which increased by approximately $253,000, an  increase in real estate taxes of approximately $225,000 and the expensing of financing fees of approximately $286,000 associated with discontinued refinancing activities.  All other facets of manageable operating costs continue to be in check and Management anticipates that Operating Income (before depreciation and interest) for the remainder of 2013 will be strong.

The Nashoba Apartments were sold during the quarter.  The sale price was $4,300,000.  The Partnership netted approximately $2,100,000 in cash after retiring the debt. These funds were transferred to a Qualified Intermediary in order to maintain the Partnership’s ability to structure a tax free exchange.  During the quarter, the Partnership entered into a purchase and sale agreement to purchase a 193 unit apartment complex in Andover, MA known as Windsor Green. The purchase was consummated on July 15th.  The purchase price was $62,500,000 and was funded with the cash reserves, cash from the sale of Nashoba, $20,000,000 from the proceeds from the refinancing of 62 Boylston Street and a $40,000,000 acquisition loan.

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Permanent long term financing is expected to be in place by end of the third quarter.  It is expected that the new acquisition will provide the Partnership with an increased cash flow and additional tax benefits.

In July 2013, Boylston Downtown, LP refinanced the property located at 62 Boylston Street, Boston, Massachusetts.  The new $40,000,000 mortgage has an interest rate of 3.97% with interest only for the first 3 years and a 30 year amortization.  Approximately $19,500,000 of the loan proceeds were used to pay off the existing mortgage and the balance was included in the Partnership’s cash reserves.  The Partnership is in the process of refinancing the property owned by Westgate Apartments LLC.  The Partnership is seeking a $15,000,000 mortgage to pay off the current mortgage of approximately $8,000,000 and will raise an additional $7,000,000 in cash.  There is no lender commitment at this time.  The Partnership anticipates closing on this mortgage in the fourth quarter of 2013.  Combined, the new debt service, when amortization starts in three years will be approximately $3,000,000 per year compared to $2,000,000. See Note 16 – Subsequent Events

In February 2013, the Partnership paid off the loan on Cypress Street of approximately $3,679,000 with existing cash on hand and plans to do the same with one of its joint ventures, Hamilton Bay for approximately $1,600,000.  In August 2013, Management repurchased 12,000 depository receipts for a total cost of $498,000. This purchase of receipts is in line with the Partnership’s trading plan. Management continues to weigh investment alternatives including acquiring additional properties against cash liquidity and the current depositary receipt price.

It is anticipated that the interest rates on new debt will be less than the current interest rate.  Management will be considering additional debt in balance with its future acquisition goals and historically low interest rate environment.    When appropriate, Management will continue to repurchase shares per its trading plan. Management continues to weigh investment alternatives including acquiring additional properties against cash liquidity and the current depositary receipt price.

The Stock Repurchase Program that was initiated in 2007 has purchased 1,229,636 Depositary Receipts through June 30, 2013 or 30% of the outstanding Class A Depositary Receipts.  From July 1, 2013 through August 9, 2013 purchased 12,000 Class A Depositary Receipts for a total cost of $498,000.  There were no repurchases during the fiscal quarter ended June 30, 2013.  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 August 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. The Class B units of the Partnership, controlled by Harold Brown, are owned by HBC Holdings LLC, an entity of which he is the manager. 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.

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 typically sign a one year lease.  In 2013, tenant renewals were approximately 70% with an average rental increase of approximately 4.5%, new leases accounted for approximately 30% with rental rate increases of approximately 6.4%.  In 2013, leasing commissions decreased approximately $31,000 (58%) from 2012, while tenant concessions increased approximately $7,000 (58%) from 2012.  Tenant improvements were approximately $826,000 in 2013, compared to approximately $483,000 in 2012, an increase of approximately $343,000.   In addition, building improvements and others were approximately $1,349,000.

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Hamilton accounted for approximately 6.0 % of the repair and maintenance expense paid for by the Partnership for the six months ended June 30, 2013 and 6.0% for the six months ended June 30, 2012. Of the funds paid to Hamilton for this purpose, the great majority was to cover the cost of services 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 $106,000 (74.6%) and $97,000 (83.0%) of the legal services paid for by the Partnership for the six months ended June 30, 2013 and 2012, 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. Hamilton provided the Partnership approximately $34,000 and $8,000 in construction and architectural services for the six months ended June 30, 2013 and 2012, respectively.

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. During the six months ended June 30, 2013, Hamilton charged the Partnership $62,500 ($125,000 per year) 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 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

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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.

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 in the six months of 2013.

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.

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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

Six Months Ended June 30, 2013 and June 30, 2012

The Partnership and its Subsidiary Partnerships earned income before interest expense, other income and discontinued operations  of approximately $2,889,000 during the three months ended June 30, 2013, compared to approximately $3,337,000 for the three months ended June 30, 2012, a decrease of approximately $448,000 (13.4%).

The rental activity is summarized as follows:

	Occupancy Date
	August 1, 2013		August 1, 2012
Residential
Units	2,238		2,270
Vacancies	97		74
Vacancy rate	4.3	%	3.3	%
Commercial
Total square feet	110,949		110,949
Vacancy	11,603		5,500
Vacancy rate	10.4	%	5.0	%

	Rental Income (in thousands) Three Months Ended June 30,
	2013						2012
	Total Operations			Continuing Operations			Total Operations			Continuing Operations
Total rents	$	8,981		$	8,905		$	8,703		$	8,595
Residential percentage	91		%	91		%	91		%	91		%
Commercial percentage	9		%	9		%	9		%	9		%
Contingent rentals	$	170		$	170		$	153		$	153

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Three months ended June 30, 2013 compared to three months ended June 30, 2012:

	Three Months Ended June 30,						Dollar			Percent
	2013			2012			Change			Change
Revenues
Rental income	$	8,904,762		$	8,594,881		$	309,881		3.6	%
Laundry and sundry income	98,000			96,955			1,045			1.1	%
	9,002,762			8,691,836			310,926			3.6	%
Expenses
Administrative	697,238			406,665			290,573			71.5	%
Depreciation and amortization	1,479,860			1,534,033			(54,173		)	(3.5	)%
Management fee	374,622			361,608			13,014			3.6	%
Operating	814,609			702,327			112,282			16.0	%
Renting	26,815			52,979			(26,164		)	(49.4	)%
Repairs and maintenance	1,515,934			1,274,441			241,493			18.9	%
Taxes and insurance	1,204,862			1,022,677			182,185			17.8	%
	6,113,940			5,354,730			759,210			14.2	%
Income Before Other Income and Discontinued Operations	2,888,822			3,337,106			(448,284		)	(13.4	)%
Other Income (loss)
Interest income	351			553			(202		)	(36.5	)%
Interest expense	(1,762,647		)	(1,911,952		)	149,305			(7.8	)%
(Loss) from investments in unconsolidated joint ventures	(336,332		)	(401,226		)	64,894			(16.2	)%
	(2,098,628		)	(2,312,625		)	213,997			(9.3	)%
Income From Continuing Operations	790,194			1,024,481			(234,287		)	(22.9	)%
Discontinued Operations
Income from discontinued operations	143			22,781			(22,638		)	(99.4	)%
Gain on the sale of real estate	3,678,779			—			3,678,779			N/A
	3,678,922			22,781			3,656,141			16049.1	%
Net Income	$	4,469,116		$	1,047,262		$	3,421,854		326.7	%

Rental income from continuing operations for the three months ended June 30, 2013 was approximately $8,905,000, compared to approximately $8,595,000 for the three months ended June 30, 2012 an increase of approximately $310,000 (3.6%).   Rental rate increases has lead to this increase in rental income in 2013 compared to the same period in 2012.  The Partnership properties with the most significant increases in rental income include 62 Boylston Street, 1144 Commonwealth Avenue, School Street, Westgate Woburn, Redwood Hills and Linewt with increases of approximately $71,000, $52,000, $47,000, $35,000, $29,000 and $25,000, respectively.  These increases are offset by a decrease in commercial rental income at Hamilton Cypress of approximately $45,000.  This decrease is due to increased vacancies at the property.  Included in rental income for the three months ended June 30, 2013 and 2012 is contingent rentals of approximately $170,000 and $153,000, respectively.  Contingent rentals are collected on commercial properties and include such charges as bill backs of common area maintenance charges, real estate taxes, and utility charges.

Expenses from continuing operations for the three months ended June 30, 2013 were approximately $6,114,000 compared to approximately $5,355,000 for the three months ended June 30, 2012, an increase of approximately $759,000 (14.2%). The most significant factors contributing to this increase were an increase in administrative expenses of approximately $291,000 (71.5%) due to an increase in professional fees in connection with the refinancing of partnership properties ; an increase in repairs and maintenance expenses of approximately $241,000 (18.9%)  due to ongoing repairs to Partnership properties in an effort to maintain occupancy; an increase in taxes and insurance of approximately $182,000 (17.8%) due to an increase in real estate taxes as well as insurance premiums; and an increase in operating expenses of approximately $112,000 (16.0%) due to a cold and snowy winter in 2013 compared to the same period in 2012. The management fee increased approximately $13,000 (3.6%) due to the increase in rental income.

These increases are offset by a decrease in depreciation and amortization expense of approximately $54,000 (3.5%) due to assets being fully depreciated; and a decrease in renting expenses of approximately $26,000 (49.4%) due to decreases in advertising costs and rental commissions due to continued demand for apartments.

Interest expense for the three months ended June 30, 2013 was approximately $1,763,000 compared to approximately $1,912,000 for the three months ended June 30, 2012, a decrease of approximately $149,000 (7.8%).  This decrease is due to a lower level of debt in 2013 compared to 2012.

At June 30, 2013, 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.

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As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net loss from the Investment Properties was approximately $336,000 for the three months ended June 30, 2013, compared to approximately $401,000 for the three months ended June 30, 2012, a decrease in the loss of approximately $65,000 (16.2%).  This decrease in loss is consistent with the continued strength in the rental real estate market including approximately 4.1% increase in revenue.  Included in the loss for the three months ended June 30, 2013 is depreciation and amortization expense of approximately $926,000.  The allocable loss for the three months ended June 30, 2013 associated with the investment in Dexter Park is approximately $200,000 of which approximately $576,000 is depreciation and amortization.

In May 2013, the Partnership sold the Nashoba Apartments in Acton, Massachusetts.  The sale price was $4,300,000.  The net proceeds of approximately $2,100,000 were transferred to Investment Property Exchange Services, Inc. a Qualified Intermediary.  These funds were held by the intermediary in order to maintain the Partnership’s ability to structure a tax free exchange in accordance with the Internal Revenue Service’s rules under Sec. 1031.  The gain on the sale is approximately $3,679,000 and is included in income from discontinued operations.

Interest income for the three months ended June 30, 2013 was approximately $350 compared to approximately $550 for the three months ended June 30, 2012, a decrease of approximately $200.

As a result of the changes discussed above, net income for the three months ended June 30, 2013 was approximately $4,469,000 compared to approximately $1,047,000 for the three months ended June 30, 2012, an increase of approximately $3,422,000 (326.7%).

Comparison of the six months ended June 30, 2013 compared to six months ended June 30, 2012

The Partnership and its subsidiary Partnerships earned income before other income and discontinued operations of approximately $5,928,000 for the six months ended June 30, 2013, compared to approximately $6,279,000 for the six months ended June 30, 2012, a decrease of $351,000 (5.6%).  The following is a summary of the Partnership’s operations for the six months ended June 30, 2013 and 2012:

	Six Months Ended June 30,						Dollar			Percent
	2013			2012			Change			Change
Revenues
Rental income	$	17,828,769		$	17,235,744		$	593,025		3.4	%
Laundry and sundry income	193,686			189,094			4,592			2.4	%
	18,022,455			17,424,838			597,617			3.4	%
Expenses
Administrative	1,149,855			892,158			257,697			28.9	%
Depreciation and amortization	2,933,991			3,037,517			(103,526		)	(3.4	)%
Management fee	743,874			708,789			35,085			4.9	%
Operating	2,246,784			1,928,077			318,707			16.5	%
Renting	56,666			99,362			(42,696		)	(43.0	)%
Repairs and maintenance	2,597,213			2,326,786			270,427			11.6	%
Taxes and insurance	2,365,792			2,152,870			212,922			9.9	%
	12,094,175			11,145,559			948,616			8.5	%
Income Before Other Income and Discontinued Operations	5,928,280			6,279,279			(350,999		)	(5.6	)%
Other Income (loss)
Interest income	715			1,192			(477		)	(40.0	)%
Interest expense	(3,603,716		)	(3,846,414		)	242,698			(6.3	)%
(Loss) from investments in unconsolidated joint ventures	(653,189		)	(804,344		)	151,155			(18.8	)%
	(4,256,190		)	(4,649,566		)	393,376			(8.5	)%
Income From Continuing Operations	1,672,090			1,629,713			42,377			2.6	%
Discontinued Operations
Income from discontinued operations	19,873			44,500			(24,627		)	(55.3	)%
Gain on the sale of real estate	3,678,779			—			3,678,779			N/A
	3,698,652			44,500			3,654,152			8211.6	%
Net Income	$	5,370,742		$	1,674,213		3,696,529			220.8	%

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Rental income from continuing operations for the six months ended June 30, 2013 was approximately $17,829,000 compared to approximately $17,236,000 for the six months ended June 30, 2012, an increase of approximately $593,000 (3.4%). Rental income has increase at the majority of the Partnership properties due to increased demand and increases in rental rates.  The following properties experienced rental income increases:  62 Boylston Street, 1144 Commonwealth Avenue, School Street, Westgate Woburn, Redwood Hills, Battle Green, Hamilton Oaks and North Beacon Street with increases of approximately $165,000, $104,000, $93,000, $77,000, $46,000, $38,000, $36,000 and $29,000 respectively.  These increases are offset by a decrease in rental income of approximately $110,000 at Cypress Street due to vacancies at the property in 2013.

Expenses from continuing operations for the six months ended June 30, 2013 were approximately $12,094,000 compared to approximately $11,146,000 for the six months ended June 30, 2012, an increase of approximately $948,000 (8.5%). The most significant factor contributing to this increase is an increase in operating expenses of approximately $318,000 (16.5%); an increase in repairs and maintenance expenses of approximately $270,000 (11.6%), an increase in administrative expenses of approximately $258,000 (28.9%) and an increase in taxes and insurance of approximately $213,000 (9.9%).  The reasons for these changes are discussed in the section for the results for the three months ended June 30, 2013.

These increases in expenses are offset by a decrease in depreciation and amortization of approximately $103,000 (3.4%), and a decrease in renting expenses of approximately $43,000 (43.0%).  The reasons for these decreases are discussed in the section for the results for the three months ended June 30, 2013.

Interest expenses for the six months ended June 30, 2013 was approximately $3,604,000 compared to approximately $3,946,000 for the six months ended June 30, 2012, a decrease of approximately $ $242,000 (6.3%).

At June 30, 2013, the Partnership has between a 40 - 50% ownership interest in nine Investment Properties. See a description of these properties included in 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 loss from these Investment Properties was approximately $653,000 for the six months ended June 30, 2013 compared to a loss of approximately $804,000 for the six months ended June 30, 2012, a decrease of approximately $151,000.  Included in the loss for the six months ended June 30, 2013 is depreciation and amortization of approximately $1,848,000.

Interest income for the six months ended June 30, 2013 was approximately $700 compared to approximately $1,200 for the six months ended June 30, 2012, a decrease of approximately $500 (40%).

As discussed previously, the Partnership sold the Nashoba Apartments in May 2013.  The gain of approximately $3,679,000 is included in income from discontinued operations.

As a result of the changes discussed above, net income for the six months ended June 30, 2013 was approximately $5,371,000 compared to net income of $1,674,000 an increase of approximately $3,697,000.

LIQUIDITY AND CAPITAL RESOURCES

The Partnership’s principal source of cash during the six months ended June 30, 2013 and 2012 was the collection of rents. Most of the cash and cash equivalents of $3,291,685 at June 30, 2013 and $6,981,906 at December 31, 2012 were held in interest bearing accounts at creditworthy financial institutions.

This decrease in cash of $3,690,221 at June 30, 2013 is summarized as follows:

	Six Months Ended June 30,
	2013			2012
Cash provided by operating activities	$	5,128,887		$	5,731,154
Cash (used in) investing activities	(1,942,773		)	(151,517		)
Cash (used in) financing activities	(4,526,252		)	(2,406,892		)
Repurchase of Depositary Receipts, Class B and General Partner Units	(399,487		)	(69,379		)
Distributions paid	(1,950,596		)	(1,971,689		)
Net (decrease) increase in cash and cash equivalents	$	(3,690,221	)	$	1,131,677

32

The cash provided by operating activities is primarily due to the collection of rents less cash operating expenses. The increase in cash used in investing is due to the deposit of $2,000,000 paid in connection with a new acquisition which closed in July 2013 and the net proceeds of approximately $2,100,000 from the sale of Nashoba which was held by an intermediary at June 30, 2013 for the acquisition of new real estate. The increase in cash used in financing activities is due to the payoff of the mortgage of approximately $3,686,000 on Cypress Street.  During the six months ended June 30, 2013, the Partnership purchased 9,709 Depositary Receipts for a cost of $321,240; 77 Class B Units for a cost of $74,335 and 4 General Partnership Units for a cost of $3,912, for a total cost of $399,487.

During the six months ended June 30, 2013, the Partnership and its Subsidiary Partnerships completed improvements to certain of the properties at a total cost of approximately $2,189,000. 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, 62 Boylston Street, Hamilton Oaks, 1144 Commonwealth Ave, Hamilton Cypress, and Dean Street at a cost of approximately $854,000, $163,000, $162,000, $141,000, $136,000, and $131,000 respectively. The Partnership plans to invest approximately $600,000 in additional capital improvements for the remainder of 2013.

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 $87,999,000 at June 30, 2013.  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 three months ended March 31, 2012 was $18,960.  This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

During the six months ended June 30, 2013 and 2012, the Partnership received distributions from the investment properties in the amount of $2,205,880 and $677,500 respectively.  Included in these distributions is the amount from Dexter Park of $600,000 and $490,000 during the six months ended June 30, 2013 and 2012, respectively.  The Partnership received distributions of approximately $1,463,000 from 345 Franklin, LLC for the six months ended June 30, 2013.

In 2013, the Partnership approved distributions of $7.50 per Unit ($0.25 per Receipt) payable on March 31, 2013, June 28, 2013 and September 30, 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 June 30, 2013, 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 June 30, 2013, the Partnership’s proportionate share of the non-recourse debt related to these investments was approximately $61,429,000. 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.

33

Factors That May Affect Future Results

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.

·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.

34

·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.

ITEM 3.  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 June 30, 2013, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have approximately $272,130,000 in long-term debt, substantially all of which require payment of interest at fixed rates. Accordingly, the fair value of these debt instruments is affected by changes in market interest rates. This long term debt matures through 2028. For information regarding the fair value and maturity dates of these debt obligations,  See 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.”

For additional disclosure about market risk, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors That May Affect Future Results”.

ITEM 4.  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 quarterly report on Form 10-Q. 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.

Changes in Internal Control over Financial Reporting.  There were no changes in our internal control over financial reporting during the second quarter of 2013 that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1.  Legal Proceedings

The Partnership, the Subsidiary Partnerships 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 Partnership and Subsidiary Partnerships 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 1A.  Risk Factors

There were no material changes to the risk factors disclosed in our annual report on Form 10K for the year ended December 31, 2012.

Item 2.  Unregistered Sale of Equity Securities and Use of Proceeds

(a)None

(b)None

(c)None

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosure

Not applicable.

Item 5.  Other Information

None.

Item 6.  Exhibits

See the exhibit index below.

36

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: August 12, 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	President and Director of the General Partner (Principal Executive Officer)	August 12, 2013
Ronald Brown
/s/ HAROLD BROWN	Treasurer and Director of the General Partner (Principal Financial Officer and Principal Accounting Officer)	August 12, 2013
Harold Brown
/s/ GUILLIAEM AERTSEN	Director of the General Partner	August 12, 2013
Guilliaem Aertsen
/s/ DAVID ALOISE	Director of the General Partner	August 12, 2013
David Aloise

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EXHIBIT INDEX

Exhibit No.	Description of Exhibit
10.1	Hamilton Green Purchase Agreement dated June 14, 2013 [described in the 6/20/13 8-K]
10.2	Loan Agreement dated July 15, 2013 complete description
(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)
(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).
(101.1)	The following financial statements from New England Realty Associates Limited Partnership Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 formatted in XBRL: (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Income (unaudited), (iii) Consolidated Statements of Changes in Partners’ Capital (unaudited), (iv) Consolidated Statements of Cash Flows (unaudited), and (v) Notes to Consolidated Financial Statements (unaudited).

38

EX-10.1

Exhibit 10.1

PURCHASE AND SALE AGREEMENT

WINDSOR GREEN AT ANDOVER

311 AND 319 LOWELL STREET

ANDOVER, MASSACHUSETTS

Date:   June 14, 2013

TABLE OF CONTENTS

			PAGE
ARTICLE 1 CERTAIN DEFINITIONS			1
ARTICLE 2 SALE OF PROPERTY			5
ARTICLE 3 PURCHASE PRICE			5
3.1	Deposit Money		5
3.2	Cash at Closing		5
ARTICLE 4 TITLE MATTERS			5
4.1	Title Defects		5
	4.1.1	Certain Exceptions to Title	5
	4.1.2	Discharge of Title Objections	6
4.2	Title Insurance		7
ARTICLE 5 BUYER’S DUE DILIGENCE/CONDITION OF THE PROPERTY			7
5.1	Buyer’s Inspections and Due Diligence		7
5.2	Termination of Agreement During Due Diligence Period		7
5.3	Confidentiality		7
5.4	Property Sold “As Is”		8
5.5	Buyer’s Certificate		9
5.6	Survival		9
ARTICLE 6 ADJUSTMENTS AND PRORATIONS			9
6.1	Lease Rentals and Other Revenues		9
	6.1.1	Definition of “Revenues”	9
	6.1.2	Revenues	9
6.2	Real Estate and Personal Property Taxes and Other Fees and Assessments		10
6.3	Other Property Operating Expenses		10
6.4	Tenant Deposits, Fees and Charges		11
6.5	Closing Costs		11
6.6	Lease Expenses		11
6.7	Closing Proration Calculation; Delivery of Operating and Other Financial Statements		11
	6.7.1	Apportionment of Income and Expense	11
	6.7.2	Reconciliation	12

i

	6.7.3	Survival	12
ARTICLE 7 CLOSING			12
7.1	Closing Date		12
7.2	Title Transfer and Payment of Purchase Price		12
7.3	Seller’s Closing Deliveries		12
7.4	Buyer’s Closing Deliveries		14
ARTICLE 8 CONDITIONS TO CLOSING			15
8.1	Conditions to Seller’s Obligations		15
8.2	Conditions to Buyer’s Obligations		15
8.3	Waiver of Failure of Conditions Precedent		15
8.4	Approvals Not a Condition to Buyer’s Performance		16
ARTICLE 9 REPRESENTATIONS AND WARRANTIES			16
9.1	Buyer’s Representations		16
	9.1.1	Buyer’s Authorization	16
	9.1.2	Buyer’s Financial Condition	16
9.2	Seller’s Representations		16
	9.2.1	Seller’s Authorization	16
	9.2.2	Litigation	17
	9.2.3	Contracts	17
	9.2.4	Leases	17
	9.2.5	Violations	17
	9.2.6	Personal Property	17
	9.2.7	Pending Condemnation	17
	9.2.8	Executive Order 13224	17
9.3	General Provisions		18
	9.3.1	No Representation as to Leases	18
	9.3.2	Definition of “Seller’s Knowledge” and “Written Notice” to Seller	18
	9.3.3	Seller’s Representations Deemed Modified	18
	9.3.4	Seller’s Recertification of Seller’s Warranties	18
	9.3.5	Notice of Breach; Seller’s Right to Cure	18
	9.3.6	Survival; Limitation on Seller’s Liability	19

ii

ARTICLE 10 COVENANTS			20
10.1	Buyer’s Covenants		20
	10.1.1	Buyer’s Indemnity; Delivery of Reports	20
10.2	Seller’s Covenants		20
	10.2.1	Contracts	20
	10.2.2	Maintenance of Property	20
	10.2.3	Termination of Management Agreement	20
	10.2.4	Leasing	21
	10.2.5	Lease Enforcement	21
10.3	Mutual Covenants		21
	10.3.1	Confidentiality	21
	10.3.2	Publicity	21
	10.3.3	Broker	21
	10.3.4	Tax Protests; Tax Refunds and Credits	22
10.4	Survival		22
ARTICLE 11 DEFAULT			22
11.1	Buyer’s Default		22
11.2	Seller’s Default		23
ARTICLE 12 CONDEMNATION/CASUALTY			23
12.1	Condemnation		23
	12.1.1	Right to Terminate	23
	12.1.2	Assignment of Proceeds	24
12.2	Destruction or Damage		24
12.3	Insurance		24
12.4	Effect of Termination		24
12.5	Waiver		25
ARTICLE 13 ESCROW			25
ARTICLE 14 MISCELLANEOUS			26
14.1	Assignment		26
14.2	Designation Agreement		26
14.3	Survival/Merger		27
14.4	Integration; Waiver		27
14.5	Governing Law		27

iii

14.6	Captions Not Binding; Exhibits	27
14.7	Binding Effect	27
14.8	Severability	27
14.9	Notices	27
14.10	Counterparts	29
14.11	No Recordation	29
14.12	Additional Agreements; Further Assurances	29
14.13	Construction	29
14.14	Business Day	29
14.15	Maximum Aggregate Liability	30
14.16	JURISDICTION	30
14.17	WAIVER OF JURY TRIAL	30
14.18	Facsimile Signatures	30
14.19	Riders	31
14.20	Attorneys’ Fees	31
14.21	Windsor	31
14.22	Exchange Transaction	31

iv

EXHIBITS

Schedule 1	Index of Defined Terms
Schedule 2	List of Due Diligence Items
Exhibit A	Legal Description
Exhibit B	List of Contracts
Exhibit C	Form of As-Is Certificate and Agreement
Exhibit D	Form of Deed
Exhibit E	Form of Bill of Sale
Exhibit F	Form of Assignment of Leases
Exhibit G	Form of Assignment of Intangible Property
Exhibit H	Form of Notice to Tenants
Exhibit I	Form of Notice to Vendors
Exhibit J	Form of FIRPTA Affidavit
Exhibit K	Survey
Exhibit L	Notices of Litigation, Governmental Violations and Condemnation
Exhibit M	Confidentiality Agreement
Exhibit N	Schedule of Personal Property
Exhibit O	List of Leases
Exhibit P	Title Commitment

v

PURCHASE AND SALE AGREEMENT

THIS PURCHASE AND SALE AGREEMENT (“Agreement”) is made to be effective as of June 14, 2013, by WINDSOR GREEN AT ANDOVER LLC, a Delaware limited liability company (formerly known as Criterion Andover Apartments, L.P., a Delaware limited partnership) (“Seller”), and HAMILTON GREEN APARTMENTS, LLC, a Massachusetts limited liability company (“Buyer”).

W I T N E S S E T H:

In consideration of the mutual covenants and agreements set forth herein the parties hereto do hereby agree as follows:

ARTICLE 1

CERTAIN DEFINITIONS

As used herein, the following terms shall have the following meanings:

“Affiliate” shall mean an entity which controls Buyer or is controlled by or under common control with Buyer,

“Broker” shall mean Jones Lang LaSalle Americas, Inc.

“Buyer’s Representative” shall mean Buyer, its partners, members, shareholders or trustees and any officers, directors, employees, agents and counsel of Buyer, its partners, members, shareholders or trustees.

“Closing” shall mean the closing of the Transaction.

“Closing Date” shall mean July 15, 2013, or such earlier date on which Seller and Buyer may agree in writing for closing of the Transaction, provided the Buyer shall have the one-time right to extend the Closing Date by not more than ten (10) additional days by delivering written notice of such extension to the Seller not later than 5:00 p.m. E.D.S.T. on Wednesday, July 10, 2013, and by posting an additional $500,000.00 deposit (the “Extension Deposit”) with the Escrow Agent.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Confidentiality Agreement” shall mean that certain Confidentiality Agreement dated March 29, 2013, attached hereto as Exhibit M and incorporated herein by this reference, the terms of which shall continue and be fully applicable during the term of this Agreement and, if longer, the term therein specified.

“Contracts” shall mean all service, supply, maintenance and utility agreements, all equipment leases, and all other contracts, subcontracts and agreements relating to the Real Property and the Personal Property, all as described in Exhibit B attached hereto

and incorporated herein by this reference, and any additional contracts, subcontracts and agreements entered into in accordance with the terms of Section 10.2.1 hereof.

“Deemed to Know” (or words of similar import, whether or not such words may be capitalized) shall mean that: Buyer shall be deemed to know:  (a) of the existence of a fact or circumstance, to the extent that such fact or circumstance is disclosed by this Agreement, the Documents, or any studies, tests, reports, or analyses prepared by, for or otherwise obtained by Buyer or Buyer’s Representative in connection with the Property; and (b)  that a representation or warranty of Seller is untrue, inaccurate or incorrect to the extent that this Agreement, the Documents, or any studies, tests, reports or analyses prepared by or for or otherwise obtained by Buyer or Buyer’s Representative in connection with the Property contains information which is inconsistent with such representation or warranty.

“Designated Representative” shall mean Christina Reale, Asset Manager and Assistant Vice President.

“Documents” shall mean the documents and instruments applicable to the Property or any portion thereof that Seller or any of the other Seller Parties deliver or make available to Buyer prior to Closing or otherwise allow Buyer access to prior to Closing, including, but not limited to, the Title Commitment, the Survey, the Title Documents and the Property Documents, as well as any other documents that are publicly available.

“Due Diligence” shall mean examinations, inspections, tests, studies, analyses, appraisals, evaluations and/or investigations with respect to the Property, the Documents, and other information and documents regarding the Property, including, without limitation, examination and review of title matters, applicable land use and zoning Laws and other Laws applicable to the Property, the physical condition of the Property, and the economic status of the Property.

“Due Diligence Period” shall mean the period commencing prior to the execution of this Agreement and expiring at 5:00 p.m. E.D.S.T. on June 18, 2013.

“Escrow Agent” shall mean Commonwealth Land Title Insurance Company, whose mailing address is 131 Dartmouth Street, Suite 501, Boston, MA 02116, Attention:  William Bonaccorso (617) 912-0956.

“Laws” shall mean all municipal, county, state or federal statutes, codes, ordinances, laws, rules or regulations.

“Leases” shall mean all shall mean all leases for tenants leasing residential apartment units at the Real Property.

“MHPFB” shall mean the Massachusetts Housing Partnership Fund Board.

“Other Property Rights” shall mean, collectively, Seller’s interest in and to all of the following, if any, if and to the extent the same are assignable by Seller without any expense or other liability to Seller and are in effect as of the Closing Date:  (a) any rights,

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licenses, permits and other written authorizations necessary for the use, operation or ownership of the Real Property, but specifically excluding Seller’s or any affiliate’s right to the name “Windsor”; and (b) guaranties and warranties with respect to any portion of the Property.

“Permitted Exceptions” shall mean and include all of the following:  (a) applicable zoning, building and land use Laws, (b) unless Buyer timely objects to any thereof as provided in Section 4.1.1 hereof:  (i) the Title Documents, (ii) facts disclosed in the Survey, and (iii) any matters about which Buyer knows or is Deemed to Know prior to the expiration of the Due Diligence Period; (c) facts that would be disclosed by a physical inspection of the Property; (d) tax liens not yet due and payable; (e) any exceptions to title caused by Buyer, its agents, Representative or employees; (f) such other exceptions to title as the Title Company shall commit to insure over, without any additional cost to Buyer, whether such insurance is made available in consideration of payment, bonding, indemnity by Seller or otherwise; (g) the rights of the tenants under the Leases and (h) any matters deemed to constitute additional Permitted Exceptions under Section 4.1.1 hereof.

“Person” shall mean a natural person, partnership, limited partnership, limited liability company, corporation, trust, estate, association, unincorporated association or other entity.

“Personal Property” shall mean, collectively, (a) all tangible personal property owned by Seller (excluding any computers, any computer software or programs which either (x) are licensed to Seller or Property Manager, or (y) Seller or Property Manager deem proprietary), located on the Real Property and used in the ownership, operation and maintenance of the Real Property, including, without limitation, those items of tangible personal property listed on Exhibit N attached hereto and incorporated herein by reference, and (b) all non-confidential books, records and files maintained by Seller’s property manager at the Property (excluding any appraisals, budgets, strategic plans for the Property, internal analyses, property condition reports, information regarding the marketing of the Property for sale, submissions relating to Seller’s obtaining of corporate authorization, attorney and accountant work product, and attorney-client privileged documents) relating exclusively to the Property.

“Project” shall mean that certain apartment project consisting of 193 apartment units located on the Real Property.

“Property” shall mean, collectively:  (a) the Real Property; (b) the Personal Property; (c) Seller’s interest as landlord in all Leases; (d) if and to the extent assignable by Seller without any expense to Seller, the Contracts; and (e) the Other Property Rights.

“Property Documents” shall mean, collectively:  (a) the Leases; (b) the Contracts; and (c) any other documents or instruments which constitute or otherwise create any portion of the Property.

“Property Manager” shall mean Windsor Property Management Company.

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“Real Property” shall mean that certain parcel of real estate legally described in Exhibit A attached hereto and incorporated herein by this reference, together with all buildings, improvements and fixtures located thereon and owned by Seller as of the Closing Date and all rights, privileges and appurtenances pertaining thereto including all of Seller’s right, title and interest in and to all rights-of-way, open or proposed streets, alleys, easements and strips or gores of land adjacent thereto.

“Regulatory Agreement” shall mean that certain Chapter 40B Regulatory and Affordable Housing Agreement for Limited Dividend Organizations dated February 14, 2008 by and between Seller and the Massachusetts Housing Partnership Fund Board.

“Seller Cure Limit” shall mean the sum of $50,000.00, which sum shall be the aggregate amount available to cure breaches of Seller’s Warranties as provided in Section 9.3.5 and Section 10.2.5 hereof.

“Seller Parties” shall mean and include, collectively:  (a) Seller; (b) its counsel; (c) Broker; (d) the Property Manager; (e) any direct or indirect equity owner, officer, shareholder, trustee, director, employee or agent of Seller, Seller’s partners or members, or Seller’s partners’ or members’ partners or members, counsel to any of the foregoing, Broker or Seller’s property manager; (f) any other entity or individual affiliated or related in any way to any of the foregoing; and (g) the Designated Representative.

“Seller’s Warranties” shall mean Seller’s representations and warranties set forth in Section 9.2 hereof and in any documents executed by Seller for the benefit of Buyer in connection with Closing.

“Survey” shall mean the survey listed and described on Exhibit K attached hereto and incorporated herein by reference.

“Tax Year” shall mean the real estate tax year for the Town of Andover, Essex County, Massachusetts.

“Title Commitment” shall mean Title Commitment No. 13-7393 from the Title Company dated June 2, 2013, a copy of which is attached hereto as Exhibit P and incorporated herein by reference.

“Title Company” shall mean Commonwealth Land Title Insurance Company, whose mailing address is 131 Dartmouth Street, Suite 501, 1400, Boston, MA 02116, Attention:  William Bonaccorso (617) 912-0956, williamb@bonaccorsolaw.com

“Title Documents” shall mean all recorded documents referred to on Schedule B of the Title Commitment as exceptions to coverage and any other recorded documents relating to the Real Property that have been made available to Buyer.

“Transaction” shall mean the purchase and sale transaction contemplated by this Agreement.

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ARTICLE 2

SALE OF PROPERTY

Seller agrees to sell, transfer and assign, and Buyer agrees to purchase, accept and assume, subject to the Permitted Exceptions and the terms and conditions set forth in this Agreement and the Exhibits attached hereto, all of Seller’s right, title and interest in and to the Property.

ARTICLE 3

PURCHASE PRICE

The purchase price (the “Purchase Price”) to be paid by Buyer for the Property is Sixty Two Million Five Hundred Thousand and no/100ths Dollars ($62,500,000.00).  The Purchase Price shall be paid in the following manner:

3.1Deposit Money.  Upon the full execution and delivery of this Agreement, Buyer shall deposit with Escrow Agent earnest money in the amount of One Million and no/100ths Dollars ($1,000,000.00) (the “Initial Deposit”) in immediately available funds.  If Buyer fails to deposit the Initial Deposit within three (3) days of the full execution and delivery of this Agreement, Seller may elect to terminate this Agreement by delivering written notice thereof to Buyer and neither party shall have any further rights or obligations at law or equity except for those rights and obligations which expressly survive the termination of this Agreement.  If Buyer does not terminate this Agreement pursuant to ARTICLE 5, then Buyer shall deliver to Escrow Agent the additional sum of One Million and no/100ths Dollars ($1,000,000.00) (the “Additional Deposit”) in immediately available funds within three (3) business days after expiration of the Due Diligence Period.  The Initial Deposit and the Additional Deposit, and the Extension Deposit, if applicable, together with all interest earned thereon, are collectively referred to in this Agreement as the “Deposit”.  The Deposit shall be held and delivered by Escrow Agent in accordance with the provisions of ARTICLE 13.  Any interest earned on the Deposit shall be considered a part of the Deposit.  Except as otherwise set forth herein, the Deposit shall be applied against the Purchase Price at Closing.

3.2Cash at Closing.  On the Closing Date, Buyer shall pay to Seller an amount equal to the Purchase Price, subject to the prorations and adjustments set forth in ARTICLE 6 or as otherwise provided under this Agreement, plus any other amounts required to be paid by Buyer at Closing, in immediately available funds by wire transfer as more particularly set forth in Section 10.2.

ARTICLE 4

TITLE MATTERS

4.1Title Defects.

4.1.1Certain Exceptions to Title.  Buyer shall have the right to object in writing to any title matters that are not Permitted Exceptions (herein collectively called the

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“Other Exceptions”) shown on the Title Commitment, Title Documents and Survey by written notice to Seller given no later than seven (7) business days before the end of the Due Diligence Period, and to any Other Exceptions first appearing on any subsequent update to the Title Commitment, Title Documents or Survey within five (5) business days after Buyer obtains knowledge thereof or is Deemed to Know of their existence, but in any event no later than the Closing Date.  Unless Buyer shall timely object to such Other Exceptions, all such Other Exceptions shall be deemed to constitute additional Permitted Exceptions.  Any Other Exceptions that are timely objected to by Buyer shall be herein collectively called the “Title Objections.”  Seller shall, at Closing, remove or cause to be removed any Title Objections to the extent (and only to the extent) that such Title Objections are (A) mortgage financing documentation, or (B) mechanics’ or materialmen’s liens which relate to work performed by or on behalf of Seller and liens evidencing monetary encumbrances (other than liens for non-delinquent general real estate taxes) which are removable by payment of liquidated and ascertainable amounts (collectively, the “Required Clearance Exceptions”).  In addition, Seller may elect (but shall not be obligated) to remove, or cause to be removed, at its expense, any other Title Objections.  Seller shall be entitled to a reasonable extension of the Closing (not to exceed thirty (30) days) for the purpose of the removal of any Required Clearance Exceptions or other Title Objections, which removal will be deemed effected by the issuance of title insurance eliminating or insuring against the effect of the Title Objections.  To the extent that the same do not constitute Required Clearance Exceptions, Seller shall notify Buyer in writing within three (3) business days after receipt of Buyer’s notice of Title Objections whether Seller elects to remove the same.  If Seller is unable to remove or cause the Title Company to endorse over any Required Clearance Exceptions (after using reasonable efforts as provided in Section 10.2.5) or any Other Objections (as to which Seller has elected to remove or cause the Title Company to endorse over) prior to the Closing, or if Seller elects not to remove or cause the Title Company to endorse over one or more Title Objections, Buyer may elect to either (a) terminate this Agreement in its entirety by notice given to Seller (1) on the Closing Date if Seller is unable to remove or cause the Title Company to endorse over any such Title Objections, or (2) within four (4) business days after notice from Seller of its election not to remove or to cause the Title Company to endorse over any such Title Objections, in either which event the Deposit shall be refunded to Buyer and thereafter, the parties shall have no further rights or obligations hereunder except for obligations which expressly survive the termination of this Agreement, or (b) waive such Title Objections, in which event such Title Objections shall be deemed additional “Permitted Exceptions”, and the Closing shall occur as herein provided without any reduction of or credit against the Purchase Price.

4.1.2Discharge of Title Objections.  If on the Closing Date there are any Required Clearance Exceptions or any other Title Objections which Seller has elected to pay and discharge, Seller may use any portion of the Purchase Price to satisfy the same, provided Seller shall either:  (a) deliver to Buyer at the Closing instruments in recordable form sufficient to cause such Title Objections to be released of

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record, together with the cost of recording or filing such instruments; or (b) cause the Title Company to insure over the same, without any additional cost to Buyer, whether such insurance is made available in consideration of payment, bonding, indemnity of Seller or otherwise.

4.2Title Insurance.  At Closing and at Buyer’s sole cost and expense, the Title Company shall issue to Buyer an Owner’s Form title insurance policy with extended coverage endorsement over the standard printed exceptions where available, in the form that is customary in the Commonwealth of Massachusetts (collectively, the “Owner’s Title Policy”), in the amount of the Purchase Price, insuring that fee simple title to the Real Property is vested in Buyer, subject to the Permitted Exceptions.  Buyer shall be entitled to request that the Title Company provide coinsurance or reinsurance or such endorsements or amendments to the Owner’s Title Policy and Survey as Buyer may reasonably require, provided that (a) such coinsurance, reinsurance, endorsements or amendments shall be at no cost to, and shall impose no additional liability on, Seller, and (b) Buyer’s obligations under this Agreement shall not be conditioned upon Buyer’s ability to obtain such coinsurance, reinsurance, endorsements or amendments and, if Buyer is unable to obtain such coinsurance, reinsurance, endorsements or amendments, Buyer shall nevertheless be obligated to proceed to close the Transaction without reduction of or set off against the Purchase Price, and (c) the Closing shall not be delayed as a result of any such requirements of Buyer.

ARTICLE 5

BUYER’S DUE DILIGENCE/CONDITION OF THE PROPERTY

5.1Buyer’s Inspections and Due Diligence.  Buyer acknowledges that during the Due Diligence Period, Buyer has conducted, and shall continue to conduct, such Due Diligence as Buyer deems necessary or appropriate.  Buyer further acknowledges that on or prior to the date hereof, Buyer has received, or has been provided access to, the items list on Schedule 2, attached hereto.

5.2Termination of Agreement During Due Diligence Period.  If Buyer is not, in its sole and absolute discretion, satisfied with the results of its Due Diligence during the Due Diligence Period, Buyer may terminate this Agreement in its entirety by written notice to Seller given in accordance with the provisions of Section 14.9 hereof at any time prior to 6:00 p.m. E.D.S.T. on the last day of the Due Diligence Period, and, in the event of such termination, neither Seller nor Buyer shall have any liability hereunder except for those obligations which expressly survive the termination of this Agreement, Buyer shall be entitled to the return of the Deposit.  In the event Buyer fails to terminate this Agreement prior to expiration of the Due Diligence Period, Buyer shall be deemed to have waived its rights to terminate this Agreement in accordance with this ARTICLE 5.

5.3Confidentiality.  The terms and conditions of that certain Confidentiality Agreement dated March 29, 2013, a copy of which is attached hereto and incorporated into this Agreement.  Such Confidentiality Agreement will survive the termination of this Agreement and shall survive the Closing (and not be merged therein).

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5.4Property Sold “As Is”.

(a)Buyer acknowledges and agrees that (i) the Property is being sold, and Buyer shall accept possession of the Property on the Closing Date, “AS IS, WHERE IS, WITH ALL FAULTS”, with no right of setoff or reduction in the Purchase Price; (ii) except for Seller’s Warranties, none of the Seller Parties have or shall be deemed to have made any verbal or written representations, warranties, promises or guarantees (whether express, implied, statutory or otherwise) to Buyer with respect to the Property, any matter set forth, contained or addressed in the Documents (including, but not limited to, the accuracy and completeness thereof) or the results of Buyer’s Due Diligence; and (iii) Buyer has confirmed independently all information that it considers material to its purchase of the Property or the Transaction.  Buyer specifically acknowledges that, except for Seller’s Warranties, Buyer is not relying on (and Seller and each of the other Seller Parties does hereby disclaim and renounce) any representations or warranties of any kind or nature whatsoever, whether oral or written, express, implied, statutory or otherwise, from Seller or any other Seller Parties, as to any matter whatsoever.  Buyer further acknowledges and agrees that, except for Seller’s Warranties, Seller is not under any duty to make any affirmative disclosures or inquiry regarding any matter which may or may not be known to Seller or any of the other Seller Parties, and Buyer, for itself and for its successors and assigns, hereby expressly waives and releases Seller and each of the other Seller Parties from any such duty that otherwise might exist.

(b)Any reports, repairs or work required by Buyer are the sole responsibility of Buyer, and Buyer agrees that there is no obligation on the part of Seller to make any changes, alterations or repairs to the Property or to cure any violations of Law or to comply with the requirements of any insurer.

(c)Except as expressly provided hereinbelow in this Subsection (c), Buyer, for Buyer and Buyer’s successors and assigns, hereby releases Seller and each of the other Seller Parties from, and waives all claims and liability against Seller and each of the other Seller Parties for or attributable to, the following:

(i)any and all statements or opinions heretofore or hereafter made, or information furnished, by the Seller Parties to Buyer or any of Buyer’s Representative; and

(ii)any and all losses, costs, claims, liabilities, expenses, demands or obligations of any kind or nature whatsoever attributable to the Property, whether arising or accruing before, on or after the Closing Date and whether attributable to events or circumstances which have heretofore or may hereafter occur, including, without limitation, all losses, costs, claims, liabilities, expenses, demands and obligations with respect to the structural, physical, and environmental condition of the Property;

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(iii)provided, however, that the release and waiver set forth in this Section 5.4(c) is not intended and shall not be construed to affect or impair any rights or remedies under this Agreement that Buyer may have against Seller as a result of a breach of any of Seller’s Warranties or of any covenant of Seller expressly set forth in this Agreement.

(d)Buyer acknowledges and agrees that the provisions of this ARTICLE 5 were a material factor in Seller’s acceptance of the Purchase Price and that while Seller has provided the Documents and cooperated with Buyer, Seller is unwilling to sell the Property unless Seller and the other Seller Parties are expressly released as set forth in Section 5.4(c).

5.5Buyer’s Certificate.  Buyer shall deliver to Seller, at the Closing, a certificate in the form of Exhibit C attached hereto and incorporated herein by this reference, confirming and certifying Buyer’s acceptance and acknowledgement of all matters set forth in this ARTICLE 5.

5.6Survival.  Notwithstanding anything to the contrary herein, the provisions of this ARTICLE 5 shall survive the Closing and shall not be merged therein.

ARTICLE 6

ADJUSTMENTS AND PRORATIONS

The following adjustments and prorations shall be made for the Project as of 11:59 p.m. E.D.S.T. on the day before the Closing Date (the “Cut-Off Time”):

6.1Lease Rentals and Other Revenues.

6.1.1Definition of “Revenues”.  For purposes of this ARTICLE 6, the term “Revenues” shall mean all rents due from the tenants under the Leases (including without limitation all pass-through payments due from tenants for utilities) and all other revenue derived from the Project (including periodic payments to Seller under telephone and cable provision agreements and the like but excluding any initial inducement payments made to Seller under such agreements).

6.1.2Revenues.  Seller shall be entitled to all Revenues attributable to any period through the Cut-Off Time.  Buyer shall be entitled to all Revenues attributable to any period after the Cut-Off Time.  Prorations for Revenues shall be calculated and paid at such time as required by Section 6.7 hereof; provided that there shall be no credit to Buyer for Revenues delinquent as of the Cut-Off Time.  After Closing, Buyer shall make a good faith, reasonable effort to collect any Revenues due but not collected as of the Cut-Off Time on Seller’s behalf and, if Buyer so collects such Revenues, Buyer shall tender the same to Seller upon receipt (which obligation of Buyer shall survive the Closing and not be merged therein); provided, however, that all Revenues collected by Buyer after the Cut-Off Time shall first be applied to all amounts due Buyer at the time of collection (i.e., current Revenues and sums due Buyer as the current owner and landlord) with the

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balance (if any) payable to Seller, but only to the extent of amounts delinquent and actually due Seller for periods prior to the Cut-Off Time.  Buyer shall not have an exclusive right to collect the sums due Seller under the Leases, and Seller hereby retains its rights to pursue any tenant under the Leases for sums due Seller for periods attributable to Seller’s ownership of the Property, provided, however, that Seller shall not be permitted to commence or pursue any legal proceedings against any tenant seeking eviction of such tenant or the termination of the underlying lease.  Buyer agrees to deliver to Seller, on or before the tenth (10th) day of each calendar month from and after the Closing Date through and including the ninetieth (90th) day following the Closing Date, a written report as to the status of collections from all tenants who were delinquent as of the Closing Date, and if such report is not timely delivered, Buyer shall deliver such report to Seller within five (5) days after Seller’s written request therefor.

6.2Real Estate and Personal Property Taxes and Other Fees and Assessments.  Real estate taxes (the “Taxes”) for the Property shall be prorated based upon the amounts actually payable during the Tax Year in which Closing occurs.  If the Taxes have not been paid before Closing, Seller shall be charged at Closing an amount equal to that portion of such Taxes which relates to the period before the Cut-Off Time, and Buyer shall pay the Taxes prior to their becoming delinquent.  If the actual amount of the Taxes shall not have been finally determined as of the Closing Date, such apportionment made with respect to Taxes shall be based upon an estimate of the Taxes obtained by Seller from its real estate tax consultant.  To the extent that the actual amount of Taxes differs from the amount apportioned at Closing, the parties shall make all necessary adjustments by appropriate payments between themselves in accordance with Section 6.7 below; provided, however, that Buyer shall be solely responsible for any penalties or interest that may be assessed due to Buyer’s late payment of Taxes.  Seller shall pay all installments of special assessments due and payable on or before the Closing Date, and Buyer shall pay all installments of special assessments due and payable after the Closing Date; provided, however, that Seller shall not be required by the foregoing to pay any installments of special assessments which have not been confirmed or which relate to projects that have not been completed as of the date hereof.

6.3Other Property Operating Expenses.  Operating expenses for the Property (including without limitation license and permit fees for assignable or transferable licenses and permits, if any) shall be prorated as of the Cut-Off Time.  Seller shall pay all utility charges and other operating expenses attributable to the Property prior to the Cut-Off Time (except for those utility charges and operating expenses payable directly by tenants to the providers thereof), and Buyer shall pay all utility charges and other operating expenses attributable to the Property after the Cut-Off Time.  Prorations for all items of Property operating expenses shall be calculated and paid at such time as required by Section 6.7.  Following the Closing Date, and pending final settlement pursuant to Section 6.7, (i) Buyer shall pay when due all invoices issued for Property operating expenses (except for invoices entirely attributable to the period prior to the Cut-Off Time, which shall be forwarded to Seller for payment), subject to final settlement pursuant to Section 6.7, and (ii) Seller and Buyer shall cooperate with each other to effect the transfer of Property owner responsibilities under the Contracts, utility accounts and applicable

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licenses and permits.  Seller shall not assign to Buyer any deposits which Seller has made with any utility services or companies servicing the Property,  all of which, together with any amounts on deposit with governmental authorities in connection with development of or improvements to the Property, which shall remain the property of the Seller.  Buyer shall arrange with such services and companies to have accounts opened in Buyer’s name beginning at the Cut-Off Time.

6.4Tenant Deposits, Fees and Charges.  At Closing, Seller shall give Buyer a credit against the Purchase Price in the aggregate amount of all cash security deposits then held by Seller under Leases less any administrative or similar charges to which Seller may be entitled under applicable Law. Seller shall not assign to Buyer and shall retain all non-refundable deposits, fees, or charges made by tenants under Leases, including without limitation, move-in fees, cleaning fees, redecorating fees, administrative fees, amenity fees, laundry revenue and pet fees, and there shall be no proration of such items.

6.5Closing Costs.  Except as expressly provided to the contrary in this Section 6.5, Buyer shall pay all its costs and expenses associated with the Transaction, including, without limitation:  (a) all premiums and charges of the Title Company for insurance, coinsurance or reinsurance for the Owner’s Title Policy or any lender’s title policy or any endorsements to the Owner’s Title Policy or any lender’s title policy; (b) revisions to the Survey required by the Buyer; (c) recording and filing charges in connection with any loan placed on the Property by Buyer; (d) one/half (½) of all closing or escrow charges charged by Escrow Agent; (e) all costs of Buyer’s Due Diligence, including fees due its consultants and attorneys; (f) all lenders’ fees and charges related to any financing to be obtained by Buyer; (g) any brokerage commission due Buyer’s broker; and (h) all fees due its attorneys.  Seller shall pay:  (i) documentary transfer tax stamps; (j) all fees due its attorneys; (k) the commission due Broker; (l) all costs incurred in connection with causing the Title Company to remove any Required Clearance Exceptions or to remove any other Title Objections to the extent Seller elects to remove any such matter; and (m) one/half (½) of all closing or escrow charges charged by Escrow Agent.  The obligations of the parties under this Section 6.5 shall survive the Closing (and not be merged therein) or any earlier termination of this Agreement.

6.6Lease Expenses.  Seller shall retain responsibility for and shall pay when and as due all lease or apartment finder fees and commissions payable with respect to Leases to tenants whose move-in date occurred on or before the Closing Date.  Buyer shall be responsible for and shall pay when and as due all lease or apartment finder fees and commissions payable with respect to Leases to tenants whose move-in date occurred after the Closing Date.  A list of the fore-going charges fees and commissions will be reviewed and allocated by the parties as a Closing proration.

6.7Closing Proration Calculation; Delivery of Operating and Other Financial Statements.

6.7.1Apportionment of Income and Expense.  At Closing, notwithstanding anything to the contrary that may be contained in this Agreement, apportionment of the items of income and expense described in Section 6.1 and Section 6.3, shall be made solely as described in this Section 6.7.  Within ninety (90) days following the

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Closing Date, the parties shall calculate the actual amounts of income and expense described in Section 6.1 and Section 6.3 attributable to the month in which Closing occurs and shall make a final adjustment of the estimated proration made at Closing.  Any sum that may be owed by one party to the other party as a result of such adjustment shall be paid by the owing party to the other party within thirty (30) days after such final adjustment is made.

6.7.2Reconciliation.  To account for any adjustments made at Closing pursuant to this ARTICLE 6 that prove to be incorrect (whether as a result of an error in calculation or a lack of complete and accurate information as of the time of initial adjustment), the parties shall make a final proration one hundred eighty (180) days following the Closing Date, and the party in whose favor any net error was made, shall pay to the other party the sum necessary to correct such error within thirty (30) days after expiration of such one hundred eighty (180) day period (except in the case of real estate property taxes, in which case, such final proration and payment shall be made within thirty (30) days after receipt of the final tax bill for Proratable Taxes or the disposition of any appeal thereof).

6.7.3Survival.  The provisions of this Section 6.7 shall survive the Closing and not be merged therein.

ARTICLE 7

CLOSING

Buyer and Seller hereby agree that the Transaction shall be consummated as follows:

7.1Closing Date.  Subject to Seller’s right to extend the Closing as provided in this Agreement, Closing shall occur on the Closing Date and shall be through escrow.  Time is of the essence with respect to the Closing Date.

7.2Title Transfer and Payment of Purchase Price.  Provided all conditions precedent to Seller’s obligations hereunder have been satisfied, Seller agrees to convey the Property to Buyer against payment of the Purchase Price as set forth below.  Provided all conditions precedent to Buyer’s obligations hereunder have been satisfied, Buyer agrees to pay the amount specified in ARTICLE 3 by wire transfer of immediately available funds to the account or accounts designated by Seller for payment of the Purchase Price no later than 1:00 p.m. E.D.S.T., as confirmed by transmittal to Seller of the Federal Reserve Wire Reference Number for the transfer.

7.3Seller’s Closing Deliveries.  At Closing, Seller shall deliver or cause to be delivered the following:

(a)Deed.  A quitclaim deed for the Project substantially in the form of Exhibit D attached hereto and incorporated herein by this reference (the “Deed”) executed and acknowledged by Seller.

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(b)Bill of Sale.  A bill of sale for the Project in the form of Exhibit E attached hereto and incorporated herein by this reference (the “Bill of Sale”) executed by Seller.

(c)Assignment of Leases.  An assignment and assumption of Leases for the Project, in the form of Exhibit F attached hereto and incorporated herein by this reference (the “Assignment of Leases”) executed by Seller.

(d)Assignment of Intangible Property.  An assignment and assumption of the Contracts and the Other Property Rights for the Project (to the extent the same are not transferred by the Deed, Bill of Sale or Assignment of Leases) in the form of Exhibit G attached hereto and incorporated herein by this reference (the “Assignment of Intangible Property”) executed by Seller.

(e)Notice to Tenants.  A single form letter for the Project in the form of Exhibit H attached hereto and incorporated herein by this reference, executed by Seller, duplicate copies of which shall be delivered by Seller on the day of Closing to each tenant under the Leases.

(f)Notice to Vendors.  A single form letter for the Project in the form of Exhibit I attached hereto and incorporated herein by this reference, executed by Seller, duplicate copies of which shall be sent by Seller on or prior to Closing to each contractor under the Contracts.

(g)Non-Foreign Status Affidavit.  A non-foreign status affidavit for the Project in the form of Exhibit J attached hereto and incorporated herein by this reference, as required by Section 1445 of the Code, executed by Seller.

(h)Evidence of Authority.  Documentation to establish, to the Title Company’s reasonable satisfaction, the due authorization of Seller’s execution of all documents contemplated by this Agreement.

(i)Other Documents.  A closing statement executed by Seller and such other documents as may be reasonably required by the Title Company or as may be agreed upon by Seller and Buyer to consummate the Transaction.

(j)Keys and Original Documents.  Keys, fob passes or codes to all locks and security features on the Real Property in Seller’s or Property Manager’s possession and originals or, if originals are not available, copies, of all of the Property Documents, to the extent not previously delivered to Buyer.

(k)Consent of the MHPFB.  Written consent to the sale of the Property from the MHPFB as required in Section 10(a) of the Regulatory Agreement.

(l)Easement Estoppel.  In addition, Seller shall undertake commercially-reasonable efforts to obtain an estoppel from the Lot 2 Owner described in Section 17 of that Restatement of Declaration and Grant of Easements, Rights and Restrictions dated April 28, 2005, recorded at the Massachusetts Essex County Registry of Deeds in Book 9483, Page 11.

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The items to be delivered by Seller in accordance with the terms of Section 7.3(a) through (k) shall be delivered to Escrow Agent no later than 5:00 p.m. E.D.S.T. on the last business day prior to the Closing Date, and the items to be delivered by Seller in accordance with the terms of Section 7.3(j) shall be delivered outside of escrow and shall be deemed delivered if the same are located at the Property on the Closing Date.

7.4Buyer’s Closing Deliveries.  At the Closing, Buyer shall deliver or cause to be delivered the following:

(a)Purchase Price.  The Purchase Price, as adjusted for apportionments and other adjustments required under this Agreement, plus any other amounts required to be paid by Buyer at Closing.

(b)Assignment of Leases.  The Assignment of Leases executed by Buyer.

(c)Assignment of Intangible Property.  The Assignment of Intangible Property executed by Buyer.

(d)Buyer’s As-Is Certificate.  The certificate of Buyer required under ARTICLE 5 hereof, as set forth in Exhibit C attached hereto and incorporated herein.

(e)Evidence of Authority.  Documentation to establish, to the Title Company’s reasonable satisfaction, the due authorization of Buyer’s acquisition of the Property and execution of all documents contemplated by this Agreement.

(f)Buyer’s Assumption of Obligations and Duties Under the Regulatory Agreement.  A written statement from the Buyer required under Section 10(a) of the Regulatory Agreement that the Buyer will assume Seller’s obligations and duties under the Regulatory Agreement.

(g)Other Documents.  A closing statement executed by Buyer and such other documents as may be reasonably required by the Title Company or may be agreed upon by Seller and Buyer to consummate the Transaction.

The Purchase Price shall be paid in accordance with the terms of Section 7.2 hereof, and the items to be delivered by Buyer in accordance with the terms of Sections 7.4(b) — (f) shall be delivered to Escrow Agent no later than 5:00 p.m. E.D.S.T. on the last business day prior to the Closing Date.

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ARTICLE 8

CONDITIONS TO CLOSING

8.1Conditions to Seller’s Obligations.  Seller’s obligation to close the Transaction is conditioned on all of the following, any or all of which may be waived by Seller by an express written waiver, at its sole option:

(a)Representations True.  All representations and warranties made by Buyer in this Agreement shall be true and correct in all material respects on and as of the Closing Date, as if made on and as of such date except to the extent that they expressly relate to an earlier date;

(b)Buyer’s Financial Condition.  No petition shall have been filed by or against Buyer or an Affiliate under the Federal Bankruptcy Code or any similar state or federal Law, whether now or hereafter existing; and

(c)Buyer’s Deliveries Complete.  Buyer shall have delivered the funds required hereunder and all of the documents to be executed by Buyer set forth in Section 7.4 and shall have performed all other covenants, undertakings and obligations, and complied with all conditions required by this Agreement, to be performed or complied with by Buyer at or prior to the Closing.

8.2Conditions to Buyer’s Obligations.  Buyer’s obligation to close the Transaction is conditioned on all of the following, any or all of which may be waived by Buyer by an express written waiver, at its sole option:

(a)Representations True.  Subject to the provisions of Section 9.3, all representations and warranties made by Seller in this Agreement, as the same may be amended or modified as provided in Section 9.3, shall be true and correct in all material respects on and as of the Closing Date, as if made on and as of such date except to the extent that they expressly relate to an earlier date;

(b)Title Conditions Satisfied.  At the time of the Closing, title to the Property shall be as required by ARTICLE 4 of this Agreement; and

(c)Seller’s Deliveries Complete.  Seller shall have delivered all of the documents to be executed by Seller and other items required pursuant to Section 7.3 and shall have performed all other covenants, undertakings and obligations, and complied with all conditions required by this Agreement, to be performed or complied with by Seller at or prior to the Closing.

8.3Waiver of Failure of Conditions Precedent.  At any time or times on or before the date specified for the satisfaction of any condition, Seller or Buyer may elect in writing to waive the benefit of any such condition set forth in Section 8.1 or Section 8.2, respectively.  By closing the Transaction, Buyer shall be conclusively deemed to have waived the benefit of any remaining unfulfilled conditions set forth in Section 8.2.  In the event any of the conditions set forth in Section 8.1 or Section 8.2 are neither waived nor

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fulfilled, Seller or Buyer (as appropriate) may exercise such rights and remedies, if any, that such party may have pursuant to the terms of ARTICLE 11 hereof.

8.4Approvals Not a Condition to Buyer’s Performance.  Subject to Buyer’s right to terminate this Agreement prior to the expiration of the Due Diligence Period in accordance with the terms of ARTICLE 5 hereof, Buyer acknowledges and agrees that its obligation to perform under this Agreement is not contingent upon Buyer’s ability to obtain any (a) governmental or quasi-governmental approval of changes or modifications in use or zoning, or (b) modification of any existing land use restriction, or (c) consents to assignments of any service contracts, or (d) endorsements to the Owner’s Title Policy, or (e) financing for acquisition of the Property.  Notwithstanding the foregoing, delivery of the MHPFB consent listed in Section 7.3(k) is a condition to Buyer’s performance.

ARTICLE 9

REPRESENTATIONS AND WARRANTIES

9.1Buyer’s Representations.  Buyer represents and warrants to, and covenants with, Seller as follows:

9.1.1Buyer’s Authorization.  Buyer (a) was formed or organized and is validly existing and in good standing under the laws of its state of formation or organization and, prior to Closing, the state in which the Property is located, (b) is authorized to consummate the Transaction and fulfill all of its obligations hereunder and under all documents contemplated hereunder to be executed by Buyer, and (c) has all necessary power to execute and deliver this Agreement and all documents contemplated hereunder to be executed by Buyer, and to perform all of its obligations hereunder and thereunder.  This Agreement and all documents contemplated hereunder to be executed by Buyer have been duly authorized by all requisite partnership, corporate or other required action on the part of Buyer and are the valid and legally binding obligation of Buyer, enforceable in accordance with their respective terms.  Neither the execution and delivery of this Agreement and all documents contemplated hereunder to be executed by Buyer, nor the performance of the obligations of Buyer hereunder or thereunder, will result in the violation of any Law or any provision of the organizational documents of Buyer or will conflict with any order or decree of any court or governmental instrumentality of any nature by which Buyer is bound.

9.1.2Buyer’s Financial Condition.  No petition has been filed by or against Buyer or an Affiliate under the Federal Bankruptcy Code or any similar state or federal Law.

9.2Seller’s Representations.  Seller represents and warrants to Buyer as follows:

9.2.1Seller’s Authorization.  Seller (a) was formed and is validly existing and in good standing under the laws of its state of formation and the state in which the Property is located, (b) is authorized to consummate the Transaction and fulfill all of its obligations hereunder and under all documents contemplated hereunder to

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be executed by Seller, and (c) has all necessary power to execute and deliver this Agreement and all documents contemplated hereunder to be executed by Seller, and to perform all of its obligations hereunder and thereunder.  This Agreement and all documents contemplated hereunder to be executed by Seller have been duly authorized by all requisite partnership, corporate or other required action on the part of Seller and are the valid and legally binding obligation of Seller, enforceable in accordance with their respective terms.  Neither the execution and delivery of this Agreement and all documents contemplated hereunder to be executed by Seller, nor the performance of the obligations of Seller hereunder or thereunder, will result in the violation of any Law or any provision of the organizational documents of Seller or will conflict with any order or decree of any court or governmental instrumentality of any nature by which Seller is bound.

9.2.2Litigation.  Except as listed in Exhibit L attached hereto and incorporated herein by this reference, Seller has not received any written notice of any current or pending litigation against Seller which would, in the reasonable judgment of Seller, if determined adversely to Seller, materially and adversely affect Buyer or the Property following the Closing.

9.2.3Contracts.  As of the date of this Agreement, Seller has not entered into any contracts or agreements for services (including equipment leases) to or for the Property which will be binding upon Buyer after the Closing, other than the Contracts listed in Exhibit B attached hereto.

9.2.4Leases.  As of the date of this Agreement, Seller has not entered into any Leases other than the Leases listed on Exhibit O attached hereto.  The rent roll set forth in Exhibit O is true, accurate and complete in all material respects.

9.2.5Violations.  Except for violations cured or remedied on or before the date hereof and except as listed in Exhibit L attached hereto, as of the date of this Agreement, Seller has not received any written notice from any governmental authority of any violation of any Law or change in zoning applicable to the Property.

9.2.6Personal Property.  The Personal Property is free and clear of liens, security interests and other encumbrances (except for any Personal Property subject to equipment leases that are listed on Exhibit B).

9.2.7Pending Condemnation.  Except as listed in Exhibit L, Seller has not been served with legal process in connection with any pending condemnation proceeding with respect to the Property.

9.2.8Executive Order 13224.  Neither Buyer, nor any assignee of Buyer, nor any Person holding any legal or beneficial interest whatsoever in Buyer, or in any assignee of Buyer, is included in, owned by, controlled by, acting for or on behalf of, providing assistance, support, sponsorship, or services of any kind to, or otherwise associated with any of the Persons referred to or described in

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Executive Order 13224 — Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism, as amended.

9.3General Provisions.

9.3.1No Representation as to Leases.  Seller does not represent or warrant that any particular Lease or Leases will be in force or effect on the Closing Date or that the tenants will have performed their obligations thereunder, and none of the foregoing shall be conditions precedent to Buyer’s obligations hereunder.

9.3.2Definition of “Seller’s Knowledge” and “Written Notice” to Seller.  All references in this Agreement to “Seller’s knowledge” or words of similar import shall refer only to the conscious actual knowledge of the Designated Representative and shall not be construed to refer to the knowledge of any other member, officer, director, shareholder, employee, agent, property manager or representative of Seller, its partners or members (including, without limitation, Seller’s counsel and Broker), or of any affiliate of any of the foregoing, or to impose or have imposed upon the Designated Representative any duty to investigate the matters to which such knowledge, or the absence thereof, pertains, including without limitation the Documents or the contents of files maintained by the Designated Representative.  There shall be no personal liability on the part of the Designated Representative arising out of any representations or warranties made herein.  All references herein to “written notice” having been given to Seller shall include only those notices received at the Property by Seller’s property manager.

9.3.3Seller’s Representations Deemed Modified.  To the extent that Buyer knows or is Deemed to Know prior to the expiration of the Due Diligence Period that Seller’s representations and warranties are inaccurate, untrue or incorrect in any way, such representations and warranties shall be deemed modified to reflect Buyer’s knowledge or deemed knowledge, as the case may be.

9.3.4Seller’s Recertification of Seller’s Warranties.  At Closing, Seller shall remake Seller’s Warranties as of the date of Closing (with such modifications as may be required to reflect any changes in the matters represented by Seller), which remade Seller’s Warranties shall be subject to Section 9.3.1, Section 9.3.2 and Section 9.3.3.

9.3.5Notice of Breach; Seller’s Right to Cure.  If after the expiration of the Due Diligence Period but prior to the Closing, Buyer or any Buyer’s Representative obtains actual knowledge that any of the representations or warranties made herein by Seller are untrue, inaccurate or incorrect in any material respect, Buyer shall give Seller written notice thereof within five (5) business days of obtaining such knowledge (but, in any event, prior to the Closing).  If at or prior to the Closing, Seller obtains actual knowledge that any of the representations or warranties made herein by Seller are untrue, inaccurate or incorrect in any material respect, Seller shall give Buyer written notice thereof within five

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(5) business days of obtaining such knowledge (but, in any event, prior to the Closing).  In either such event, Seller shall have the right (but not the obligation except to the extent required by Section 10.2.5 hereof) to cure such misrepresentation or breach and shall be entitled to a reasonable extension of the Closing (not to exceed sixty (60) days) for the purpose of such cure.  Subject to performance of Seller’s obligations set forth in Section 10.2.5 hereto, if Seller is unable or unwilling to so cure any misrepresentation or breach of warranty, then Buyer, as its sole remedy for any and all such materially untrue, inaccurate or incorrect representations or warranties, shall elect either:  (a) to waive such misrepresentations or breaches of representations and warranties and consummate the Transaction without any reduction of or credit against the Purchase Price; or (b) to terminate this Agreement in its entirety by written notice given to Seller on the Closing Date, in which event this Agreement shall be terminated, the Deposit shall be returned to Buyer and, thereafter, neither party shall have any further rights or obligations hereunder except as provided in any section hereof that by its terms expressly provides that it survives any termination of this Agreement.  If any such representation or warranty is untrue, inaccurate or incorrect but is not untrue, inaccurate or incorrect in any material respect, Buyer shall be deemed to waive such misrepresentation or breach of warranty and Buyer shall be required to consummate the Transaction without any reduction of or credit against the Purchase Price.  The untruth, inaccuracy or incorrectness of a representation or warranty shall be deemed material only if Buyer’s aggregate damages resulting from the untruth, inaccuracy or incorrectness of any of the representations or warranties exceed, or are reasonably estimated to exceed, Twenty-five Thousand Dollars ($25,000.00) (the “Materiality Threshold”).

9.3.6Survival; Limitation on Seller’s Liability.  The representations and warranties made by Seller in Section 9.2 shall survive the Closing and not be merged therein for a period of one-hundred and eighty (180) days (the “Claims Survival Period”), and Seller shall only be liable to Buyer hereunder for a breach of a representation and warranty made herein or in any of the documents executed by Seller at the Closing with respect to which a claim is made by Buyer against Seller on or before the expiration of the Claims Survival Period.  Anything in this Agreement to the contrary notwithstanding, the Maximum Aggregate Liability of Seller for Seller’s breaches of representations and warranties herein or in any documents executed by Seller at Closing shall be limited to Two Hundred Thousand Dollars ($200,000.00) as set forth in Section 14.15 hereof.  Notwithstanding the foregoing, however, if the Closing occurs, Buyer hereby expressly waives, relinquishes and releases any right or remedy available to it at law, in equity, under this Agreement or otherwise to make a claim against Seller for damages that Buyer may incur, or to rescind this Agreement and the Transaction, as the result of any of Seller’s representations or warranties being untrue, inaccurate or incorrect if (a) Buyer knew or is Deemed to Know that such representation or warranty was untrue, inaccurate or incorrect at the time of the Closing, or (b) Buyer’s damages as a result of such representations or warranties being untrue, inaccurate or incorrect are less than, or are reasonably estimated to

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aggregate less than, the Materiality Threshold of Twenty-Five Thousand Dollars ($25,000.00).

ARTICLE 10

COVENANTS

10.1Buyer’s Covenants.  Buyer hereby covenants as follows:

10.1.1Buyer’s Indemnity; Delivery of Reports.  Buyer hereby agrees to indemnify, defend, and hold Seller and each of the other Seller Parties free and harmless from and against any and all Losses arising out of or resulting from the breach by Buyer of the terms of the Access Agreement, which indemnity shall survive the Closing (and not be merged therein) or any earlier termination of this Agreement.  Buyer shall deliver promptly to Seller, at Seller’s request, copies of all third-party reports commissioned by or on behalf of Buyer evidencing the results of its Due Diligence.

10.1.2Buyer shall use its best efforts to obtain any consents or approvals it is required to obtain from the MHPFB in this Agreement and shall use its best efforts to assist Seller in obtaining any similar consents and approvals required to be obtained by Seller hereunder.

10.2Seller’s Covenants.  Seller hereby covenants as follows:

10.2.1Contracts.  Without Buyer’s prior consent, which consent shall not be unreasonably withheld, between the expiration of the Due Diligence Period and the Closing Date, Seller shall not extend, renew, replace or modify any Contract unless such contract (as so extended, renewed, replaced or modified) is terminable by the owner of the Property without penalty on not more than thirty (30) days’ advance notice, or is entered into in the ordinary course of business, in accordance with past practices, and is for a term of less than one (1) year.  In any event, Seller shall assign to Buyer at Closing all of Seller’s rights under (i) an existing service contract with Otis Elevator Company and (ii) those of the Contracts that Buyer notifies Seller in writing on or before expiration of the Due Diligence Period that Buyer wishes to have assigned to it, unless Seller is relieved of any obligation to make such assignment by a provision hereof; and Seller shall cause to be cancelled at Closing all other Contracts.

10.2.2Maintenance of Property.  Except to the extent Seller is relieved of such obligations by ARTICLE 12 hereof, between the expiration of the Due Diligence Period and the Closing Date, Seller shall maintain and keep the Property in a manner consistent with Seller’s past practices with respect to the Property.

10.2.3Termination of Management Agreement.  As of the Closing Date, Seller shall terminate and satisfy all obligations of Owner under Seller’s property management agreement.  Seller and Property Manager shall have the right to remove all furniture, equipment, supplies and other tangible Personal Property

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from the office maintained by Property Manager, together with all of their proprietary software and licensed software from computers at the Property.

10.2.4Leasing.  Pending Closing, Seller may continue to lease vacant residential units at the Property in accordance with Seller’s business judgment, including, without limitation, adjustment of lease offering terms to respond to market conditions.

10.2.5Lease Enforcement.  Seller shall have the right, but not the obligation, to enforce the rights and remedies of the landlord under any Lease by summary proceedings or otherwise (including, without limitation, the right to remove any tenant), and to apply all or any portion of any security deposits then held by Seller toward any loss or damage incurred by Seller by reasons of any defaults by tenants, and the exercise of any such rights or remedies shall not affect the obligations of Buyer under this Agreement in any manner or entitle Buyer to a reduction in, or credit or allowance against, the Purchase Price or give rise to any other claim on the part of Buyer.

10.2.6Seller shall use its best efforts to assist Buyer in obtaining any consents or approvals Buyer is required to obtain from the MHPFB in this Agreement.

10.3Mutual Covenants.

10.3.1Confidentiality.  The Access Agreement is hereby incorporated in this Agreement by reference and Seller and Buyer agree to continue to be bound by the terms thereof binding on such parties.

10.3.2Publicity.  Seller and Buyer each hereby covenant that:  (a) prior to Closing, neither Seller nor Buyer, nor any of their respective Representatives, consultants or affiliates shall issue any Release (as hereinafter defined) with respect to the Transaction without the prior consent of the other, except to the extent required by applicable Law, and (b) after the Closing, any Release issued by either Seller or Buyer, or any of their respective Representative, consultants or affiliates that provides more information than would be available in the public records as a result of the Closing shall be subject to the review and approval of both parties (which approval shall not be unreasonably withheld).  If either Seller or Buyer is required by applicable Law to issue a Release, such party shall, at least two (2) business days prior to the issuance of the same, deliver a copy of the proposed Release to the other party for its review.  As used herein, the term “Release” shall mean any press release or public statement with respect to the Transaction or this Agreement.

10.3.3Broker.  Seller and Buyer expressly acknowledge that Broker has acted as Seller’s exclusive broker with respect to the Transaction and with respect to this Agreement and that Seller shall pay any brokerage commission due to Broker in accordance with the separate agreement between Seller and Broker.  Seller agrees to hold Buyer harmless and indemnify Buyer from and against any and all Losses suffered or incurred by Buyer as a result of any claims by any party claiming to

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have represented Seller as broker in connection with the Transaction.  Buyer agrees to hold Seller harmless and indemnify Seller from and against any and all Losses suffered or incurred by Seller as a result of any claims by any party (other than Broker) claiming to have represented Buyer as broker in connection with the Transaction.

10.3.4Tax Protests; Tax Refunds and Credits.  Seller shall have the right to continue and to control the progress of and to make all decisions with respect to any contest of Taxes and real estate taxes for the Property for all prior Tax Years.  Buyer shall have the right to control the progress of and to make all decisions with respect to any tax contest of the real estate taxes and personal property taxes for the Property due and payable in all Tax Years after the Tax Year in which the Closing occurs.  Either Seller or Buyer may require a contest of the Taxes, but Seller shall control any such process as above provided.  All real estate tax refunds and credits received after Closing with respect to the Property shall be applied in the following order of priority:  first, to pay the costs and expenses (including reasonable attorneys’ fees and expenses) incurred in connection with obtaining such tax refund or credit; and second, apportioned between Buyer and Seller as follows:

(a)with respect to any refunds or credits attributable to the Taxes, such refunds and credits shall be apportioned between Buyer and Seller in proportion to the number of days in such Tax Year that each party owned the Property (with title to the Property being deemed to have passed as of the Cut-Off Time);

(b)with respect to any refunds or credits attributable to real estate taxes assessed for any Tax Year prior to the Tax Year in which the Closing occurs, Seller shall be entitled to the entire refunds and credits; and

(c)with respect to any refunds or credits attributable to real estate taxes assessed for any Tax Year after the Tax Year in which the Closing occurs, Buyer shall be entitled to the entire refunds and credits.

10.4Survival.  The provisions of this ARTICLE 10 shall survive the Closing (and not be merged therein) or earlier termination of this Agreement.

ARTICLE 11

DEFAULT

11.1Buyer’s Default.  If, on or before the Closing Date, (i) Buyer is in default of any of its obligations hereunder, or (ii) the Closing otherwise fails to occur by reason of Buyer’s failure or refusal to perform its obligations hereunder, then Seller may elect, as its sole and exclusive remedy, either to:  (a) terminate this Agreement in its entirety by written notice to Buyer; or (b) waive the condition and proceed to close the Transaction.  If this Agreement is so terminated, then Seller shall be entitled to retain the Deposit as

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liquidated damages, and thereafter neither party to this Agreement shall have any further rights or obligations hereunder other than any arising under any section or provision herein that expressly provides that it survives the termination of this Agreement.

11.2Seller’s Default.  If, on or before the Closing Date, (i) Seller is in default of any of its obligations hereunder, or (ii)  the Closing otherwise fails to occur by reason of Seller’s failure or refusal to perform its obligations hereunder in a prompt and timely manner, then Buyer may elect, as its sole and exclusive remedy, to:  (a) terminate this Agreement in its entirety by written notice to Seller, promptly after which the Deposit shall be returned to Buyer, and thereafter neither party to this Agreement shall have any further rights or obligations hereunder other than any arising under any section or provision herein that expressly provides that it survives the termination of this Agreement; or (b) waive the condition and proceed to close the Transaction; or (c) seek specific performance of this Agreement by Seller, Buyer specifically acknowledging that Buyer shall have no right to damages pursuant to this Section 11.2 or otherwise under this Agreement.  As a condition precedent to exercise by Buyer of any right Buyer may have to bring an action for specific performance hereunder, Buyer must commence such an action within thirty (30) days after the occurrence of Seller’s default.  Buyer agrees that its failure timely to commence such an action for specific performance within such thirty (30) day period shall be deemed a waiver by Buyer of its right to commence an action for specific performance. Seller and Buyer expressly acknowledge that a breach of any of Seller’s Warranties arising prior to the Closing Date shall not constitute a “default”  for purposes of this Section 11.2 and that any such breach shall be modified by Section 9.3.3,  as applicable,  and subject to Section 9.3.5 above.

ARTICLE 12

CONDEMNATION/CASUALTY

12.1Condemnation.

12.1.1Right to Terminate.  If, prior to the Closing Date, all or any significant portion (as hereinafter defined) of the Project is taken by eminent domain (or is the subject of a pending taking in which Seller has been served with legal process, but which has not yet been consummated), Seller shall notify Buyer in writing of such fact promptly after obtaining knowledge thereof, and, thereafter, either Buyer or Seller shall have the right to terminate this Agreement in its entirety by giving written notice to the other no later than ten (10) days after the giving of Seller’s notice, and the Closing Date shall be extended, if necessary, to provide sufficient time for Buyer or Seller to make such election.  The failure by Buyer and Seller to so elect in writing to terminate this Agreement within such ten (10) day period shall be deemed an election not to terminate this Agreement.  For purposes hereof, a “significant portion” of the Project shall mean any interest in the Project except a de minimis interest the taking of which has no material effect on the use or operation of such Project.

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12.1.2Assignment of Proceeds.  If (a) neither Seller nor Buyer elects to terminate this Agreement as aforesaid if all or any significant portion of the Property is taken, or (b) a portion of the Property not constituting a significant portion of the Property is taken or becomes subject to a pending taking by eminent domain, there shall be no abatement of the Purchase Price; provided, however, that, at the Closing, Seller shall pay to Buyer the amount of any award for or other proceeds on account of such taking which have been actually paid to Seller prior to the Closing Date as a result of such taking (less all costs and expenses, including attorneys’ fees and costs, incurred by Seller as of the Closing Date in obtaining payment of such award or proceeds) and, to the extent such award or proceeds have not been paid, Seller shall assign to Buyer at the Closing (without recourse to Seller) the rights of Seller to, and Buyer shall be entitled to receive and retain, all awards for the taking of the Property or such portion thereof.

12.2Destruction or Damage.  In the event any portion of the Project is damaged or destroyed by casualty prior to the Closing Date, Seller shall notify Buyer in writing of such fact promptly after obtaining knowledge thereof.  If any such damage or destruction (a) is an insured casualty and (b) would cost less than five percent (5%) of the Purchase Price to repair or restore (a “Non-Material Casualty”), then this Agreement shall remain in full force and effect and Buyer shall acquire the Property upon the terms and conditions set forth herein.  In such event, Buyer shall receive a credit against the Purchase Price equal to the deductible amount applicable under Seller’s casualty policy less all costs and expenses, including attorneys’ fees and costs, incurred by Seller as of the Closing Date in connection with the negotiation and/or settlement of the casualty claim with the insurer (the “Realization Costs”), and Seller shall assign to Buyer all of Seller’s right, title and interest in and to all proceeds of insurance on account of such damage or destruction.  In the event the Project is damaged or destroyed prior to the Closing Date by a casualty that is not a Non-Material Casualty, then, notwithstanding anything to the contrary set forth above in this section, Buyer shall have the right, at its option, to terminate this Agreement in its entirety.  Buyer shall have thirty (30) days after Seller notifies Buyer that a casualty has occurred to make such election by delivery to Seller of a written election notice (the “Election Notice”), and the Closing Date shall be extended, if necessary, to provide sufficient time for Buyer to make such election.  The failure by Buyer to deliver the Election Notice within such thirty (30) day period shall be deemed an election not to terminate this Agreement.  In the event Buyer elects not to terminate this Agreement as set forth above, this Agreement shall remain in full force and effect, Seller shall assign to Buyer all of Seller’s right, title and interest in and to any and all proceeds of insurance on account of such damage or destruction, if any, and, if the casualty was an insured casualty, Buyer shall receive a credit against the Purchase Price equal to the deductible or self-insured amount (less the Realization Costs) under Seller’s casualty insurance policy.

12.3Insurance.  Seller shall maintain the property insurance coverage currently in effect for the Property through the Closing Date.

12.4Effect of Termination.  If this Agreement is terminated pursuant to Section 12.1 or Section 12.2, the Deposit, subject to, and except as otherwise provided in Section 3.1 above, shall be returned to Buyer.  Upon such refund, this Agreement shall terminate in

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its entirety and neither party to this Agreement shall have any further rights or obligations hereunder other than any arising under any section herein which expressly provides that it shall survive the termination of this Agreement.

12.5Waiver.  The provisions of this ARTICLE 12 supersede the provisions of any applicable Laws with respect to the subject matter of this ARTICLE 12.

ARTICLE 13

ESCROW

The Deposit and any other sums which the parties agree shall be held in escrow (herein collectively called the “Escrow Deposits”), together with all interest earned thereon, shall be held by the Escrow Agent, in trust, and disposed of only in accordance with the following provisions:

(a)The Escrow Agent shall invest the Escrow Deposits in government insured interest-bearing instruments satisfactory to both Buyer and Seller, shall not commingle the Escrow Deposits with any funds of the Escrow Agent or others, and shall promptly provide Buyer and Seller with confirmation of the investments made.

(b)If the Closing occurs, the Escrow Agent shall deliver the Escrow Deposits to, or upon the instructions of, Seller on the Closing Date.

(c)If for any reason the Closing does not occur, the Escrow Agent shall deliver the Escrow Deposits and all interest earned thereon to Seller or Buyer only upon receipt of a written demand therefor from such party, subject to the following provisions of this ARTICLE 13(c).  If for any reason the Closing does not occur and either party makes a written demand upon the Escrow Agent for payment of the Escrow Deposits and the interest earned thereon, the Escrow Agent shall give written notice to the other party of such demand.  If the Escrow Agent does not receive a written objection from the other party to the proposed payment within ten (10) days after the giving of such notice, the Escrow Agent is hereby authorized to make such payment.  If the Escrow Agent does receive such written objection within such period, the Escrow Agent shall continue to hold such amount until otherwise directed by written instructions signed by Seller and Buyer or a final judgment of a court.

(d)The parties acknowledge that the Escrow Agent is acting solely as a stakeholder at their request and for their convenience, that the Escrow Agent shall not be deemed to be the agent of either of the parties, and that the Escrow Agent shall not be liable to either of the parties for any action or omission on its part taken or made in good faith, and not in disregard of this Agreement, but shall be liable for its negligent acts and for any loss, cost or expense incurred by Seller or Buyer resulting from the Escrow Agent’s mistake of law respecting the Escrow Agent’s scope or nature of its duties.  Seller and Buyer shall jointly and severally indemnify and hold the Escrow Agent harmless from and against all Losses

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incurred in connection with the performance of the Escrow Agent’s duties hereunder, except with respect to actions or omissions taken or made by the Escrow Agent in bad faith, in disregard of this Agreement or involving negligence on the part of the Escrow Agent.

(e)Buyer shall pay any income taxes on any interest earned on the Escrow Deposits.  Buyer represents and warrants to the Escrow Agent that its taxpayer identification number is                     .

(f)The Escrow Agent has executed this Agreement in the place indicated on the signature page hereof in order to confirm that the Escrow Agent has received and shall hold the Escrow Deposits and the interest earned thereon, in escrow, and shall disburse the Escrow Deposits, and the interest earned thereon, pursuant to the provisions of this ARTICLE 13.

ARTICLE 14

MISCELLANEOUS

14.1Assignment.  Buyer shall not assign this Agreement or its rights hereunder to any individual or entity, except an affiliate of Buyer, without the prior written consent of Seller, which consent Seller may grant or withhold in its sole discretion, and any such assignment shall be null and void ab initio.  In the event of any permitted assignment by Buyer, any assignee shall assume any and all obligations and liabilities of Buyer under this Agreement but, notwithstanding such assumption, Buyer shall continue to be liable hereunder, and Buyer shall provide Seller written notice and a copy of such assignment at least five (5) business days before Closing.

14.2Designation Agreement.  Section 6045(e) of the Code and the regulations promulgated thereunder (herein collectively called the “Reporting Requirements”) require an information return to be made to the United States Internal Revenue Service, and a statement to be furnished to Seller, in connection with the Transaction.  Escrow Agent (“Agent”) is either:  (x) the person responsible for closing the Transaction (as described in the Reporting Requirements); or (y) the disbursing title or escrow company that is most significant in terms of gross proceeds disbursed in connection with the Transaction (as described in the Reporting Requirements).  Accordingly:

(a)Agent is hereby designated as the “Reporting Person” (as defined in the Reporting Requirements) for the Transaction.  Agent shall perform all duties that are required by the Reporting Requirements to be performed by the Reporting Person for the Transaction.

(b)Seller and Buyer shall furnish to Agent, in a timely manner, any information requested by Agent and necessary for Agent to perform its duties as Reporting Person for the Transaction.

(c)Agent hereby requests Seller to furnish to Agent Seller’s correct taxpayer identification number.  Seller acknowledges that any failure by Seller to provide

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Agent with Seller’s correct taxpayer identification number may subject Seller to civil or criminal penalties imposed by law.  Accordingly, Seller hereby certifies to Agent, under penalties of perjury, that Seller’s correct taxpayer identification number is 20-1345501.

(d)Each of the parties hereto shall retain this Agreement for a period of four (4) years following the calendar year during which the Closing occurs.

14.3Survival/Merger.  Except for the provisions of this Agreement which are explicitly stated to survive the Closing, (a) none of the terms of this Agreement shall survive the Closing, and (b) the delivery of the Deed and any other documents and instruments by Seller and the acceptance thereof by Buyer shall effect a merger and be deemed the full performance and discharge of every obligation on the part of Buyer and Seller to be performed hereunder.

14.4Integration; Waiver.  This Agreement, together with the Exhibits hereto, embodies and constitutes the entire understanding among the parties with respect to the Transaction, and all prior agreements, understandings, representations and statements, oral or written, are merged into this Agreement.  Neither this Agreement nor any provision hereof may be waived, modified, amended, discharged or terminated except by an instrument signed by the party against whom the enforcement of such waiver, modification, amendment, discharge or termination is sought, and then only to the extent set forth in such instrument.  No waiver by any party hereto of any failure or refusal by the other party to comply with its obligations hereunder shall be deemed a waiver of any other or subsequent failure or refusal to so comply.

14.5Governing Law.  This Agreement shall be governed by, and construed in accordance with, the Laws of the Commonwealth of Massachusetts.

14.6Captions Not Binding; Exhibits.  The captions in this Agreement are inserted for reference only and in no way define, describe or limit the scope or intent of this Agreement or of any of the provisions hereof.  All Exhibits attached hereto shall be incorporated by reference as if set out herein in full.

14.7Binding Effect.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

14.8Severability.  If any term or provision of this Agreement or the application thereof to any Persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to Persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.

14.9Notices.  Any notice, request, demand, consent, approval and other communications under this Agreement shall be in writing, and shall be deemed duly given or made at the time and on the date when received by facsimile (provided that the sender of such communication shall send a copy of such communication to the appropriate parties within

27

one (1) business day of such facsimile) or when personally delivered as shown on a receipt therefor (which shall include delivery by a nationally recognized overnight delivery service) or upon receipt (or refusal of delivery) after being mailed by prepaid certified mail, return receipt requested, to the address for each party set forth below.  Any party, by written notice to the other in the manner herein provided, may designate an address different from that set forth below.

IF TO BUYER:

Hamilton Green Apartments, LLC

c/o The Hamilton Company Inc.

39 Brighton Avenue

Boston, MA  02134

Attention:  Carl A. Valeri, President

Telephone:  (617) 783-0039

Facsimile:  (617) 783-0568

WITH A COPY TO:

Saul Ewing LLP

131 Dartmouth Street, Suite 501

Boston, MA  02116

Attn:  Sally E. Michael, Esq.

Telephone:  (617) 723-3300

Facsimile:  (617) 723-4151

IF TO SELLER:

Windsor Green at Andover LLC

c/o GID

125 High Street, High Street Tower, 27th Floor

Boston, MA  02110

Attention:  Christina Reale, Asset Manager and Assistant Vice President

Telephone:  (617) 854-6652

Facsimile:  (617) 589-9504

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WITH A COPY TO:

GID

125 High Street

High Street Tower, 27th Floor

Boston, MA  02110

Attention:  Robert S. Farrington, Jr., Esq., Senior Vice President, Legal

Telephone:  (617) 854-6694

Facsimile:  (617) 557-1429

IF TO ESCROW AGENT:

Commonwealth Land Title Insurance Company

131 Dartmouth Street, Suite 501

Boston, MA  02116

Attention:  William Bonaccorso

Telephone:  (617) 912-0956

Facsimile:  (617) 367-3417

14.10Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which counterparts taken together shall constitute one and the same agreement.

14.11No Recordation.  Seller and Buyer each agrees that neither this Agreement nor any memorandum or notice hereof shall be recorded, and Buyer agrees:  (a) not to file any notice of pendency or other instrument (other than a judgment) against the Property or any portion thereof in connection herewith; and (b) to indemnify Seller against all Losses incurred by Seller by reason of the filing by Buyer of such notice of pendency or other instrument.

14.12Additional Agreements; Further Assurances.  Subject to the terms and conditions herein provided, each of the parties hereto shall execute and deliver such documents as the other party shall reasonably request in order to consummate and make effective the Transaction; provided, however, that the execution and delivery of such documents by such party shall not result in any additional liability or cost to such party.

14.13Construction.  The parties acknowledge that each party and its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any amendment hereof or Exhibit hereto.

14.14Business Day.  As used herein, the term “business day” shall mean any day other than a Saturday, Sunday or any federal or Commonwealth of Massachusetts holiday.  If any period expires on a day which is not a business day or any event or condition is required by the terms of this Agreement to occur or be fulfilled on a day which is not a business

29

day, such period shall expire or such event or condition shall occur or be fulfilled, as the case may be, on the next succeeding business day.

14.15Maximum Aggregate Liability.  Prior to Closing, the liabilities of the parties shall be governed by Section 9.3.3, Section 9.3.5 and ARTICLE 11 hereof, as applicable.  Once Closing has occurred, notwithstanding any provision to the contrary contained in this Agreement or any documents executed by Seller pursuant hereto or in connection herewith, the maximum aggregate liability of Seller and the Seller Parties, and the maximum aggregate amount which may be awarded to and collected by Buyer, in connection with the Transaction or the Property, under this Agreement and under any and all documents executed pursuant hereto or in connection herewith (including, without limitation, in connection with the breach of any of Seller’s Warranties or any other representations or covenants under this Agreement made by Seller for which a claim is timely made by Buyer) shall not exceed Two Hundred Thousand Dollars ($200,000.00) in actual damages suffered by Buyer arising directly as a result of such breach by Seller, the parties agreeing that Seller shall have no liability whatsoever for matters waived by Buyer pursuant to Section 9.3.6 hereof or for consequential or punitive damages, and no claim may be made by Buyer unless Buyer’s damages are reasonably estimated to aggregate more than the Materiality Threshold of Twenty-Five Thousand Dollars ($25,000.00).  The provisions of this section shall survive the Closing (and not be merged therein) or any earlier termination of this Agreement.  Any claim by Buyer against Seller as described in this Section 14.15 must be made by notice to Seller given prior to the expiration of the Claims Survival Period.

14.16JURISDICTION.  WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THE TRANSACTION, THIS AGREEMENT, THE PROPERTY OR THE RELATIONSHIP OF BUYER AND SELLER HEREUNDER (“PROCEEDINGS”) EACH PARTY IRREVOCABLY (A) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE COUNTY OF ESSEX, COMMONWEALTH OF MASSACHUSETTS AND THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS, AND (B) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDINGS BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT SUCH PROCEEDINGS HAVE BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDINGS, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY.

14.17WAIVER OF JURY TRIAL.  EACH PARTY HEREBY WAIVES TRIAL BY JURY IN ANY PROCEEDINGS BROUGHT BY THE OTHER PARTY IN CONNECTION WITH ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE TRANSACTION, THIS AGREEMENT, THE PROPERTY OR THE RELATIONSHIP OF BUYER AND SELLER HEREUNDER.

14.18Facsimile Signatures.  Signatures to this Agreement transmitted by telecopy shall be valid and effective to bind the party so signing.  Each party agrees to promptly deliver an execution original of this Agreement with its actual signature to the other party, but a

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failure to do so shall not affect the enforceability of this Agreement, it being expressly agreed that each party to this Agreement shall be bound by its own telecopied signature and shall accept the telecopied signature of the other party to this Agreement.

14.19Riders.  Any riders attached to this Agreement are incorporated in this Agreement by reference.

14.20Attorneys’ Fees.  Should either party employ attorneys to enforce any of the provisions hereof, the party against whom any final judgment is entered agrees to pay the prevailing party all reasonable costs, charges and expenses, including attorneys’ fees and expenses and court costs, expended or incurred in connection therewith.

14.21Windsor.  There is expressly excluded from the Transaction:  (i) the names “Windsor”, “Windsor Communities” and any variation thereof; (ii) all computers used in connection with the operation of the Property and all computer software; (iii) all operating and marketing materials, records and reports which are proprietary to the operation and management of the Property by Windsor Property Management Company; and (iv) any text, graphics, artwork or photographs of the exterior or interior of the Property located at [www.windsorcommunities/apartments/boston/andover/].  Buyer shall temporarily cover all signage from the Property utilizing or containing the name Windsor within two (2) business days of Closing.  Buyer shall permanently remove all signage from the Property utilizing or containing “Windsor” within thirty (30) days after the Closing Date, failing which Seller may remove all such signage, at Buyer’s expense, upon fifteen (15) days’ prior written notice.  The provisions of this Section 14.21 shall survive the Closing.

14.22Exchange Transaction.  Buyer and Seller agree to cooperate with each other so that Seller may dispose of the Property and/or Buyer may acquire the Buyer in a transaction intended to qualify in whole or in part as a tax deferred exchange pursuant to Section 1031 of the Internal Revenue Code of 1986, as amended.  Such cooperation shall include, but not be limited to, executing and delivering any and all documents required by the exchange trustee or intermediary; provided, however, that the non-exchanging party shall not be required to incur any additional expense other than to de minimis extent (unless the exchanging party agrees to reimburse the non-exchanging party for same at the Closing) or liability as a result of such cooperation, exchange or assignment.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be duly executed as of the date(s) set forth below to be effective as of the day and year first above written.

SELLER:
WINDSOR GREEN AT ANDOVER LLC, a
Delaware limited liability company
By:
Name:
Title:
BUYER:
HAMILTON GREEN APARTMENTS, LLC, a Massachusetts limited liability company
By:	NewReal, Inc., a Massachusetts corporation,
	its Manager
By:
	Name:	Ronald Brown
	Title:	President

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AGREEMENT OF ESCROW AGENT

The undersigned has executed this Agreement solely to confirm its agreement to (a) hold the Escrow Deposits in escrow in accordance with the provisions hereof and (b) comply with the provisions of ARTICLE 13 and Section 14.2.

COMMONWEALTH LAND TITLE INSURANCE COMPANY
By:
	Name:
	Title:

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Schedule 1

Index of Defined Terms

Term	Reference
Additional Deposit	3.1
Agent	14.2
Agreement	Introductory Paragraph
Assignment of Intangible Property	7.3(d)
Assignment of Leases	7.3(c)
Bill of Sale	7.3(b)
Broker	Article 1
business day	14.14
Buyer	Introductory Paragraph
Buyer’s Representative	Article 1
Buyer’s Work	5.3
Claims Survival Period	9.3.6
Closing	Article 1
Closing Date	Article 1
Code	Article 1
Confidentiality Agreement	Article 1
Contracts	Article 1
Cut-Off Time	Article 6
Deed	7.3(a)
Deemed to Know	Article 1
Deposit	3.1
Designated Representative	Article 1
Documents	Article 1
Due Diligence	Article 1
Due Diligence Period	Article 1
Election Notice	12.2
Escrow Agent	Article 1
Escrow Deposits	Article 13
Governmental Authority	5.3
Initial Deposit	3.1
Laws	Article 1
Leases	Article 1
Losses	5.3
Materiality Threshold	9.3.5
Non-Material Casualty	12.2
Other Exceptions	4.1.1
Other Property Rights	Article 1
Owner’s Title Policy	4.2
Permitted Exceptions	Article 1
Person	Article 1
Personal Property	Article 1
Proceedings	14.16

S1-1

Term	Reference
Project	Article 1
Property	Article 1
Property Documents	Article 1
Property Manager	Article 1
Purchase Price	Article 3
Real Property	Article 1
Realization Costs	12.2
Release	10.3.2
Reporting Person	14.2(a)
Reporting Requirements	14.2
Required Clearance Exceptions	4.1.1
Revenues	6.1.1
Seller	Introductory Paragraph
Seller Cure Limit	Article 1
Seller Parties	Article 1
Seller’s Knowledge	9.3.2
Seller’s Warranties	Article 1
significant portion	12.1.1
Survey	Article 1
Tax Year	Article 1
Title Commitment	Article 1
Title Company	Article 1
Title Documents	Article 1
Title Objections	4.1.1
Transaction	Article 1

S1-2

Schedule 2

List of Due Diligence Items

Operating Statements for last 3 years and 2013

Rent Roll

Current Utility Bills

Current Real Estate Tax Bills

Staff compensation

Existing Title Policy, Property Exceptions and/or Easements

Existing Survey and Legal Description

Third Party Warranties/Guarantees in Effect

Lease Agreement

Phase I Environmental Report

Site Evaluation Report

12 month lease expiration report

Windsor Green Regulatory Agreement with MHP

2012 Computation of Excess Equity

S2-1

Exhibit A

LEGAL DESCRIPTION

Parcel 1 (311 Lowell Street):

A certain parcel of land with the buildings and improvements thereon in Andover, Essex County, Massachusetts, and being shown as Lot 2 on a plan entitled “Plan of Land, 307 & 311 Lowell Street, Andover, Massachusetts” by Otte & Dwyer, Inc., Land Surveyors, dated June 21, 2004, recorded with the Essex North Registry of Deeds on June 30, 2004, as Plan No. 14808.

Parcel 2 (319 Lowell Street):

The land with the buildings thereon situated on Lowell Street in Andover, No. Essex County, Massachusetts and being shown as Lot 3 on a plan of land entitled “Plan of Land in Andover, Mass. as surveyed for John Bolten” drawn by McCracken Bros. Engineers, Methuen, Mass., Scale l” = 20’ dated January 7, 1947 and recorded in No. Essex County Registry of Deeds as Plan #1692, to which plan reference is made for a more particular description of Lot 3 as affected by taking by the Commonwealth of Massachusetts for the relocation of Lowell Street dated December 4, 1956 and recorded in the Registry in Book 856, Page 100 as affected by an entry dated June 25, 1957 and recorded in the Registry in Book 858, Page 84.

A-1

Exhibit B

LIST OF CONTRACTS

Service	Vendor
ADMINISTRATIVE EXPENSES
Equipment Leasing Expense	Pitney Bowes (postage machine)
Internet Services — Office	Comcast
Telephone — Office, Elevator, Call Boxes, 911	Verizon/Sprint
Telephone — Fire Alarms	N/A
Telephone — Answering Service	Quick Phone
Copy Machine	Canon Business Solutions
Otis Spunkmeyer/Cookies
Water Cooler	Poland Springs
Alarm Monitoring — Office	ACT
Alarm Monitoring — Shop	ACT
Minol/Sub-metering Company	Minol
Minol/UEM bill pay Company	N/A
Credit Retriever/Applicant Credit Check Co.	Credit Retriever
Collection Agency	FCO
MARKETING EXPENSES
Advertising — Print Ad	Apt Guide
Advertising — Other	Classified Ventures
Advertising — Other	Move.com
Advertising — Other	Rent.com
Advertising — Other	forRent.com
Advertising — Other	Peoplewithpets.com
SERVICE EXPENSES
Pest Contract	N/A
Termite Contract/Bond	N/A
Trash Contract	EL Harvey & Sons
Compactor Rental Agreement	N/A
Recycling Contract	EL Harvey & Sons
Landscaping Contract	Preferred Landscaping
Fire Alarm Monitoring Contract	Cintas
Life Safety Contract (Fire Sprinkler, Alarms)	Cintas
Painting Contract	N/A
Cleaning Service Contract	Jani King
Elevator Contract	Otis
HVAC Contract for Common Areas	N/A
Key System	HandiTrack
Snow Removal	Preferred Landscaping

B-1

Exhibit C

FORM OF AS-IS CERTIFICATE AND AGREEMENT

THIS CERTIFICATE AND AGREEMENT (“Agreement”), is made as of the        day of June, 2013, by HAMILTON GREEN APARTMENTS, LLC, a Massachusetts limited liability company (“Buyer”), to and for the benefit of WINDSOR GREEN AT ANDOVER LLC, a Delaware limited liability company (“Seller”), and each of the Seller Parties (as defined herein).

RECITALS

Seller, as seller, and Buyer, as buyer, are parties to a Purchase and Sale Agreement (“Sale Agreement”) dated as of June     , 2013, which provides for the sale of certain real property (the “Property”) located in County of Essex, Commonwealth of Massachusetts, commonly known as Windsor Green at Andover and legally described on Exhibit A attached hereto and incorporated herein by this reference.  Any initially capitalized terms not otherwise defined herein shall have the meaning ascribed to such term in the Sale Agreement; and

The Sale Agreement requires, inter alia, that, as a condition precedent to Seller’s obligations under the Sale Agreement, Buyer shall execute and deliver this Agreement to Seller at Closing.

NOW, THEREFORE, in consideration of TEN AND NO/100 DOLLARS ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer hereby certifies and agrees as follows:

1.For purposes of this Agreement, the following terms shall have the following meanings:

“Buyer’s Representative” shall mean Buyer, its partners and members, and any officers, directors, employees, agents, Representative and attorneys of Buyer, its partners or members.

“Deemed to Know” (or words of similar import, whether or not such words may be capitalized) shall have the following meaning:  (a) Buyer shall be “Deemed to Know” of the existence of a fact or circumstance to the extent that such fact or circumstance is disclosed by this Agreement, the Documents, or any studies, tests, reports, or analyses prepared by or for or otherwise obtained by Buyer or Buyer’s Representative; and (b) Buyer shall be “Deemed to Know” that a representation or warranty is untrue, inaccurate or incorrect to the extent that this Agreement, the Documents, or any studies, tests, reports or analyses prepared by or for or otherwise obtained by Buyer or Buyer’s Representative in connection with the Property contains information which is inconsistent with such representation or warranty.

“Documents” shall mean the documents and instruments applicable to the Property or any portion thereof that Seller or any of the other Seller Parties deliver or make available to Buyer prior to Closing or otherwise allow Buyer access to

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prior to Closing, including, but not limited to, the Title Commitment, the Survey, the Title Documents, the Property Documents and the Property Condition Report.

“Due Diligence” shall mean examinations, inspections, investigations, tests, studies, analyses, appraisals, evaluations and/or investigations with respect to the Property, the Documents, and other information and documents regarding the Property, including, without limitation, examination and review of title matters, applicable land use and zoning Laws and other Laws applicable to the Property, the physical condition of the Property, and the economic status of the Property.

“Property Documents” shall mean, collectively, (a) the Leases, (b) the Contracts, and (c) any other documents or instruments which constitute or otherwise create any portion of the Property.

“Seller Parties” shall mean and include, collectively, (a) Seller; (b) its counsel; (c) Broker; (d) Seller’s property manager; (e) any direct or indirect equity owner, officer, director, employee, or agent of Seller, Seller’s partners or members, or Seller’s partners’ or members’ partners or members, counsel to any of the foregoing, Broker or Seller’s property manager; and (f) any other entity or individual affiliated or related in any way to any of the foregoing; and (g) the Designated Representative.

“Seller’s Warranties” shall mean Seller’s representations and warranties set forth in Section 9.2 of the Sale Agreement and any documents executed by Seller for the benefit of Buyer in connection with Closing.

2.Buyer acknowledges that, prior to the date hereof, (a) Seller has made available to Buyer and otherwise allowed Buyer access to the Property and the Documents; and (b) Buyer has conducted (or has waived its right to conduct) all such Due Diligence as Buyer considers necessary or appropriate.

3.Buyer acknowledges and agrees that (a) the Property is being sold, and Buyer accepts possession of the Property on the date hereof, “AS IS, WHERE IS, WITH ALL FAULTS,” with no right of setoff or reduction in the Purchase Price; (b) except for Seller’s Warranties, none of the Seller Parties have or shall be deemed to have made any verbal or written representations, warranties, promises or guarantees (whether express, implied, statutory or otherwise) to Buyer with respect to the Property, any matter set forth, contained or addressed in the Documents (including, but not limited to, the accuracy and completeness thereof) or the results of Buyer’s Due Diligence; and (c) Buyer has confirmed independently all information that it considers material to its purchase of the Property or the Transaction.  Buyer specifically acknowledges that, except for Seller’s Warranties, Buyer is not relying on (and Seller, each of the other Seller Parties does hereby disclaim and renounce) any representations or warranties of any kind or nature whatsoever, whether oral or written, express, implied, statutory or otherwise, from Seller or any other Seller Parties, as to any matter whatsoever.  Buyer further acknowledges and agrees that, except for Seller’s Warranties, neither Seller nor Seller is under any duty to make any affirmative disclosures or inquiry regarding any matter which may or may not be known to Seller or any of the other Seller Parties, and Buyer, for itself and for its successors and

C-2

assigns, hereby specifically waives and releases Seller and each of the other Seller Parties from any such duty that otherwise might exist.

4.Any reports, repairs or work required by Buyer are the sole responsibility of Buyer, and Buyer agrees that there is no obligation on the part of Seller or Seller to make any changes, alterations or repairs to the Property or to cure any violations of Law or to comply with the requirements of any insurer.

5.Except as expressly provided hereinbelow in this Section 5, Buyer, for Buyer and Buyer’s successors and assigns, hereby releases Seller and each of the other Seller Parties from, and waives all claims and liability against Seller and each of the other Seller Parties for or attributable to, the following:

(a)any and all statements or opinions heretofore or hereafter made, or information furnished, by the Seller Parties to Buyer or any of Buyer’s Representative; and

(b)any and all losses, costs, claims, liabilities, expenses, demands or obligations of any kind or nature whatsoever attributable to the Property, whether arising or accruing before, on or after the date hereof and whether attributable to events or circumstances which have heretofore or may hereafter occur, including, without limitation, all losses, costs, claims, liabilities, expenses, demands and obligations with respect to the structural, physical, or environmental condition of the Property.

The release and waiver set forth in this Section 5 is not intended and shall not be construed to affect or impair any rights or remedies that Buyer may have against Seller under the Sale Agreement as a result of a breach of any of Seller’s Warranties or of any covenant of Seller expressly set forth in the Sale Agreement.

6.Buyer acknowledges and agrees that the provisions of this Agreement were a material factor in Seller’s acceptance of the Purchase Price, and while Seller has provided the Documents and cooperated with Buyer, Seller is unwilling to sell the Property unless Seller and the other Seller Parties are expressly released as set forth in Section 5.

7.This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

8.If any term or provision of this Agreement or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforced to the fullest extent permitted by law.

C-3

IN WITNESS WHEREOF, Buyer has executed this Agreement as of the date first set forth hereinabove.

HAMILTON GREEN APARTMENTS, LLC,
a Massachusetts limited liability company
By:	NewReal, Inc., a Massachusetts corporation
	its Manager
By:
Name:
Title:

C-4

Exhibit D

FORM OF DEED

WHEN RECORDED RETURN TO:

WINDSOR GREEN AT ANDOVER LLC, a Delaware limited liability company, formerly known as CRITERION ANDOVER APARTMENTS, L.P., a Delaware limited partnership (“Grantor”), whose address is c/o GID, 125 High Street, High Street Tower, 27th Floor, Boston, MA  02110, for consideration paid in the amount of                                                                             and 00/100 ($                                        ) DOLLARS, grants to                                                       , a                                                           (“Grantee”) with its principal office located at                                                                                                     ,

with Quitclaim Covenants:

the land known and numbered as 311 Lowell Street (“Parcel 1”) and 319 Lowell Street (“Parcel 2”) located in Andover, Massachusetts, more particularly described on Exhibit A attached hereto, together with any improvements thereon (the “Property”),

Subject to and with the benefit of all easements, rights of way, encumbrances, liens, covenants, conditions and other matters of record to the extent that the same are now in force and applicable and as more particularly described on Exhibit B attached hereto.

Parcel 1 is subject to a non-disturbance zone in which no alteration of land or vegetation may occur.  The non-disturbance zone is shown on the plan entitled “Plan of Non-Disturbance Zone to Wetlands Per Order of Conditions No. 090-0853, 307 & 311 Lowell Street, Andover, Massachusetts,” dated March 24, 2005, prepared by H.W. Moore Associates, Inc., recorded with the Essex North Registry of Deeds (the “Registry”) as Plan # 15047, and as described in the Order of conditions recorded in the Registry at Book 9304, Page 216.  In accordance with said Order of Conditions, this language shall be incorporated in full into all future deeds, easements, mortgages, leases, licenses, occupancy agreements or any other instrument of transfer, whereby an interest in and/or a right to use the property or a portion thereof is conveyed.

For Grantor’s title, for Parcel 1 see Deed recorded with the Registry in Book 9483, Page 67 and for Parcel 2 see Deed recorded with the Registry in Book 9483, Page 69.

D-1

IN WITNESS WHEREOF, Grantor has set its hand and seal this                  day of June, 2013.

WINDSOR GREEN AT ANDOVER LLC, a

Delaware limited liability company

By:

Name:

Title:

COMMONWEALTH OF MASSACHUSETTS

COUNTY OF                               , ss.

On this              day of                               , 2013, before me, the undersigned notary public, personally appeared                                                 .                                              of Windsor Green at Andover LLC, a Delaware limited liability company, proved to me through satisfactory evidence of identification, which was                                                         , to be the person whose name is signed on the preceding or attached document, and acknowledged to me that he signed it voluntarily for its stated purpose as                                         .

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public

My commission expires:

D-2

EXHIBIT A

Parcel 1 (311 Lowell Street):

A certain parcel of land with the buildings and improvements thereon in Andover, Essex County, Massachusetts, being shown as Lot 2 on a plan entitled “Plan of Land, 307 & 311 Lowell Street, Andover, Massachusetts” by Otte & Dwyer, Inc., Land Surveyors, dated June 21, 2004, recorded with the Essex North Registry of Deeds on June 30, 2004, as Plan No. 14808.

Parcel 2 (319 Lowell Street):

The land with the buildings thereon situated on Lowell Street in Andover, No. Essex County, Massachusetts and being shown as Lot 3 on a plan of land entitled “Plan of Land in Andover, Mass. as surveyed for John Bolten” drawn by McCracken Bros. Engineers, Methuen, Mass., Scale l” = 20’ dated January 7, 1947 and recorded in No. Essex County Registry of Deeds as Plan #1692, to which plan reference is made for a more particular description of Lot 3 as affected by taking by the Commonwealth of Massachusetts for the relocation of Lowell Street dated December 4, 1956 and recorded in the Registry in Book 856, Page 100 as affected by an entry dated June 25, 1957 and recorded in the Registry in Book 858, Page 84.

D-3

EXHIBIT B

1.Terms and provisions of a lease by and between Windsor Green at Andover LLC, as Lessor, and STC Six Company, as Lessee, dated March 25, 2010, Notice of which is dated December 11, 2009 and recorded in Book 12082, Page 238, as affected by Memorandum of Lease Supplement by and between STC Six Company and Bell Atlantic Mobile of Massachusetts Corporation Ltd., dated October 27, 2010 and recorded in Book 12293, Page 93, as affected by Notice of Lease by and between STC Six Company and New Cingular Wireless PCS, LLC dated October 29, 2010 and recorded in Book 12380, Page 134, as affected by Notice of Site License Acknowledgement recorded in Book 11518, Page 144.

2.Taking by the Commonwealth of Massachusetts Department of Public Works for the relocation of Lowell Street and for access easement on Parcel 11-R-1 shown on Plan No. 6129 by Order dated November 26, 1969, and recorded in Book 1145, Page 150, as affected by Amendment to Access Easement Agreement dated April 28, 2005 and recorded in Book 9483, Page 41, as shown on the Survey entitled “ALTA/ACSM Land Title Survey”, in Andover, Mass., by Hayes Engineering, dated September 27, 2007, (“the Survey”)

3.Taking by the Commonwealth of Massachusetts Department of Public Works of an easement related to Parcel 11-RS-1 Easement to construct slopes of excavation and/or embankment in Parcel 11-RS-1 shown on Plan No. 6212 by Order dated May 27, 1970, and recorded in Book 1153, Page 684, as affected by Amendment to Access Easement Agreement dated April 28, 2005 and recorded in Book 9483, Page 41, as shown on the Survey entitled “ALTA/ACSM Land Title Survey”, in Andover, Mass., by Hayes Engineering, dated September 27, 2007, (“the Survey”)

4.Rights and easement granted in Reciprocal Easement Agreement between Andover Real Estate Corporation and Rolling Green Motor Inn Corporation dated September 22, 1982, and recorded in Book 1617, Page 187, as affected by Easement Relocation Agreement dated April 28, 2005 and recorded in Book 9483, Page 73, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

5.Easement from Dauphin Corporation to Harry Axelrod dated July 15, 1985, and recorded in Book 2005, Page 128, with respect to “Right of Way Easement 66’ Wide” shown on a plan entitled “Plan of Land in Andover, Mass., owned by Rolling Green Motor Inn Corp.” dated May 29, 1985 and recorded as Plan No. 9957 as affected by Declaration and Grant of Easements between Harry Axelrod and Lowell Street Associates Limited Partnership dated May 22, 1991 recorded with the Registry in Book 3274, Page 96, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

6.Rights and easement granted in Easement Agreement between Inncorp Development Limited Partnership and David Bruce Maddox, Trustee of Powers Realty Trust, dated September 30, 1988, and recorded in Book 2820, Page 81, as amended by the

D-4

Amendment to Access Easement Agreements recorded in Book 9483, Page 41, as affected by Confirmation Regarding Easement Agreement, dated May 8, 2007, recorded in Book 10750, Page 111, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

7.Rights granted in a Lease dated June 19, 1999, with Sprint Spectrum LP., as Tenant, Notice of which is recorded in Book 5691, Page 307.

8.Notice of Lease to Andtower, LLC dated April 28, 2005 and recorded in Book 9483, Page 59, as affected by Amendment to Notice of Lease dated April 28, 2005 and recorded in Book 9483, Page 132, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

9.Rights and easement granted in Easement to New England Telephone and Telegraph Company dated February 22, 2000, and recorded in Book 5691, Page 313, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

10.Rights and easement granted in Easement to Massachusetts Electric Company dated March 21, 2000, and recorded in Book 5708, Page 29, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

11.Terms and provisions of Declaration and Grant of Easement, Rights and Restrictions dated June 17, 2003 and recorded with the Registry in Book 7920, Page 113, as amended by Restatement of Declaration and Grant of Easements, Rights and Restrictions dated April 28, 2005 and recorded in Book 9483, Page 11, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

12.Grant of Utility Easement and Easement Agreement between Criterion Andover Apartments, L.P. and Yvon Cormier and Denise Enxing, Trustees of CA Investment Trust dated April 28, 2005 and recorded in Book 9483, Page 95, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

13.Grant of Easement between Comcast of Massachusetts I, Inc. and Criterion Apartments, LP, dated September 24, 2006, recorded in Book 10382, Page 207.

14.Easement to Verizon New England Inc., dated March 22, 2006, recorded in Book 10097, Page 46.

15.Easement to Massachusetts Electric Company, dated September 27, 2005, recorded in Book 9842, Page 154.

16.Matters disclosed on a survey entitled “ALTA/ACSM Land Title Survey in Andover, Mass.”, prepared by Hayes Engineering, dated September 27, 2007:  Gravel path shown at Northeast corner of Parcel 1 appears to run on and off insured premises and abutter’s premises.

D-5

17.Terms and provision of Chapter 40B Regulatory and Affordable Housing Agreement for Limited Dividend Organizations, between Criterion Andover Apartments LP and Massachusetts Housing Partnership Fund Board, dated February 15, 2008, recorded in Book 11067, Page 28.

18.Notice of Variance by the Andover Board of Appeals granted to Sprint Spectrum L.P., recorded in Book 5647, Page 199 (Decision No. 2956).

19.Order of Conditions from the Andover Conservation Commission (DEP File No. 090-0853) issued October 22, 2003 and recorded on January 14, 2005 in Book 9304, Page 216, as affected by a Certificate of Compliance, recorded in Book 10737, Page 79.

20.Notice of Variance by the Andover Board of Appeals granted to Rolling Green Motor Inn Corp. recorded in Book 1910, Page 234 (Decision No. 1699).

21.Decision for Comprehensive Permit by the Andover Board of Appeals recorded in Book 8447, Page 238, as affected by Certification of No Appeal recorded in Book 8447, Page 248, as affected by Decision Consenting to Proposed Transfer of Comprehensive Permit Decision No. 3312, Decision No. 3449, dated August 16, 2004 and recorded in Book 9082, Page 177; as affected by Finding of Insubstantial Change dated February 15, 2005 and recorded in Book 9417, Page 39; as affected by Decision to Extend and Determination of Insubstantial Changes, Decision No. 3451, dated August  16, 2004 and recorded in Book 9474, Page 141; as affected by Stipulation of Dismissal with Prejudice recorded in Book 9483, Page 1, as affected by Finding of Insubstantial Change by Town of Andover, (Comprehensive Permit #3312), issued to AND Development, LLC, dated April 25, 2005, recorded in Book 9554, Page 98. Also see Decision in Book 9696, Page 75, as affected by Decision of the Zoning Board of Appeals, Town of Andover, recorded in Book 10832, Page 31.

22.Notice of Decision by the Andover Zoning Board of Appeals granted to Altiostar Networks, Inc., recorded in Book 13434, Page 307 (Decision No. 4022).

23.Notice of Decision by the Zoning Board of Appeals of the Town of Andover recorded in Book 11995, Page 294.

29.Notice of Decision of the Town of Andover Zoning Board of Appeals dated March 3, 2011 and recorded in Book 12467, Page 239.

D-6

Exhibit E

FORM OF BILL OF SALE

THIS BILL OF SALE (“Bill of Sale”), is made as of the        day of June, 2013, by and between WINDSOR GREEN AT ANDOVER LLC, a Delaware limited liability company (“Seller”), and HAMILTON GREEN APARTMENTS, LLC, a Massachusetts limited liability company (“Buyer”).

W I T N E S S E T H:

WHEREAS, by that certain Purchase and Sale Agreement (“Sale Agreement”) dated as of June     , 2013, by and between Seller and Buyer, Seller agreed to sell to Buyer certain real property, and the improvements located thereon (“Real Property”) as more particularly described in Exhibit A attached hereto and incorporated herein by this reference, together with all improvements located thereon (“Real Property”); and

WHEREAS, by deed of even date herewith, Seller conveyed the Real Property to Buyer; and

WHEREAS, in connection with the above described conveyance Seller desires to sell, transfer and convey to Buyer certain items of tangible personal property as hereinafter described.

NOW, THEREFORE, in consideration of the receipt of TEN AND NO/100 DOLLARS ($10.00) and other good and valuable consideration paid in hand by Buyer to Seller, the receipt and sufficiency of which are hereby acknowledged, Seller has GRANTED, CONVEYED, SOLD, TRANSFERRED, SET OVER and DELIVERED and by these presents does hereby GRANT, SELL, TRANSFER, SET OVER and DELIVER to Buyer, its legal Representative, successors and assigns, all of its right, title and interest in and to (a) all tangible personal property owned by Seller (excluding (i) all furniture, equipment, supplies and other tangible personal property located in the office maintained by Seller’s property manager, and (ii) computer software which either (x) is licensed to Seller or Seller’s property manager, or (y) Seller or Seller’s property manager deems proprietary), located on the Real Property and used in the ownership, operation and maintenance of the Real Property, and (b) all non-confidential books, records and files (excluding any appraisals, budgets, strategic plans for the Real Property, internal analyses, marketing information regarding the marketing of the Property for sale, submissions relating to Seller’s obtaining of corporate authorization, attorney and accountant work product, and attorney-client privileged documents), relating to the Real Property (herein collectively called the “Personal Property”), to have and to hold, all and singular, the Personal Property unto Buyer forever.

This Bill of Sale is made without any covenant, warranty or representation by, or recourse against, Seller except as expressly set forth in the Sale Agreement and the documents executed in connection therewith.

If any term or provision of this Bill of Sale or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Bill of Sale

E-1

or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Bill of Sale shall be valid and enforced to the fullest extent permitted by law.

IN WITNESS WHEREOF, the undersigned have executed this Bill of Sale as of the date first set forth hereinabove.

WINDSOR GREEN AT ANDOVER LLC, a

Delaware limited liability company

By:

Name:

Title:

E-2

Exhibit F

FORM OF ASSIGNMENT OF LEASES

THIS ASSIGNMENT OF LEASES (“Assignment”), is made as of the        day of June, 2013, by and between WINDSOR GREEN AT ANDOVER LLC, a Delaware limited liability company (“Assignor”), and HAMILTON GREEN APARTMENTS, LLC, a Massachusetts limited liability company (“Assignee”).

W I T N E S S E T H:

WHEREAS, by Purchase and Sale Agreement (“Sale Agreement”) dated as of June     , 2013, by and between Assignor and Assignee, Assignor agreed to sell to Assignee certain real property, and the improvements located thereon (“Property”) as more particularly described in the Sale Agreement; and

WHEREAS, the Sale Agreement provides, inter alia, that Assignor shall assign to Assignee certain leases and Assignee shall assume all of the obligations of Assignor under such leases from and after the date of such assignment, and that Assignor and Assignee shall enter into this Assignment.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto hereby agree as follows:

1.Assignment.  Assignor hereby assigns, sets over and transfers to Assignee all of its right, title and interest in, to and under the leases (“Leases”) with the tenants of the Property identified on Exhibit A attached hereto and incorporated herein by this reference.

2.Assumption.  Assignee hereby assumes all liabilities and obligations of Assignor under the Leases arising or accruing after the date hereof.

3.Miscellaneous.  This Assignment and the obligations of the parties hereunder shall survive the closing of the transaction referred to in the Sale Agreement and shall not be merged therein, shall be binding upon and inure to the benefit of the parties hereto, their respective legal Representative, successors and assigns, shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts applicable to agreements made and to be wholly performed within said State and may not be modified or amended in any manner other than by a written agreement signed by the party to be charged therewith.

4.Severability.  If any term or provision of this Assignment or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Assignment or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Assignment shall be valid and enforced to the fullest extent permitted by law.

F-1

5.Counterparts.  This Assignment may be executed in counterparts, each of which shall be an original and all of which counterparts taken together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the undersigned have executed this Assignment as of the date first set forth hereinabove.

ASSIGNOR:
WINDSOR GREEN AT ANDOVER LLC, a Delaware limited liability company
By:
Name:
Title:
ASSIGNEE:
HAMILTON GREEN APARTMENTS, LLC,
a Massachusetts limited liability company
By:	NewReal, Inc., a Massachusetts corporation
	its Manager
By:
Name:
Title:

F-2

Exhibit G

FORM OF ASSIGNMENT OF INTANGIBLE PROPERTY

THIS ASSIGNMENT OF INTANGIBLE PROPERTY (“Assignment”), is made as of the        day of June, 2013, by and between WINDSOR GREEN AT ANDOVER LLC, a Delaware limited liability company (“Assignor”), and HAMILTON GREEN APARTMENTS, LLC, a Massachusetts limited liability company (“Assignee”).

W I T N E S S E T H:

WHEREAS, by Purchase and Sale Agreement (“Sale Agreement”) dated as of June      , 2013, by and between Assignor and Assignee, Assignor agreed to sell to Assignee certain real property, and the improvements located thereon (“Property”) as more particularly described in the Sale Agreement; and

WHEREAS, the Sale Agreement provides, inter alia, that Assignor shall assign to Assignee rights to certain intangible property and that Assignee shall assume all of the obligations of Assignor under such intangible property from and after the date of such assignment, and that Assignor and Assignee shall enter into this Assignment.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto hereby agree as follows:

1.Assignment of Contracts, Licenses and Permits.  Assignor hereby assigns, sets over and transfers to Assignee all of its right, title and interest, if any, in, to and under (if and to the extent assignable by Assignor without expense to Assignor), (a) all service, supply, maintenance and utility agreements, all equipment leases, and all other contracts, subcontracts and agreements relating to the Real Property and the Personal Property, all of which are listed in Exhibit A attached hereto and incorporated herein by this reference (herein collectively called the “Contracts”), (b) to the extent that the same are in effect as of the date hereof, any licenses, permits and other written authorizations necessary for the use, operation or ownership of the Property (excluding Seller’s right to the name “Windsor”) (herein collectively called the “Licenses and Permits”) and (c) any and all warranties and guarantees relating to the Property (“Warranties”).  The foregoing assignment specifically excludes (i) the names “Windsor”, “Windsor Communities” and any variation thereof, (ii) all computers used in connection with the operation of the Property and all computer software, (iii) all operating and marketing materials, records and reports which are proprietary to the operation and management of the Property by Windsor Property Management Company and (iv) any text, graphics, artwork or photographs of the exterior or interior of the Property located at 311 Lowell Street, Andover, Massachusetts [www.windsorcommunities/apartments/boston/andover/].

2.Assumption.  Assignee hereby assumes and takes responsibility for all damages, losses, costs, claims, liabilities, expenses, demands, and obligations of any kind or nature whatsoever attributable to the Contracts, the Licenses and Permits and the Warranties arising or accruing after the date hereof.

G-1

3.Miscellaneous.  This Assignment and the obligations of the parties hereunder shall survive the closing of the transaction referred to in the Sale Agreement and shall not be merged therein, shall be binding upon and inure to the benefit of the parties hereto, their respective legal Representative, successors and assigns, shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts applicable to agreements made and to be wholly performed within said State and may not be modified or amended in any manner other than by a written agreement signed by the party to be charged therewith.

4.Severability.  If any term or provision of this Assignment or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Assignment or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Assignment shall be valid and enforced to the fullest extent permitted by law.

5.Counterparts.  This Assignment may be executed in counterparts, each of which shall be an original and all of which counterparts taken together shall constitute one and the same agreement.

IN WITNESS WHEREOF, the undersigned have executed this Assignment as of the date first set forth hereinabove.

ASSIGNOR:
WINDSOR GREEN AT ANDOVER LLC, a Delaware limited liability company
By:
Name:
Title:
ASSIGNEE:
HAMILTON GREEN APARTMENTS, LLC,
a Massachusetts limited liability company
By:	NewReal, Inc., a Massachusetts corporation
	its Manager
By:
Name:
Title:

G-2

Exhibit H

FORM OF NOTICE TO TENANTS

Date

Re:	Notice of Change of Ownership of
	Windsor Green at Andover
	311 Lowell Street
	Andover, MA

Ladies and Gentlemen:

You are hereby notified as follows:

1.That as of the date hereof, Windsor Green at Andover LLC has transferred, sold, assigned, and conveyed all of its interest in and to the above-described property (the “Property”) to Hamilton Green Apartments, LLC (the “New Owner”).

2.Future notices and rental payments with respect to your leased premises at the Property should be made to the New Owner in accordance with your lease terms at the following address:

3.Your security deposit, if any, has been transferred to the New Owner and as such the New Owner shall be responsible for holding the same in accordance with the terms of your lease.

Sincerely,

WINDSOR GREEN AT ANDOVER LLC,

a Delaware limited liability company

By:

Name:

Title:

H-1

Exhibit I

FORM OF NOTICE TO VENDORS

Date

Re:	Notice of Change of Ownership of
	Windsor Green at Andover
	311 and 319 Lowell Street
	Andover, Massachusetts

Reference is made to an agreement with respect to the furnishing by you of certain services at the captioned property.

Effective this date, the new owner of the property is Hamilton Green Apartments, LLC.  You should direct all bills, notices and other communications to                                                                                                                                                            .

Very truly yours,

SELLER

WINDSOR GREEN AT ANDOVER LLC, a

Delaware limited liability company

By:

Name:

Title:

I-1

Exhibit J

FORM OF FIRPTA AFFIDAVIT

Section 1445 of the Internal Revenue Code provides that a transferee of a United States real property interest must withhold tax if the transferor is a foreign person.  For U.S. tax purposes (including Section 1445 of the Code), the owner of a disregarded entity (which holds legal title to a U.S.  real property interest under local law) will be the transferor of the property and not the disregarded entity.  To inform the transferee that withholding of tax is not required upon the disposition of a United States real property interest by Windsor Green at Andover LLC, a Delaware limited liability company (“Seller”), the undersigned hereby certifies the following on behalf of Seller:

1.Seller is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); and

2.Seller is a disregarded entity as defined in Section 1.1445-2(b)(2)(iii) of the Income Tax Regulations.

3.Seller’s U.S. employer tax identification number is 20-1345501; and

4.Seller’s office address is 125 High Street, High Street Tower, 27th Floor, Boston, MA  02110.

Seller understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

The undersigned declares that she/he has examined this certification and to the best of her/his knowledge and belief it is true, correct and complete, and she/he further declares that she/he has authority to sign this document on behalf of Seller.

Dated:                             , 2013.

WINDSOR GREEN AT ANDOVER LLC, a
Delaware limited liability company

By:

Name:

Title:

J-1

COMMONWEALTH OF MASSACHUSETTS	§
	§
COUNTY OF SUFFOLK	§

This instrument was acknowledged before me on                           , 2013 by                                                                           , a                                                                              of Windsor Green at Andover LLC, a Delaware limited liability company, on behalf of said company.

Notary Public

My commission expires:

P-2

Exhibit K

SURVEY

ALTA/ACSM Land Title Survey in Andover, Mass.

Prepared by Hayes Engineering, Inc. Civil Engineers & Land Surveyors

603 Salem Street Wakefield, Mass. 01880

Date: April 8, 2013

BUYER ACKNOWLEDGES RECEIPT OF SURVEY

K-1

Exhibit L

NOTICES OF LITIGATION, GOVERNMENTAL VIOLATIONS
AND CONDEMNATION

NONE

L-1

Exhibit M

CONFIDENTIALITY AGREEMENT

(Attached)

N-1

March 29,2013 William Roberts Christina Reale GID Investment Advisers LLC High Street Tower, 27 the Floor 125 High Street Boston, MA 02110 Re: Windsor Green at Andover Dear Bill and Christina: Jones Lang LaSalle Americas, Inc., a Maryland corporation1 ("Jones Lang LaSalle"), is pleased to confirm the agreement (the "Agreement") under which Jones Lang LaSalle has been exclusively engaged by Windsor Green at Andover LLC, a Delaware limited liability company ("Owner"), to provide the services described below in connection with the above-referenced property (the "Property"). I. SCOPE OF SERVICES On the terms and subject to the conditions described in this letter, Owner hereby engages Jones Lang LaSalle as its exclusive and sole agent to arrange a sale or other disposition (the “Transaction”) of Owner's interest hi the Property. Jones Lang LaSalle acknowledges that Owner's objective is to obtain the best terms suitable for Owner in connection with the Transaction; and in order to achieve that objective, Jones Lang LaSalle shall perform the following services and responsibilities: 1. Determination of Marketing Strategy Jones Lang LaSalle will evaluate and recommend to Owner the appropriate structure, including pricing, and marketing strategy for the Transaction. The primary considerations in determining this structure and strategy will be meeting Owner's objective of completing the Transaction on the most favorable terms obtainable in a timely manner based on a review of the Property and an analysis of comparable transactions. The initial listing price of the Property shall be unpriced. At any time during the term of this Agreement, Owner reserves the right, in its sole and absolute discretion, to: (i) set or adjust the asking price for the Property; (ii) modify the marketing plan implemented by Jones Lang LaSalle; or (iii) withdraw the Property from the market. 2. Preparation of Marketing Presentation Jones Lang LaSalle will prepare a comprehensive marketing presentation ("Offering Memorandum") which shall be subject to the approval of Owner. This Offering Memorandum will provide detailed information necessary for the analysis and evaluation of the Transaction. In addition to descriptive material, the Offering Memorandum will contain financial projections as well as an explanation of the terms and conditions under which a Transaction will be pursued. Jones Lang LaSalle shall conduct Property tours and market tours with all prospective purchasers expressing a desire to do so. Travis D’ Amato or Mike Coyne shall be present on all Property tours with prospective purchasers and Jones Lang LaSalle shall use its best efforts to provide at least twenty-four (24) hours' notice to Owner prior to such tours. p-2

GID Investment Advisers LLC March 29, 20 13 Page 2 3. Creation and Implementation of Marketing Plan During this phase of the engagement, representatives of Jones Lang LaSalle will identify qualified parties who are potentially interested in the Transaction. Such parties will be selected for their perceived interest in the Transaction and financial capability to perform under the terms of the Offering Memorandum. Each such party will be required to sign a confidentiality agreement in a form approved by Owner and then presented with a copy of the Offering Memorandum. Follow-up discussions and on-site property tours will be conducted by Jones Lang LaSalle as needed. 4. Preparation of Due Diligence Information Jones Lang LaSalle will coordinate the preparation of appropriate back-up material, which will be provided to qualified parties in addition to the Offering Memorandum in their detailed investigation of the Property. This information may include, but not be limited to, such items as lease copies, document summaries, tenant-by-tenant computer projections, physical property descriptions and site plans to the extent deemed reasonably appropriate by Jones Lang LaSalle. 5. Contract Negotiations The status of the marketing efforts, discussions, and terms and conditions of any and all offers will be systematically communicated to and discussed with Owner. Owner shall refer all inquiries regarding the Transaction to Jones Lang LaSalle, and Jones Lang LaSalle will assist Owner in conducting all negotiations; provided, however, in no event shall Jones Lang LaSalle have the authority to make any commitments or representations, enter into any agreements or sign any documents on behalf of Owner. All final terms and conditions of the Transaction will be subject to approval by Owner in its sole discretion, and Owner shall have the sole and absolute discretion to accept or reject any offer or to withdraw the Property from the market. 6. Transaction Closing During the term of this Agreement, Jones Lang LaSalle shall meet at least twice a month with Owner (either by phone or in person) to review the status of the market program efforts. Within ten (10) days after the end of each calendar month, Jones Lang LaSalle shall also render a written report to Owner setting forth in detail: (i) the efforts exercised during the prior month; (it) the responses received with respect to such efforts, including the names and addresses of prospective purchasers; (iii) any offers made by such prospective purchasers; (iv) similar information relating to the prospects of any other brokers with whom Jones Lang LaSalle has had contact; (v) a list of all prospects to whom Offering materials have been submitted; (vi) a list of all prospective purchasers who have toured the Property; and (vii) upon Owner's requests, copies of all correspondence with such prospective purchasers and brokers. The final phase of Jones Lang LaSalle’s involvement will be to assist Owner in the coordination of activities required to consummate the Transaction. This will include assistance in the resolution of due diligence and business issues and assistance in the satisfaction of closing requirements. p-3

GID Investment Advisers LLC March 29, 2013 Page 3 Owner acknowledges, however, that Jones Lang LaSalle is not an expert in and is not responsible for any legal, regulatory, tax, accounting, engineering, environmental or other technical matters, all of which shall be solely Owner's responsibility; provided, however, Jones Lang LaSalle shall, based on its professional expertise, assist Owner in connection with such matters, including giving Owner recommendations as to experts to use for such matters and coordinating the work of such experts with the other parties working on the Transaction, but in no event shall Jones Lang LaSalle have responsibility for the work of such experts. II. COOPERATION OF OWNER Promptly after execution of this Agreement, Owner shall provide Jones Lang LaSalle with the names of al1 parties, if any, with whom Owner has discussed the Transaction prior to the date hereof. Owner shall likewise inform Jones Lang LaSalle of the dates and nature of all communications by Owner with any prospective parties concerning the Transaction after the date hereof and shall refer all inquiries from such parties to Jones Lang LaSalle. Owner shall also make available to Jones Lang LaSalle such documents, materials and information regarding the Property, which, in the reasonable professional judgment of Jones Lang LaSalle, are necessary or appropriate for the proper marketing of the Transaction. In addition, Owner agrees to review and verify the accuracy of the rent roll for the Property, the operating expenses of the Property, and all financial and other factual data and other information included in the Offering Memorandum or any other materials submitted to or prepared by Jones Lang LaSalle regarding the Property; and Jones Lang LaSalle shall have no liability with respect to the use of any data or information provided by other parties. III. COMPENSATION As compensation for the services to be performed by Jones Lang LaSalle under this Agreement, if, as and when the Transaction has closed, the deed for the Property has been recorded and the net sales proceeds have been received by Owner, Jones Lang LaSalle shall be entitled to be paid a transaction fee (the “Transaction Fee") equal to an amount determined in accordance with the following schedule: TRANSACTION FEE: 0.5% of the Gross Proceeds For purposes of calculating the Transaction Fee payable to Jones Lang LaSalle under this Agreement, the term "Gross Proceeds" shall mean the total fair market value of the gross consideration (including, without limitation, cash, notes, securities, property, obligations or mortgages assumed or taken subject to, and any other form of consideration) to be received by Owner and/or its investors in connection with the Transaction. Gross Proceeds shall include any portion of the purchase price placed in escrow or subject to a holdback as part of the Transaction but shall not be adjusted by any fees, prorations or closing expenses. The Transaction Fee will become due and payable by Owner upon consummation of a Transaction, whether or not through the efforts of Jones Lang LaSalle, provided Owner has entered into a letter of intent or definitive agreement for the Transaction during the term of this Agreement. In addition, if Owner enters into a letter of intent or definitive agreement for a Transaction within ninety (90) days following the termination of Jones Lang LaSalle's engagement under this Agreement with one or more of the prospective parties contacted by Jones Lang LaSalle while performing its services under this Agreement or one or more of their affiliates and such Transaction subsequently closes, Owner shall be obligated to pay Jones Lang LaSalle the Transaction Fee determined in accordance with the terms of this Agreement upon the consummation of the Transaction. A complete list of such prospective parties, along with a brief synopsis of

GID Investment Advisers LLC March 29,2013 Page 4 communications with such parties, shall be provided to Owner within fifteen (15) days following the effective date of the termination of this Agreement. For purposes of this Agreement, the term "Transaction" shall include a direct or indirect transaction with respect to the Property or of the interests in any entity holding title to the Property, whether accomplished through a sale, merger, consolidation or otherwise; any direct or indirect transaction with respect to a partial ownership interest in the Property; or any capital investment structured as a financing, joint venture or any combination thereof. In no event, however, shall a Transaction be deemed to have occurred if the Transaction does not close for any reason; and in such case, Jones Lang LaSalle shall not be entitled to any Transaction Fee. No Transaction Fee shall be payable to Jones Lang LaSalle upon any direct or indirect transfer of the Property to an affiliate of Owner. IV. EXPENSES Owner shall reimburse Jones Lang LaSalle for all direct and reasonable out-of-pocket third-party costs and expenses incurred by Jones Lang LaSalle within the scope of its engagement pursuant to this Agreement, including, without limitation, marketing materials, printing and production charges, provided that the aggregate amount of such out-of-pocket costs and expenses shall not exceed the sum of $7,500.00 during the term of this Agreement, without Owner's prior written approval. V. TERMINATION The term of Jones Lang LaSalle's engagement by Owner shall begin as of the date hereof and shall end on the earlier of: (a) September 1, 2013, or the closing of the Transaction; provided, however, Jones Lang LaSalle's engagement under this Agreement shall be automatically extended thereafter from month to month upon the same terms and conditions until terminated by either party upon thirty (30) days' prior written notice to the other party; or (b) the date of the closing of the Transaction. Upon termination of this Agreement, neither party will have any liability or continuing obligation to the other, except that: (i) any provision of this Agreement concerning rights or obligations of the parties with respect to representations, reimbursement, indemnification, the return or delivery of documents and other property, and confidentiality shall survive such termination; (ii) Owner shall remain liable for Jones Lang LaSalle's reasonable costs and expenses incurred up to the time of such termination; and (iii) Jones Lang LaSalle's right to payment of a Transaction Fee, if any, under this Agreement shall survive such termination. Notwithstanding anything to the contrary herein, at any time prior to the expiration of the term of this Agreement, Owner may terminate this Agreement upon written notice to Jones Lang LaSalle in the event of Jones Lang LaSalle's negligence in the performance of its responsibilities hereunder or upon the breach of any of the terms of this Agreement, which termination shall be effective upon Jones Lang LaSalle's receipt of such written notice.

GID Investment Advisers LLC March 29, 2013 Page 5 VL INDEMNIFICATION Owner shall indemnify, defend (with attorneys reasonably acceptable to Jones Lang LaSalle) and hold harmless Jones Lang LaSalle, each person or entity deemed to control or to be controlled by Jones Lang LaSalle, and their respective members, partners, shareholders, directors, officers and employees, against and from any and all losses, liabilities, and damages (including, without limitation, reasonable attorneys' fees) arising in connection with any third-party action, claim, proceeding or investigation relating to this engagement, except such as may be imposed or incurred by reason of the negligence, willful misconduct or fraud of Jones Lang LaSalle (or any of its employees or agents) in the performance of Jones Lang LaSalle’s services and responsibilities hereunder and provided that Jones Lang LaSalle has acted within the scope of its authority described in this Agreement. Jones Lang LaSalle shall indemnify, defend (with attorneys reasonably acceptable to Owner) and hold harmless Owner, each person or entity deemed to control or to be controlled by Owner, and their respective members, partners, shareholders, directors, officers and employees, against and from any and all losses, liabilities, and damages (including, without limitation, reasonable attorneys’ fees) arising in connection with any third-party action, claim, proceeding, or investigation relating to this engagement which may be imposed or incurred by reason of the negligence, willful misconduct, or fraud of Jones Lang LaSalle (or any of its employees or agents). The foregoing indemnification obligations shall survive the expiration or early termination of this Agreement. VII. GENERAL PROVISIONS 1. Notices. Any notice or other communication required or desired to be given to any party under this Agreement shall be in writing and shall be either: (a) delivered personally by hand; (b) sent by certified United States mail, return receipt requested; (c) sent by a nationally recognized overnight courier service; or (d) sent by facsimile, provided a copy of any facsimile notice is also sent by one of the other foregoing means. All notices to either party shall be delivered to the following address provided either party may change such address by delivering notice to the other party in accordance with the provisions of this paragraph: Notice to Jones Lang LaSalle: Jones Lang LaSalle Americas, Inc. One Post Office Square, 27th Floor Boston, MA 02109 Attention: Travis D'Amato Facsimile No.: (312) 938-1593 Notice to Owner: Windsor Green at Andover LLC 125 High Street, 27"1 Floor Boston, MA 02110 Attention: William Roberts Facsimile No.: (617)557-1474 and Attention: Christina Reale Facsimile No.: (617)589-9504

GID Investment Advisers LLC March 29, 2013 Page 6 with a copy to: .with a copy lo: Jones Lang LaSalle Americas, Inc. GID Investment Advisers LLC 200 East Randolph Dr. 125 High Street, 27th Floor Chicago, Illinois 60601 Boston, MA 02110 Attention: General Counsel Attention: Robert S. Farrington, Jr. Facsimile No.: (312)228-2277 Facsimile No.: (617)557-1429 All notices shall be deemed given upon receipt or upon the date such receipt is refused by the party receiving such notice. 2. Confidentiality. Jones Lang LaSalle agrees, for itself and all persons retained or employed by Jones Lang LaSalle in performing its services, to hold in confidence and not to use or disclose to others any confidential or proprietary information of Owner heretofore or hereafter disclosed to Jones Lang LaSalle, which may become known to Jones Lang LaSalle in me performance of, or as a result of, its services, except where Owner specifically authorizes Jones Lang LaSalle to disclose, in writing, any of the foregoing to others or such disclosure reasonably results from the performance of Jones Lang LaSalle's duties hereunder; provided, however, that for purposes of this Agreement, information shall not be deemed to be confidential if it is otherwise within the public domain or if Jones Lang LaSalle has obtained such information from a source other than Owner or its employees or agents. 3. Announcements. Jones Lang LaSalle will not issue any press releases or announcements regarding the Transaction without the prior approval of Owner as to the contents thereof. 4. Taxes. Owner shall not be responsible for any net income, franchise or property tax assessed against Jones Lang LaSalle, all of which shall be the responsibility of Jones Lang LaSalle. 5. Interest; Litigation Costs. If any payment due hereunder is not paid when due, such payment shall bear interest at the rate of one percent (1%) per month from the date due to the date paid. In the event there is any litigation between Owner and Jones Lang LaSalle with respect to the subject matter of this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees and disbursements in such litigation from the other party. 6. Brokers. Jones Lang LaSalle shall not be required to deal with any other brokers or finders unless they are representing another party to the Transaction and have agreed to be paid by such other party, and neither Owner nor Jones Lang LaSalle shall have any obligations for such brokers or finders. Except as set forth in the immediately preceding sentence, each party represents and warrants to the other party that it has not and will not deal with any other brokers or finders who are or will be entitled to any compensation with respect to the Transaction; and each party agrees to indemnify the other party for its breach of such representation and warranty. 7. Authority; Construction. Owner represents and warrants that it is the owner of the Property, that it is duly authorized to enter into this Agreement and perform its obligations hereunder and that it is authorized to enter into the Transaction in accordance with the terms hereof. Jones Lang LaSalle represents and warrants that is duly authorized to enter into this Agreement and perform its obligations hereunder. This Agreement is intended to create an independent contractor relationship between Jones Lang LaSalle and Owner, and nothing herein shall be construed as creating an employer/employee or partnership relationship between the parties. p-7

GID Investment Advisers LLC March 29,2013 Page 7 8. Financing. In an effort to maximize proceeds from a Transaction, Owner recognizes that Jones Lang LaSalle may also be contacting lending institutions regarding their potential interest in financing the Property; in some cases, potential purchasers may request Jones Lang LaSalle's assistance in placing debt on the Property. In such cases, Jones Lang LaSalle will notify and obtain consent from Owner. Owner will have the right to approve or decline permission. 9. Assignment: Successors. Neither party shall assign their rights or obligations under this Agreement, in whole or in part, or any payments due or to become due under this Agreement without prior written consent of the other party (and any such attempted assignment or delegation shall be void); provided, however, either party may assign this Agreement to an affiliate or to an entity which succeeds to all or substantially all of the business of the assignor, but no such assignment shall relieve the assignor of its obligations hereunder. Except as described in the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by and against the respective successors and assigns of the parties to this Agreement. 10. Dual Representation. Owner understands and acknowledges that Jones Lang LaSalle may solicit offers for the Property from clients of Jones Lang LaSalle or its affiliates and that Jones Lang LaSalle may, in addition to its representation of Owner hereunder, represent one or more other prospective parties to the Transaction. In addition, Owner understands and acknowledges that Jones Lang LaSalle or one of its affiliates may make an offer on behalf of itself for the Property. Jones Lang LaSalle shall disclose to Owner any such potential relationship and obtain Owner's prior approval thereof, and Jones Lang LaSalle shall not be entitled to any compensation from Owner, in addition to that set forth above, for representing itself or any other party. 11. Limited Liability. Neither party shall be liable to the other for, and each party hereby waives any and all rights to claim against the other, any special, indirect, incidental, consequential, punitive or exemplary damages in connection with this Agreement, including, but not limited to, lost profits, even if such party has knowledge of the possibility of such damages; and excluding (i) third party claims for bodily injury or property damage, and; (ii) claims based on Jones Lang LaSalle's gross negligence or willful misconduct, in no event shall Jones Lang LaSalle’ s liability to Owner exceed the greater of (i) Two Hundred percent (200%) of fees paid to Jones Lang LaSalle pursuant to this Agreement or (ii) $500,000. 12. Counterparts; Electronic Copies. This Agreement may be executed in any number of separate counterparts and by facsimile signatures, each of which shall together be deemed an original, but the several counterparts shall together constitute one and the same instrument. In addition, the parties agree that: (i) an electronic signature shall be considered an original signature; and (ii) a copy of the Agreement shall be considered an original instrument, and each, together or separately, shall become binding and enforceable as if original and the parties may rely on the same to prove the authenticity of the Agreement. 13. Governing Law. This Agreement shall be governed by the law of the state where the Property is located, without regard to the conflicts of law principles of such state. 14. Waiver of Trial by Jury. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.

GID Investment Advisers LLC March 29,2013 Page 8 15. Non-Discrimination Owner and Broker agree that the Property will be offered in compliance with all applicable anti-discrimination laws 16. Press Release. Any advertising, signage or press release regarding the marketing of the Property for sale or a consummated transaction is prohibited without the prior consent of Owner, which consent may be granted or withheld in Owner's sole discretion. 17. Complete Agreement, This document (including any exhibits referred to herein and attached hereto, which are incorporated herein by reference) contains the entire agreement between the parties and supersedes any prior discussions, negotiations, representations, or agreements, written or oral, between the parties hereto or any of their respective affiliates respecting the subject matter hereof. No alterations, additions, or other changes to this Agreement shall be made or binding unless made in writing and signed by both parties to this Agreement. If the foregoing accurately reflects our agreement, please execute this Agreement below and return it to the undersigned JONES LANG LA SALLE AMERICAS, INC." By: Title: AGREED and ACCEPTED this 2 day of April - ___________.WINDSOR GREEN AT AND OVER LLC By: 1 In Illinois, use Janes Lang LaSalle Americas (Illinois), LP., an Illinois limited partnership " In Illinois, use Jones Lang LaSnlle Americas (Illinois), L.P., an Illinois limited partnership iii In WA and/or OR, use Jones Lang LaSalle Brokerage, Inc. R:VAndovertLtstljij Agreement JLL (3-29-13).dDc Senior Vice president Tutle: Vice President

Exhibit N

SCHEDULE OF PERSONAL PROPERTY

(Attached)

N-1

Exhibit O

LIST OF LEASES

(Attached)

O-1

Exhibit P

TITLE COMMITMENT

FIRST AMERICAN TITLE INSURANCE COMPANY

A.L.T.A. COMMITMENT

SCHEDULE A

NUMBER:	13-7393	EFFECTIVE DATE:	June 2, 2013
			@ 8:00 A.M.

1.Policy or Policies to be issued:

ALTA OWNER’S POLICY 2006
OWNER’S:	$To be determined
Proposed Insured:	To be determined
ALTA LOAN POLICY 2006
LOAN:	$To be determined
Proposed Insured:	To be determined

2.The estate or interest in the land described or referred to in this Commitment and covered herein is a fee simple, and title thereto is at the effective date hereof vested in:

Windsor Green at Andover LLC

3.The land referred to in the Commitment is The property located at 311 & 319 Lowell Street, Andover, Essex County, Massachusetts and more particularly described in Exhibit “A”, attached.

NOTE 1:As in hereinafter used, “recorded” shall mean “recorded with the Essex North District Registry of Deeds.”

Countersigned:

Authorized Signatory

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SCHEDULE B - Section 1

The following requirements to be complied with:

1.Instrument(s) creating the estate or interest to be insured must be approved, executed and filed for record:

NOTE 2:In the case of corporate signatories, documents must be signed by the President or Vice President and Treasurer or Assistant Treasurer of the respective corporations.  Alternatively, corporate resolutions which authorize the signatories on the documents must be obtained and recorded with a clerk’s certificate of incumbency.

2.Payment of the full consideration to, or for the account of, the grantors or mortgagors.

3.Receipt of current and accurate instrument survey and Surveyor’s Report form acceptable to the Company in order to modify or delete Items 2 (c) and 2 (d) of Schedule B-Section 2 of the loan policy to be issued.

4.Receipt of properly executed Mechanic’s Lien and Parties in Possession Affidavit  in order to modify Items 2 (a) and 2 (b) of Schedule B-Section 2.

5.The actual value of the estate or interest to be insured must be disclosed to the Company, and subject to approval by the Company, entered as the amount of the policies to be insured.  Until the amount of the policies to be issued shall be determined, and entered as aforesaid, it is agreed that as between the Company, the applicant for the policies, and every person relying on the policies, the Company cannot be required to approve any such evaluation in excess of $100,000.00 and the total liability of the Company on account of these policies shall not exceed said amount.

6.Upon full disclosure to the Company of the nature and scope of this transaction and its review and approval of the closing documents, including all instruments or documents relating to any foreclosure sale commenced within the past year, and further including updated certifications of title, the Company reserves the right to raise such other and further exceptions and requirements as are appropriate.

7.Obtain and record discharge, termination or release of the following:

a)Mortgage and Security Agreement from Windsor Green at Andover LLC to Massachusetts Housing Partnership Fund Board in the original principal amount of $15,000,000.00 dated February 15, 2008 and recorded in Book 11067, Page 58.

b)Assignment of Leases, Rents and Contracts from Windsor Green at Andover LLC to Massachusetts Housing Partnership Fund Board dated February 15, 2008 and recorded in Book 11067, Page 72.

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8.Obtain and record Subordination, Non-Disturbance and Attornment Agreements with respect to Schedule B-Part 2, Exceptions 6, 13 and 14 in order to move to Schedule B-Part 2 of the final loan policy.

9.Obtain and record Estoppel Certificate for Easement referenced in Schedule B-Part 1, Exception 17 in order to provide affirmative insurance that said Exception has not been violated and is in full force and effect.

10.Obtain and record consent and approval from Massachusetts Housing Partnership Fund Board pursuant to the Agreement referenced in Exception 23, to the transfer to be insured hereunder.

NOTE 3:  The following items apply to transactions involving limited liability companies:

8.Good standing certificate from the Secretary of the Commonwealth of Massachusetts, disclosing names of manager(s) authorized to act on behalf of company, and naming person or entity authorized to act with respect to real estate.

9.Documents are to be signed by the manager and/or person or entity authorized to act with respect to real estate AS ON FILE WITH THE MA SECRETARY OF STATE. In the alternative, a Manager’s Certificate is to be recorded authorizing an alternate signatory.

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SCHEDULE B - Section 2

Schedule B of the policy or policies to be issued will contain exceptions to the following matters unless the same are disposed of to the satisfaction of the Company.

1.Defects, liens, encumbrances, adverse claims or other matters, if any, created, first appearing in the public records or attaching subsequent to the effective date hereof but prior to the date the proposed Insured acquires for value of record the estate or interest or mortgage thereon covered by this Commitment.

2.Any policy issued pursuant hereto will contain the standard exceptions set forth below.  For loan policies see specific requirements set forth in Schedule B - Section 1 hereof.

a.Any liability for mechanics’ or materialmen’s liens.

b.Rights or claims of parties in possession not shown by the public records.

c.Encroachments, overlaps, boundary line disputes, and any matters that would be disclosed by an accurate survey and inspection of the premises.

d.Easements, or claims of easements, not shown by the public records.

3.The exact acreage or square footage other than stated in the description sheet annexed or the plan(s) therein referred to.

4.Any matters that would be disclosed by a current municipal lien certificate.

5.Title to and rights of the public and others entitled thereto in and to those portions of the insured premises lying within the bounds of   Lowell Street and the adjoining streets and ways.

6.Terms and provisions of a lease by and between Windsor Green at Andover LLC, as Lessor, and STC Six Company, as Lessee, dated March 25, 2010, Notice of which is dated December 11, 2009 and recorded in Book 12082, Page 238, as affected by Memorandum of Lease Supplement by and between STC Six Company and Bell Atlantic Mobile of Massachusetts Corporation Ltd., dated October 27, 2010 and recorded in Book 12293, Page 93, as affected by Notice of Lease by and between STC Six Company and New Cingular Wireless PCS, LLC dated October 29, 2010 and recorded in Book 12380, Page 134, as affected by Notice of Site License Acknowledgement recorded in Book 11518, Page 144.

7.Taking by the Commonwealth of Massachusetts Department of Public Works for the relocation of Lowell Street and for access easement on Parcel 11-R-1 shown on Plan No. 6129 by Order dated November 26, 1969, and recorded in Book 1145, Page 150, as affected by Amendment to Access Easement Agreement dated April 28, 2005 and recorded in Book 9483, Page 41, as shown on the Survey entitled “ALTA/ACSM Land Title Survey”, in Andover, Mass., by Hayes Engineering, dated September 27, 2007, (“the Survey”)

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NOTE 4:The Company insures against loss or damage arising out of the enforcement or attempted enforcement of rights of access over that portion of Parcel 11-R-1 not contained within the Right of Way described in the Easement recorded in Book 2820, Page 81 or within the 24’ Wide Access Easement shown on the plan recorded as Plan No. 14483.

8.Taking by the Commonwealth of Massachusetts Department of Public Works of an easement related to Parcel 11-RS-1 Easement to construct slopes of excavation and/or embankment in Parcel 11-RS-1 shown on Plan No. 6212 by Order dated May 27, 1970, and recorded in Book 1153, Page 684, as affected by Amendment to Access Easement Agreement dated April 28, 2005 and recorded in Book 9483, Page 41, as shown on the Survey entitled “ALTA/ACSM Land Title Survey”, in Andover, Mass., by Hayes Engineering, dated September 27, 2007, (“the Survey”)

NOTE 5:The Company insures against loss or damage arising out of the enforcement or attempted enforcement of rights of access over that portion of Parcel 11-R-1 not contained within the Right of Way described in the Easement recorded in Book 2820, Page 81 or within the 24’ Wide Access Easement shown on the plan recorded as Plan No. 14483.

NOTE 6:This policy affirmatively insures that an exercise of rights under the Takings referenced in Exceptions 7 and 8 do not adversely affect the use of the buildings located on the Insured Premises.

9.Rights and easement granted in Reciprocal Easement Agreement between Andover Real Estate Corporation and Rolling Green Motor Inn Corporation dated September 22, 1982, and recorded in Book 1617, Page 187, as affected by Easement Relocation Agreement dated April 28, 2005 and recorded in Book 9483, Page 73, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

NOTE 7:This policy affirmatively insures that an exercise of rights under the Easement referenced in Exception 9 does not adversely affect the use of the buildings located on the Insured Premises.

10.Easement from Dauphin Corporation to Harry Axelrod dated July 15, 1985, and recorded in Book 2005, Page 128, with respect to “Right of Way Easement 66’ Wide” shown on a plan entitled “Plan of Land in Andover, Mass., owned by Rolling Green Motor Inn Corp.” dated May 29, 1985 and recorded as Plan No. 9957 as affected by Declaration and Grant of Easements between Harry Axelrod and Lowell Street Associates Limited Partnership dated May 22, 1991 recorded with the Registry in Book 3274, Page 96, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

NOTE 8:This policy affirmatively insures that an exercise of rights under the Easement referenced in Exception 10 does not adversely affect the use of the buildings located on the Insured Premises.

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11.Rights and easement granted in Easement Agreement between Inncorp Development Limited Partnership and David Bruce Maddox, Trustee of Powers Realty Trust, dated September 30, 1988, and recorded in Book 2820, Page 81, as amended by the Amendment to Access Easement Agreements recorded in Book 9483, Page 41, as affected by Confirmation Regarding Easement Agreement, dated May 8, 2007, recorded in Book 10750, Page 111, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

NOTE 9:This policy affirmatively insures that an exercise of rights under the Easement referenced in Exception 11 does not adversely affect the use of the buildings located on the Insured Premises.

12.Rights granted in a Lease dated June 19, 1999, with Sprint Spectrum LP., as Tenant, Notice of which is recorded in Book 5691, Page 307.

13.Notice of Lease to Andtower, LLC dated April 28, 2005 and recorded in Book 9483, Page 59, as affected by Amendment to Notice of Lease dated April 28, 2005 and recorded in Book 9483, Page 132, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

NOTE 10:This policy affirmatively insures that an exercise of rights under the tenants under the Notices of Lease referenced in Exceptions 6, 12 and 13 do not adversely affect the use of the buildings located on the Insured Premises.

14.Rights and easement granted in Easement to New England Telephone and Telegraph Company dated February 22, 2000, and recorded in Book 5691, Page 313, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

15.Rights and easement granted in Easement to Massachusetts Electric Company dated March 21, 2000, and recorded in Book 5708, Page 29, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

NOTE 11:This policy affirmatively insures that an exercise of rights under the Easement referenced in Exception 15 does not adversely affect the use of the buildings located on the Insured Premises.

16.Terms and provisions of Declaration and Grant of Easement, Rights and Restrictions dated June 17, 2003 and recorded with the Registry in Book 7920, Page 113, as amended by Restatement of Declaration and Grant of Easements, Rights and Restrictions dated April 28, 2005 and recorded in Book 9483, Page 11, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

17.Grant of Utility Easement and Easement Agreement between Criterion Andover Apartments, L.P. and Yvon Cormier and Denise Enxing, Trustees of CA Investment Trust dated April 28, 2005 and recorded in Book 9483, Page 95, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

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NOTE 11:This policy affirmatively insures that an exercise of rights under the Easement referenced in Exception 17 does not adversely affect the use of the buildings located on the Insured Premises.

18.Grant of Easement between Comcast of Massachusetts I, Inc. and Criterion Apartments, LP, dated September 24, 2006, recorded in Book 10382, Page 207.

19.Easement to Verizon New England Inc., dated March 22, 2006, recorded in Book 10097, Page 46.

20.Easement to Massachusetts Electric Company, dated September 27, 2005, recorded in Book 9842, Page 154.

21.Matters disclosed on a survey entitled “ALTA/ACSM Land Title Survey in Andover, Mass.”, prepared by Hayes Engineering, dated September 27, 2007:  Gravel path shown at Northeast corner of Parcel 1appears to run on and off insured premises and abutter’s premises.

22.Terms and provision of Chapter 40B Regulatory and Affordable Housing Agreement for Limited Dividend Organizations, between Criterion Andover Apartments LP and Massachusetts Housing Partnership Fund Board, dated February 15, 2008, recorded in Book 11067, Page 28.

NOTE 12:Although excluded from coverage under the Policy to be issued, notice is hereby given of the following matters being Items 24-29, which appear of record:

23.Notice of Variance by the Andover Board of Appeals granted to Sprint Spectrum L.P., recorded in Book 5647, Page 199 (Decision No. 2956).

24.Order of Conditions from the Andover Conservation Commission (DEP File No. 090-0853) issued October 22, 2003 and recorded on January 14, 2005 in Book 9304, Page 216, as affected by a Certificate of Compliance, recorded in Book 10737, Page 79.

25.Notice of Variance by the Andover Board of Appeals granted to Rolling Green Motor Inn Corp. recorded in Book 1910, Page 234 (Decision No. 1699).

26.Decision for Comprehensive Permit by the Andover Board of Appeals recorded in Book 8447, Page 238, as affected by Certification of No Appeal recorded in Book 8447, Page 248, as affected by Decision Consenting to Proposed Transfer of Comprehensive Permit Decision No. 3312, Decision No. 3449, dated August 16, 2004 and recorded in Book 9082, Page 177; as affected by Finding of Insubstantial Change dated February 15, 2005 and recorded in Book 9417, Page 39; as affected by Decision to Extend and Determination of Insubstantial Changes, Decision No. 3451, dated August  16, 2004 and recorded in Book 9474, Page 141; as affected by Stipulation of Dismissal with Prejudice recorded in Book 9483, Page 1, as affected by Finding of Insubstantial Change by Town

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of Andover, (Comprehensive Permit #3312), issued to AND Development, LLC, dated April 25, 2005, recorded in Book 9554, Page 98. Also see Decision in Book 9696, Page 75, as affected by Decision of the Zoning Board of Appeals, Town of Andover, recorded in Book 10832, Page 31.

27.Notice of Decision by the Andover Zoning Board of Appeals granted to Altiostar Networks, Inc., recorded in Book 13434, Page 307 (Decision No. 4022).

28.Notice of Decision by the Zoning Board of Appeals of the Town of Andover recorded in Book 11995, Page 294.

29.Notice of Decision of the Town of Andover Zoning Board of Appeals dated March 3, 2011 and recordedin Book 12467, Page 239.

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EXHIBIT A

Real property in the Town of Andover, County of Essex, Commonwealth of Massachusetts, described as follows:

Parcel 1(311 Lowell Street)

A certain Parcel of land with the buildings and improvements thereon in Andover, Essex County, Massachusetts, and being shown as Lot 2 on a plan entitled “Plan of Land-307-311 Lowell- Street Andover, Mass.”, prepared for Lowell Street Associates Limited Partnership by Otte & Dwyer, Inc. Land Surveyors dated June 21, 2004, recorded with the Essex North Registry of Deeds (“Registry”) as Plan No. 14808 on June 30, 2004, described as follows:

Beginning at a point on the northwesterly sideline of said Lowell Street, said point being the Southwesterly most corner of said Lot 2; thence running

N 33-29-14 W one hundred eighteen and 00/100 (118.00) feet to a corner; thence turning and running

S 52-05-47 W two hundred forty and 72/100 (240.72) feet to a corner; thence turning and running

N 33-29-14 W one hundred ninety and 00/100 (190.00) feet to a corner; thence turning and running

S 62-29-44 W two hundred forty-nine and 86/100 (249.86) feet to a point; thence

S 66-05-13 W thirty-eight and 95/100 (38.95) feet to a point; thence

S 60-14-01 W fifteen and 62/100 (15.62) feet to a corner; thence turning and running

Northwesterly by a curved line to the right having a radius of 320.00 feet, a distance of seven and 04/100 (7.04) feet; thence

N 27-21-52 W four hundred thirty-four and 86/100 (434.86) feet to a point; thence

N 18-50-48 W one hundred ten and 67/100 (110.67) feet to a corner; thence turning and running

N 64-33-42 E six hundred sixty-five and 69/100 feet (665.69) feet to a corner; thence turning and running

S 26-18-33 E one hundred forty-six and 76/100 (146.76) feet to a point; thence

Southeasterly by a curved line to the left having a radius of 50.00 feet, a distance of seventy- eight and 54/100 (78.54) feet; thence

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N 63-41-27 E thirty-six and 78/100 (36.78) feet to a corner; thence turning and running

S 34-36-07 E one hundred seventy-six and 83/100 (176.83) feet to a corner; thence turning and running

N 54-37-39 E sixty and 54/100 (60.54) feet to a corner; thence turning and running

S 34-34-40 E forty-five and 00/100 (45.00) feet to a corner; thence turning and running

S 20-40-48 W sixty-two and 81/100 (62.81) feet to a point; thence

Southwesterly by a curved line to the right having a radius of 50.00 feet, a distance of forty-four and 95/100 (44.95) feet; thence

Southeasterly by a curved line to the left having a radius of 35.00 feet, a distance of seventy-four and 60/ 100 (74.60) feet; thence

Southeasterly again, by a curved line to the left having a radius of 122.00 feet, a distance of ninety-seven and 40/100 feet (97.40) feet to a corner; thence turning and running

S 50-15-40 E three and 05/100 (3.05) feet to a corner; thence turning and running

N 39-44-20 E twenty-seven and 00/100 (27.00) feet to a corner; thence turning and running

S 50-15-40  E thirty and 00/100 feet (30.00) feet to a corner; thence turning and running

N 39-44-20 E eleven and 21/100 (11.21) feet to a point; thence

Southeasterly by a curved line to the right having a radius of 25.00 feet, a distance of forty-one and 79/100 (41.79) feet to a point; thence

S 44-29-27 E forty-seven and 73/100 (47.73) feet, to a point on the northwesterly sideline of said Lowell Street; thence turning and running by said sideline on three courses as follows:

S 37-46-23 W two hundred six and 73/100 (206.73) feet to a corner; thence turning and running

N 52-13-37 W five and 00/100 (5.00) feet to a corner; thence turning and running

Southwesterly by a curved line to the right having a radius 1047.44 feet, a distance of one hundred forty-two and 24/100 (142.24) feet to the point of beginning.

Together with the benefit of certain rights as provided in the following documents:

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1.Declaration and Grant of Easements between Harry Axelrod and Lowell Street Associates Limited Partnership dated May 22, 1991 recorded with the Registry in Book 3274, Page 96 (“1991 Easement Agreement”)

2.Rights and easement granted in Reciprocal Easement Agreement between Andover Real Estate Corporation and Rolling Green Motor Inn Corporation dated September 22, 1982, and recorded with the Registry in Book 1617, Page 187, as affected by Easement Relocation Agreement dated April 28, 2005, and recorded with the Registry in Book 9483, Page 73.

3.Rights and easements granted in a certain Declaration and Grant of Easement, Rights and Restrictions dated June 17, 2003 and recorded with the Registry in Book 7920, Page 113, as affected by Restatement of Declaration and Grant of Easements, Rights and Restrictions dated April 28, 2005 recorded with the Registry in Book 9483, Page 11.

Parcel 2 (319 Lowell Street)

The land with the buildings thereon situated on Lowell Street in Andover, No. Essex County, Massachusetts and being shown as Lot 3 on a plan of land entitled “Plan of Land in Andover, Mass. as surveyed for John Bolten” drawn by McCracken Bros. Engineers, Methuen, Mass., Scale 1”=20’ dated January 7, 1947 and recorded in No. Essex County Registry of Deeds as Plan

#1692 to which plan reference is made for a more particular description of Lot 3, as affected by Taking by the Commonwealth of Massachusetts for the relocation of Lowell Street dated December 4, 1956 and recorded in the Registry in Book 856, Page 100, as affected by an entry dated June 25, 1957 and recorded in the Registry in Book 858, Page 84, and being more particularly described as follows:

Beginning at a point on the northwesterly sideline of said Lowell Street said point being the southwesterly most corner of Lot 2; thence running

N 33-29-14 W one hundred eighteen and 00/100 (118.00) feet to a corner; thence turning and running

S 52-05-47 W eighty and 24/100 (80.24) feet to a corner; thence turning and running

S 33-31-35 E one hundred twenty-six and 06/100 (126.06) feet to a corner; thence turning and running

Northeasterly by the sideline of Lowell Street by a curved line to the left having a radius of 1047.44 feet, eighty-one and 19/100 (81.19) feet to the point of beginning.

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EX-10.2

Exhibit 10.2

LOAN AGREEMENT

for a loan in the amount of

$40,000,000.00

MADE BY AND BETWEEN

HAMILTON GREEN APARTMENTS, LLC

a Massachusetts limited liability company

39 Brighton Avenue

Boston, Massachusetts 02134

AND

KEYBANK NATIONAL ASSOCIATION,
a national banking association,
127 Public Square,
Cleveland, Ohio 44114

Dated as of July 15Ag, 2013

KeyCorp Confidential

TABLE OF CONTENTS

ARTICLE 1 INCORPORATION OF RECITALS AND EXHIBITS		1
1.1	INCORPORATION OF RECITALS.	1
1.2	INCORPORATION OF EXHIBITS.	1
ARTICLE 2 DEFINITIONS		1
2.1	DEFINED TERMS.	1
2.2	OTHER DEFINITIONAL PROVISIONS.	7
ARTICLE 3 BORROWER’S REPRESENTATIONS AND WARRANTIES		7
3.1	REPRESENTATIONS AND WARRANTIES.	7
3.2	SURVIVAL OF REPRESENTATIONS AND WARRANTIES.	9
ARTICLE 4 LOAN AND LOAN DOCUMENTS		9
4.1	AGREEMENT TO BORROW AND LEND; LENDER’S OBLIGATION TO DISBURSE.	9
4.2	LOAN DOCUMENTS.	10
4.3	TERM OF THE LOAN.	10
4.4	PREPAYMENTS.	10
ARTICLE 5 INTEREST		11
5.1	INTEREST RATE.	11
ARTICLE 6 COSTS OF MAINTAINING LOAN		12
6.1	INCREASED COSTS AND CAPITAL ADEQUACY.	12
6.2	BORROWER WITHHOLDING.	13
ARTICLE 7 LOAN EXPENSE AND ADVANCES		13
7.1	LOAN AND ADMINISTRATION EXPENSES.	13
7.2	ORIGINATION FEE.	14
7.3	EXIT FEE.	14
7.4	LENDER’S ATTORNEYS’ FEES AND DISBURSEMENTS.	14
7.5	TIME OF PAYMENT OF FEES AND EXPENSES.	14
7.6	EXPENSES AND ADVANCES SECURED BY LOAN DOCUMENTS.	15
7.7	RIGHT OF LENDER TO MAKE ADVANCES TO CURE BORROWER’S DEFAULTS.	15
ARTICLE 8 REQUIREMENTS PRECEDENT TO THE CLOSING OF THE LOAN		15
8.1	CONDITIONS PRECEDENT.	15
ARTICLE 9 [RESERVED]		17
ARTICLE 10 [RESERVED]		17
ARTICLE 11 OTHER COVENANTS		17
11.1	BORROWER FURTHER COVENANTS AND AGREES AS FOLLOWS:	17
11.2	AUTHORIZED REPRESENTATIVE.	21
ARTICLE 12		21
CASUALTIES AND CONDEMNATION		21
12.1	LENDER’S ELECTION TO APPLY PROCEEDS ON INDEBTEDNESS.	21
12.2	BORROWER’S OBLIGATION TO REBUILD AND USE OF PROCEEDS THEREFOR.	22
ARTICLE 13 ASSIGNMENTS BY LENDER AND BORROWER		22
13.1	ASSIGNMENTS AND PARTICIPATIONS.	22

13.2	PROHIBITION OF ASSIGNMENTS AND TRANSFERS BY BORROWER.		22
13.3	PROHIBITION OF TRANSFERS IN VIOLATION OF ERISA.		23
13.4	SUCCESSORS AND ASSIGNS.		23
ARTICLE 14 TIME OF THE ESSENCE			23
14.1	TIME IS OF THE ESSENCE. BORROWER AGREES THAT TIME IS OF THE ESSENCE UNDER THIS AGREEMENT.		23
ARTICLE 15 EVENTS OF DEFAULT			23
ARTICLE 16 LENDER’S REMEDIES IN EVENT OF DEFAULT			25
16.1	REMEDIES CONFERRED UPON LENDER.		25
ARTICLE 17 GENERAL PROVISIONS			26
17.1	CAPTIONS.		26
17.2	MODIFICATION; WAIVER.		26
17.3	GOVERNING LAW.		26
17.4	ACQUIESCENCE NOT TO CONSTITUTE WAIVER OF LENDER’S REQUIREMENTS.		26
17.5	DISCLAIMER BY LENDER.		26
17.6	PARTIAL INVALIDITY; SEVERABILITY.		27
17.7	DEFINITIONS INCLUDE AMENDMENTS.		27
17.8	EXECUTION IN COUNTERPARTS.		27
17.9	ENTIRE AGREEMENT.		27
17.10	WAIVER OF DAMAGES.		27
17.11	CLAIMS AGAINST LENDER.		27
17.12	JURISDICTION.		28
17.13	SET-OFFS.		28
ARTICLE 18 NOTICES			28
ARTICLE 19 WAIVER OF JURY TRIAL			29
EXHIBITS TO LOAN AGREEMENT
Exhibit A		Legal Description of Land
Exhibit B		Permitted Exceptions
Exhibit C		Title Requirements
Exhibit D		Form of Survey Certification
Exhibit E		[Reserved]
Exhibit F		Insurance Requirements

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LOAN AGREEMENT

“Project located at 311 and 319 Lowell Street, Andover, Massachusetts”

THIS LOAN AGREEMENT (“Agreement”) is made as of July       , 2013, by and between HAMILTON GREEN APARTMENTS, LLC (“Borrower”), a Massachusetts limited liability company, and KEYBANK NATIONAL ASSOCIATION, a national banking association, its successors and assigns (“Lender”).

W I T N E S S E T H:

RECITALS

A.Borrower is the owner in fee simple of land, and associated development rights, located at 311 and 319 Lowell Street, in the Town of Andover, County of Essex, Commonwealth of Massachusetts, and legally described in Exhibit A attached hereto (collectively, the “Land”).

B.Borrower has applied to Lender for a loan in the amount of FORTY MILLION DOLLARS ($40,000,000.00) (the “Loan”) to reimburse Borrower for certain acquisition costs of the Project, and Lender is willing to make the Loan on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

ARTICLE 1
INCORPORATION OF RECITALS AND EXHIBITS

1.1Incorporation of Recitals.

The foregoing preambles and all other recitals set forth herein are made a part hereof by this reference.

1.2Incorporation of Exhibits.

Exhibits A through F, to this Agreement, attached hereto are incorporated in this Agreement and expressly made a part hereof by this reference.

ARTICLE 2
DEFINITIONS

2.1Defined Terms.

The following terms as used herein shall have the following meanings:

Adjusted LIBOR Rate: For any LIBOR Rate Interest Period, an interest rate per annum equal to the sum of (a) the rate obtained by dividing (i) the Daily LIBOR Rate for such LIBOR Rate Interest Period by (ii) a percentage equal to one hundred percent (100%) minus the Reserve Percentage for such LIBOR Rate Interest Period and (b) the LIBOR Rate Margin.

Adjusted Prime Rate: A rate per annum equal to the sum of (a) the Prime Rate Margin and (b) the greater of (i) the Prime Rate or (ii) One Percent (1%) in excess of the Federal Funds Effective Rate, provided, however, that the Adjusted Prime Rate as of a date shall never be less than the Adjusted LIBOR Rate in effect on such date for a LIBOR Interest Period of one (1) Month. Any change in the Adjusted Prime Rate (or the Federal Funds Effective Rate, as applicable) shall be effective immediately from and after such change in the Adjusted Prime Rate.

Affiliate:  With respect to a specified person or entity, any individual, partnership, corporation, limited liability company, trust, unincorporated organization, association or other entity which, directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with such person or entity, including, without limitation, any general or limited partnership in which such person or entity is a partner.

Agreement:  This Loan Agreement.

Applicable Rate:  As such term is defined in Section 5.1(a).

Appraisal.  An MAI certified appraisal of the Project performed in accordance with FIRREA and Lender’s appraisal requirements by an appraiser selected and retained by Lender.

Assignment of Rents: An assignment of leases and rents made by Borrower in favor of Lender assigning all leases, subleases and other agreements relating to the use and occupancy of all or any portion of the Project, and all present and future leases, rents, issues and profits therefrom.

Authorized Representative:   Harold Brown.

Bankruptcy Code:  Title 11 of the United States Code entitled “Bankruptcy” as now or hereafter in effect, or any successor thereto or any other present or future bankruptcy or insolvency statute.

Business Day:  A day of the year on which banks are not required or authorized to close in Cleveland, Ohio.

Closing Date or Closing of the Loan: The date the Mortgage has been recorded, all conditions to the disbursements of the proceeds of the Loan have been satisfied and Lender has disbursed proceeds of the Loan to Borrower in accordance with the terms and conditions of this Agreement.

Collateral Assignment of Management Agreement:  A collateral assignment and security agreement executed by Borrower in favor of the Lender as security for Borrower’s obligations under the Loan granting a first priority lien on Borrower’s interest in the management agreement for the Project acquired with the Loan.

Control:  As such term is used with respect to any person or entity, including the correlative meanings of the terms “controlled by” and “under common control with”, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of such person or entity, whether through the ownership of voting securities, by contract or otherwise.

Daily LIBOR Rate: The per annum rate calculated by the Lender in good faith on a daily basis, which Lender determines with reference to the rate (rounded upwards to the next higher whole multiple of 1/16th if such rate is not such a multiple) based on the one month London Interbank offered rate for deposits in U.S. Dollars at approximately 11:00 a.m. (London time) on the second LIBOR Business Day preceding the date of the calculation as determined and adjusted from time to time in Lender’s sole discretion.

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Debt Service Coverage:  With respect to a particular period, the ratio of (a) the annualized Net Operating Income of the Project to (b) the Total Annual Debt Service.

Default or default:  Any event, circumstance or condition, which, if it were to continue uncured, would, with notice or lapse of time or both, constitute an Event of Default hereunder.

Default Rate:  A rate per annum equal to three percentage points (300 basis points) in excess of the Applicable Rate, but shall not at any time exceed the highest rate permitted by law.

Environmental Indemnity:  An environmental indemnity from the Borrower and Guarantor, jointly and severally, indemnifying Lender with regard to all matters related to Hazardous Material and other environmental matters.

Environmental Proceedings:  Any environmental proceedings, whether civil (including actions by private parties), criminal, or administrative proceedings, relating to the Project.

Environmental Report:  An environmental report prepared at Borrower’s expense by a qualified environmental consultant approved by Lender, dated not more than three (3) months prior to the Closing Date and addressed to Lender (or subject to separate letter agreement permitting Lender to relay on such environmental report).

ERISA:  The Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder from time to time.

Event of Default:  As such term is defined in Article 19.

Exit Fee:  As such term is defined in Section 7.3.

Federal Funds Effective Rate:  Shall mean, for any day, the rate per annum (rounded upward to the nearest on one-hundredth of one percent (1/100 of 1%)) announced by the Federal Reserve Bank of Cleveland on such day as being the weighted average of the rates on overnight federal funds transactions arranged by federal funds brokers on the previous trading day, as computed and announced by such Federal Reserve Bank in substantially the same manner as such Federal Reserve Bank computes and announces the weighted average it refers to as the “Federal Funds Effective Rate.”

FIRREA:  The Financial Institutions Reform, Recovery And Enforcement Act of 1989, as amended from time to time.

Governmental Approvals:  Collectively, all consents, licenses, and permits and all other authorizations or approvals required from any Governmental Authority for the operation of the Project.

Governmental Authority:  Any federal, state, county or municipal government, or political subdivision thereof, any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality, or public body, or any court, administrative tribunal, or public utility.

Gross Revenues:  The current rent roll for the Project, annualized, plus for a trailing twelve (12) month period, all other miscellaneous income derived from owning the Project; provided, however, that in no event shall Gross Revenues for such Project include (i) any loan proceeds; (ii) proceeds or payments under insurance policies (except proceeds of business interruption insurance); (iii) condemnation proceeds; (iv) any security deposits received from a Tenant in such Project, unless and until the same are

3

applied to rent or other obligations in accordance with such Tenant’s lease; or (v) any other extraordinary items, in Lender’s reasonable discretion.

Guarantor: New England Realty Associates, a [Massachusetts limited partnership]

Hazardous Material:  Means and includes gasoline, petroleum, asbestos containing materials, explosives, radioactive materials or any hazardous or toxic material, substance or waste which is defined by those or similar terms or is regulated as such under any Law of any Governmental Authority having jurisdiction over the Project or any portion thereof or its use, including: (i) any “hazardous substance” defined as such in (or for purposes of) the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.A. § 9601(14) as may be amended from time to time, or any so-called “superfund” or “superlien” Law, including the judicial interpretation thereof; (ii) any “pollutant or contaminant” as defined in 42 U.S.C.A. § 9601(33); (iii) any material now defined as “hazardous waste” pursuant to 40 C.F.R. Part 260; (iv) any petroleum, including crude oil or any fraction thereof; (v) natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel; (vi) any “hazardous chemical” as defined pursuant to 29 C.F.R. Part 1910; and  (vii) any other toxic substance or contaminant that is subject to any other Law or other past or present requirement of any Governmental Authority.  Any reference above to a Law, includes the same as it may be amended from time to time, including the judicial interpretation thereof.

Impound Account: As such term is defined in Section 11.1(e).

Improvements:  The improvements referred to in Recital A hereto.

Including or including:  Including but not limited to.

Interest Rate Agreement:  An Interest Rate Protection Product purchased by Borrower from Lender.

Interest Rate Protection Product:  An interest rate hedging product, such as a cap or swap.

Internal Revenue Code:  The Internal Revenue Code of 1986, as amended from time to time.

Land:  As such term is defined in Recital A.

Laws:  Collectively, all federal, state and local laws, statutes, codes, ordinances, orders, rules and regulations, including judicial opinions or precedential authority in the applicable jurisdiction.

Late Charge:  As such term is defined in Section 4.6.

Leases:  The collective reference to all leases, subleases and occupancy agreements affecting the Project or any part thereof now existing or hereafter executed and all amendments, modifications or supplements thereto approved in writing by Lender.

Lender:  As defined in the opening paragraph of this Agreement, and including any successor holder of the Loan from time to time.

LIBOR Business Day:  A Business Day on which dealings in U.S. dollars are carried on in the London Interbank Market.

4

LIBOR Rate Interest Period:  With respect to each amount bearing interest at a LIBOR based rate, a period of one LIBOR Business Day, commencing on the date a disbursement of the Loan proceeds is made, continued or converted.

LIBOR Rate Margin:  2.25% percent (225 basis points) per annum, subject to increase as set forth in Section 5.1(d).

Limited Recourse Guaranty Agreement: A limited recourse guaranty agreement executed by the Guarantor in favor of Lender with respect to the Loan.

Loan:  As defined in Recital B.

Loan Amount:  The maximum amount of the Loan as set forth in Section 4.1(a) as reduced by principal payments made from time to time.

Loan Documents:  The collective reference to this Agreement, the documents and instruments listed in Section 4.2, and all the other documents and instruments entered into from time to time, evidencing or securing the Loan or any obligation of payment thereof or performance of Borrower’s or Guarantor’s obligations in connection with the transaction contemplated hereunder, each as amended.

Loan to Value Ratio:  The ratio of the maximum amount of the Loan to value of the Project, as set forth in an Appraisal of the Project

Material Adverse Change or material adverse change:  If, in Lender’s reasonable discretion, the business prospects, operations or financial condition of a person, entity or property has changed in a manner which could impair the value of Lender’s security for the Loan, prevent timely repayment of the Loan or otherwise prevent the applicable person or entity from timely performing any of its material obligations under the Loan Documents.

Maturity Date:  October 15, 2013.

Monthly Excess Cash Flow:  For any month, the amount by which Gross Revenues exceed the sum of (a) actual cash operating expenses and (b) actual debt service on the Loan.

Monthly Insurance Impound: As such term is defined in Section 11.1(e).

Monthly Tax Impound: As such term is defined in Section 11.1(e).

Mortgage:  A mortgage (or deed of trust), assignment of leases and rents, security agreement and fixture filing, executed by Borrower for the benefit of Lender securing this Agreement, the Note, and all obligations of Borrower in connection with the Loan, granting a first priority lien on Borrower’s fee interest in the Project, subject only to the Permitted Exceptions.

Net Operating Income:  For any period, Gross Revenues less Operating Expenses.

Note:  A promissory note, in the Loan Amount, executed by Borrower and payable to the order of Lender, evidencing the Loan.

Operating Expenses:  For a trailing twelve (12) month period as of a particular date of calculation, the actual costs and expenses of owning, operating, managing and maintaining the Project for such period as confirmed by an Appraisal of the Project.  Operating Expenses shall include (a) fixed expenses such as insurance, real estate and other taxes, (b) costs of repairs and maintenance of the Project,

5

(c) expenses for cleaning, utilities, administration, landscaping and security, (d) an assumed annual replacement reserve charge of $250 per apartment unit in such Project and (e) an annual management fee equal to the lesser of Five Percent (5%) of gross rents from such Project or the actual management fee paid by the Borrower owning such Project, and shall exclude (x) all expenses for capital improvements and replacements, (y) debt service, (z) depreciation or amortization of capital expenditures and other similar non-cash items.  Operating Expenses for such Project during such period incurred by Borrower shall also be determined on a cash basis (except for real and personal property taxes and insurance premiums, which shall be determined on an accrual basis), excepting, however, (i) interest or principal due on the Loan and (ii) capital expenditures.

Permitted Exceptions:  Those matters listed on Schedule B to the Title Policy to which title to the Project may be subject to on the Closing Date and thereafter such other title exceptions as Lender may reasonably approve in writing.

Prime Rate:  That interest rate established from time to time by Lender as Lender’s prime rate,  whether or not such rate is publicly announced; the Prime Rate may not be the lowest interest rate charged by Lender for commercial or other extensions of credit;

Prime Rate Margin:  0% (0 basis points) per annum.

Pro-Forma Projection:  A pro forma statement of projected income and expenses of Project.

Project:  The collective reference to (i) the Land, together with all buildings, structures and improvements located or to be located thereon, including the Improvements, (ii) all rights, privileges, easements and hereditaments relating or appertaining thereto, and (iii) all personal property, fixtures and equipment required or beneficial for the operation thereof.

Required Permits:  Each building permit, environmental permit, utility permit, land use permit, wetland permit and any other permits, approvals or licenses issued by any Governmental authority which are required in connection with the operation of the Project.

Reserve Percentage:  For any LIBOR Rate Interest Period, that percentage which is specified three (3) Business Days before the first day of such LIBOR Rate Interest Period by the Board of Governors of the Federal Reserve System (or any successor) or any other governmental or quasi-governmental authority with jurisdiction over Lender for determining the maximum reserve requirement (including, but not limited to, any marginal reserve requirement) for Lender with respect to liabilities constituting of or including (among other liabilities) Eurocurrency liabilities in an amount equal to that portion of the Loan affected by such LIBOR Rate Interest Period and with a maturity equal to such LIBOR Rate Interest Period.

Soil Report:  A soil test report prepared by a licensed engineer satisfactory to Lender indicating to the satisfaction of Lender that the soil and subsurface conditions underlying the Project will support the Improvements.

State:  The state in which the Land is located.

Tenant:  The tenant under a Lease.

Title Insurer:  Commonwealth Land Title Insurance Company, or such other title insurance company licensed in the State as may be approved in writing by Lender.

6

Title Policy:  An ALTA Mortgagee’s Loan Title Insurance Policy with extended coverage issued by the Title Insurer insuring the lien of the Mortgage as a valid first, prior and paramount lien upon the Project  and all appurtenant easements, and subject to no other exceptions other than the Permitted Exceptions and otherwise satisfying the requirements of Exhibit C attached hereto and made a part hereof.

Total Annual Debt Service:  With respect to a Project, the aggregate of debt service payments (principal and interest) during a twelve (12) month period under a mortgage style amortization of the original principal amount of such Project Loan, assuming (x) a per annum interest rate equal to 4.5%, and (y) monthly payments of principal and interest based on an amortization period of thirty (30) years.

Transfer:  Any sale, transfer, lease (other than a Lease approved by Lender), conveyance, alienation, pledge, assignment, mortgage, encumbrance hypothecation or other disposition of (a) all or any portion of the Project or any portion of any other security for the Loan, (b) all or any portion of the Borrower’s right, title and interest (legal or equitable) in and to the Project or any portion of any other security for the Loan, or (c) any interest in Borrower or any interest in any entity which directly or indirectly holds an interest in, or directly or indirectly controls, Borrower.

2.2Other Definitional Provisions.

All terms defined in this Agreement shall have the same meanings when used in the Note, Mortgage, any other Loan Documents, or any certificate or other document made or delivered pursuant hereto.  The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement.

ARTICLE 3
BORROWER’S REPRESENTATIONS AND WARRANTIES

3.1Representations and Warranties.

To induce Lender to execute this Agreement and perform its obligations hereunder, Borrower hereby represents and warrants to Lender as follows:

(a)Borrower has good and marketable fee simple title to the Project, subject only to the Permitted Exceptions.

(b)Except as previously disclosed to Lender in writing, no litigation or proceedings are pending, or to the best of Borrower’s knowledge threatened, against Borrower or any Guarantor, which could, if adversely determined, cause a Material Adverse Change with respect to Borrower, any Guarantor or the Project.  There are no pending Environmental Proceedings and Borrower has no knowledge of any threatened Environmental Proceedings or any facts or circumstances which may give rise to any future Environmental Proceedings.

(c)Borrower is a duly organized and validly existing limited liability company and has full power and authority to execute, deliver and perform all Loan Documents to which Borrower is a party, and such execution, delivery and performance have been duly authorized by all requisite action on the part of Borrower.

(d)No consent, approval or authorization of or declaration, registration or filing with any Governmental Authority or nongovernmental person or entity, including any creditor, partner, or member of Borrower or any Guarantor, is required in connection with the execution, delivery and performance of this Agreement or any of the Loan Documents other than the recordation of the Mortgage, Assignment of Leases and Rents and the filing of UCC-1 Financing Statements, except for such consents, approvals or

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authorizations of or declarations or filings with any Governmental Authority or non-governmental person or entity where the failure to so obtain would not have an adverse effect on Borrower or such Guarantor or which have been obtained as of any date on which this representation is made or remade.

(e)The execution, delivery and performance of this Agreement, the execution and payment of the Note and the granting of the Mortgage and other security interests under the other Loan Documents have not constituted and will not constitute, upon the giving of notice or lapse of time or both, a breach or default under any other agreement to which Borrower or Guarantor is a party or may be bound or affected, or a violation of any law or court order which may affect the Project, any part thereof, any interest therein, or the use thereof.

(f)There is no default under this Agreement or and of the other Loan Documents, nor any condition which, after notice or the passage of time or both, would constitute a default or an Event of Default under said documents.

(g)No condemnation of any portion of the Project, (ii) no condemnation or relocation of any roadways abutting the Project materially affecting access to the Project, and (iii) no proceeding to deny access to the Project from any point or planned point of access to the Project, has commenced or, to the best of Borrower’s knowledge, is contemplated by any Governmental Authority.

(h)No brokerage fees or commissions are payable by or to any person in connection with this Agreement or the Loan to be disbursed hereunder.

(i)All financial statements and other information previously furnished by Borrower or any Guarantor to Lender in connection with the Loan are true, complete and correct and fairly present the financial conditions of the subjects thereof as of the respective dates thereof and do not fail to state any material fact necessary to make such statements or information not misleading, and no Material Adverse Change with respect to Borrower or any Guarantor has occurred since the respective dates of such statements and information.  Neither Borrower nor any Guarantor has any material liability, contingent or otherwise, not disclosed in such financial statements.

(j)Except as disclosed by Borrower to Lender, (i) the Project is in a clean, safe and healthful condition, and, except for materials used in the ordinary course of maintenance and operation of the Project, is free of all Hazardous Material and is in compliance with all applicable Laws; (ii) neither Borrower nor, to the best knowledge of Borrower, any other person or entity, has ever caused or permitted any Hazardous Material to be placed, held, located or disposed of on, under, at or in a manner to affect the Project, or any part thereof, and the Project has never been used (whether by Borrower or, to the best knowledge of Borrower, by any other person or entity) for any activities involving, directly or indirectly, the use, generation, treatment, storage, transportation, or disposal of any Hazardous Material; (iii) neither the Project nor Borrower is subject to any existing, pending, or, to the best of Borrower’s knowledge, threatened investigation or inquiry by any Governmental Authority, and the Project is not subject to any remedial obligations under any applicable Laws pertaining to health or the environment; and (iv) there are no underground tanks, vessels, or similar facilities for the storage, containment or accumulation of Hazardous Materials of any sort on, under or affecting the Project.

(j)The Project is taxed separately without regard to any other property and for all purposes the Project may be mortgaged, conveyed and otherwise dealt with as an independent parcel.

(k)Except for Leases which have been provided to and approved by Lender in writing, Borrower and its agents have not entered into any non-residential Leases, subleases or other arrangements for occupancy of space within the Project.  True, correct and complete copies of all non-residential Leases, as amended, have been delivered to Lender.  All Leases are in full force and effect.  Neither

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Borrower nor any Tenant is in default under any Lease and Borrower has disclosed to Lender in writing any material default by the tenant under any non-residential Lease.

(l)The Loan is not being made for the purpose of purchasing or carrying “margin stock” within the meaning of Regulation G, T, U or X issued by the Board of Governors of the Federal Reserve System, and Borrower agrees to execute all instruments necessary to comply with all the requirements of Regulation U of the Federal Reserve System.

(m)Borrower is not a party in interest to any plan defined or regulated under ERISA, and the assets of Borrower are not “plan assets” of any employee benefit plan covered by ERISA or Section 4975 of the Internal Revenue Code.

(n)Borrower is not a “foreign person” within the meaning of Section 1445 or 7701 of the Internal Revenue Code.

(o)Borrower uses no trade name other than its actual name set forth herein.  The principal place of business of Borrower is as stated in Article 22.

(p)Borrower’s place of formation or organization is the Commonwealth of Massachusetts.

(q)All statements set forth in the Recitals are true and correct.

(r)Neither Borrower nor any Guarantor is (or will be) a person with whom Lender is restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury of the United States of America (including, those Persons named on OFAC’s Specially Designated and Blocked Persons list) or under any statute, executive order (including, the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action and is not and shall not engage in any dealings or transactions or otherwise be associated with such persons.  In addition, Borrower hereby agrees to provide to the Lender with any additional information that the Lender deems necessary from time to time in order to ensure compliance with all applicable Laws concerning money laundering and similar activities.

3.2Survival of Representations and Warranties.

Borrower agrees that all of the representations and warranties set forth in Section 3.1 and elsewhere in this Agreement are true as of the date hereof, will be true on the Closing Date and, except for matters which have been disclosed by Borrower and approved by Lender in writing, at all times thereafter.

ARTICLE 4
LOAN AND LOAN DOCUMENTS

4.1Agreement to Borrow and Lend; Lender’s Obligation to Disburse.

Subject to the terms, provisions and conditions of this Agreement and the other Loan Documents, Borrower agrees to borrow from Lender and Lender agrees to lend to Borrower the Loan, for the purposes and subject to all of the terms, provisions and conditions contained in this Agreement.  If Lender consists of more than one party, the obligations of each such party with respect to the amount it has agreed to loan to Borrower shall be several (and not joint and several) and shall be limited to its proportionate share of the Loan and of each advance.

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(a)The maximum amount of the Loan shall not exceed the lesser of (i) Seventy Percent (70%) of the purchase price for the Project, as confirmed by an Appraisal obtained by Lender (at Borrower’s cost) as set forth herein, (ii) a maximum Loan to Value Ratio for the Project of Seventy Percent (70%) or (iii) such amount as will result in a Debt Service Coverage Ratio for the Project, as set forth in the Pro Forma Projection, of at least, a minimum of 1.20:1.

(b)To the extent that Lender may have acquiesced in noncompliance with any requirements precedent to the Closing of the Loan or precedent to any subsequent disbursement of Loan proceeds, such acquiescence shall not constitute a waiver by Lender, and Lender may at any time after such acquiescence require Borrower to comply with all such requirements.

4.2Loan Documents.

Borrower agrees that it will, on or before the Closing Date, execute and deliver or cause to be executed and delivered to Lender the following documents in form and substance acceptable to Lender:

(a)The Note.

(b)The Mortgage.

(c)The Assignment of Rents.

(d)The Limited Recourse Guaranty Agreement.

(f)The Environmental Indemnity.

(g)The Collateral Assignment of Management Agreement.

(h)Such UCC financing statements as Lender determines are advisable or necessary to perfect or notify third parties of the security interests intended to be created by the Loan Documents.

(i)Such other documents, instruments or certificates as Lender and its counsel may reasonably require, including such documents as Lender in its sole discretion deems necessary or appropriate to effectuate the terms and conditions of this Agreement and the Loan Documents, and to comply with the laws of the State.

4.3Term of the Loan.

All principal, interest and other sums due under the Loan Documents shall be due and payable in full on the Maturity Date without relief from valuation and appraisement laws.

4.4Prepayments.

Borrower shall have the right to make prepayments of the Loan, in whole or in part, without prepayment penalty, upon not less than seven (7) days’ prior written notice to Lender.  No prepayment of all or part of the Loan shall be permitted unless same is made together with the payment of all interest accrued on the Loan through the date of prepayment and attorneys’ fees and disbursements incurred by Lender as a result of the prepayment.

4.5.Required Principal Payments.

All principal shall be paid on or before the Maturity Date.

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4.6Late Charge.

Any and all amounts due hereunder or under the other Loan Documents which remain unpaid more than five (5) days after the date said amount was due and payable shall incur a fee (the “Late Charge” of four percent (4%) of said amount, which payment shall be in addition to all of Lender’s other rights and remedies under the Loan Documents, provided that no Late Charge shall apply to the final payment of principal on the Maturity Date.

ARTICLE 5
INTEREST

5.1Interest Rate.

(a)Provided that no Event of Default exists, the Loan will bear interest at the Applicable Rate, unless the Default Rate is applicable. The Adjusted LIBOR Rate shall be the “Applicable Rate” for the Loan, except that the Adjusted Prime Rate shall be the “Applicable Rate” with respect to portions of the Loan as to which a Daily LIBOR Rate is not available.  All payments (whether of principal or of interest) shall be deemed credited to Borrower’s account only if received by 12:00 noon Cleveland time on a Business Day; otherwise, such payment shall be deemed received on the next Business Day.

(b) If Lender determines (which determination shall be conclusive and binding upon Borrower, absent manifest error) (i) that Dollar deposits are not generally available at such time in the London Interbank Market for deposits in Dollars in an amount equal to the Loan, (ii) that the rate at which such deposits are being offered will not adequately and fairly reflect the cost to Lender of maintaining a Daily LIBOR Rate on the Loan or of funding the same for such LIBOR Rate Interest Period due to circumstances affecting the London Interbank Market generally, (iii) that reasonable means do not exist for ascertaining a Daily LIBOR Rate, or (iv) that the Adjusted LIBOR Rate would be in excess of the maximum interest rate which Borrower may by law pay, then, in any such event, Lender shall so notify Borrower and all portions of the Loan bearing interest at the Adjusted LIBOR Rate that are so affected shall, as of the date of such notification with respect to an event described in clause (ii) or (iv) above, or as of the expiration of the applicable LIBOR Rate Interest Period with respect to an event described in clause (i) or (iii)  above, bear interest at the Adjusted Prime Rate until such time as the situations described above are no longer in effect.

(c)If the introduction of or any change in any Law or in the interpretation thereof by any Governmental Authority charged with the administration or interpretation thereof, shall make it unlawful for Lender to maintain an Adjusted LIBOR Rate with respect to the Loan or any portion thereof, or to fund the Loan or any portion thereof in United States dollars in the London Interbank market, then (i) Lender shall notify Borrower that Lender is no longer able to maintain the Adjusted LIBOR Rate and (ii) the interest rate for any portion of the Loan for which the Adjusted LIBOR Rate is then applicable shall automatically be converted to the Adjusted Prime Rate.

(d)Interest at the Applicable Rate (or Default Rate) shall be calculated for the actual number of days elapsed on the basis of a 360-day year, including the first date of the applicable period to, but not including, the date of repayment.

(e)The Loan shall bear interest at the Default Rate at any time at which an Event of Default shall exist.

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5.2Interest Rate Agreements.

(a)Any indebtedness incurred pursuant to an Interest Rate Agreement entered into by Borrower and Lender shall constitute indebtedness evidenced by the Note and secured by the Mortgage and the other Loan Documents to the same extent and effect as if the terms and provisions of such Interest Rate Agreement were set forth herein, whether or not the aggregate of such indebtedness, together with the disbursements made by Lender of the proceeds of the Loan, shall exceed the face amount of the Note.

(b)Borrower hereby collaterally assigns to Lender for the benefit of Lender any and all Interest Rate Protection Products purchased or to be purchased by Borrower in connection with the Loan, as additional security for the Loan, and agrees to provide Lender with any additional documentation requested by Lender in order to confirm or perfect such security interest during the term of the Loan.  If Borrower obtains an Interest Rate Protection Product from a party other than Lender, Borrower shall deliver to Lender such third party’s consent to such collateral assignment.  No Interest Rate Protection Product purchased from a third party may be secured by an interest in Borrower or the Project.

ARTICLE 6
COSTS OF MAINTAINING LOAN

6.1Increased Costs and Capital Adequacy.

(a)Borrower recognizes that the cost to Lender of maintaining the Loan or any portion thereof may fluctuate and, Borrower agrees to pay Lender additional amounts to compensate Lender for any increase in its actual costs incurred in maintaining the Loan or any portion thereof outstanding or for the reduction of any amounts received or receivable from Borrower as a result of:

(i)any change after the date hereof in any applicable Law, regulation or treaty, or in the interpretation or administration thereof, or by any domestic or foreign court, (A) changing the basis of taxation of payments under this Agreement to Lender (other than taxes imposed on all or any portion of the overall net income or receipts of Lender), or (B) imposing, modifying or applying any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, credit extended by, or any other acquisition of funds for loans by Lender (which includes the Loan or any applicable portion thereof) (provided, however, that Borrower shall not be charged again the Reserve Percentage already accounted for in the definition of the Adjusted LIBOR Rate), or (C) imposing on Lender, or the London interbank market generally, any other condition affecting the Loan, provided that the result of the foregoing is to increase the cost to Lender of maintaining the Loan or any portion thereof or to reduce the amount of any sum received or receivable from Borrower by Lender under the Loan Documents; or

(ii)the maintenance by Lender of reserves in accordance with reserve requirements promulgated by the Board of Governors of the Federal Reserve System of the United States with respect to “Eurocurrency Liabilities” of a similar term to that of the applicable portion of the Loan (without duplication for reserves already accounted for in the calculation of a LIBOR Rate pursuant to the terms hereof).

(b)If the application of any Law, rule, regulation or guideline adopted or arising out of the Basle Committee on Banking Regulations and Supervisory Practices entitled “International Convergence of Capital Measurement and Capital Standards”, or the adoption after the date hereof of any other Law, rule, regulation or guideline regarding capital adequacy, or any change after the date hereof in any of the foregoing, or in the interpretation or administration thereof by any domestic or foreign Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or

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compliance by Lender, with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has the effect of reducing the rate of return on Lender’s capital to a level below that which Lender would have achieved but for such application, adoption, change or compliance (taking into consideration the policies of Lender with respect to capital adequacy), then, from time to time Borrower shall pay to Lender such additional amounts as will compensate Lender for such reduction with respect to any portion of the Loan outstanding.

(c)Any amount payable by Borrower under subsection (a) or subsection (b) of this Section 6.1 shall be paid within five (5) days of receipt by Borrower of a certificate signed by an authorized officer of Lender setting forth the amount due and the basis for the determination of such amount, which statement shall be conclusive and binding upon Borrower, absent manifest error.  Failure on the part of Lender to demand payment from Borrower for any such amount attributable to any particular period shall not constitute a waiver of Lender’s right to demand payment of such amount for any subsequent or prior period.  Lender shall use reasonable efforts to deliver to Borrower prompt notice of any event described in subsection (a) or (b) above, of the amount of the reserve and capital adequacy payments resulting therefrom and the reasons therefor and of the basis of calculation of such amount; provided, however, that any failure by Lender to so notify Borrower shall not affect Borrower’s obligation to pay the reserve and capital adequacy payment resulting therefrom.

6.2Borrower Withholding.

If by reason of a change in any applicable Laws occurring after the date hereof, Borrower is required by Law to make any deduction or withholding in respect of any taxes (other than taxes imposed on or measured by the net income of Lender or any franchise tax imposed on Lender), duties or other charges from any payment due under the Note to the maximum extent permitted by law, the sum due from Borrower in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, Lender receives and retains a net sum equal to the sum which it would have received had no such deduction or withholding been required to be made.

ARTICLE 7
LOAN EXPENSE AND ADVANCES

7.1Loan and Administration Expenses.

Borrower unconditionally agrees to pay all expenses of the Loan, including all amounts payable pursuant to Sections 7.2, 7.3 and 7.4 and any and all other fees owing to Lender pursuant to the Loan Documents or any separate fee agreement, and also including, without limiting the generality of the foregoing, all recording, filing and registration fees and charges, mortgage or documentary taxes, all insurance premiums, title insurance premiums and other charges of the Title Insurer, printing and photocopying expenses, survey fees and charges, cost of certified copies of instruments, cost of premiums on surety company bonds and the Title Policy, charges of the Title Insurer or other escrowee for administering disbursements, all appraisal fees, insurance consultant’s fees, environmental consultant’s fees, travel related expenses and all costs and expenses incurred by Lender in connection with the determination of whether or not Borrower has performed the obligations undertaken by Borrower hereunder or has satisfied any conditions precedent to the obligations of Lender hereunder and, if any default or Event of Default occurs hereunder or under any of the Loan Documents or if the Loan or Note or any portion thereof is not paid in full when and as due, all costs and expenses of Lender (including, without limitation, court costs and counsel’s fees and disbursements and fees and costs of paralegals) incurred in attempting to enforce payment of the Loan and expenses of Lender incurred (including court costs and counsel’s fees and disbursements and fees and costs of paralegals) in attempting to realize,

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while a default or Event of Default exists, on any security or incurred in connection with the sale or disposition (or preparation for sale or disposition) of any security for the Loan.  Borrower agrees to pay all brokerage, finder or similar fees or commissions payable in connection with the transactions contemplated hereby and shall indemnify and hold Lender harmless against all claims, liabilities, costs and expenses (including attorneys’ fees and expenses) incurred in relation to any claim by broker, finder or similar person.  Lender shall have the right to obtain from time to time  title updates of such Project twice a year or upon an Event of Default.  Borrower shall cooperate with Lender in this regard and Borrower shall pay for the title updates.

7.2Origination Fee.

Borrower shall pay to Lender on or before the Closing Date an origination fee in an amount equal to twenty-five (25) basis points of the amount of the Loan. Such fee, once paid by Borrower to the Lender, shall be fully earned and non-refundable.  Notwithstanding the foregoing, in the event that the Loan is repaid prior to the Maturity Date through a capital markets or balance sheet refinance with, or a permanent loan with or arranged by, Lender or an Affiliate of Lender, such origination fee shall be returned to Borrower by Lender.

7.3Exit Fee.

Upon the full or partial repayment of the Loan (whether at the Maturity Date therefor or at any other date) other than as a result of any monthly payments of principal required pursuant to Section 4.5 hereof, Borrower will pay to Lender an exit fee equal to (x) twenty-five (25) basis points of the amount of the Loan if repayment is made through a capital markets refinance with a lender other than Lender and (y) fifty (50) basis points of the amount of the Loan if repayment is made through a balance sheet refinance other than Lender (such fee, the “Exit Fee”) unless (i) the Loan is repaid with a permanent loan from Lender or an Affiliate of Lender, (ii) the Loan is repaid with a permanent loan arranged by Lender or an Affiliate of Lender through another investor or lender (including, but not limited to, Fannie Mae, Freddie Mac, HUD or GinnieMae) or (iii) the Loan is repaid as a result of the sale of the Project to an unrelated third party.  The Exit Fee payable shall be deemed to be earned upon the full or partial repayment of the Loan unless one of the events set forth in subparts (i), (ii) or (iii) of this Section occurs.  Such Exit Fee shall also be payable in the event of the foreclosure of the Mortgage. In no event shall Lender or any Affiliate be obligated to make a permanent loan to Borrower to refinance the Project or place a permanent loan with a third party lender.

The obligation to repay the Exit Fee in respect of the Loan is provided for in this Section 7.3 shall survive the repayment of the Loan.

7.4Lender’s Attorneys’ Fees and Disbursements.

Borrower agrees to pay Lender’s attorney fees and disbursements incurred in connection with this Loan, including (i) the preparation of this Agreement, any intercreditor agreements and the other Loan Documents and the preparation of the closing binders, (ii) the disbursement, syndication, amendment, and administration of the Loan and (iii) the enforcement of the terms of this Agreement and the other Loan Documents.

7.5Time of Payment of Fees and Expenses.

Borrower shall pay all expenses and fees incurred as of the Closing Date for the Loan (unless sooner required herein).  At the time of the Closing Date, Lender may pay from the proceeds of the disbursement of the Loan all expenses of the Loan (unless sooner required herein).

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7.6Expenses and Advances Secured by Loan Documents.

Any and all advances or payments made by Lender under this Article 7 from time to time, and any amounts expended by Lender pursuant to Section 20.1(a), shall, as and when advanced or incurred, constitute additional indebtedness evidenced by the Note and secured by the Mortgage and the other Loan Documents.

7.7Right of Lender to Make Advances to Cure Borrower’s Defaults.

In the event that Borrower fails to perform any of Borrower’s covenants, agreements or obligations contained in this Agreement or any of the other Loan Documents (after the expiration of applicable grace periods, except in the event of an emergency or other exigent circumstances), Lender may (but shall not be required to) perform any of such covenants, agreements and obligations, and any amounts expended by Lender in so doing and shall constitute additional indebtedness evidenced by the Note and secured by the Mortgage and the other Loan Documents and shall bear interest at the Default Rate.

ARTICLE 8
REQUIREMENTS PRECEDENT
TO THE CLOSING OF THE LOAN

8.1Conditions Precedent.

Borrower agrees that Lender’s obligation to open the Loan and thereafter to make further disbursements of proceeds thereof is conditioned upon Borrower’s delivery, performance and satisfaction of the following conditions precedent in form and substance satisfactory to Lender in its reasonable discretion:

(a)Equity:  Borrower shall have provided evidence reasonably satisfactory to Lender that Borrower’s cash equity invested in the Project is not less than the difference between the total Project cost and the maximum Loan Amount; provided, however, in no event shall Borrower’s cash equity in the Project be less than $22,000,000.00.

(b)Commitment Fee: Borrower shall have paid to Lender the Commitment Fee as set forth in Section 7.2 herein.

(c)Required Lease Forms.  Borrower shall have provided to Lender for Lender’s written approval, in Lender’s sole discretion, a copy of Borrower’s standard form of lease for residential tenants.

(d)[Intentionally deleted]

(e)Title and Other Documents:  Borrower shall have furnished to Lender the Title Policy together with legible copies of all title exception documents cited in the Title Policy and all other legal documents affecting the Project or the use thereof;

(f)Survey:  Borrower shall have furnished to Lender an ALTA/ACSM “Class A” Land Title Survey of the Project.  Said survey shall be dated no earlier than ninety (90) days prior to the Closing Date, shall be made (and certified to have been made) as set forth in Exhibit D attached hereto and made a part hereof.  Such survey shall be sufficient to permit issuance of the Title Policy in the form required by this Agreement.  Such survey shall include the legal description of the Land;

(g)Insurance Policies:  Borrower shall have furnished to Lender not less than ten (10) days prior to the date of this Agreement policies or binders evidencing that insurance coverages are in effect

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with respect to the Project and Borrower, in accordance with the Insurance Requirements attached hereto as Exhibit F, for which the premiums have been fully prepaid with endorsements satisfactory to Lender.

(h)No Litigation:  Borrower shall have furnished evidence that no litigation or proceedings shall be pending or threatened which could or might cause a Material Adverse Change with respect to Borrower, any Guarantor or the Project;

(i)Utilities:  [Intentionally deleted].

(j)Attorney Opinions:  Borrower shall have furnished to Lender an opinion from counsel for Borrower and Guarantor covering due authorization, execution and delivery and enforceability of the Loan Documents and also containing such other legal opinions as Lender shall reasonably require;

(k)Appraisal:  Prior to the Closing of the Loan, Lender shall have obtained (at Borrower’s cost) an Appraisal of the Project demonstrating a Loan To Value Ratio of not less than Seventy Percent (70%), which Appraisal shall be satisfactory to Lender in all respects;

(l)Searches:  Borrower shall have furnished to Lender current bankruptcy, federal tax lien and judgment searches and searches of all Uniform Commercial Code financing statements filed in each place UCC Financing Statements are to be filed hereunder, demonstrating the absence of adverse claims;

(m)Financial Statements:  Borrower shall have furnished to Lender current annual financial statements of Borrower, the Guarantor and such other persons or entities connected with the Loan as Lender may request, each in form and substance and certified by such individual as acceptable to Lender.  Borrower and the Guarantor shall provide such other additional financial information Lender reasonably requires;

(n)Pro Forma Projection:  Borrower shall have furnished to Lender a Pro Forma Projection covering the succeeding two (2) year period.

(o)Management Agreements:  Borrower shall have delivered to Lender executed copies of any leasing, management and development agreements entered into by Borrower in connection with the operation of the Project;

(p)Flood Hazard:  Lender has received evidence that the Project is not located in an area designated by the Secretary of Housing and Urban Development as a special flood hazard area, or flood hazard insurance acceptable to Lender in its sole discretion;

(q)Zoning:  If the Title Policy does not include a zoning endorsement, Borrower shall have furnished to Lender a legal opinion, zoning letter or other satisfactory evidence as to compliance of the Project with zoning and similar laws;

(r)Organizational Documents:  Borrower shall have furnished to Lender proof satisfactory to Lender of authority, formation, organization and good standing in the State of its incorporation or formation  and, if applicable, qualification as a foreign entity in good standing in the state of its incorporation or formation, of all corporate, partnership, trust and limited liability company entities (including Borrower and Guarantor) executing any Loan Documents, whether in their own name or on behalf of another entity.  Borrower shall also provide certified resolutions in form and content satisfactory to Lender, authorizing execution, delivery and performance of the Loan Documents, and such other documentation as Lender may reasonably require to evidence the authority of the persons executing the Loan Documents;

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(s)No Default:  There shall be no uncured Default or Event of Default by Borrower hereunder.;

(t)Easements:  Borrower shall have furnished Lender all easements reasonably required for the maintenance or operation of the Project and such easements shall be insured by the Title Policy; and

(u)Additional Documents:  Borrower shall have furnished to Lender such other materials, documents, papers or requirements regarding the Project, Borrower and any Guarantor as Lender shall reasonably request.

(v)Debt Service Coverage Ratio:  Lender shall have received evidence reasonable satisfactory to Lender that the pro forma Debt Service Coverage Ratio for the Project, set forth in the Pro Forma Projection, is a minimum of 1.20:1.

(w)Property Condition Report: Lender shall have received a property condition report for the Project, which report shall be satisfactory to Lender within it sole discretion.

ARTICLE 9
[RESERVED]

ARTICLE 10
[RESERVED]

ARTICLE 11

OTHER COVENANTS

11.1Borrower further covenants and agrees as follows:

(a)Mechanics’ Liens and Contest Thereof.  Borrower will not suffer or permit any mechanics’ lien claims to be filed or otherwise asserted against the Project and will promptly discharge the same in case of the filing of any claims for lien or proceedings for the enforcement thereof, provided, however, that Borrower shall have the right to contest in good faith and with reasonable diligence the validity of any such lien or claim provided that Borrower posts a statutory lien bond which removes such lien from title to the Project within thirty (30) days of written notice by Lender to Borrower of the existence of the lien).

(b)Settlement of Mechanics’ Lien Claims.  If Borrower shall fail promptly either (i) to discharge any such lien, or (ii) post a statutory lien bond in the manner provided in Section 15.1(e)  Lender may, at its election (but shall not be required to), procure the release and discharge of any such claim and any judgment or decree thereon and, further, may in its sole discretion effect any settlement or compromise of the same, or may furnish such security or indemnity to the Title Insurer, and any amounts so expended by Lender, including premiums paid or security furnished in connection with the issuance of any surety company bonds, shall be deemed to constitute disbursement of the proceeds of the Loan hereunder.  In settling, compromising or discharging any claims for lien, Lender shall not be required to inquire into the validity or amount of any such claim.

(c)Renewal of Insurance.  Borrower shall cause insurance policies to be maintained in compliance with Exhibit F at all times, as applicable.  Borrower shall timely pay all premiums on all insurance policies required hereunder, and as and when additional insurance is required, from time to time, and as and when any policies of insurance may expire, furnish to Lender, premiums prepaid,

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additional and renewal insurance policies with companies, coverage and in amounts satisfactory to Lender in accordance with Section 8.1(g).

(d)Payment of Taxes.  Borrower shall pay all real estate taxes and assessments and charges of every kind upon the Project before the same become delinquent, provided, however, that Borrower shall have the right to pay such tax under protest or to otherwise contest any such tax or assessment, but only if (i) such contest has the effect of preventing the collection of such taxes so contested and also of preventing the sale or forfeiture of the Project or any part thereof or any interest therein, (ii) Borrower has notified Lender of Borrower’s intent to contest such taxes, and (iii) Borrower has deposited security in form and amount satisfactory to Lender, in its sole discretion, and has increased the amount of such security so deposited promptly after Lender’s reasonable request therefor.  If Borrower fails to commence such contest or, having commenced to contest the same, and having deposited such security required by Lender for its full amount, shall thereafter fail to prosecute such contest in good faith or with due diligence, or, upon adverse conclusion of any such contest, shall fail to pay such tax, assessment or charge, Lender may, at its election (but shall not be required to), pay and discharge any such tax, assessment or charge, and any interest or penalty thereon, and any amounts so expended by Lender shall be deemed to constitute disbursements of the Loan proceeds hereunder (even if the total amount of disbursements would exceed the face amount of the Note).  Borrower shall furnish to Lender evidence that taxes are paid at least five (5) days prior to the last date for payment of such taxes and before imposition of any penalty or accrual of interest.

(e)Tax and Insurance Escrow Accounts.  Upon request of Lender or upon an Event of Default, Borrower shall establish and maintain at all times until the obligations of Borrower under the Loan Documents have been satisfied an impound account (the “Impound Account”) with Lender for payment of taxes and insurance premiums on the Project and as additional security for the obligations of Borrower under the Loan Documents.  Borrower shall deposit in the Impound Account an amount reasonably determined by Lender to be sufficient (when added to the monthly deposits described herein) to pay the next due installment of real estate taxes and assessments on the Project at least one (1) month prior to the due date or the delinquency date thereof (as Lender shall determine) and the next due annual insurance premiums with respect to the Project at least one (1) month prior to the due date thereof. On January 10, 2011 and on each Payment Date thereafter, Borrower shall pay to Lender, concurrently with the payment due under the Note, deposits in an amount equal to one-twelfth (1/12) of the amount of the annual taxes that will next become due and payable on the Project (the “Monthly Tax Impound”), plus one-twelfth (1/12) of the amount of the annual insurance premiums that will next become due and payable on insurance policies which Borrower is required to maintain hereunder (the “Monthly Insurance Impound”), each as estimated and determined by Lender.  The Monthly Tax Impound and Monthly Insurance Impound, and the payments of interest or principal or both, payable pursuant to the Note, shall be added together and shall be paid as an aggregate sum by Borrower to Lender. If Lender at any time determines that the Monthly Tax Impound or Monthly Insurance Impound is insufficient, Lender may in its reasonable discretion adjust the required monthly payments of such amounts, and Borrower shall be obligated to pay the increased amounts for the Monthly Tax Impound or Monthly Insurance Impound commencing with the next Payment Date under the Note. So long as no Event of Default or Default has occurred and is continuing, all sums in the Impound Account shall be held by Lender in the Impound Account and used to pay taxes and insurance premiums on the Project before the same become delinquent. Borrower shall be responsible for ensuring the receipt by Lender, at least thirty (30) days prior to the respective due date or the delinquency date for payment thereof (as Lender shall determine), of all bills, invoices and statements for all taxes and insurance premiums on the Project to be paid from the Impound Account, and so long as no Event of Default has occurred and is continuing, Lender shall pay the governmental authority or other party entitled thereto directly to the extent funds are available for such purpose in the Impound Account. In making any payment from the Impound Account, Lender shall be entitled to rely on any bill, statement or estimate procured from the appropriate public office or

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insurance company or agent without any inquiry into the accuracy of such bill, statement or estimate and without any inquiry into the accuracy, validity, enforceability or contestability of any tax, assessment, valuation, sale, forfeiture, tax lien or title or claim thereof. Lender shall pay no interest on funds contained in the Impound Account to Borrower and any interest or other earnings on funds deposited in the Impound Account shall be solely for the account of Lender. If the total funds in the Impound Account shall exceed the amount of payments actually applied by Lender for the purposes of the Impound Account, such excess maybe credited by Lender on subsequent payments to the Impound Account to be made hereunder or, at the option of Lender, refunded to Borrower. In allocating such excess, Lender may deal with the person shown on the records of Lender to be the owner of the Project. If, however, the Impound Account shall not contain sufficient funds to pay the sums required when the same shall become due and payable, Borrower shall, within ten (10) Business Days after receipt of written notice thereof, deposit with Lender the full amount of any such deficiency. The Impound Account shall not constitute a trust fund and may be commingled with other monies held by Lender.  In the event Borrower does not comply with the foregoing terms, Borrower shall pay to the governmental authority or other party entitled thereto all real estate taxes and assessments and.

(f)Personal Property.  All of Borrower’s personal property, fixtures, attachments and equipment delivered upon, attached to or used in connection with the operation of the Project shall always be located at the Project and shall be kept free and clear of all liens, encumbrances and security interests.

(g)Leasing Restrictions.  Without the prior written consent of Lender, Borrower and Borrower’s agents shall not (i) enter into any additional non-residential Leases, (ii) modify, amend or terminate any non-residential Lease, or (iii) accept any rental payment in advance of its due date.  Borrower shall provide Lender with a copy of all non-residential Leases no less than ten (10) days prior to execution of such Leases.  Borrower shall provide Lender with a copy of the fully executed original of all non-residential Leases promptly following their execution.  Borrower will not enter into any residential Leases for a term of more than one year and all such residential Leases shall be on a form approved by Lender without material modification.  At Lender’s request, Borrower shall cause Tenants to execute Subordination, Non-Disturbance and Attornment Agreements reasonable satisfactory to Lender.  Lender reserves the right to subordinate the Mortgage to any Lease.

(h)Defaults Under Leases.  Borrower will not suffer or permit any breach or default to occur in any of Borrower’s obligations under any of the Leases nor suffer or permit the same to terminate by reason of any failure of Borrower to meet any requirement of any Lease including those with respect to any time limitation within which any of Borrower’s work is to be done or the space is to be available for occupancy by the lessee.  Borrower shall notify Lender promptly in writing in the event a non-residential Tenant commits a material default under a Lease.

(i)Lender’s Attorneys’ Fees for Enforcement of Agreement.  In case of any default or Event of Default hereunder, Borrower (in addition to Lender’s attorneys’ fees, if any, to be paid pursuant to Section 7.3) will pay Lender’s attorneys’ and paralegal fees (including, without limitation, any attorney and paralegal fees and costs incurred in connection with any litigation or bankruptcy or administrative hearing and any appeals therefrom and any post-judgment enforcement action including, without limitation, supplementary proceedings) in connection with the enforcement of this Agreement; without limiting the generality of the foregoing, if at any time or times hereafter Lender employs counsel (whether or not any suit has been or shall be filed and whether or not other legal proceedings have been or shall be instituted) for advice or other representation with respect to the Project, this Agreement, or any of the other Loan Documents, or to protect, collect, lease, sell, take possession of, or liquidate any of the Project, or to attempt to enforce any security interest or lien in any portion of the Project, or to enforce any rights of Lender or Borrower’s obligations hereunder, then in any of such events all of the attorneys’ fees arising

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from such services, and any expenses, costs and charges relating thereto (including fees and costs of paralegals), shall constitute an additional liability owing by Borrower to Lender, payable on demand.

(j)Appraisals.  Lender shall have the right to obtain a new or updated Appraisal of the Project and Borrower shall cooperate with Lender in connection therewith, for the following reasons: (i) to comply with any applicable law or regulatory requirement or bank policy promulgated to comply therewith, (ii) if an Event of Default has occurred and is continuing.  Borrower shall pay for any such Appraisal upon Lender’s request.

(k)Furnishing Information.  Borrower shall deliver or cause to be delivered to Lender within thirty (30) days after the end of each calendar quarter, (i) a rent roll for the Project and (ii) operating statements for the Project.  All such financial statements shall be in a format approved in writing by Lender in Lender’s reasonable sole discretion.  Each financial statement shall be certified as true, complete and correct by its preparer and by Borrower.  Borrower shall during regular business hours permit Lender or any of its agents or representatives to have access to and examine all of its books and records regarding the development and operation of the Project..

(l)Sign and Publicity.  [Intentionally omitted].

(m)Lost Note.  Upon Lender’s furnishing to Borrower an affidavit to such effect, Borrower shall, if the Note is mutilated, destroyed, lost or stolen, deliver to Lender, in substitution therefor, a new note containing the same terms and conditions as the Note.

(n)Indemnification.  Borrower shall indemnify Lender, including each party owning an interest in the Loan and their respective officers, directors, employees and consultants (each, an “Indemnified Party”) and defend and hold each Indemnified Party harmless from and against all claims, injury, damage, loss and liability, cost and expense (including attorneys’ fees, costs and expenses) of any and every kind to any persons or property by reason of (i) the operation or maintenance of the Project; (ii) any breach of representation or warranty, default or Event of Default under this Agreement or any other Loan Document or Related Document; or (iii) any other matter arising in connection with the Loan, Borrower, Guarantor or the Project.  No Indemnified Party shall be entitled to be indemnified against its own gross negligence or willful misconduct.  The foregoing indemnification shall survive repayment of the Loan and shall continue to benefit Lender following any assignment of the Loan with respect to matters arising or accruing prior to such assignment.

(o)No Additional Debt.  Except for the Loan, Borrower shall neither incur nor guarantee any indebtedness (whether personal or nonrecourse, secured or unsecured) other than customary trade payables paid within sixty (60) days after they are incurred.

(p)Compliance With Laws.  Borrower shall comply with all applicable requirements (including applicable Laws) of any Governmental Authority having jurisdiction over Borrower or the Project.

(q)Organizational Documents.  Borrower shall not, without the prior written consent of Lender, permit or suffer (i) a material amendment or modification of its organizational documents, (ii) the admission of any new member, partner or shareholder, or (iii) any dissolution or termination of its existence.

(r)Furnishing Reports.  Upon Lender’s request, Borrower shall provide Lender with copies of all inspections, reports, test results and other information received by any Borrower, which in any way relate to the Project or any part thereof.

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(s)Management Contracts.  Borrower shall not enter into, materially modify or amend, terminate or cancel any management contracts for the Project, without the prior written approval of Lender.

(t)Furnishing Notices.  Borrower shall provide Lender with copies of all material notices pertaining to the Project received by Borrower from any Governmental Authority or insurance company within seven (7) days after such notice is received.

(u)Alterations.  Without the prior written consent of Lender, Borrower shall not make any material alterations to the Project.

(v)Cash Distributions.  Borrower shall not make any distributions to partners, members or shareholders, provided that Borrower may so distribute Monthly Excess Cash Flow not needed to pay Operating Expenses or amount payable under the Loan Documents.

(w)Tenant Estoppels and Subordination Non-Disturbance and Attornment Agreements.  Within thirty (30) days after the date hereof, Borrower shall use commercially reasonable efforts to provide to Lender, in form and substance satisfactory to Lender within its reasonable discretion, (x) tenant estoppel certificates from the following non-residential tenants of the Project: (i) STC Six Company (“STC”), (ii) Andtower LLC (“Andtower”) and (iii) Sprint Spectrum L.P. and (y) subordination, non-disturbance and attornment agreements from STC and Andtower.  In the event that Borrower is unable to deliver any estoppel or subordination, non-disturbance and attornment agreement as set forth in this subsection (w), Borrower must provide to Lender evidence of its commercially reasonable efforts to obtain same, which evidence shall be satisfactory to Lender within its sole discretion.

11.2Authorized Representative.

Borrower hereby appoints Harold Brown as its Authorized Representative for purposes of dealing with Lender on behalf of Borrower in respect of any and all matters in connection with this Agreement, the other Loan Documents, and the Loan.  The Authorized Representative shall have the power, in his discretion, to give and receive all notices, monies, approvals, and other documents and instruments, and to take any other action on behalf of Borrower.  All actions by the Authorized Representative shall be final and binding on Borrower.  Lender may rely on the authority given to the Authorized Representative until actual receipt by Lender of a duly authorized resolution substituting a different person as the Authorized Representative.  No more than one person shall serve as Authorized Representative at any given time.

ARTICLE 12

CASUALTIES AND CONDEMNATION

12.1Lender’s Election to Apply Proceeds on Indebtedness.

(a)Subject to the provisions of Section 16.1(b) below, Lender may elect to collect, retain and apply upon the indebtedness of Borrower under this Agreement or any of the other Loan Documents all proceeds of insurance or condemnation (individually and collectively referred to as “Proceeds”) after deduction of all expenses of collection and settlement, including attorneys’ and adjusters’ fees and charges.  Any proceeds remaining after repayment of the indebtedness under the Loan Documents shall be paid by Lender to Borrower.

(b)Notwithstanding anything in Section 16.1(a) to the contrary, in the event of any casualty to the Improvements or any condemnation of part of the Project, Lender agrees to make available the Proceeds to restoration of the Improvements if (i) no Event of Default has occurred which remains

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outstanding, (ii) all Proceeds are deposited with Lender, (iii) in Lender’s reasonable judgment, the amount of Proceeds available for restoration of the Improvements is sufficient to pay the full and complete costs of such restoration, (iv) no material non-residential Leases in effect at the time of such casualty or condemnation are or will be terminated, (v) if the cost of restoration exceeds ten percent (10%) of the Loan Amount, in Lender’s sole determination after completion of  restoration the Loan Amount will not exceed 70% of the fair market value of the Project, (vi) in Lender’s reasonable determination, the Project can be restored to an architecturally and economically viable project in compliance with applicable Laws, (vii) Guarantor reaffirms the Limited Recourse Guaranty Agreement in writing, and (viii) in Lender’s reasonable determination, such restoration is likely to be completed no later than three  months prior to the Maturity Date.

12.2Borrower’s Obligation to Rebuild and Use of Proceeds Therefor.

In case Lender does not elect to apply or does not have the right to apply the Proceeds to the indebtedness, as provided in Section 16.1 above, Borrower shall:

(a)Proceed with diligence to make settlement with insurers or the appropriate Governmental Authorities and cause the Proceeds to be deposited with Lender;

(b)In the event of any delay in making settlement with insurers or the appropriate Governmental Authorities or effecting collection of the Proceeds, deposit with Lender the full amount required to complete construction as aforesaid;

(c)In the event the Proceeds and the available proceeds of the Loan are insufficient to assure the Lender that the Loan will be In Balance, promptly deposit with Lender any amount necessary to place the Loan In Balance; and

(d)Promptly proceed with the assumption of construction of the Improvements, including the repair of all damage resulting from such fire, condemnation or other cause and restoration to its former condition.

Any request by Borrower for a disbursement by Lender of Proceeds and funds deposited by Borrower shall be treated by Lender as if such request were for an advance of the Loan hereunder, and the disbursement thereof shall be conditioned upon Borrower’s compliance with and satisfaction of the same conditions precedent as would be applicable under this Agreement for an advance of the Loan.

ARTICLE 13
ASSIGNMENTS BY LENDER AND BORROWER

13.1Assignments and Participations.

Lender may from time to time sell the Loan and the Loan Documents (or any interest therein) and may grant participations in the Loan.  Borrower agrees to cooperate with Lender’s efforts to do any of the foregoing and to execute all documents reasonably required by Lender in connection therewith which do not materially adversely affect Borrower’s rights under the Loan Documents.

13.2Prohibition of Assignments and Transfers by Borrower.

Borrower shall not assign or attempt to assign its rights under this Agreement and any purported assignment shall be void.  Without the prior written consent of Lender, in Lender’s sole discretion,

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Borrower shall not suffer or permit (a) any change in the management (whether direct or indirect) of the Project or of Borrower, or (b) any Transfer.  Notwithstanding anything in this Agreement to the contrary, Borrower shall be permitted to Transfer (such Transfer, a “Permitted Transfer”), without the prior written consent of Lender (but Borrower shall provide Lender with written notice of such Transfer prior to such Transfer), direct or indirect ownership interests of any Borrower provided such Transfers do not result in a change in Control.  In connection with any proposed Permitted Transfer, Borrower shall provide Lender with any and all information as Lender shall reasonably require with respect to such Transfer, including, without limitation, any information necessary for Lender to complete Lender’s Patriot Act Customer Identification Process and OFAC Review Process prior to such Permitted Transfer.  In no event shall any Transfer be permitted unless all parties in connection with any proposed Transfer successfully complete Lender’s Patriot Act Customer Identification Process.

13.3Prohibition of Transfers in Violation of ERISA.

In addition to the prohibitions set forth in Section 13.2 above, Borrower shall not assign, sell, pledge, encumber, transfer, hypothecate or otherwise dispose of its interest or rights in this Agreement or in the Project, or attempt to do any of the foregoing or suffer any of the foregoing, nor shall any party owning a direct or indirect interest in Borrower assign, sell, pledge, mortgage, encumber, transfer, hypothecate or otherwise dispose of any of its rights or interest (direct or indirect) in Borrower, attempt to do any of the foregoing or suffer any of the foregoing, if such action would cause the Loan, or the exercise of any of Lender’s rights in connection therewith, to constitute a prohibited transaction under ERISA or the Internal Revenue Code or otherwise result in Lender being deemed in violation of any applicable provision of ERISA.  Borrower agrees to indemnify and hold Lender free and harmless from and against all losses, costs (including attorneys’ fees and expenses), taxes, damages (including consequential damages) and expenses Lender may suffer by reason of the investigation, defense and settlement of claims and in obtaining any prohibited transaction exemption under ERISA necessary or desirable in Lender’s sole judgment or by reason of a breach of the foregoing prohibitions.  The foregoing indemnification shall be a recourse obligation of Borrower and shall survive repayment of the Note, notwithstanding any limitations on recourse contained herein or in any of the Loan Documents.

13.4Successors and Assigns.

Subject to the foregoing restrictions on transfer and assignment contained in this Article 17, this Agreement shall inure to the benefit of and shall be binding on the parties hereto and their respective successors and permitted assigns.

ARTICLE 14
TIME OF THE ESSENCE

14.1Time is of the Essence.   Borrower agrees that time is of the essence under this Agreement.

ARTICLE 15
EVENTS OF DEFAULT

The occurrence of any one or more of the following shall constitute an “Event of Default” as said term is used herein:

(a)Failure of Borrower (i) (A) to make any principal payment when due, (B) to pay any interest within five (5) days after the date when due or (C) to observe or perform any of the other covenants or conditions by Borrower to be performed under the terms of this Agreement or any other

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Loan Document concerning the payment of money, for a period of ten (10) days after written notice from Lender that the same is due and payable; or (ii) for a period of thirty (30) days after written notice from Lender, to observe or perform any non-monetary covenant or condition contained in this Agreement or any other Loan Documents; provided that if any such failure concerning a non-monetary covenant or condition is susceptible to cure and cannot reasonably be cured within said thirty (30) day period, then Borrower shall have an additional sixty (60) day period to cure such failure and no Event of Default shall be deemed to exist hereunder so long as (Y) Borrower commences such cure within the initial thirty (30) day period and diligently and in good faith pursues such cure to completion within such resulting ninety (90) day period from the date of Lender’s notice, and (Z) the existence of such default will not result in any non-residential Tenant having the right to terminate its Lease due to such default; and provided further that if a different notice or grace period is specified under any other subsection of this Section 19.1 with respect to a particular breach, or if another subsection of this Section 19.1 applies to a particular breach and does not expressly provide for a notice or grace period the specific provision shall control.

(b)[Intentionally omitted].

(c)[Intentionally omitted].

(d)[Intentionally omitted].

(e)Any Transfer or other event in violation of Sections 13.2 or 13.3.

(f)Any material default by Borrower, as lessor, under the terms of any non-residential Lease following the expiration of any applicable notice and cure period, provided that if the Lease does not provide a notice and cure period, then the notice and cure period provided in (a)(i) above will apply to any such monetary default, and the notice and cure period provided in (a)(ii) will apply to any such non-monetary default (which respective periods shall commence upon written notice of default from Lender or the applicable Tenant, whichever occurs first).

(g)If any material warranty, representation, statement, report or certificate made now or hereafter by Borrower or any Guarantor is untrue or incorrect at the time made or delivered, provided that if such breach is reasonably susceptible of cure, then no Event of Default shall exist so long as Borrower cures said breach (i) within the notice and cure period provided in (a)(i) above for a breach that can be cured by the payment of money or (ii) within the notice and cure period provided in (a)(ii) above for any other breach.

(h)Borrower or any Guarantor shall commence a voluntary case concerning Borrower or such Guarantor under the Bankruptcy Code; or an involuntary proceeding is commenced against Borrower or any Guarantor under the Bankruptcy Code and relief is ordered against Borrower or such Guarantor, or the petition is controverted but not dismissed or stayed within sixty (60) days after the commencement of the case, or a custodian (as defined in the Bankruptcy Code) is appointed for or takes charge of all or substantially all of the property of Borrower or any Guarantor; or the Borrower or any Guarantor commences any other proceedings under any reorganization, arrangement, readjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar Law of any jurisdiction whether now or hereafter in effect relating to the Borrower or any Guarantor; or there is commenced against Borrower or any Guarantor any such proceeding which remains undismissed or unstayed for a period of sixty (60) days; or the Borrower or any Guarantor fails to controvert in a timely manner any such case under the Bankruptcy Code or any such proceeding, or any order of relief or other order approving any such case or proceeding is entered; or the Borrower or any Guarantor by any act or failure to act indicates its consent to, approval of, or acquiescence in any such case or proceeding or the appointment of any custodian or the like of or for it for any substantial part of its property or suffers any such appointment to continue undischarged or unstayed for a period of sixty (60) days.

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(i)Borrower or any Guarantor shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or shall consent to the appointment of a receiver or trustee or liquidator of all of its property or the major part thereof or if all or a substantial part of the assets of Borrower or any Guarantor are attached, seized, subjected to a writ or distress warrant, or are levied upon, or come into the possession of any receiver, trustee, custodian or assignee for the benefit of creditors.

(j)If Borrower is enjoined, restrained or in any way prevented by any court order from constructing or operating the Project.

(k)[Intentionally omitted]

(l)One or more final, unappealable judgments are entered (i) against Borrower in amounts aggregating in excess of $100,000 or (ii) against any Guarantor in amounts aggregating in excess of $500,000, and said judgments are not stayed or bonded over within thirty (30) days after entry.

(m)If Borrower or any Guarantor shall fail to pay any debt owed by it or is in default under any agreement with Lender or any other party (other than a failure or default for which Borrower’s maximum liability does not exceed $100,000 and Guarantor’s maximum liability does not exceed $500,000) and such failure or default continues after any applicable grace period specified in the instrument or agreement relating thereto.

(n)If a Material Adverse Change occurs with respect to Borrower, the Project or Guarantor.

(o)The occurrence of any other event or circumstance denominated as an Event of Default in this Agreement or under any of the other Loan Documents and the expiration of any applicable grace or cure periods, if any, specified for such Event of Default herein or therein, as the case may be.

ARTICLE 16
LENDER’S REMEDIES IN EVENT OF DEFAULT

16.1Remedies Conferred Upon Lender.

Upon the occurrence and during the continuance of any Event of Default, Lender may pursue any one or more of the following remedies concurrently or successively, it being the intent hereof that none of such remedies shall be to the exclusion of any other:

(a)Take possession of the Project and do anything which is necessary or appropriate in its sole judgment to fulfill the obligations of Borrower under this Agreement and the other Loan Documents, including either the right to avail itself of and procure performance of existing contracts or let any contracts with the same contractors or others.  Without restricting the generality of the foregoing and for the purposes aforesaid, Borrower hereby appoints and constitutes Lender its lawful attorney-in-fact with full power of substitution in the Project to use unadvanced funds remaining under the Note or which may be reserved, escrowed or set aside for any purposes hereunder at any time, or to advance funds in excess of the face amount of the Note, to execute all applications and certificates in the name of Borrower prosecute and defend all actions or proceedings in connection with the Improvements or Project; and in connection therewith, to execute instruments of release and satisfaction; and to do any and every act which the Borrower might do in its own behalf; it being understood and agreed that this power of attorney shall be a power coupled with an interest and cannot be revoked;

(b)Withhold further disbursement of the proceeds of the Loan and/or terminate Lender’s obligations to make further disbursements hereunder;

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(c)Declare the Note to be immediately due and payable;

(d)Use and apply any monies or letters of credit deposited by Borrower with Lender, regardless of the purposes for which the same was deposited, to cure any such default or to apply on account of any indebtedness under this Agreement which is due and owing to Lender; and

(e)Exercise or pursue any other remedy or cause of action permitted under this Agreement or any other Loan Documents, or conferred upon Lender by operation of Law.

Notwithstanding the foregoing, upon the occurrence of any Event of Default under Section 19.1(h) with respect to Borrower, all amounts evidenced by the Note shall automatically become due and payable, without any presentment, demand, protest or notice of any kind to Borrower.

ARTICLE 17
GENERAL PROVISIONS

17.1Captions.

The captions and headings of various Articles, Sections and subsections of this Agreement and Exhibits pertaining hereto are for convenience only and are not to be considered as defining or limiting in any way the scope or intent of the provisions hereof.

17.2Modification; Waiver.

No modification, waiver, amendment or discharge of this Agreement or any other Loan Document shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, waiver, amendment or discharge is sought.

17.3Governing Law.

Irrespective of the place of execution and/or delivery, this Agreement shall be governed by, and shall be construed in accordance with, the laws of the Commonwealth of Massachusetts.

17.4Acquiescence Not to Constitute Waiver of Lender’s Requirements.

Each and every covenant and condition for the benefit of Lender contained in this Agreement may be waived by Lender, provided, however, that to the extent that Lender may have acquiesced in any noncompliance with any conditions precedent to the Closing of the Loan, such acquiescence shall not be deemed to constitute a waiver by Lender of such requirements with respect to any future disbursements of Loan proceeds.

17.5Disclaimer by Lender.

The Loan Documents are made for the sole benefit of Borrower and Lender, and no other person or persons shall have any benefits, rights or remedies under or by reason of the Loan Documents, or by reason of any actions taken by Lender pursuant to the Loan Documents.   Lender shall not be liable for any debts or claims accruing in favor of any such parties against Borrower or others or against the Project.  Lender, by making the Loan or taking any action pursuant to any of the Loan Documents, shall not be deemed a partner or a joint venturer with Borrower or fiduciary of Borrower.  No payment of funds

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directly to a contractor or subcontractor or provider of services be deemed to create any third-party beneficiary status or recognition of same by the Lender.

17.6Partial Invalidity; Severability.

If any of the provisions of this Agreement, or the application thereof to any person, party or circumstances, shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such provision or provisions to persons, parties or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and every provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

17.7Definitions Include Amendments.

Definitions contained in this Agreement which identify documents, including, but not limited to, the Loan Documents, shall be deemed to include all amendments and supplements to such documents from the date hereof, and all future amendments, modifications, and supplements thereto entered into from time to time to satisfy the requirements of this Agreement or otherwise with the consent of Lender.  Reference to this Agreement contained in any of the foregoing documents shall be deemed to include all amendments and supplements to this Agreement.

17.8Execution in Counterparts.

This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

17.9Entire Agreement.

This Agreement, taken together with all of the other Loan Documents and all certificates and other documents delivered by Borrower to Lender, embody the entire agreement and supersede all prior agreements, written or oral, relating to the subject matter hereof.

17.10Waiver of Damages.

In no event shall Lender be liable to Borrower for punitive, exemplary or consequential damages, including, without limitation, lost profits, whatever the nature of a breach by Lender of its obligations under this Agreement or any of the Loan Documents, and Borrower for itself and its Guarantor waive all claims for punitive, exemplary or consequential damages.

17.11Claims Against Lender.

Lender shall not be in default under this Agreement, or under any other Loan Documents, unless a written notice specifically setting forth the claim of Borrower shall have been given to Lender within three (3) months after Borrower first had knowledge of the occurrence of the event which Borrower alleges gave rise to such claim and Lender does not remedy or cure the default, if any there be, promptly thereafter.  Borrower waives any claim, set-off or defense against Lender arising by reason of any alleged default by Lender as to which Borrower does not give such notice timely as aforesaid.  Borrower acknowledges that such waiver is or may be essential to Lender’s ability to enforce its remedies without delay and that such waiver therefore constitutes a substantial part of the bargain between Lender and Borrower with regard to the Loan.  No Guarantor or Tenant is intended to have any rights as a third-party beneficiary of the provisions of this Section 21.11.

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17.12Jurisdiction.

TO THE GREATEST EXTENT PERMITTED BY LAW, BORROWER HEREBY WAIVES ANY AND ALL RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY LENDER.  WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS AGREEMENT (EACH, A “PROCEEDING”), BORROWER IRREVOCABLY (A) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING JURISDICTION IN THE CITY OF BOSTON, COUNTY OF SUFFOLK AND COMMONWEALTH OF MASSACHUSETTS AND (B) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER WAIVES THE RIGHT TO OBJECT, WITH RESPECT TO SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY.  NOTHING IN THIS AGREEMENT SHALL PRECLUDE LENDER FROM BRINGING A PROCEEDING IN ANY OTHER JURISDICTION NOR WILL THE BRINGING OF A PROCEEDING IN ANY ONE OR MORE JURISDICTIONS PRECLUDE THE BRINGING OF A PROCEEDING IN ANY OTHER JURISDICTION.  BORROWER FURTHER AGREES AND CONSENTS THAT, IN ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN ANY MASSACHUSETTS STATE OR UNITED STATES COURT SITTING IN THE CITY OF BOSTON AND COUNTY OF SUFFOLK MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO BORROWER AT THE ADDRESS INDICATED BELOW, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF BORROWER SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

17.13Set-Offs.

After the occurrence and during the continuance of an Event of Default, Borrower hereby irrevocably authorizes and directs Lender from time to time to charge Borrower’s accounts and deposits with Lender (or its Affiliates), and to pay over to Lender an amount equal to any amounts from time to time due and payable to Lender hereunder, under the Note or under any other Loan Document.  Borrower hereby grants to Lender a security interest in and to all such accounts and deposits maintained by the Borrower with Lender (or its Affiliates).

ARTICLE 18
NOTICES

Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three Business Days after mailing (c) if by Federal Express or other reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) if by telecopier on the day of transmission so long as copy is sent on the same day by overnight courier as set forth below:

If to Borrower:

c/o The Hamilton Company

39 Brighton Avenue

Boston, Massachusetts 02134

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Attention:Carl Valeri

Telephone617-783-0039

Facsimile617-783-0568

With a copy to:

Saul Ewing LLP

131 Dartmouth Street, Suite 501

Boston, MA 02116

Attention:Sally E. Michael, Esq.

Telephone:617.912.0920

Facsimile:617.723.4151

If to Lender:

KeyBank National Association

66 South Pearl Street

Albany, New York 12207

Attention:Servicing Manager

Telephone518.257.8571

Facsimile518-257-8572

With a copy to:

KeyBank National Association

225 Franklin Street, 18th Floor

Boston, Massachusetts 02110

Attention:Matthew Purtell

Telephone617.385.6248

Facsimile:617.385.6291

And a copy to:

Thompson Hine LLP

335 Madison Avenue

New York, New York 10017

Attention:Karen M. Kozlowski, Esq.

Telephone212 908 3937

Facsimile212 344 6101

or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice.

ARTICLE 19
WAIVER OF JURY TRIAL

BORROWER AND LENDER EACH WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS OR RELATING THERETO OR ARISING

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FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS AGREEMENT AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.

EXECUTED as of the date first set forth above.

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IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be executed as of the day and year first above written.

BORROWER:

HAMILTON GREEN APARTMENTS, LLC,
a Massachusetts limited liability company
By:	New Real, Inc.,
	a Massachusetts corporation
	its Manager
	By:
	Its: President
	Print Name: Ronald Brown
	Borrower’s Tax ID No.

[Borrower signature page.  Lender signature page follows.]

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IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to be executed as of the day and year first above written.

LENDER:	KEYBANK NATIONAL ASSOCIATION
	By:
	Name:
	Title:

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EXHIBIT A

Legal Description of Land

EXHIBIT B

Permitted Exceptions

1.Liens for taxes and municipal charges which become due and payable subsequent to the date of said policy. Taxes have been paid through June 30, 2013.

2.Title to and rights of the public and others entitled thereto in and to those portions of the insured premises lying within the bounds of the adjoining streets and ways.

3.Title to and rights of the public and others entitled thereto in and to those portions of the insured premises lying within the bounds of Lowell Street and the adjoining streets and ways. .

4.Terms and provisions of a lease by and between Windsor Green at Andover LLC, as Lessor, and STC Six Company, as Lessee, dated March 25, 2010, Notice of which is dated December 11, 2009 and recorded in Book 12082, Page 238, as affected by a Lease Subordination, Non-Disturbance and Attornment Agreement by and among Massachusetts Housing Partnership Fund Board, as Lender, Windsor Green at Andover LLC, as Landlord, and STC Six Company, as Tenant, dated March 23, 2010 and recorded in Book 12082, Page 250, as affected by Memorandum of Lease Supplement by and between STC Six Company and Bell Atlantic Mobile of Massachusetts Corporation Ltd., dated October 27, 2010 and recorded in Book 12293, Page 93, as affected by Notice of Lease by and between STC Six Company and New Cingular Wireless PCS, LLC dated October 29, 2010 and recorded in Book 12380, Page 134, as affected by Notice of Site License Acknowledgement recorded in Book 11518, Page 144.

5.Notice of Decision of the Town of Andover Zoning Board of Appeals dated March 3, 2011 and recorded in Book 12467, Page 239.

6.Taking by the Commonwealth of Massachusetts Department of Public Works for the relocation of Lowell Street and for access easement on Parcel 11-R-1 shown on Plan No. 6129 by Order dated November 26, 1969, and recorded in Book 1145, Page 150, as affected by Amendment to Access Easement Agreement dated April 28, 2005 and recorded in Book 9483, Page 41, as shown on the Survey entitled “ALTA/ACSM Land Title Survey”, in Andover, Mass., by Hayes Engineering, dated September 27, 2007, (“the Survey”)

7.Taking by the Commonwealth of Massachusetts Department of Public Works of an easement related to Parcel 11-RS-1 Easement to construct slopes of excavation and/or embankment in Parcel 11-RS-1 shown on Plan No. 6212 by Order dated May 27, 1970, and recorded in Book 1153, Page 684, as affected by Amendment to Access Easement Agreement dated April 28, 2005 and recorded in Book 9483, Page 41, as shown on the Survey entitled “ALTA/ACSM Land Title Survey”, in Andover, Mass., by Hayes Engineering, dated September 27, 2007, (“the Survey”)

8.Rights and easement granted in Reciprocal Easement Agreement between Andover Real Estate Corporation and Rolling Green Motor Inn Corporation dated September 22, 1982, and recorded in Book 1617, Page 187, as affected by Easement Relocation Agreement dated April 28, 2005 and recorded in Book 9483, Page 73, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

9.Easement from Dauphin Corporation to Harry Axelrod dated July 15, 1985, and recorded in Book 2005, Page 128, with respect to “Right of Way Easement 66’ Wide” shown on a plan entitled

“Plan of Land in Andover, Mass., owned by Rolling Green Motor Inn Corp.” dated May 29, 1985 and recorded as Plan No. 9957 as affected by Declaration and Grant of Easements between Harry Axelrod and Lowell Street Associates Limited Partnership dated May 22, 1991 recorded with the Registry in Book 3274, Page 96, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

10.Rights and easement granted in Easement Agreement between Inncorp Development Limited Partnership and David Bruce Maddox, Trustee of Powers Realty Trust, dated September 30, 1988, and recorded in Book 2820, Page 81, as amended by the Amendment to Access Easement Agreements recorded in Book 9483, Page 41, as affected by Confirmation Regarding Easement Agreement, dated May 8, 2007, recorded in Book 10750, Page 111, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

11.Rights granted in a Lease dated June 19, 1999, with Sprint Spectrum LP., as Tenant, Notice of which is recorded in Book 5691, Page 307, as affected by Notice of Lease dated April 28, 2005 and recorded in Book 9483, Page 59.

12.Amendment to Notice of Lease dated April 28, 2005 and recorded in Book 9483, Page 132, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

13.Rights and easement granted in Easement to New England Telephone and Telegraph Company dated February 22, 2000, and recorded in Book 5691, Page 313, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

14.Rights and easement granted in Easement to Massachusetts Electric Company dated March 21, 2000, and recorded in Book 5708, Page 29, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

15.Terms and provisions of Declaration and Grant of Easement, Rights and Restrictions dated June 17, 2003 and recorded with the Registry in Book 7920, Page 113, as amended by Restatement of Declaration and Grant of Easements, Rights and Restrictions dated April 28, 2005 and recorded in Book 9483, Page 11, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

16.Grant of Utility Easement and Easement Agreement between Criterion Andover Apartments, L.P. and Yvon Cormier and Denise Enxing, Trustees of CA Investment Trust dated April 28, 2005 and recorded in Book 9483, Page 95, as shown on the Survey. (AFFECTS 311 LOWELL STREET ONLY)

17.Grant of Easement between Comcast of Massachusetts I, Inc. and Criterion Apartments, LP, dated September 24, 2006, recorded in Book 10382, Page 207.

18.Easement to Verizon New England Inc., dated March 22, 2006, recorded in Book 10097, Page 46.

19.Easement to Massachusetts Electric Company, dated September 27, 2005, recorded in Book 9842, Page 154.

20.Survey entitled “ALTA/ACSM Land Title Survey in Andover, Mass.”, prepared by Hayes Engineering, dated April 8, 2013 discloses the following matters:

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a.electric, drain, sewer gas and water lines, drain manholes, catch basins, water gate, manholes, light poles, overhead wires, transformer pads, fire connection, underground detention systems;

b.Gravel path shown at Northeast corner of Parcel 1 appears to run on and off insured premises and abutter’s premises.

21.Terms and provision of Chapter 40B Regulatory and Affordable Housing Agreement for Limited Dividend Organizations, between Criterion Andover Apartments LP and Massachusetts Housing Partnership Fund Board, dated February 15, 2008, recorded in Book 11067, Page 28.

22.Notice of Variance by the Andover Board of Appeals granted to Sprint Spectrum L.P., recorded in Book 5647, Page 199 (Decision No. 2956).

23.Order of Conditions from the Andover Conservation Commission (DEP File No. 090-0853) issued October 22, 2003 and recorded on January 14, 2005 in Book 9304, Page 216, as affected by a Certificate of Compliance, recorded in Book 10737, Page 79.

24.Notice of Variance by the Andover Board of Appeals granted to Rolling Green Motor Inn Corp. recorded in Book 1910, Page 234 (Decision No. 1699).

25.Decision for Comprehensive Permit by the Andover Board of Appeals recorded in Book 8447, Page 238, as affected by Certification of No Appeal recorded in Book 8447, Page 248, as affected by Decision Consenting to Proposed Transfer of Comprehensive Permit Decision No. 3312, Decision No. 3449, dated August 16, 2004 and recorded in Book 9082, Page 177; as affected by Finding of Insubstantial Change dated February 15, 2005 and recorded in Book 9417, Page 39; as affected by Decision to Extend and Determination of Insubstantial Changes, Decision No. 3451, dated August 16, 2004 and recorded in Book 9474, Page 141; as affected by Stipulation of Dismissal with Prejudice recorded in Book 9483, Page 1, as affected by Finding of Insubstantial Change by Town of Andover, (Comprehensive Permit #3312), issued to AND Development, LLC, dated April 25, 2005, recorded in Book 9554, Page 98. Also see Decision in Book 9696, Page 75, as affected by Decision of the Zoning Board of Appeals, Town of Andover, recorded in Book 10832, Page 31.

26.Notice of Decision by the Andover Zoning Board of Appeals granted to Altiostar Networks, Inc., recorded in Book 13434, Page 307 (Decision No. 4022).

27.Notice of Decision by the Zoning Board of Appeals of the Town of Andover recorded in Book 11995

iii

EXHIBIT C

Title Requirements

1.Title Insurance Company Requirements. The maximum single risk (i.e., the amount insured under any one policy) by a title insurer may not exceed 25% of that insurer’s surplus and statutory reserves.  Reinsurance must be obtained by closing for any policy exceeding such amount.

2.Loan Policy Forms. Standard 1992 or 2006 American Land Title Association (“ALTA”) form of loan title insurance policy, or the 1970 (amended October 17, 1970) ALTA loan form policies must be used.

3.Insurance Amount. The amount insured must equal at least the original principal amount of the Loan.

4.Named Insured. The named insured under the Title Policy must be substantially the same as the following: “KeyBank National Association, and its respective successors and assigns.”

5.Creditors’ Rights. Any “creditors’ rights” exception or other exclusion from coverage for voidable transactions under bankruptcy, fraudulent conveyance, or other debtor protection laws or equitable principles must be removed by either an endorsement or a written waiver and an affirmative creditors’ rights endorsement (ALRA Endorsement 21) must be added.

6.Arbitration. In the event that the form policy which is utilized includes a compulsory arbitration provision, the insurer must agree that such compulsory arbitration provisions do not apply to any claims by or on behalf of the insured. Please note that the 1987 and 1992 ALTA form loan policies include such provisions.

7.Date of Policy. The effective date of the Title Policy must be as of the date and time of the closing.

8.Legal Description. The legal description of the property contained in the Title Policy must conform to (a) the legal description shown on the survey of the property, and (b) the legal description contained in the Mortgage. In any event, the Title Policy must be endorsed to provide that the insured legal description is the same as that shown on the survey.

9.Easements. Each Title Policy shall insure, as separate parcels: (a) all appurtenant easements and other estates benefiting the property, and (b) all other rights, title, and interests of the borrower in real property under reciprocal easement agreements, access agreements, operating agreements, and agreements containing covenants, conditions, and restrictions relating to the Project.

10.Exceptions to Coverage. With respect to the exceptions, the following applies:

a)Each Title Policy shall afford the broadest coverage available in the state in which the subject property is located.

b)The “standard” exceptions (such as for parties in possession or other matters not shown on public records) must be deleted.

c)The “standard” exception regarding tenants in possession under residential leases, should also be deleted. For commercial properties, a rent roll should be attached in lieu of the general exception.

d)The standard survey exception to the Title Policy must be deleted. Instead, a survey reading reflecting the current survey should be incorporated.

e)Any exception for taxes, assessments, or other lienable items must expressly insure that such taxes, assessments, or other items are not yet due and payable.

f)Any lien, encumbrance, condition, restriction, or easement of record must be listed in the Title Policy, and the Title Policy must affirmatively insure that the improvements do not encroach upon the insured easements or insure against all loss or damage due to such encroachment

g)The Title Policy may not contain any exception for any filed or unfiled mechanics’ or materialmen’s liens.

h)In the event that a comprehensive endorsement has been issued and any Schedule B exceptions continue to be excluded from the coverage provided through that endorsement, then a determination must be made whether such exceptions would be acceptable to Bank. In the event that it is determined that such exception is acceptable, a written explanation regarding the acceptability must be submitted as part of the delivery of the loan documents.

If Schedule B indicates the presence of any easements that are not located on the survey, the Title Policy must provide affirmative insurance against any loss resulting from the exercise by the holder of such easement of its right to use or maintain that easement. ALTA Form 103.1 or an equivalent endorsement is required for this purpose.

11.Endorsements. With respect to endorsements, the following applies:

a)Each Title Policy must include an acceptable environmental protection lien endorsement on ALTA Form 8.1. Please note that Form 8.1 may take exception for an entire statute which contains one or more specific sections under which environmental protection liens could take priority over the Mortgage; provided, however, that such specific sections under which the lien could arise must also be referenced.

b)Each Title Policy must contain an endorsement which provides that the insured legal description is the same as shown on the survey.

c)Each Title Policy must contain a comprehensive endorsement (ALTA Form 9) if a lien, encumbrance, condition, restriction, or easement is listed in Schedule B to the title insurance policy.

d)Lender may require the following endorsements where applicable and available:

-access	-due execution	-single tax lot
-address	-first loss	-subdivision
-assessments	-last dollar	-tie in
-assignment of leases and rents	-leasehold	-usury

ii

-assignment of loan documents	-mineral rights	-zoning (ALTA 3.1 -
-contiguity	-mortgage tax	with parking)
-doing business	-reverter

12.Other Coverages. Each Title Policy shall insure the following by endorsement or affirmative insurance to the extent such coverage is not afforded by the ALTA Form 9 or its equivalent in a particular jurisdiction:

a)that no conditions, covenants, or restrictions of record affecting the property:

(i)have been violated,

(ii)create lien rights which prime the insured mortgage,

(iii)contain a right of reverter or forfeiture, a right of reentry, or power of termination, or

(iv)if violated in the future would result in the lien created by the insured mortgage or title to the property being lost, forfeited, or subordinated; and

b)that except for temporary interference resulting solely from maintenance, repair, replacement, or alteration of lines, facilities, or equipment located in easements and rights of way taken as certain exceptions to each Title Policy, such exceptions do not and shall not prevent the use and operation of the Property or the improvements as used and operated on the effective date of the Title Policy.

13.Informational Matters.  The Policy must include, as an informational note, the following:

a)The recorded plat number together with recording information; and

b)The property parcel number or the tax identification number, as applicable.

14.Delivery of Copies.  Legible copies of all easements, encumbrances, or other restrictions shown as exceptions on the Title Policy must be delivered with the first draft of the title commitment.

iii

EXHIBIT D

Form of Survey Certification

To KeyBank National Association,                        and                        (insert Borrower and Title Insurance Company):

This is to certify that this map or plat and the survey on which it is based were made in accordance with the “2011 Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys,” jointly established and adopted by ALTA and NSPS, and includes Items [2, 3, 4, 6, 7(a), 7(b), 7(c), 8, 9, 10, 11(a), 13 and 16] of Table A thereof. The field work was completed on                       .  Pursuant to the Accuracy Standards as adopted by ALTA and NSPS and in effect on the date of this certification, undersigned further certifies that in my professional opinion, as a land surveyor registered in the State of                     , the Relative Positional Accuracy of this survey does not exceed that which is specified therein.

Date of Plat or Map:		(signed)
	(seal)
		Registration No.

EXHIBIT E

[Reserved[

ii

EXHIBIT F

Insurance Requirements

INSURANCE REQUIREMENTS FOR COMMERCIAL REAL ESTATE LOANS

TERM LOAN – Existing or Completed Building – $30-75MM Urban/Dense Suburban 7/11/13

Named Insured (Borrower):		Hamilton Green Apartments LLC
Collateral Property Address:		311 (Buildings 1, 2 & 3) and 319 Lowell Street
		Andover, MA 01810
Mortgagee:	KeyBank National Association, its successors and/or assignees, for itself and, when applicable, as agent for other participating lenders
Mortgagee address:	KeyBank Real Estate Capital, Attention: Insurance Dept (Emily / Melissa) 11501 Outlook Street, Suite #300, Overland Park, KS 66211

Deductible under any line of coverage (except flood, quake and named windstorm) must not exceed $25,000.

Note:  If transaction includes mezzanine or equity loan, deductible must not exceed $25,000.

NOTE:  EVIDENCE OF INSURANCE MUST ADDRESS ALL THESE POINTS

PROPERTY

Required coverage and conditions:	·“Special Form” equivalent to ISO standard, or “Risks of loss not otherwise excluded” for coverage comparable to ISO Special Form, including damage from windstorm and hail ·Boiler & Machinery or Breakdown coverage for buildings with boilers, elevators or central HVAC (not required for per-unit HVAC) ·Replacement cost valuation for building.  Actual loss sustained for business income. ·No coinsurance / coinsurance waived ·At least 180 days extended period of recovery provision under business income
Additional causes of loss if specified:	o Flood – mandatory at NFIP limits ($250,000 per residential bldg., $500,000 per commercial bldg.) if property is in Special Flood Hazard Area o Additional or alternative flood limits: $1,000,000 o Earthquake $1,000,000 min.; up to 25% of value if location is high-risk for earthquake o Terrorism x Ordinance or Law:  (A) Loss of value of undamaged part – within full building limit (if sublimit applies, it should be at least 25% of hard cost value); (B) Demolition and (C) Increased Cost of Construction: $2,500,000 o Other
Amount of insurance:	Building:  Sufficient to cover insurable value (cost to construct less standard exclusions such as foundation):  $ 42,000,000 Business interruption:  Sufficient to cover 12 months’ revenue or rental income: $4,500,000
Mortgagee Clause:	Mortgagee identified as above. Mortgagee provisions must match standard clause of ISO forms or Lender’s Loss Payable clause per section D of ISO form CP 12 18 (06-07); INCLUDE COPY WITH CERTIFICATE
Documentation:	Acord 28 Evidence of Property Insurance ·      All details specified above must be specifically addressed.

iii

·      All deductibles and any sub-limits must be disclosed.

·      If program is blanket over other locations as well as loan property, show policy limits along with values reported to insurer for the subject location.

iv

INSURANCE REQUIREMENTS FOR COMMERCIAL REAL ESTATE LOANS

PERMANENT LOAN

- continued –

GENERAL LIABILITY

Coverage form:	Commercial General Liability — equivalent to ISO standard occurrence-based form, including bodily injury, property damage, personal injury, contractual liability and products/completed operations liability
Limit of liability per occurrence:	Not less than $30,000,000 combining primary and excess
Mortgagee as Additional Insured:	Mortgagee identified on page 1. Coverage granted per ISO form CG 20 18 or CG 20 26, or equivalent. INCLUDE COPY OF ENDORSEMENT OR POLICY PROVISIONS WITH CERTIFICATE.
Documentation:	Acord 25 Certificate of Liability Insurance

BORROWER’S PROPERTY, GENERAL LIABILITY AND UMBRELLA/EXCESS INSURERS MUST HAVE BEST’S RATINGS NOT LESS THAN A:X UNLESS OTHERWISE AGREED TO BY LENDER.

OTHER COVERAGES

Workers’ Compensation:	Statutory benefits for the state where the building is located.  This requirement may be waived if borrowing entity has no employees and property manager produces evidence of workers’ compensation coverage.
Employer’s Liability:	$100,000 per accident for accidental injury; $100,000 per employee and $100,000 aggregate for occupational illness or disease.
Business Auto Liability:	Covering owned, non-owned and hired/rented vehicles
Environmental Liability:	o Requirement applies only if checked.  Form should cover liability for bodily injury and property damage claims, both on and off site, arising from existing and newly-discovered conditions, and include mortgagee as an insured along with borrower.  Full quote and specimen forms must be submitted for lender approval. Required limit: $N/A

v

EX-31.1

Exhibit 31.1

New England Realty Associates Limited Partnership

CERTIFICATION

I, Ronald Brown, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q 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: August 12, 2013

1

EX-31.2

Exhibit 31.2

New England Realty Associates Limited Partnership

CERTIFICATIONS

I, Harold Brown, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q 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: August 12, 2013

1

EX-32.1

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 Quarterly Report on Form 10-Q of New England Realty Associates Limited Partnership for the six months ended June 30, 2013, 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: August 12, 2013
	/s/ Harold Brown
	Harold Brown
	Principal Financial Officer
	(Treasurer and Director of the
	Partnership’s General Partner, NewReal, Inc.)
Date: August 12, 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.

1

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CASH FLOW INFORMATION

6 Months Ended

Jun. 30, 2013

CASH FLOW INFORMATION

CASH FLOW INFORMATION

NOTE 11. CASH FLOW INFORMATION

During the six months ended June 30, 2013 and 2012, cash paid for interest was approximately $3,652,000, and $3,900,000 respectively.  Cash paid for state income taxes was approximately $48,000, and $44,000 during the six months ended June 30, 2013 and 2012 respectively.

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CONSOLIDATED STATEMENTS OF INCOME (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Revenues
Rental income	$ 8,904,762	$ 8,594,881	$ 17,828,769	$ 17,235,744
Laundry and sundry income	98,000	96,955	193,686	189,094
Total Revenues	9,002,762	8,691,836	18,022,455	17,424,838
Expenses
Administrative	697,238	406,665	1,149,855	892,158
Depreciation and amortization	1,479,860	1,534,033	2,933,991	3,037,517
Management fee	374,622	361,608	743,874	708,789
Operating	814,609	702,327	2,246,784	1,928,077
Renting	26,815	52,979	56,666	99,362
Repairs and maintenance	1,515,934	1,274,441	2,597,213	2,326,786
Taxes and insurance	1,204,862	1,022,677	2,365,792	2,152,870
Total Expenses	6,113,940	5,354,730	12,094,175	11,145,559
Income Before Other Income and Discontinued Operation	2,888,822	3,337,106	5,928,280	6,279,279
Other Income (Expense)
Interest income	351	553	715	1,192
Interest expense	(1,762,647)	(1,911,952)	(3,603,716)	(3,846,413)
(Loss) from investments in unconsolidated joint venture	(336,332)	(401,226)	(653,189)	(804,344)
Total Other Income (loss)	(2,098,628)	(2,312,625)	(4,256,190)	(4,649,565)
Income From Continuing Operations	790,194	1,024,481	1,672,090	1,629,714
Discontinued Operations
Income from discontinued operations	143	22,781	19,873	44,500
Gain on the sale of real estate	3,678,779		3,678,779
Total Discontinued Operations	3,678,922	22,781	3,698,652	44,500
Net Income	$ 4,469,116	$ 1,047,262	$ 5,370,742	$ 1,674,214
Income per Unit
Income before discontinued operations (in dollars per unit)	$ 6.08	$ 7.80	$ 12.85	$ 12.39
Income from discontinued operations (in dollars per unit)	$ 28.29	$ 0.17	$ 28.43	$ 0.34
Net Income per Unit (in dollars per unit)	$ 34.37	$ 7.97	$ 41.28	$ 12.73
Weighted Average Number of Units Outstanding (in units)	130,040	131,469	130,114	131,477

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OTHER ASSETS & DEPOSIT AND ESCROW HELD FOR ACQUISITION OF REAL ESTATE

6 Months Ended

Jun. 30, 2013

OTHER ASSETS & DEPOSIT AND ESCROW HELD FOR ACQUISITION OF REAL ESTATE

OTHER ASSETS & DEPOSIT AND ESCROW HELD FOR ACQUISITION OF REAL ESTATE

NOTE 4. OTHER ASSETS & DEPOSIT AND ESCROW HELD FOR ACQUISITION OF REAL ESTATE

Approximately $1,962,000 and $1,919,000 of security deposits are included in prepaid expenses and other assets at June 30, 2013 and December 31, 2012, respectively. The security deposits and escrow accounts are restricted cash.

Included in prepaid expenses and other assets at June 30, 2013 and December 31, 2012 is approximately $132,000 and $420,000, respectively, held in escrow to fund future capital improvements.

Financing fees of approximately $1,771,000 and $1,136,000 are net of accumulated amortization of approximately $739,000 and $772,000 at June 30, 2013 and December 31, 2012, respectively.

Included in deposit and escrow held for acquisition of real estate  is approximately $2,100,000 held by an intermediary in connection with the sale of Nashoba Apartments as well as a deposit of approximately $2,000,000 in connection with the purchase of Windsor Green Apartments in Andover, Massachusetts.  See Note 16 — Subsequent Events.

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RENTAL PROPERTIES (Tables)

6 Months Ended

Jun. 30, 2013

RENTAL PROPERTIES

Schedule of rental properties

	June 30, 2013			December 31, 2012			Useful Life
Land, improvements and parking lots	$	27,799,184		$	27,743,726		15—40 years
Buildings and improvements	119,862,255			118,739,283			15—40 years
Kitchen cabinets	3,963,114			3,544,868			5—10 years
Carpets	3,499,777			3,218,975			5—10 years
Air conditioning	761,371			746,043			5—10 years
Laundry equipment	429,571			378,806			5—7 years
Elevators	1,139,296			1,139,296			20-40 years
Swimming pools	241,772			235,242			10-30 years
Equipment	1,631,336			1,529,904			5—7 years
Motor vehicles	101,657			101,657			5 years
Fences	28,295			22,445			5—15 years
Furniture and fixtures	1,143,141			1,031,348			5—7 years
Smoke alarms	199,021			193,298			5—7 years
Total fixed assets	160,799,789			158,624,893
Less: Accumulated depreciation	(66,507,720		)	(63,651,293		)
	$	94,292,069		$	94,973,600

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2013

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At June 30, 2013 and December 31, 2012, 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 June 30, 2013 and December 31, 2012 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable,  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 June 30, 2013 and December 31, 2012, 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 June 30, 2013 and December 31, 2012, 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 June 30, 2013	$	131,671,632	$	140,763,628
At December 31, 2012	$	138,055,522	$	155,942,880
Investment Properties
At June 30, 2013	$	140,458,521	$	151,279,690
At December 31, 2012	$	138,256,711	$	157,983,030

Disclosure about fair value of financial instruments is based on pertinent information available to management as of June 30, 2013 and December 31, 2012. 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 June 30, 2013 and current estimates of fair value may differ significantly from the amounts presented herein.

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 3) (USD $)	3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 Hamilton Essex 81	Jun. 30, 2012 Hamilton Essex 81	Jun. 30, 2013 Hamilton Essex 81	Jun. 30, 2012 Hamilton Essex 81	Jun. 30, 2013 Hamilton Essex 81 NERA 50%	Jun. 30, 2012 Hamilton Essex 81 NERA 50%	Jun. 30, 2013 Hamilton Essex 81 NERA 50%	Jun. 30, 2012 Hamilton Essex 81 NERA 50%	Jun. 30, 2013 Hamilton Essex Development	Jun. 30, 2012 Hamilton Essex Development	Jun. 30, 2013 Hamilton Essex Development	Jun. 30, 2012 Hamilton Essex Development	Jun. 30, 2013 Hamilton Essex Development NERA 50%	Jun. 30, 2012 Hamilton Essex Development NERA 50%	Jun. 30, 2013 Hamilton Essex Development NERA 50%	Jun. 30, 2012 Hamilton Essex Development NERA 50%	Jun. 30, 2013 345 Franklin	Jun. 30, 2012 345 Franklin	Jun. 30, 2013 345 Franklin	Jun. 30, 2012 345 Franklin	Nov. 30, 2001 345 Franklin	Jun. 30, 2013 345 Franklin NERA 50%	Jun. 30, 2012 345 Franklin NERA 50%	Jun. 30, 2013 345 Franklin NERA 50%	Jun. 30, 2012 345 Franklin NERA 50%	Jun. 30, 2013 Hamilton 1025	Jun. 30, 2012 Hamilton 1025	Jun. 30, 2013 Hamilton 1025	Jun. 30, 2012 Hamilton 1025	Mar. 02, 2005 Hamilton 1025	Jun. 30, 2013 Hamilton 1025 NERA 50%	Jun. 30, 2012 Hamilton 1025 NERA 50%	Jun. 30, 2013 Hamilton 1025 NERA 50%	Jun. 30, 2012 Hamilton 1025 NERA 50%	Jun. 30, 2013 Hamilton Bay Apartments	Jun. 30, 2012 Hamilton Bay Apartments	Jun. 30, 2013 Hamilton Bay Apartments	Jun. 30, 2012 Hamilton Bay Apartments	Oct. 03, 2005 Hamilton Bay Apartments	Jun. 30, 2013 Hamilton Bay Apartments NERA 50%	Jun. 30, 2012 Hamilton Bay Apartments NERA 50%	Jun. 30, 2013 Hamilton Bay Apartments NERA 50%	Jun. 30, 2012 Hamilton Bay Apartments NERA 50%	Jun. 30, 2013 Hamilton Bay Sales	Jun. 30, 2012 Hamilton Bay Sales	Jun. 30, 2013 Hamilton Bay Sales	Jun. 30, 2012 Hamilton Bay Sales	Jun. 30, 2013 Hamilton Bay Sales NERA 50%	Jun. 30, 2012 Hamilton Bay Sales NERA 50%	Jun. 30, 2013 Hamilton Bay Sales NERA 50%	Jun. 30, 2012 Hamilton Bay Sales NERA 50%	Jun. 30, 2013 Hamilton Minuteman	Jun. 30, 2012 Hamilton Minuteman	Jun. 30, 2013 Hamilton Minuteman	Jun. 30, 2012 Hamilton Minuteman	Sep. 30, 2004 Hamilton Minuteman	Jun. 30, 2013 Hamilton Minuteman NERA 50%	Jun. 30, 2012 Hamilton Minuteman NERA 50%	Jun. 30, 2013 Hamilton Minuteman NERA 50%	Jun. 30, 2012 Hamilton Minuteman NERA 50%	Jun. 30, 2013 Hamilton on Main	Jun. 30, 2012 Hamilton on Main	Jun. 30, 2013 Hamilton on Main	Jun. 30, 2012 Hamilton on Main	Aug. 31, 2004 Hamilton on Main	Jun. 30, 2013 Hamilton on Main NERA 50%	Jun. 30, 2012 Hamilton on Main NERA 50%	Jun. 30, 2013 Hamilton on Main NERA 50%	Jun. 30, 2012 Hamilton on Main NERA 50%	Jun. 30, 2013 Dexter Park	Jun. 30, 2012 Dexter Park	Jun. 30, 2013 Dexter Park	Jun. 30, 2012 Dexter Park	Oct. 28, 2009 Dexter Park	Jun. 30, 2013 Dexter Park NERA 40%	Jun. 30, 2012 Dexter Park NERA 40%	Jun. 30, 2013 Dexter Park NERA 40%	Jun. 30, 2012 Dexter Park NERA 40%	Jun. 30, 2013 Total	Jun. 30, 2012 Total	Jun. 30, 2013 Total	Jun. 30, 2012 Total	Jun. 30, 2013 Total NERA 50%	Jun. 30, 2012 Total NERA 50%	Jun. 30, 2013 Total NERA 50%	Jun. 30, 2012 Total NERA 50%	Jun. 30, 2013 Total NERA 40%	Jun. 30, 2012 Total NERA 40%	Jun. 30, 2013 Total NERA 40%	Jun. 30, 2012 Total NERA 40%
Revenues
Rental income	$ 8,904,762	$ 8,594,881	$ 17,828,769	$ 17,235,744	$ 335,464	$ 333,509	$ 663,919	$ 626,002					$ 71,896	$ 72,046	$ 143,792	$ 144,092					$ 311,745	$ 287,052	$ 616,034	$ 578,703						$ 221,666	$ 211,699	$ 441,883	$ 421,727						$ 222,162	$ 216,498	$ 441,443	$ 436,161						$ 61,864	$ 59,714	$ 121,472	$ 111,192					$ 216,932	$ 201,973	$ 432,789	$ 398,676						$ 676,242	$ 649,487	$ 1,353,188	$ 1,297,371						$ 3,171,661	$ 3,051,260	$ 6,331,670	$ 6,062,838						$ 5,289,631	$ 5,083,238	$ 10,546,189	$ 10,076,761
Laundry and sundry income	98,000	96,955	193,686	189,094	5,151	3,540	8,997	7,073													1,288	600	1,933	1,188																																464	83	675	491						7,510	4,617	17,281	9,980						24,997	21,355	46,429	43,855						39,411	30,195	75,316	62,587
Total Revenues	9,002,762	8,691,836	18,022,455	17,424,838	340,615	337,049	672,916	633,075					71,896	72,046	143,792	144,092					313,033	287,652	617,968	579,891						221,666	211,699	441,883	421,727						222,162	216,498	441,443	436,161						61,864	59,714	121,472	111,192					217,396	202,056	433,464	399,167						683,752	654,104	1,370,469	1,307,350						3,196,658	3,072,615	6,378,099	6,106,693						5,329,041	5,113,433	10,621,505	10,139,348
Expenses
Administrative	697,238	406,665	1,149,855	892,158	6,074	4,330	9,928	7,606					386	547	703	1,114					8,699	8,864	14,431	15,366						2,124	2,189	3,805	2,480						3,669	15,351	7,551	23,711						2,813	1,895	3,586	4,103					2,042	1,982	2,465	2,931						9,769	12,303	18,408	26,098						66,845	66,572	113,724	109,434						102,422	114,031	174,601	192,842
Depreciation and amortization	1,479,860	1,534,033	2,933,991	3,037,517	106,494	103,742	212,066	206,865					2,245	3,243	4,488	6,485					110,055	112,159	215,739	222,140						60,128	63,477	120,215	126,593						76,840	74,723	153,638	149,087						20,035	19,736	41,098	39,472					79,225	79,613	157,933	158,546						244,233	240,010	488,767	476,667						1,440,022	1,438,955	2,878,479	2,870,999						2,139,276	2,135,656	4,272,422	4,256,855
Management fees					13,762	14,208	26,015	27,026					2,876	2,882	5,752	5,764					12,707	12,115	25,782	24,116						9,227	8,333	18,186	16,885						9,422	8,599	17,887	16,992						2,649	2,537	4,987	4,587					8,538	7,978	17,076	16,016						28,298	26,698	57,339	52,207						68,497	66,306	133,507	129,568						155,978	149,656	306,530	293,161
Operating	814,609	702,327	2,246,784	1,928,077	28,483	22,810	63,549	53,132													14,190	14,338	40,044	29,481						452	570	712	635						195	217	617	905						382	256	1,962	927					18,737	13,014	41,947	37,721						77,185	73,937	191,181	178,324						235,835	243,755	564,660	547,102						375,460	368,896	904,672	848,227
Renting	26,815	52,979	56,666	99,362	200	150	9,550	2,090													23		1,788	141						3,220	659	3,925	2,328						6,845	2,377	7,250	3,271						1,425	535	1,425	1,450					1,703	1,083	4,042	1,993						1,994	4,556	3,305	6,580						15,098	10,807	26,654	41,798						30,508	20,169	57,939	59,652
Repairs and maintenance	1,515,934	1,274,441	2,597,213	2,326,786	41,851	32,326	64,094	54,878					3,150	4,150	3,700	4,525					24,593	28,474	38,179	44,319						81,300	76,398	157,409	146,192						72,781	68,837	147,694	133,219						23,216	15,410	45,986	32,177					15,442	17,521	25,537	29,497						79,801	103,533	165,706	197,892						272,433	285,183	454,017	429,952						614,565	631,833	1,102,323	1,072,650
Taxes and insurance	1,204,862	1,022,677	2,365,792	2,152,870	55,878	50,693	111,759	100,878					12,209	12,844	24,407	25,186					28,069	25,296	56,255	50,561						38,381	36,671	77,131	73,592						35,468	40,902	71,147	81,677						10,389	11,918	20,619	23,560					31,082	25,458	61,948	50,868						84,473	83,186	169,290	168,309						346,742	364,513	742,955	744,643						642,690	651,482	1,335,512	1,319,275
Total Expenses	6,113,940	5,354,730	12,094,175	11,145,559	252,742	228,259	496,961	452,475					20,865	23,666	39,051	43,074					198,337	201,245	392,218	386,125						194,832	188,296	381,383	368,706						205,220	211,006	405,784	408,862						60,909	52,287	119,663	106,276					156,769	146,648	310,947	297,573						525,753	544,223	1,093,996	1,106,077						2,445,472	2,476,092	4,913,995	4,873,495						4,060,899	4,071,723	8,153,999	8,042,662
Income Before Other Income and Discontinued Operation	2,888,822	3,337,106	5,928,280	6,279,279	87,873	108,790	175,955	180,601					51,031	48,380	104,741	101,018					114,696	86,406	225,750	193,766						26,834	23,403	60,499	53,021						16,941	5,492	35,658	27,299						955	7,426	1,809	4,916					60,627	55,408	122,516	101,594						157,999	109,981	276,473	201,274						751,186	596,522	1,464,104	1,233,197						1,268,143	1,041,709	2,467,506	2,096,686
Other Income (loss)
Interest expense	(1,762,647)	(1,911,952)	(3,603,716)	(3,846,413)	(122,047)	(124,068)	(243,202)	(248,551)					(14,668)	(15,034)	(29,266)	(30,327)					(138,605)	(121,314)	(257,547)	(245,913)						(70,998)	(71,826)	(141,481)	(143,846)						(66,707)	(67,577)	(132,973)	(135,267)						(24,507)	(24,445)	(48,689)	(48,871)					(78,076)	(79,013)	(155,538)	(158,370)						(205,633)	(208,988)	(409,587)	(418,707)						(1,252,195)	(1,267,892)	(2,495,453)	(2,540,630)						(1,973,436)	(1,980,156)	(3,913,736)	(3,970,481)
Interest Income	351	553	715	1,192																	13	12	26	24						2	21	2	41															41	53	86	114																							57		57							113	86	171	178
Interest Income from Note																																																911	1,635	2,007	3,442																																911	1,635	2,007	3,442
Other Income (Expenses)																					(68,588)		(68,588)																																																												(68,588)		(68,588)
Total Other Income (loss)	(2,098,628)	(2,312,625)	(4,256,190)	(4,649,565)	(122,047)	(124,068)	(243,202)	(248,551)					(14,668)	(15,034)	(29,266)	(30,327)					(207,180)	(121,302)	(326,109)	(245,889)						(70,996)	(71,805)	(141,478)	(143,805)						(66,707)	(67,577)	(132,973)	(135,267)						(23,555)	(22,757)	(46,596)	(45,315)					(78,076)	(79,013)	(155,538)	(158,370)						(205,633)	(208,988)	(409,587)	(418,707)						(1,252,138)	(1,267,892)	(2,495,396)	(2,540,630)						(2,041,000)	(1,978,435)	(3,980,146)	(3,966,860)
Net Income	4,469,116	1,047,262	5,370,742	1,674,214	(34,174)	(15,278)	(67,247)	(67,950)					36,362	33,346	75,475	70,691					(92,484)	(34,895)	(100,359)	(52,123)						(44,162)	(48,402)	(80,979)	(90,784)						(49,765)	(62,085)	(97,315)	(107,968)						(22,600)	(15,331)	(44,787)	(40,398)					(17,449)	(23,605)	(33,022)	(56,776)						(47,633)	(99,107)	(133,114)	(217,433)						(500,951)	(671,370)	(1,031,292)	(1,307,433)						(772,857)	(936,726)	(1,512,639)	(1,870,174)
Proportionate share of net loss	$ (336,333)	$ (401,226)	$ (653,190)	$ (804,344)					$ (17,087)	$ (7,639)	$ (33,623)	$ (33,975)					$ 18,181	$ 16,673	$ 37,737	$ 35,345						$ (46,242)	$ (17,448)	$ (50,180)	$ (26,061)						$ (22,081)	$ (24,201)	$ (40,489)	$ (45,392)						$ (24,883)	$ (31,043)	$ (48,657)	$ (53,984)					$ (11,300)	$ (7,665)	$ (22,393)	$ (20,199)						$ (8,725)	$ (11,802)	$ (16,511)	$ (28,388)						$ (23,817)	$ (49,553)	$ (66,557)	$ (108,717)						$ (200,380)	$ (268,548)	$ (412,517)	$ (522,973)	$ (336,333)	$ (401,226)	$ (653,190)	$ (804,344)	$ (135,953)	$ (132,678)	$ (240,673)	$ (281,371)	$ (200,380)	$ (268,548)	$ (412,517)	$ (522,973)
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%	50.00%	50.00%	50.00%					50.00%	50.00%	50.00%	50.00%	50.00%					40.00%	40.00%	40.00%	40.00%	40.00%					50.00%	50.00%	50.00%	50.00%	40.00%	40.00%	40.00%	40.00%

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MORTGAGE NOTES PAYABLE (Details) (USD $)		6 Months Ended		0 Months Ended
	Jun. 30, 2013	Jun. 30, 2013 Mortgages payable	Jun. 30, 2013 Mortgages payable Boylston Street, Westgate Woburn, School Street and Cypress Street	Feb. 25, 2013 Mortgages payable Hamilton Cypress LLC Commercial-1031Exchange Brookline, Massachusetts	Mar. 11, 2013 Mortgages payable Property located at School Street	Jun. 30, 2013 Mortgages payable Minimum	Jun. 30, 2013 Mortgages payable Maximum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)					3.70%	3.25%	7.07%
Amount of monthly installments including principal		$ 656,000
Weighted average interest rate (as a percent)		5.30%
Effective interest rate (as a percent)	5.47%	5.40%
Annual maturities of mortgage debt
2014-current maturities	27,517,000
2015	9,160,000
2016	267,000
2017	486,000
2018	1,709,000
Thereafter	92,532,000
Total	131,671,000
Additional disclosures related to mortgages
Amount of mortgage paid off				3,697,000
Mortgage prepayment penalties				0
Increase in debt			28,000,000
Amount of new loan					15,000,000
Period of interest only payments on loans					3 years
Deferred financing cost associated with mortgage			67,000		159,000
Total amount expected to be refinanced			27,000,000
Expected amount of new loan			55,000,000
Expected prepayment penalties upon refinancing			$ 125,000

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TREASURY UNITS (Tables)

6 Months Ended

Jun. 30, 2013

TREASURY UNITS

Schedule of treasury units

Treasury Units at June 30, 2013 are as follows:

Class A	40,148
Class B	9,535
General Partnership	502
	50,185

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PARTNERS' CAPITAL (Tables)

6 Months Ended

Jun. 30, 2013

PARTNERS' CAPITAL

Schedule of information per depositary receipt

	Six Months Ended June 30,
	2013		2012
Income per Depositary Receipt before Discontinued Operations	$	0.43	$	0.41
Income from Discontinued Operations	0.95		0.01
Net Income per Depositary Receipt after Discontinued Operations	$	1.38	$	0.42
Distributions per Depositary Receipt	$	0.50	$	0.50

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details) (USD $)	6 Months Ended			0 Months Ended	6 Months Ended		0 Months Ended					1 Months Ended					1 Months Ended		0 Months Ended		1 Months Ended			6 Months Ended			6 Months Ended					0 Months Ended		1 Months Ended				1 Months Ended								6 Months Ended	12 Months Ended					3 Months Ended	6 Months Ended																										0 Months Ended					1 Months Ended		3 Months Ended		12 Months Ended			0 Months Ended					1 Months Ended		3 Months Ended		6 Months Ended				6 Months Ended				6 Months Ended
	Jun. 30, 2013 item	Jun. 30, 2012	Dec. 31, 2012	Oct. 28, 2009 Dexter Park item	Jun. 30, 2013 Dexter Park item	Jun. 30, 2012 Dexter Park item	Oct. 28, 2009 Dexter Park Mortgage loan	Jun. 30, 2013 Dexter Park Mortgage loan	Jun. 30, 2013 Hamilton Bay Apartments, LLC item	Jun. 30, 2012 Hamilton Bay Apartments, LLC item	Oct. 03, 2005 Hamilton Bay Apartments, LLC item	Feb. 28, 2007 Hamilton Bay Apartments, LLC Mortgage loan	Jun. 30, 2013 Hamilton Bay Apartments, LLC Mortgage loan	Jun. 30, 2013 Hamilton Bay Sales item	Jun. 30, 2012 Hamilton Bay Sales item	Apr. 30, 2008 Hamilton Bay Sales item	Apr. 30, 2008 Hamilton Bay Sales Mortgage loan	Jun. 30, 2013 Hamilton Bay Sales Mortgage loan	Aug. 01, 2013 Hamilton Bay Sales Mortgage loan Subsequent events	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	Jun. 30, 2013 Hamilton Essex 81, LLC item	Jun. 30, 2012 Hamilton Essex 81, LLC item	Jun. 30, 2013 Hamilton Essex 81, LLC Mortgage loan	Jun. 30, 2013 Hamilton Essex Development, LLC item	Jun. 30, 2012 Hamilton Essex Development, LLC item	Jun. 30, 2013 Hamilton Essex Development, LLC Mortgage loan	Aug. 31, 2008 Hamilton Essex Development, LLC Mortgage loan	Jun. 30, 2013 Hamilton 1025, LLC item	Jun. 30, 2012 Hamilton 1025, LLC item	Mar. 02, 2005 Hamilton 1025, LLC item	Mar. 02, 2005 Hamilton 1025, LLC Mortgage loan	Jun. 30, 2013 Hamilton 1025, LLC Mortgage loan	Oct. 31, 2004 Hamilton Minuteman, LLC	Jun. 30, 2013 Hamilton Minuteman, LLC item	Jun. 30, 2012 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	Jun. 30, 2013 Hamilton Minuteman, LLC Mortgage loan	Dec. 31, 2006 Hamilton Minuteman, LLC Mortgage loan	Jun. 30, 2013 Hamilton Place item	Jun. 30, 2012 Hamilton Place item	May 31, 2008 Hamilton Place item	Aug. 31, 2004 Hamilton Place item	Jun. 30, 2013 Hamilton on Main Apartments, LLC	Dec. 31, 2005 Hamilton on Main Apartments, LLC Mortgage loan item	Jun. 30, 2013 Hamilton on Main Apartments, LLC Mortgage loan	Jun. 30, 2013 345 Franklin, LLC item	Jun. 30, 2012 345 Franklin, LLC item	Nov. 30, 2001 345 Franklin, LLC item	Jun. 30, 2013 345 Franklin, LLC Mortgage loan	Jun. 30, 2013 345 Franklin, LLC Mortgage loan	Jun. 30, 2013 Residential buildings Dexter Park item	Jun. 30, 2012 Residential buildings Dexter Park item	Jun. 30, 2013 Residential buildings Hamilton Bay Apartments, LLC item	Jun. 30, 2012 Residential buildings Hamilton Bay Apartments, LLC item	Jun. 30, 2013 Residential buildings Hamilton Bay Sales item	Jun. 30, 2012 Residential buildings Hamilton Bay Sales item	Jun. 30, 2013 Residential buildings Hamilton Essex 81, LLC item	Jun. 30, 2012 Residential buildings Hamilton Essex 81, LLC item	Jun. 30, 2013 Residential buildings Hamilton 1025, LLC item	Jun. 30, 2012 Residential buildings Hamilton 1025, LLC item	Jun. 30, 2013 Residential buildings Hamilton Minuteman, LLC item	Jun. 30, 2012 Residential buildings Hamilton Minuteman, LLC item	Jun. 30, 2013 Residential buildings Hamilton Place item	Jun. 30, 2012 Residential buildings Hamilton Place item	Jun. 30, 2013 Residential buildings 345 Franklin, LLC item	Jun. 30, 2012 Residential buildings 345 Franklin, LLC item	Mar. 07, 2005 Apartment Hamilton Essex Development, LLC and Hamilton Essex 81, LLC Mortgage loan item	Mar. 07, 2005 Commercial Hamilton Essex Development, LLC and Hamilton Essex 81, LLC item	Jun. 30, 2013 Commercial Hamilton Essex 81, LLC item	Jun. 30, 2012 Commercial Hamilton Essex 81, LLC item	Jun. 30, 2013 Commercial Hamilton Essex Development, LLC item	Jun. 30, 2012 Commercial Hamilton Essex Development, LLC item	Jun. 30, 2013 Commercial Hamilton 1025, LLC item	Jun. 30, 2012 Commercial Hamilton 1025, LLC item	Mar. 07, 2005 Car parking lot Hamilton Essex Development, LLC and Hamilton Essex 81, LLC item	Dec. 15, 2011 HBC	Oct. 01, 2011 HBC	Aug. 01, 2011 HBC	Aug. 17, 2010 HBC	Oct. 28, 2009 HBC	Apr. 30, 2012 HBC	Feb. 29, 2012 HBC	Mar. 31, 2012 HBC	Dec. 31, 2010 HBC	Dec. 31, 2012 HBC	Dec. 31, 2011 HBC	Dec. 31, 2011 HBC Mortgage loan	Dec. 15, 2011 HBC Dexter Park Mortgage loan	Oct. 01, 2011 HBC Dexter Park Mortgage loan	Aug. 01, 2011 HBC Dexter Park Mortgage loan	Aug. 17, 2010 HBC Dexter Park Mortgage loan	Oct. 28, 2009 HBC Dexter Park Mortgage loan	Apr. 30, 2012 HBC Dexter Park Mortgage loan	Feb. 29, 2012 HBC Dexter Park Mortgage loan	Mar. 31, 2012 HBC Dexter Park Mortgage loan	Dec. 31, 2010 HBC Dexter Park Mortgage loan	Jun. 30, 2013 HBC Dexter Park Mortgage loan	Jun. 30, 2013 Management Company item	Jun. 30, 2013 Minimum Mortgage loan	Jun. 30, 2013 Minimum Limited Partnerships	Jun. 30, 2013 Minimum Hamilton on Main Apartments, LLC	Jun. 30, 2013 Minimum Harold Brown	Jun. 30, 2013 Maximum Mortgage loan	Jun. 30, 2013 Maximum Limited Partnerships	Jun. 30, 2013 Maximum Hamilton on Main Apartments, LLC	Jun. 30, 2013 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%		57.00%
Number of employees having ownership interest																																																																																																					6
Investments in joint venture	$ 11,137,984		$ 13,986,173	$ 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			48	48	168			120	120	20						49	49		1	1			176	176	176				42	42	42					148	148		280				40	40	40			409	409	48	48	120	120	48	48	175	175	42	42	148	148	40	40	49		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					4,750,000					2,368,000				10,750,000			8,292,000			2,067,000					5,000,000						5,500,000	8,025,000								16,825,000																																				7,168,000												7,168,000
Interest rate (as a percent)							5.57%					5.57%					5.75%							5.79%								5.67%						5.67%									5.18%					3.87%	3.87%																														6.00%												6.00%							3.25%				7.07%
Period for which the entity is required to make interest only payments							2 years					5 years																				5 years						5 years									3 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	131,671,632		138,055,522		87,999,131	89,166,547		88,000,000	4,670,319	4,730,815			4,670,000	1,668,000	1,668,000			1,668,000	1,318,000			8,292,287	8,406,631		2,067,378	2,118,990			4,901,467	4,964,768			4,901,000		5,397,023	5,466,352				5,397,000		15,462,916	15,748,668					15,463,000	10,000,000	6,936,102		10,000,000	10,000,000																																				1,668,600	1,668,600
Investments funded using cash reserves				8,757,000
Term of debt																																10 years						10 years									10 years						15 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																			350,000																																																																	918,600			2,500,000									918,600			2,500,000
Principal payments elected to be made																																																																															1,000,000	1,000,000	1,000,000				750,000						1,000,000	1,000,000	1,000,000				750,000
Interest paid	3,652,000	3,900,000																																																																																				18,807		18,960										18,807		0
Amortization period of intangible assets					12 months
Number of units retained for long-term investment					409	409			48	48	48											49	49		1	1			49	49	49				42	42						148	148				3		40	40
Number of units retained														15	15
Number of units sold	0													105	105														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)																											0.1947%
Principal amount of debt to be paid per month																											4,301
Cost associated with loan extension																											6,000
Maximum personal guaranty on mortgage																												1,000,000
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
Refinanced amount																																																				$ 10,000,000	$ 10,000,000

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RENTAL PROPERTIES (Details) (USD $)	6 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
Rental properties
Total fixed assets	$ 160,799,789	$ 158,624,893
Less: Accumulated depreciation	(66,507,720)	(63,651,293)
Total fixed assets, net	94,292,069	94,973,600
Land, improvements and parking lots
Rental properties
Total fixed assets	27,799,184	27,743,726
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	119,862,255	118,739,283
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	3,963,114	3,544,868
Kitchen cabinets | Minimum
Rental properties
Useful Life	5 years
Kitchen cabinets | Maximum
Rental properties
Useful Life	10 years
Carpets
Rental properties
Total fixed assets	3,499,777	3,218,975
Carpets | Minimum
Rental properties
Useful Life	5 years
Carpets | Maximum
Rental properties
Useful Life	10 years
Air conditioning
Rental properties
Total fixed assets	761,371	746,043
Air conditioning | Minimum
Rental properties
Useful Life	5 years
Air conditioning | Maximum
Rental properties
Useful Life	10 years
Laundry equipment
Rental properties
Total fixed assets	429,571	378,806
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
Elevators | Minimum
Rental properties
Useful Life	20 years
Elevators | Maximum
Rental properties
Useful Life	40 years
Swimming pools
Rental properties
Total fixed assets	241,772	235,242
Swimming pools | Minimum
Rental properties
Useful Life	10 years
Swimming pools | Maximum
Rental properties
Useful Life	30 years
Equipment
Rental properties
Total fixed assets	1,631,336	1,529,904
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	101,657
Useful Life	5 years
Fences
Rental properties
Total fixed assets	28,295	22,445
Fences | Minimum
Rental properties
Useful Life	5 years
Fences | Maximum
Rental properties
Useful Life	15 years
Furniture and fixtures
Rental properties
Total fixed assets	1,143,141	1,031,348
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	$ 199,021	$ 193,298
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	2,219
Number of properties	19
Residential and mixed-use properties | Partially owned properties
RENTAL PROPERTIES
Number of units	798
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

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PARTNERS' CAPITAL (Details) (USD $)	6 Months Ended			6 Months Ended	0 Months Ended	6 Months Ended								6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012	Jun. 30, 2013 Limited Partner item	Jan. 03, 2012 Class A	Jun. 30, 2013 Class A	Aug. 31, 2013 Class A	Jun. 14, 2013 Class A	Dec. 31, 2012 Class A	Sep. 30, 2012 Class A	Jun. 30, 2012 Class A	Mar. 31, 2012 Class A	Aug. 20, 2007 Class A	Jun. 30, 2013 Class B	Jun. 30, 2013 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	$ 7.50
Quarterly distributions per depositary receipt (in dollars per share)							$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25
Distribution per unit (in dollars per unit)			$ 30.00
Earnings per depository receipt
Income per Depositary Receipt before Discontinued Operations (in dollars per share)	$ 0.43	$ 0.41
Income from Discontinued Operations (in dollars per share)	$ 0.95	$ 0.01
Net Income (loss) per Depositary Receipt after Discontinued Operations (in dollars per share)	$ 1.38	$ 0.42
Distributions per Depositary Receipt (in dollars per share)	$ 0.50	$ 0.50	$ 1.00

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 4) (USD $)	Jun. 30, 2013
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2014	$ 27,517,000
3/31/2015	9,160,000
3/31/2016	267,000
3/31/2017	486,000
3/31/2018	1,709,000
Thereafter	92,532,000
Total	131,671,000
Weighted average interest rate (as a percent)	5.39%
Effective interest rate (as a percent)	5.47%
Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2014	129,342
3/31/2015	137,033
3/31/2016	145,181
3/31/2017	7,880,731
Total	8,292,287
Hamilton Essex Development
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2014	2,067,378
Total	2,067,378
345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2017	177,340
3/31/2018	187,209
Thereafter	9,635,451
Total	10,000,000
Hamilton 1025
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2014	67,037
3/31/2015	70,994
3/31/2016	74,427
3/31/2017	4,689,009
Total	4,901,467
Hamilton Bay Apartments
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2014	68,027
3/31/2015	71,915
3/31/2016	76,024
3/31/2017	4,454,353
Total	4,670,319
Hamilton Bay Sales
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2014	1,668,000
Total	1,668,000
Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2014	73,421
3/31/2015	77,755
3/31/2016	81,510
3/31/2017	5,164,338
Total	5,397,024
Hamilton on Main
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2014	300,942
3/31/2015	15,161,974
Total	15,462,916
Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2014	1,311,782
3/31/2015	1,386,742
3/31/2016	1,465,987
3/31/2017	1,549,759
3/31/2018	1,638,319
Thereafter	80,646,542
Total	87,999,131
Total
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2014	5,685,930
3/31/2015	16,906,414
3/31/2016	1,843,129
3/31/2017	23,915,528
3/31/2018	1,825,528
Thereafter	90,281,993
Total	$ 140,458,522

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DISCONTINUED OPERATIONS (Tables)

6 Months Ended

Jun. 30, 2013

DISCONTINUED OPERATIONS

Summary of income from discontinued operations

	June 30,		June 30,
	2013		2012
Total Revenues	$	193,274	$	227,960
Operating and other expenses	171,290		160,746
Depreciation and amortization	2,111		22,714
	173,401		183,460
Income from discontinued operations	$	19,873	$	44,500

Schedule of gain on the sale of Nashoba

Gain on the Sale of Nashoba in the second quarter of 2013:

Sale price	$	4,300,000
Net book value	476,766
Expense of sale	144,455
Gain on the sale of real estate	$	3,678,779

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CASH FLOW INFORMATION (Details) (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
CASH FLOW INFORMATION
Cash paid for interest	$ 3,652,000	$ 3,900,000
Cash paid for state income taxes	$ 48,000	$ 44,000

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MORTGAGE NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2013

MORTGAGE NOTES PAYABLE

Schedule of approximate annual maturities

Approximate annual maturities at June 30, 2013 are as follows:

2014—current maturities	$	27,517,000
2015	9,160,000
2016	267,000
2017	486,000
2018	1,709,000
Thereafter	92,532,000
	$	131,671,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Cash Flows from Operating Activities
Net income	$ 5,370,742	$ 1,674,214
Adjustments to reconcile net income to net cash provided by operating activities
Gain on the sale of real estate	(3,678,779)
Depreciation and amortization	2,933,991	3,037,517
Loss from investments in joint venture	653,189	804,344
Depreciation and amortization - discontinued operations	2,111	22,714
Change in operating assets and liabilities
Decrease (Increase) in rents receivable	45,591	(12,524)
(Decrease) in accounts payable and accrued expense	(343,127)	(147,163)
(Increase) Decrease in real estate tax escrow	102,232	(30,994)
(Increase) Decrease in prepaid expenses and other assets	(265,100)	212,405
Increase in advance rental payments and security deposits	308,037	170,641
Total Adjustments	(241,855)	4,056,940
Net cash provided by operating activities	5,128,887	5,731,154
Cash Flows from Investing Activities
Proceeds from unconsolidated joint ventures	2,205,880	677,500
Net proceeds from the sale of real estate	2,155,546
(Investment in) unconsolidated joint ventures	(10,880)
Deposit and escrow held for the acquisition of real estate	(4,103,906)
Improvement of rental properties	(2,189,413)	(829,017)
Net cash (used in) investing activities	(1,942,773)	(151,517)
Cash Flows from Financing Activities
Payment of financing costs	(142,362)	(187,973)
Principal payments of note payable		(1,668,600)
Proceeds of mortgage notes payable	15,000,000
Principal payments and payoffs of mortgage notes payable	(19,383,890)	(550,319)
Stock buyback	(399,487)	(69,379)
Distributions to partners	(1,950,596)	(1,971,689)
Net cash (used in) financing activities	(6,876,335)	(4,447,960)
Net (Decrease) Increase in Cash and Cash Equivalents	(3,690,221)	1,131,677
Cash and Cash Equivalents, at beginning of period	6,981,906	4,050,157
Cash and Cash Equivalents, at end of period	$ 3,291,685	$ 5,181,834

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RENTAL PROPERTIES

6 Months Ended

Jun. 30, 2013

RENTAL PROPERTIES

RENTAL PROPERTIES

NOTE 2. RENTAL PROPERTIES

As of June 30, 2013, the Partnership and its Subsidiary Partnerships owned 2,219 residential apartment units in 19 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 June 30, 2013, the Partnership and its 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 June 30, 2013 with a total of 798 units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

Rental properties consist of the following:

	June 30, 2013			December 31, 2012			Useful Life
Land, improvements and parking lots	$	27,799,184		$	27,743,726		15—40 years
Buildings and improvements	119,862,255			118,739,283			15—40 years
Kitchen cabinets	3,963,114			3,544,868			5—10 years
Carpets	3,499,777			3,218,975			5—10 years
Air conditioning	761,371			746,043			5—10 years
Laundry equipment	429,571			378,806			5—7 years
Elevators	1,139,296			1,139,296			20-40 years
Swimming pools	241,772			235,242			10-30 years
Equipment	1,631,336			1,529,904			5—7 years
Motor vehicles	101,657			101,657			5 years
Fences	28,295			22,445			5—15 years
Furniture and fixtures	1,143,141			1,031,348			5—7 years
Smoke alarms	199,021			193,298			5—7 years
Total fixed assets	160,799,789			158,624,893
Less: Accumulated depreciation	(66,507,720		)	(63,651,293		)
	$	94,292,069		$	94,973,600

On April 8, 2013, the Partnership entered into a purchase and sales agreement to sell the Nashoba Apartments in Acton, Massachusetts.  On May 29, 2013 this agreement was successfully completed for the sale price of $4,300,000.  The net proceeds of approximately $2,100,000 were transferred to Investment Property, Exchange Services, Inc. a Qualified Intermediary.  These funds were held by the intermediary in order to maintain the Partnership’s ability to structure a tax free exchange in accordance with the Internal Revenue Service’s rules under Sec. 1031.  The gain on the sale in accordance with GAAP is approximately $3,679,000.

On July 15, 2013, Hamilton Green Apartments, LLC, a newly formed subsidiary of the Partnership, purchased Windsor Green at Andover, a 193 unit apartment complex located at 311 and 319 Lowell Street, Andover, Massachusetts.  The purchase price was $62,500,000.  See Note 16 — Subsequent Events.

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MORTGAGE NOTES PAYABLE

6 Months Ended

Jun. 30, 2013

MORTGAGE NOTES PAYABLE

MORTGAGE NOTES PAYABLE

NOTE 5. MORTGAGE NOTES PAYABLE

At June 30, 2013 and December 31, 2012, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At June 30, 2013, the interest rates on these loans ranged from 3.25% to 7.07%, payable in monthly installments aggregating approximately $656,000, including principal, to various dates through 2026. The majority of the mortgages are subject to prepayment penalties.  At June 30, 2013, the weighted average interest rate on the above mortgages was 5.3%. The effective rate of 5.4% 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 June 30, 2013 are as follows:

2014—current maturities	$	27,517,000
2015	9,160,000
2016	267,000
2017	486,000
2018	1,709,000
Thereafter	92,532,000
	$	131,671,000

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.

On June 30, 2013, the Partnership was in the process of refinancing the mortgages at Boylston Downtown, LLC and Westgate Apartments LLC.  The total amount expected to be refinanced is approximately $27,000,000.  The amount of the new loans will total approximately $55,000,000 resulting in additional debt of approximately $28,000,000.   As of June 30, 2013, the Partnership has paid approximately $67,000 of financing costs related to the expected refinancing.  This amount is included in financing and leasing fees in the consolidated balance sheet.  The Partnership may incur prepayment penalties of approximately $125,000 in connection with this refinancing.  The Partnership has no lender commitment at this time for Westgate Apartments, LLC and anticipates closing on this mortgage by the end of the third quarter of 2013.  The Partnership refinanced Boylston Downtown, LLC in July 2013.  See Note 16 — Subsequent Events for the details of this refinancing.

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2013

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, LLC.  Total fees paid including discontinued operations were approximately $752,000 and $718,000 during the six months ended June 30, 2013 and 2012.

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. During the six months ended June 30, 2013 and 2012, approximately $453,000 and $328,000 was charged to NERA for legal, accounting, construction, maintenance, rental and architectural services and supervision of capital improvements.  Of the 2013 expenses referred to above, approximately $154,000 consisted of repairs and maintenance and $184,000 of administrative expense.  Approximately $115,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2013, the Hamilton Company received approximately $373,000 from the Investment Properties of which approximately $301,000 was the management fee, approximately $7,000 was for construction, architectural services and supervision of capital projects, approximately $37,000 was for maintenance services and approximately $28,000 was for administrative services. The management fee is equal to 4% of gross receipts of 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 $1,388,000, and $1,247,000 for the six months ended June 30, 2013 and 2012, 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 2013 and 2012.

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 six months ended June 30, 2013 and 2012 the Management Company charged the Partnership $62,500 ($125,000 per year) 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 each of the six months ended June30, 2013 and 2012 this individual received fees of $37,500.

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 57%. See Note 14 for a description of the properties and their operations.

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 was $18,960.

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

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TREASURY UNITS (Details) (USD $)	0 Months Ended		6 Months Ended		70 Months Ended				0 Months Ended	1 Months Ended	0 Months Ended	6 Months Ended		70 Months Ended			0 Months Ended	1 Months Ended	0 Months Ended	3 Months Ended	6 Months Ended		70 Months Ended	0 Months Ended	1 Months Ended			0 Months Ended	3 Months Ended	6 Months Ended		70 Months Ended	0 Months Ended	1 Months Ended
	Aug. 08, 2008	Aug. 20, 2007	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Mar. 06, 2008	Jan. 30, 2008	Jan. 15, 2008	Aug. 09, 2013 Subsequent event	Aug. 09, 2013 Subsequent event	Sep. 17, 2008 Class A Treasury Units	Jun. 30, 2013 Class A Treasury Units	Jun. 30, 2012 Class A Treasury Units	Jun. 30, 2013 Class A Treasury Units	Jan. 03, 2012 Class A Treasury Units	Aug. 20, 2007 Class A Treasury Units	Aug. 09, 2013 Class A Treasury Units Subsequent event	Aug. 09, 2013 Class A Treasury Units Subsequent event	Sep. 17, 2008 Class B Treasury Units	Jun. 30, 2013 Class B Treasury Units	Jun. 30, 2013 Class B Treasury Units	Jun. 30, 2012 Class B Treasury Units	Jun. 30, 2013 Class B Treasury Units	Aug. 09, 2013 Class B Treasury Units Subsequent event	Aug. 09, 2013 Class B Treasury Units Subsequent event	Jun. 30, 2013 Class B Treasury Units Harold Brown, the treasurer of the General Partner	Jun. 30, 2013 Class B Treasury Units Ronald Brown, the president of the General Partner	Sep. 17, 2008 General Partnership	Jun. 30, 2013 General Partnership	Jun. 30, 2013 General Partnership	Jun. 30, 2012 General Partnership	Jun. 30, 2013 General Partnership	Aug. 09, 2013 General Partnership Subsequent event	Aug. 09, 2013 General Partnership Subsequent event	Jun. 30, 2013 General Partnership Harold Brown, the treasurer of the General Partner	Jun. 30, 2013 General Partnership Ronald Brown, the president of the General Partner
Treasury units (in shares)			50,185		50,185							40,148		40,148						9,535	9,535		9,535						502	502		502
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)					1,229,636				12,000	12,000		9,709		1,229,636						0	77		1,998						0	4		105
Repurchase price of depository receipts (in dollars per share)					$ 24.68				$ 41.50	$ 41.50
Repurchase price of units (in dollars per share)														$ 740.40			$ 1,245.00	$ 1,245.00					$ 627.53	$ 95	$ 95							$ 627.53	$ 5	$ 5
Issuance of treasury units (in shares)											6,642
Repurchase of units (in shares)			(404)	(86)															6,309									333
Repurchase of units			$ 399,487	$ 69,379	$ 31,786,000				$ 498,000	$ 498,000		$ 321,240	$ 55,778								$ 74,335	$ 12,921		$ 118,275	$ 118,275					$ 3,912	$ 680		$ 6,225	$ 6,225
Percentage of units owned by partners																										75.00%	25.00%								75.00%	25.00%

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RENTAL INCOME (Tables)

6 Months Ended

Jun. 30, 2013

RENTAL INCOME

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

	Commercial Property Leases
2014	$	2,441,000
2015	1,915,000
2016	1,698,000
2017	938,000
2018	589,000
Thereafter	583,000
	$	8,164,000

Schedule of information for commercial leases

					Percentage of
	Annual base rent		Total square feet	Total number	annual base rent for
	for expiring leases		for expiring leases	of leases expiring	expiring leases
Through June 30,
2014	$	150,282	6,462	7	6	%
2015	569,499		28,181	10	23	%
2016	680,253		25,894	7	28	%
2017	476,797		16,272	5	19	%
2018	266,841		8,567	7	11	%
2019	0		0	0	0	%
2020	265,032		6,906	3	11	%
2021	64,800		1,800	1	2	%
2022	0		0	0	0	%
2023	0		0	0	0	%
Totals	$	2,473,504	94,082	40	100	%

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SIGNIFICANT ACCOUNTING POLICIES (Details)	Jun. 30, 2013 item
Residential and mixed-use properties
Line of Business
Number of properties	19
Number of units	2,219
Condominium
Line of Business
Number of units	19
Wholly owned properties
Line of Business
Number of properties	23
Wholly owned properties | Residential buildings
Line of Business
Number of properties	15
Number of units	2,219
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	798
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

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OTHER ASSETS & DEPOSIT AND ESCROW HELD FOR ACQUISITION OF REAL ESTATE (Details) (USD $)	Jun. 30, 2013	May 29, 2013	Dec. 31, 2012
OTHER ASSETS & DEPOSIT AND ESCROW HELD FOR ACQUISITION OF REAL ESTATE
Security deposits	$ 1,962,000		$ 1,919,000
Escrow deposits to fund future capital improvements	132,000		420,000
Financing fees, net	1,771,000		1,136,000
Accumulated amortization on financing and leasing fees	739,000		772,000
Amount of sale proceeds transferred to Investment Property	2,100,000	2,100,000
Deposits in connection with the purchase of Windsor Green Apartments in Andover, Massachusetts transferred to investment property	$ 2,000,000

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DISCONTINUED OPERATIONS (Details) (USD $)	3 Months Ended		6 Months Ended		0 Months Ended	3 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	May 29, 2013 Nashoba Apartments L.P. Residential Apartments Acton, Massachusetts	Jun. 30, 2013 Nashoba Apartments L.P. Residential Apartments Acton, Massachusetts
DISCONTINUED OPERATIONS
Total Revenues			$ 193,274	$ 227,960
Operating and other expenses			171,290	160,746
Depreciation and amortization			2,111	22,714
Total Expenses			173,401	183,460
Income from discontinued operations	143	22,781	19,873	44,500
DISCONTINUED OPERATIONS
Sales price					4,300,000	4,300,000
Net book value						476,766
Expense of sale						144,455
Gain on the sale of real estate	$ 3,678,779		$ 3,678,779			$ 3,678,779

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TAXABLE INCOME AND TAX BASIS (Details) (USD $)	12 Months Ended	0 Months Ended	3 Months Ended
	Dec. 31, 2012	May 29, 2013 Nashoba Apartments in Acton, Massachusetts	Jun. 30, 2013 Nashoba Apartments in Acton, Massachusetts
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
Excess amount of statement income from joint venture investments over taxable income	1,700,000
TAXABLE INCOME AND TAX BASIS
Sales price of real estate properties		4,300,000	4,300,000
Gain on sale of property		$ 3,679,000

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CONSOLIDATED BALANCE SHEETS (Parenthetical)	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012	Dec. 31, 2011
CONSOLIDATED BALANCE SHEETS
Partners' Capital, units outstanding	130,040	130,444	131,398	131,484

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TREASURY UNITS

6 Months Ended

Jun. 30, 2013

TREASURY UNITS

TREASURY UNITS

NOTE 8. TREASURY UNITS

Treasury Units at June 30, 2013 are as follows:

Class A	40,148
Class B	9,535
General Partnership	502
	50,185

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 Restated 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 June 30, 2013, the Partnership has repurchased 1,229,636 Depositary Receipts at an average price of $24.68 per receipt (or $740.40 per underlying Class A Unit), 1,998 Class B Units and 105 General Partnership Units, both at an average price of $627.53 per Unit, totaling approximately $31,786,000 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 six months ended June 30, 2013, the Partnership purchased 9,709 Depositary Receipts for a cost of $321,240; 77 Class B Units for a cost of $74,335 and 4 General Partnership Units for a cost of $3,912 for a total cost of $399,487.

From July 1, 2013 through August 9, 2013, the Partnership purchased a total of 12,000 Depositary Receipts.  The price was $41.50 per receipt or $1,245.00 Class A unit.  The total cost was $498,000.  The Partnership is required to repurchase approximately 95 Class B Units and 5 General Partner units at a cost of $118,275 and $6,225, respectively.

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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, 2011	$ (21,310,852)		$ (17,052,134)	$ (4,045,783)	$ (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
Distribution to Partners	(1,971,689)		(1,577,351)	(374,621)	(19,717)
Stock Buyback	(69,379)		(55,778)	(12,921)	(680)
Stock Buyback (in units)	(86)					86
Net Income	1,674,214		1,339,372	318,101	16,742
Balance at Jun. 30, 2012	(21,677,705)		(17,345,891)	(4,115,224)	(216,590)
Balance (in units) at Jun. 30, 2012	131,398	180,225	144,180	34,243	1,802	48,827
Balance at Dec. 31, 2012	(22,515,678)		(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
Increase (Decrease) in Partners' Capital
Distribution to Partners	(1,950,596)		(1,560,476)	(370,614)	(19,506)
Stock Buyback	(399,487)		(321,240)	(74,335)	(3,912)
Stock Buyback (in units)	(404)					404
Net Income	5,370,742		4,296,594	1,020,441	53,707
Balance at Jun. 30, 2013	$ (19,495,018)		$ (15,602,204)	$ (3,698,174)	$ (194,640)
Balance (in units) at Jun. 30, 2013	130,040	180,225	144,180	34,243	1,802	50,185

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CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2013	Dec. 31, 2012
ASSETS
Rental Properties	$ 94,292,069	$ 94,973,600
Property Held for Sale	0	462,250
Cash and Cash Equivalents	3,291,685	6,981,906
Rents Receivable	429,492	475,083
Real Estate Tax Escrows	347,420	449,652
Prepaid Expenses and Other Assets	2,767,011	3,073,890
Deposit and Escrow Held for the Acquisition of Real Estate	4,103,906
Investments in Unconsolidated Joint Ventures	11,137,984	13,986,173
Financing and Leasing Fees	1,770,603	1,135,936
Total Assets	118,140,170	121,538,490
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	131,671,632	138,055,522
Accounts Payable and Accrued Expenses	2,018,815	2,361,942
Advance Rental Payments and Security Deposits	3,944,741	3,636,704
Total Liabilities	137,635,188	144,054,168
Commitments and Contingent Liabilities (Notes 3 and 9)
Partners' Capital 130,040 and 130,444 units outstanding in 2013 and 2012 respectively	(19,495,018)	(22,515,678)
Total Liabilities and Partners' Capital	$ 118,140,170	$ 121,538,490

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SUBSEQUENT EVENTS (Details) (USD $)	6 Months Ended		70 Months Ended					6 Months Ended		70 Months Ended	3 Months Ended	6 Months Ended		70 Months Ended	3 Months Ended	6 Months Ended		70 Months Ended	1 Months Ended		0 Months Ended	1 Months Ended	0 Months Ended	1 Months Ended	0 Months Ended	1 Months Ended	0 Months Ended	1 Months Ended	0 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2013 Hamilton Bay Unit Sales item	Jun. 30, 2012 Hamilton Bay Unit Sales item	Apr. 30, 2008 Hamilton Bay Unit Sales item	Jun. 30, 2013 Class A units	Jun. 30, 2012 Class A units	Jun. 30, 2013 Class A units	Jun. 30, 2013 Class B Units	Jun. 30, 2013 Class B Units	Jun. 30, 2012 Class B Units	Jun. 30, 2013 Class B Units	Jun. 30, 2013 General Partnership units	Jun. 30, 2013 General Partnership units	Jun. 30, 2012 General Partnership units	Jun. 30, 2013 General Partnership units	Apr. 30, 2008 Mortgage Hamilton Bay Unit Sales	Jun. 30, 2013 Mortgage Hamilton Bay Unit Sales	Aug. 09, 2013 Subsequent events	Aug. 09, 2013 Subsequent events	Aug. 09, 2013 Subsequent events Class A units	Aug. 09, 2013 Subsequent events Class A units	Aug. 09, 2013 Subsequent events Class B Units	Aug. 09, 2013 Subsequent events Class B Units	Aug. 09, 2013 Subsequent events General Partnership units	Aug. 09, 2013 Subsequent events General Partnership units	Aug. 01, 2013 Subsequent events Mortgage Hamilton Bay Unit Sales	Jul. 07, 2013 Subsequent events Boylston Downtown LP Mortgage	Jul. 15, 2013 Subsequent events Hamilton Green Apartments, LLC item	Jul. 15, 2013 Subsequent events Hamilton Green Apartments, LLC Mortgage
Subsequent events
Amount of new loan																			$ 2,368,000											$ 40,000,000
Interest rate (as a percent)																			5.75%											3.97%
Period for which the entity is required to make interest only payments																														3 years
Amortization period of debt																														30 years
Amount of loan proceeds utilized for pay off the existing mortgage																														19,500,000
Outstanding amount of mortgage loan	131,671,632		131,671,632	138,055,522	1,668,000	1,668,000														1,668,000									1,318,000	20,000,000
Number of units					120	120	20																								193
Purchase price of real estate properties																															62,500,000
Short term finance for real estate properties																															40,000,000
Use of funds for real estate properties from exchange of apartments and cash reserves																															2,100,000
Basis of interest rate																																LIBOR
Notional margin over basis of interest rate (as a percent)																																2.25%
Current interest rate (as a percent)																																2.45%
Repayment of loan																													350,000
Contribution required to repay the debt																													800,000
Repurchase of depository receipts (in shares)			1,229,636					9,709		1,229,636	0	77		1,998	0	4		105			12,000	12,000
Repurchase price of depository receipts (in dollars per share)			$ 24.68																		$ 41.50	$ 41.50
Repurchase price of units (in dollars per share)										$ 740.40				$ 627.53				$ 627.53					$ 1,245.00	$ 1,245.00	$ 95	$ 95	$ 5	$ 5
Total cost of repurchase	$ 399,487	$ 69,379	$ 31,786,000					$ 321,240	$ 55,778			$ 74,335	$ 12,921			$ 3,912	$ 680				$ 498,000	$ 498,000			$ 118,275	$ 118,275	$ 6,225	$ 6,225

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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2013

FAIR VALUE MEASUREMENTS

Schedule of carrying amounts and estimated fair value of debt

	Carrying Amount		Estimated Fair Value
Mortgage Notes Payable
Partnership Properties
At June 30, 2013	$	131,671,632	$	140,763,628
At December 31, 2012	$	138,055,522	$	155,942,880
Investment Properties
At June 30, 2013	$	140,458,521	$	151,279,690
At December 31, 2012	$	138,256,711	$	157,983,030

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2013

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 23 properties which include 15 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex.   These properties total 2,219 apartment units, 19 condominium units and 110,949 square feet of commercial space.  Additionally, the Partnership also owns a 40-50% interest in 9 residential and mixed use properties consisting of 798 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.

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 2013 and 2012 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 2013 and 2012. The Partnership makes its temporary cash investments with high-credit quality financial institutions.  At June 30, 2013, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.0% to 0.45%.  At June 30, 2013 and 2012, respectively approximately $4,330,000 and $6,253,000 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 $16,167 and $34,544 for the six months ended June 30, 2013 and 2012, 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 six months ended June 30, 2013 and 2012 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.

Reclassifications

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

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FAIR VALUE MEASUREMENTS (Details) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Mortgage Notes Payable
Carrying Amount	$ 131,671,632	$ 138,055,522
Partnership Properties
Mortgage Notes Payable
Carrying Amount	131,671,632	138,055,522
Estimated Fair Value	140,763,628	155,942,880
Investment Properties
Mortgage Notes Payable
Carrying Amount	140,458,521	138,256,711
Estimated Fair Value	$ 151,279,690	$ 157,983,030

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ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS (Details) (USD $)	6 Months Ended
	Jun. 30, 2013
ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS
Period for advance rental payment	1 month
Amount received for prepaid rent	$ 1,449,000
Security deposits	$ 1,962,000

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RENTAL PROPERTIES (Details 2) (USD $)	6 Months Ended		0 Months Ended		3 Months Ended
	Jun. 30, 2013	May 29, 2013	Jul. 15, 2013 Hamilton Green Apartments, LLC Subsequent event item	May 29, 2013 Nashoba Apartments L.P. Residential Apartments Acton, Massachusetts	Jun. 30, 2013 Nashoba Apartments L.P. Residential Apartments Acton, Massachusetts
RENTAL PROPERTIES
Sales price of real estate properties				$ 4,300,000	$ 4,300,000
Amount of sale proceeds transferred to Investment Property	2,100,000	2,100,000
Net proceeds from sale of property	2,155,546
Gain on sale of property				3,679,000
Number of units			193
Purchase price of real estate properties			$ 62,500,000

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RELATED PARTY TRANSACTIONS (Details) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended			6 Months Ended				12 Months Ended	6 Months Ended						0 Months Ended					1 Months Ended		3 Months Ended		12 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013 item	Jun. 30, 2012	Dec. 31, 2012	Jun. 30, 2013 Limited Partnerships Minimum	Jun. 30, 2013 Limited Partnerships Maximum	Jun. 30, 2013 General Partner or Management Company	Jun. 30, 2012 General Partner or Management Company	Jun. 30, 2013 Management Company item	Jun. 30, 2012 Management Company	Dec. 31, 2012 Management Company	Jun. 30, 2013 Hamilton Company	Jun. 30, 2013 Dexter Park	Jun. 30, 2013 President of Management Company	Jun. 30, 2012 President of Management Company	Jun. 30, 2013 Harold Brown Minimum	Jun. 30, 2013 Harold Brown Maximum	Dec. 15, 2011 HBC Holdings, LLC	Oct. 01, 2011 HBC Holdings, LLC	Aug. 01, 2011 HBC Holdings, LLC	Aug. 17, 2010 HBC Holdings, LLC	Oct. 28, 2009 HBC Holdings, LLC	Apr. 30, 2012 HBC Holdings, LLC	Feb. 29, 2012 HBC Holdings, LLC	Mar. 31, 2012 HBC Holdings, LLC	Dec. 31, 2010 HBC Holdings, LLC	Dec. 31, 2012 HBC Holdings, LLC	Dec. 31, 2011 HBC Holdings, LLC
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue			4.00%										4.00%	2.00%
Management fee as a percentage of gross receipts rental revenue and laundry income of Linewt, LLC			3.00%
Management fees of related party			$ 752,000	$ 718,000
Costs related to professional services								453,000	328,000
Repairs and maintenance	1,515,934	1,274,441	2,597,213	2,326,786				154,000					37,000
Administrative expense	697,238	406,665	1,149,855	892,158				184,000					28,000
Expenses for construction, architectural services and supervision of capital projects								115,000					7,000
Amount paid to related party													373,000
Management fee	374,622	361,608	743,874	708,789									301,000
Reimbursement to related party for payroll transfers										1,388,000	1,247,000
Employer contributions in 401K plan			0		0
Number of accounting staff of related party providing bookkeeping and accounting functions										14
Fees for accounting and bookkeeping services										62,500	62,500	125,000
Quarterly fee for asset management consulting services															37,500	37,500
Number of limited partnerships and limited liability companies in which the entity has invested			9
Percentage of ownership interest						40.00%	50.00%										43.20%	57.00%
Number of employees having ownership interest										6
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																			1,000,000	1,000,000	1,000,000				750,000
Outstanding amount of mortgage loan	131,671,632		131,671,632		138,055,522																								1,668,600
Interest paid			$ 3,652,000	$ 3,900,000																						$ 18,807		$ 18,960

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PARTNERS' CAPITAL

6 Months Ended

Jun. 30, 2013

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.

The Partnership approved a quarterly distribution of $7.50 per unit and $0.25 per receipt to its Class A Limited Partners and holders of Depositary Receipts of record as of June 14, 2013 and payable on June 28, 2013.  In August 2013, the Partnership approved a quarterly distribution of $7.50 per unit ($0.25 per receipt) payable on September 30, 2013.

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).

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:

	Six Months Ended June 30,
	2013		2012
Income per Depositary Receipt before Discontinued Operations	$	0.43	$	0.41
Income from Discontinued Operations	0.95		0.01
Net Income per Depositary Receipt after Discontinued Operations	$	1.38	$	0.42
Distributions per Depositary Receipt	$	0.50	$	0.50

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables)

6 Months Ended

Jun. 30, 2013

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

Summary of financial position relating to investment in unconsolidated joint ventures

Summary financial information as of June 30, 2013

			Hamilton								Hamilton	Hamilton
	Hamilton		Essex	345		Hamilton		Hamilton		Hamilton	Minuteman	on Main	Dexter
	Essex 81		Development	Franklin		1025		Bay Sales		Bay Apts	Apts	Apts	Park		Total
ASSETS
Rental Properties*	8,947,591		2,616,965	7,686,993		5,505,467		1,805,125		6,827,232	6,919,386	20,659,589	104,817,498		165,785,845
Cash & Cash Equivalents	3,147		29,108	231,329		9,023		23,732		10,077	25,303	174,000	659,245		1,164,964
Rent Receivable	51,080		—	8,863		6,872		4,062		4,887	9,600	10,730	104,164		200,257
Real Estate Tax Escrow	83,964		—	23,711		74,507		—		53,440	34,783	68,934	420,641		759,979
Due From Investment Properties	—		—	—		—		—		—	—	—	—		—
Investors Partner Loan Receivables	97,138		—	61,036		4,572		153,336		—	—	—	1,149,915		1,465,997
- Contra Investors Partner Loan	(97,138	)	—	(61,036	)	(4,572	)	(153,336	)	—	—	—	(1,149,915	)	(1,465,997	)
Prepaid Expenses & Other Assets***	75,717		1,153	27,615		42,202		123,516		24,192	51,529	228,073	1,464,682		2,038,677
Financing & Leasing Fees	55,373		1,081	99,877		17,132		4,000		23,062	13,965	11,150	370,020		595,661
Total Assets	9,216,871		2,648,307	8,078,388		5,655,204		1,960,434		6,942,889	7,054,565	21,152,475	107,836,250		170,545,384
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	8,292,287		2,067,378	10,000,000		4,901,467		1,668,000		4,670,319	5,397,023	15,462,916	87,999,131		140,458,521
Due to Investment Properties	—		—	—		—		—		—	—	—	—		—
Investors Partner Loan Payables	97,138		—	61,036		4,572		153,336		—	—	—	1,149,915		1,465,997
- Contra Investors Partner Loan	(97,138	)	—	(61,036	)	(4,572	)	(153,336	)	—	—	—	(1,149,915	)	(1,465,997	)
Accounts Payable& Accrued Exp***	50,228		5,461	19,140		51,107		18,669		8,192	71,192	196,455	1,019,021		1,439,465
Advance Rental Pymts& Security Dep	176,827		—	175,850		93,472		29,033		96,673	66,703	321,725	2,059,402		3,019,685
Total Liabilities	8,519,343		2,072,839	10,194,990		5,046,047		1,715,701		4,775,184	5,534,918	15,981,097	91,077,554		144,917,671
Partners’ Capital**	697,529		575,469	(2,116,602	)	609,157		244,733		2,167,705	1,519,648	5,171,379	16,758,697		25,627,712
Total Liabilities and Capital	9,216,871		2,648,307	8,078,388		5,655,204		1,960,434		6,942,889	7,054,565	21,152,475	107,836,250		170,545,384
Partners’ Capital - NERA 50%	348,764		287,734	(1,058,301	)	304,578		122,366		1,083,852	759,824	2,585,689			4,434,508
NERA 40%													6,703,479		6,703,479
															11,137,986

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 August 1, 2013	—	—	—	127	105	—	—	—	—	232
Unsold units	—	—	—	—	15	—	—	—	—	15
Unsold units with deposits for future sale as of August 1, 2013	—	—	—	—	—	—	—	—	—	—

Summary financial information as of June 30, 2012

	Hamilton Essex 81	Hamilton Essex Development	345 Franklin	Hamilton 1025	Hamilton Bay Sales	Hamilton Bay Apts	Hamilton Minuteman	Hamilton on Main  Apts	Dexter Park	Total
ASSETS
Rental Properties	9,261,771	2,611,819	8,049,593	5,744,197	1,882,240	7,118,237	7,152,206	21,534,347	110,257,477	173,611,888
Cash & Cash Equivalents	58,404	24,262	26,170	296	24,634	17,487	18,057	51,045	577,044	797,399
Rent Receivable	70,337	—	9,048	12,082	2,563	5,692	4,380	10,138	132,465	246,705
Real Estate Tax Escrow	49,442	—	21,015	69,257	—	93,063	42,103	107,470	483,938	866,288
Prepaid Expenses & Other Assets	85,426	1,110	91,415	97,825	161,820	104,087	76,573	273,435	1,306,813	2,198,503
Financing & Leasing Fees	65,493	1,747	12,247	22,159	4,037	29,424	17,934	18,012	429,336	600,388
Total Assets	9,590,873	2,638,938	8,209,487	5,945,816	2,075,295	7,367,990	7,311,253	21,994,446	113,187,073	178,321,171
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	8,406,631	2,118,990	6,936,102	4,964,768	1,668,000	4,730,815	5,466,352	15,748,668	89,166,547	139,206,873
Accounts Payable & Accrued Expense	61,165	5,811	118,416	49,520	18,661	54,146	85,621	211,249	884,807	1,489,395
Advance Rental Pmts & Security Dep	187,355	—	147,570	85,841	24,499	87,189	68,827	262,993	1,919,814	2,784,087
Total Liabilities	8,655,151	2,124,801	7,202,087	5,100,129	1,711,161	4,872,149	5,620,800	16,222,911	91,971,168	143,480,356
Partners’ Capital	935,722	514,137	1,007,400	845,687	364,134	2,495,641	1,690,453	5,771,535	21,215,906	34,840,816
Total Liabilities & Capital	9,590,873	2,638,938	8,209,487	5,945,816	2,075,295	7,367,990	7,311,253	21,994,446	113,187,073	178,321,171
Partners’ Capital — NERA 50%	467,861	257,068	503,700	422,844	182,067	1,247,920	845,227	2,885,768
NERA 40%									8,486,362	8,486,362
										15,298,817
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 August 1, 2012	—	—	—	127	105	—	—	—	—	232
Unsold units	—	—	—	—	15	—	—	—	—	15
Unsold units with deposits for future sale as of August 1, 2012	—	—	—	—	—	—	—	—	—	—

Summary of income statement relating to investment in unconsolidated joint ventures

Financial information for the six months ended June 30, 2013

			Hamilton										Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	663,919		143,792		616,034		441,883		121,472		441,443		432,789		1,353,188		6,331,670		10,546,189
Laundry and Sundry Income	8,997		—		1,933		—		—		—		675		17,281		46,429		75,316
	672,916		143,792		617,968		441,883		121,472		441,443		433,464		1,370,469		6,378,099		10,621,505
Expenses
Administrative	9,928		703		14,431		3,805		3,586		7,551		2,465		18,408		113,724		174,601
Depreciation and Amortization**	212,066		4,488		215,739		120,215		41,098		153,638		157,933		488,767		2,878,479		4,272,422
Management Fees	26,015		5,752		25,782		18,186		4,987		17,887		17,076		57,339		133,507		306,530
Operating	63,549		—		40,044		712		1,962		617		41,947		191,181		564,660		904,672
Renting	9,550		—		1,788		3,925		1,425		7,250		4,042		3,305		26,654		57,939
Repairs and Maintenance	64,094		3,700		38,179		157,409		45,986		147,694		25,537		165,706		454,017		1,102,323
Taxes and Insurance	111,759		24,407		56,255		77,131		20,619		71,147		61,948		169,290		742,955		1,335,512
	496,961		39,051		392,218		381,383		119,663		405,784		310,947		1,093,996		4,913,995		8,153,999
Income Before Other Income	175,955		104,741		225,750		60,499		1,809		35,658		122,516		276,473		1,464,104		2,467,506
Other Income (Loss)
Interest Expense	(243,202	)	(29,266	)	(257,547	)	(141,481	)	(48,689	)	(132,973	)	(155,538	)	(409,587	)	(2,495,453	)	(3,913,736	)
Interest Income	—		—		26		2		86		—		—		—		57		171
Interest Income from Note	—		—		—		—		2,007		—		—		—		—		2,007
Gain on Sale of Real Estate	—		—		—		—		—		—		—		—		—		—
Other Income (Expenses)	—		—		(68,588	)	—		—		—		—		—		—		(68,588	)
	(243,202	)	(29,266	)	(326,109	)	(141,478	)	(46,596	)	(132,973	)	(155,538	)	(409,587	)	(2,495,396	)	(3,980,146	)
Net Income (Loss)	(67,247	)	75,475		(100,359	)	(80,979	)	(44,787	)	(97,315	)	(33,022	)	(133,114	)	(1,031,292	)	(1,512,639	)
Net Income (Loss) - NERA 50%	(33,623	)	37,737		(50,180	)	(40,489	)	(22,393	)	(48,657	)	(16,511	)	(66,557	)			(240,673	)
NERA 40%																	(412,517	)	(412,517	)
																			(653,190	)

Financial information for the three months ended June 30, 2013

			Hamilton										Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	335,464		71,896		311,745		221,666		61,864		222,162		216,932		676,242		3,171,661		5,289,631
Laundry and Sundry Income	5,151		—		1,288		—		—		—		464		7,510		24,997		39,411
	340,615		71,896		313,033		221,666		61,864		222,162		217,396		683,752		3,196,658		5,329,041
Expenses
Administrative	6,074		386		8,699		2,124		2,813		3,669		2,042		9,769		66,845		102,422
Depreciation and Amortization**	106,494		2,245		110,055		60,128		20,035		76,840		79,225		244,233		1,440,022		2,139,276
Management Fees	13,762		2,876		12,707		9,227		2,649		9,422		8,538		28,298		68,497		155,978
Operating	28,483		—		14,190		452		382		195		18,737		77,185		235,835		375,460
Renting	200		—		23		3,220		1,425		6,845		1,703		1,994		15,098		30,508
Repairs and Maintenance	41,851		3,150		24,593		81,300		23,216		72,781		15,442		79,801		272,433		614,565
Taxes and Insurance	55,878		12,209		28,069		38,381		10,389		35,468		31,082		84,473		346,742		642,690
	252,742		20,865		198,337		194,832		60,909		205,220		156,769		525,753		2,445,472		4,060,899
Income Before Other Income	87,873		51,031		114,696		26,834		955		16,941		60,627		157,999		751,186		1,268,143
Other Income (Loss)
Interest Expense	(122,047	)	(14,668	)	(138,605	)	(70,998	)	(24,507	)	(66,707	)	(78,076	)	(205,633	)	(1,252,195	)	(1,973,436	)
Interest Income	—		—		13		2		41		—		—		—		57		113
Interest Income from Note	—		—		—		—		911		—		—		—		—		911
Gain on Sale of Real Estate	—		—		—		—		—		—		—		—		—		—
Other Income (Expenses)	—		—		(68,588	)	—		—		—		—		—		—		(68,588	)
	(122,047	)	(14,668	)	(207,180	)	(70,996	)	(23,555	)	(66,707	)	(78,076	)	(205,633	)	(1,252,138	)	(2,041,000	)
Net Income (Loss)	(34,174	)	36,362		(92,484	)	(44,162	)	(22,600	)	(49,765	)	(17,449	)	(47,633	)	(500,951	)	(772,857	)
Net Income (Loss) - NERA 50%	(17,087	)	18,181		(46,242	)	(22,081	)	(11,300	)	(24,883	)	(8,725	)	(23,817	)			(135,953	)
NERA 40%																	(200,380	)	(200,380	)
																			(336,333	)

Summary financial information for the six months ended June 30, 2012

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay Apts		Hamilton Minuteman		Hamilton on Main Apts		Dexter Park		Total
Revenues
Rental Income	626,002		144,092		578,703		421,727		111,192		436,161		398,676		1,297,371		6,062,838		10,076,761
Laundry and Sundry Income	7,073		—		1,188		—		—		—		491		9,980		43,855		62,587
	633,075		144,092		579,891		421,727		111,192		436,161		399,167		1,307,350		6,106,693		10,139,348
Expenses
Administrative	7,606		1,114		15,366		2,480		4,103		23,711		2,931		26,098		109,434		192,842
Depreciation and Amortization	206,865		6,485		222,140		126,593		39,472		149,087		158,546		476,667		2,870,999		4,256,855
Management Fees	27,026		5,764		24,116		16,885		4,587		16,992		16,016		52,207		129,568		293,161
Operating	53,132		—		29,481		635		927		905		37,721		178,324		547,102		848,227
Renting	2,090		—		141		2,328		1,450		3,271		1,993		6,580		41,798		59,652
Repairs and Maintenance	54,878		4,525		44,319		146,192		32,177		133,219		29,497		197,892		429,952		1,072,650
Taxes and Insurance	100,878		25,186		50,561		73,592		23,560		81,677		50,868		168,309		744,643		1,319,275
	452,475		43,074		386,125		368,706		106,276		408,862		297,573		1,106,077		4,873,495		8,042,662
Income Before Other Income	180,601		101,018		193,766		53,021		4,916		27,299		101,594		201,274		1,233,197		2,096,686
Other Income (Loss)
Interest Expense	(248,551	)	(30,327	)	(245,913	)	(143,846	)	(48,871	)	(135,267	)	(158,370	)	(418,707	)	(2,540,630	)	(3,970,481	)
Interest Income	—		—		24		41		114		—		—		—		—		178
Interest Income from Note	—		—		—		—		3,442		—		—		—		—		3,442
	(248,551	)	(30,327	)	(245,889	)	(143,805	)	(45,315	)	(135,267	)	(158,370	)	(418,707	)	(2,540,630	)	(3,966,860	)
Net Income (loss)	(67,950	)	70,691		(52,123	)	(90,784	)	(40,398	)	(107,968	)	(56,776	)	(217,433	)	(1,307,433	)	(1,870,174	)
Net Income (loss) - NERA 50%	(33,975	)	35,345		(26,061	)	(45,392	)	(20,199	)	(53,984	)	(28,388	)	(108,717	)			(281,371	)
NERA 40%																	(522,973	)	(522,973	)
																			(804,344	)

Summary financial information for the three months ended June 30, 2012

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay Apts		HamiltonMinuteman		Hamilton on Main Apts		Dexter Park		Total
Revenues
Rental Income	333,509		72,046		287,052		211,699		59,714		216,498		201,973		649,487		3,051,260		5,083,238
Laundry and Sundry Income	3,540		—		600		—		—		—		83		4,617		21,355		30,195
	337,049		72,046		287,652		211,699		59,714		216,498		202,056		654,104		3,072,615		5,113,433
Expenses
Administrative	4,330		547		8,864		2,189		1,895		15,351		1,982		12,303		66,572		114,031
Depreciation and Amortization	103,742		3,243		112,159		63,477		19,736		74,723		79,613		240,010		1,438,955		2,135,656
Management Fees	14,208		2,882		12,115		8,333		2,537		8,599		7,978		26,698		66,306		149,656
Operating	22,810		—		14,338		570		256		217		13,014		73,937		243,755		368,896
Renting	150		—		—		659		535		2,377		1,083		4,556		10,807		20,169
Repairs and Maintenance	32,326		4,150		28,474		76,398		15,410		68,837		17,521		103,533		285,183		631,833
Taxes and Insurance	50,693		12,844		25,296		36,671		11,918		40,902		25,458		83,186		364,513		651,482
	228,259		23,666		201,245		188,296		52,287		211,006		146,648		544,223		2,476,092		4,071,723
Income Before Other Income	108,790		48,380		86,406		23,403		7,426		5,492		55,408		109,981		596,522		1,041,709
Other Income (Loss)
Interest expense	(124,068	)	(15,034	)	(121,314	)	(71,826	)	(24,445	)	(67,577	)	(79,013	)	(208,988	)	(1,267,892	)	(1,980,156	)
Interest income	—		—		12		21		53		—		—		—		—		86
Interest income from Note	—		—		—		—		1,635		—		—		—		—		1,635
	(124,068	)	(15,034	)	(121,302	)	(71,805	)	(22,757	)	(67,577	)	(79,013	)	(208,988	)	(1,267,892	)	(1,978,435	)
Net Income (Loss)	(15,278	)	33,346		(34,895	)	(48,402	)	(15,331	)	(62,085	)	(23,605	)	(99,107	)	(671,370	)	(936,726	)
Net Loss - NERA 50%	(7,639	)	16,673		(17,448	)	(24,201	)	(7,665	)	(31,043	)	(11,802	)	(49,553	)			(132,678	)
NERA 40%																	(268,548	)	(268,548	)
																			(401,226	)

Schedule of future annual mortgage maturities

Future annual mortgage maturities at June 30, 2013 are as follows:

			Hamilton
	Hamilon		Essex 81		345		Hamilton		Hamilton		Hamilton		Hamilton		Hamilton on		Dexter
	Essex 81		Development		Franklin		1025		Bay Sales		Bay Apts		Minuteman		Main Apts		Park
	March		March		November		March		October		October		August		August		October
Period End	2005		2005		2001		2005		2005		2005		2004		2004		2009		Total
3/31/2014	129,342		2,067,378				67,037		1,668,000		68,027		73,421		300,942		1,311,782		5,685,930
3/31/2015	137,033						70,994				71,915		77,755		15,161,974		1,386,742		16,906,414
3/31/2016	145,181						74,427				76,024		81,510				1,465,987		1,843,129
3/31/2017	7,880,731				177,340		4,689,009				4,454,353		5,164,338				1,549,759		23,915,528
3/31/2018					187,209												1,638,319		1,825,528
Thereafter					9,635,451												80,646,542		90,281,993
	$	8,292,287	$	2,067,378	$	10,000,000	$	4,901,467	$	1,668,000	$	4,670,319	$	5,397,024	$	15,462,916	$	87,999,131	$	140,458,522

XML

RENTAL INCOME (Details) (USD $)	6 Months Ended
	Jun. 30, 2013 sqft item	Jun. 30, 2012	Dec. 31, 2012
RENTAL INCOME
Percentage of rental income related to residential apartments and condominium units with leases of one year or less	91.00%
Maximum period of non-cancellable operating lease	1 year
Percentage of rental income related to commercial properties	9.00%
Minimum future rental income
2014	$ 2,441,000
2015	1,915,000
2016	1,698,000
2017	938,000
2018	589,000
Thereafter	583,000
Commercial Property Leases	8,164,000
Aggregate contingent rentals from continuing operations	345,000	310,000
RENTAL INCOME
Annual base rent for expiring leases	2,473,504
Total square feet for expiring leases	94,082
Total number of leases expiring	40
Percentage of Annual base rent for expiring leases	100.00%
Allowance for doubtful rent receivable	515,000		381,000
Recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis	250,000
Deferred rental concession	21,000
Amortization of deferred rents	1,100
Through June 30, 2014
RENTAL INCOME
Annual base rent for expiring leases	150,282
Total square feet for expiring leases	6,462
Total number of leases expiring	7
Percentage of Annual base rent for expiring leases	6.00%
Through June 30, 2015
RENTAL INCOME
Annual base rent for expiring leases	569,499
Total square feet for expiring leases	28,181
Total number of leases expiring	10
Percentage of Annual base rent for expiring leases	23.00%
Through June 30, 2016
RENTAL INCOME
Annual base rent for expiring leases	680,253
Total square feet for expiring leases	25,894
Total number of leases expiring	7
Percentage of Annual base rent for expiring leases	28.00%
Through June 30, 2017
RENTAL INCOME
Annual base rent for expiring leases	476,797
Total square feet for expiring leases	16,272
Total number of leases expiring	5
Percentage of Annual base rent for expiring leases	19.00%
Through June 30, 2018
RENTAL INCOME
Annual base rent for expiring leases	266,841
Total square feet for expiring leases	8,567
Total number of leases expiring	7
Percentage of Annual base rent for expiring leases	11.00%
Through June 30, 2019
RENTAL INCOME
Annual base rent for expiring leases	0
Total square feet for expiring leases	0
Total number of leases expiring	0
Percentage of Annual base rent for expiring leases	0.00%
Through June 30, 2020
RENTAL INCOME
Annual base rent for expiring leases	265,032
Total square feet for expiring leases	6,906
Total number of leases expiring	3
Percentage of Annual base rent for expiring leases	11.00%
Through June 30, 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 June 30, 2022
RENTAL INCOME
Annual base rent for expiring leases	0
Total square feet for expiring leases	0
Total number of leases expiring	0
Percentage of Annual base rent for expiring leases	0.00%
Through June 30, 2023
RENTAL INCOME
Annual base rent for expiring leases	$ 0
Total square feet for expiring leases	0
Total number of leases expiring	0
Percentage of Annual base rent for expiring leases	0.00%

XML

RENTAL INCOME

6 Months Ended

Jun. 30, 2013

RENTAL INCOME

RENTAL INCOME

NOTE 10. RENTAL INCOME

During the six months ended June 30, 2013, approximately 91% 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 9% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30, 2013 as follows:

	Commercial Property Leases
2014	$	2,441,000
2015	1,915,000
2016	1,698,000
2017	938,000
2018	589,000
Thereafter	583,000
	$	8,164,000

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 $345,000 and $310,000 for the six months ended June 30, 2013 and 2012, respectively.

The following information is provided for commercial leases.

					Percentage of
	Annual base rent		Total square feet	Total number	annual base rent for
	for expiring leases		for expiring leases	of leases expiring	expiring leases
Through June 30,
2014	$	150,282	6,462	7	6	%
2015	569,499		28,181	10	23	%
2016	680,253		25,894	7	28	%
2017	476,797		16,272	5	19	%
2018	266,841		8,567	7	11	%
2019	0		0	0	0	%
2020	265,032		6,906	3	11	%
2021	64,800		1,800	1	2	%
2022	0		0	0	0	%
2023	0		0	0	0	%
Totals	$	2,473,504	94,082	40	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $515,000 and $381,000 at June 30, 2013 and December 31, 2012.  Included in rents receivable at June 30, 2013 is approximately $250,000 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 June 30, 2013 also includes approximately $21,000 representing the deferral of rental concession primarily related to the residential properties.

For the six months ended June 30, 2013 rent at the commercial properties includes approximately $1,100 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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ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

6 Months Ended

Jun. 30, 2013

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 June 30, 2013, amounts received for prepaid rents of approximately $1,449,000 are included in cash and cash equivalents, and security deposits of approximately $1,962,000 are included in prepaid expenses and other assets and are restricted cash.

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SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2013

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 23 properties which include 15 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex.   These properties total 2,219 apartment units, 19 condominium units and 110,949 square feet of commercial space.  Additionally, the Partnership also owns a 40-50% interest in 9 residential and mixed use properties consisting of 798 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.

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 2013 and 2012 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 2013 and 2012. The Partnership makes its temporary cash investments with high-credit quality financial institutions.  At June 30, 2013, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.0% to 0.45%.  At June 30, 2013 and 2012, respectively approximately $4,330,000 and $6,253,000 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 $16,167 and $34,544 for the six months ended June 30, 2013 and 2012, 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 six months ended June 30, 2013 and 2012 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.

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

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 2) (USD $)	Jun. 30, 2013 item	Dec. 31, 2012	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2013 Hamilton Essex 81 item	Jun. 30, 2012 Hamilton Essex 81 item	Jun. 30, 2013 Hamilton Essex 81 NERA 50%	Jun. 30, 2012 Hamilton Essex 81 NERA 50%	Jun. 30, 2013 Hamilton Essex 81 Apartments item	Jun. 30, 2012 Hamilton Essex 81 Apartments item	Jun. 30, 2013 Hamilton Essex 81 Commercial item	Jun. 30, 2012 Hamilton Essex 81 Commercial item	Jun. 30, 2013 Hamilton Essex Development item	Jun. 30, 2012 Hamilton Essex Development item	Jun. 30, 2013 Hamilton Essex Development NERA 50%	Jun. 30, 2012 Hamilton Essex Development NERA 50%	Jun. 30, 2013 Hamilton Essex Development Commercial item	Jun. 30, 2012 Hamilton Essex Development Commercial item	Jun. 30, 2013 345 Franklin item	Jun. 30, 2012 345 Franklin item	Nov. 30, 2001 345 Franklin item	Jun. 30, 2013 345 Franklin NERA 50%	Jun. 30, 2012 345 Franklin NERA 50%	Jun. 30, 2013 345 Franklin Apartments item	Jun. 30, 2012 345 Franklin Apartments item	Jun. 30, 2013 Hamilton 1025 item	Jun. 30, 2012 Hamilton 1025 item	Mar. 02, 2005 Hamilton 1025 item	Jun. 30, 2013 Hamilton 1025 NERA 50%	Jun. 30, 2012 Hamilton 1025 NERA 50%	Jun. 30, 2013 Hamilton 1025 Apartments item	Jun. 30, 2012 Hamilton 1025 Apartments item	Jun. 30, 2013 Hamilton 1025 Commercial item	Jun. 30, 2012 Hamilton 1025 Commercial item	Jun. 30, 2013 Hamilton Bay Sales item	Jun. 30, 2012 Hamilton Bay Sales item	Apr. 30, 2008 Hamilton Bay Sales item	Jun. 30, 2013 Hamilton Bay Sales NERA 50%	Jun. 30, 2012 Hamilton Bay Sales NERA 50%	Jun. 30, 2013 Hamilton Bay Sales Apartments item	Jun. 30, 2012 Hamilton Bay Sales Apartments item	Jun. 30, 2013 Hamilton Bay Apartments item	Jun. 30, 2012 Hamilton Bay Apartments item	Oct. 03, 2005 Hamilton Bay Apartments item	Jun. 30, 2013 Hamilton Bay Apartments NERA 50%	Jun. 30, 2012 Hamilton Bay Apartments NERA 50%	Jun. 30, 2013 Hamilton Bay Apartments Apartments item	Jun. 30, 2012 Hamilton Bay Apartments Apartments item	Jun. 30, 2013 Hamilton Minuteman item	Jun. 30, 2012 Hamilton Minuteman item	Sep. 30, 2004 Hamilton Minuteman item	Jun. 30, 2013 Hamilton Minuteman NERA 50%	Jun. 30, 2012 Hamilton Minuteman NERA 50%	Jun. 30, 2013 Hamilton Minuteman Apartments item	Jun. 30, 2012 Hamilton Minuteman Apartments item	Jun. 30, 2013 Hamilton on Main item	Jun. 30, 2012 Hamilton on Main item	May 31, 2008 Hamilton on Main item	Aug. 31, 2004 Hamilton on Main item	Jun. 30, 2013 Hamilton on Main NERA 50%	Jun. 30, 2012 Hamilton on Main NERA 50%	Jun. 30, 2013 Hamilton on Main Apartments item	Jun. 30, 2012 Hamilton on Main Apartments item	Jun. 30, 2013 Dexter Park item	Jun. 30, 2012 Dexter Park item	Oct. 28, 2009 Dexter Park item	Jun. 30, 2013 Dexter Park NERA 40%	Jun. 30, 2012 Dexter Park NERA 40%	Jun. 30, 2013 Dexter Park Apartments item	Jun. 30, 2012 Dexter Park Apartments item	Jun. 30, 2013 Total item	Jun. 30, 2012 Total item	Jun. 30, 2013 Total NERA 50%	Jun. 30, 2012 Total NERA 50%	Jun. 30, 2013 Total NERA 40%	Jun. 30, 2012 Total NERA 40%	Jun. 30, 2013 Total Apartments item	Jun. 30, 2012 Total Apartments item	Jun. 30, 2013 Total Commercial item	Jun. 30, 2012 Total Commercial item
ASSETS
Rental Properties	$ 94,292,069	$ 94,973,600			$ 8,947,591	$ 9,261,771							$ 2,616,965	$ 2,611,819					$ 7,686,993	$ 8,049,593						$ 5,505,467	$ 5,744,197								$ 1,805,125	$ 1,882,240						$ 6,827,232	$ 7,118,237						$ 6,919,386	$ 7,152,206						$ 20,659,589	$ 21,534,347							$ 104,817,498	$ 110,257,477						$ 165,785,845	$ 173,611,888
Cash & Cash Equivalents	3,291,685	6,981,906	5,181,834	4,050,157	3,147	58,404							29,108	24,262					231,329	26,170						9,023	296								23,732	24,634						10,077	17,487						25,303	18,057						174,000	51,045							659,245	577,044						1,164,964	797,399
Rent Receivable	429,492	475,083			51,080	70,337													8,863	9,048						6,872	12,082								4,062	2,563						4,887	5,692						9,600	4,380						10,730	10,138							104,164	132,465						200,257	246,705
Real Estate Tax Escrow	347,420	449,652			83,964	49,442													23,711	21,015						74,507	69,257															53,440	93,063						34,783	42,103						68,934	107,470							420,641	483,938						759,979	866,288
Investors Partner Loan Receivables					97,138														61,036							4,572									153,336																													1,149,915							1,465,997
Contra Investors Partner Loan					(97,138)														(61,036)							(4,572)									(153,336)																													(1,149,915)							(1,465,997)
Prepaid Expenses & Other Assets	2,767,011	3,073,890			75,717	85,426							1,153	1,110					27,615	91,415						42,202	97,825								123,516	161,820						24,192	104,087						51,529	76,573						228,073	273,435							1,464,682	1,306,813						2,038,677	2,198,503
Financing & Leasing Fees	1,770,603	1,135,936			55,373	65,493							1,081	1,747					99,877	12,247						17,132	22,159								4,000	4,037						23,062	29,424						13,965	17,934						11,150	18,012							370,020	429,336						595,661	600,388
Total Assets	118,140,170	121,538,490			9,216,871	9,590,873							2,648,307	2,638,938					8,078,388	8,209,487						5,655,204	5,945,816								1,960,434	2,075,295						6,942,889	7,367,990						7,054,565	7,311,253						21,152,475	21,994,446							107,836,250	113,187,073						170,545,384	178,321,171
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	131,671,632	138,055,522			8,292,287	8,406,631							2,067,378	2,118,990					10,000,000	6,936,102						4,901,467	4,964,768								1,668,000	1,668,000						4,670,319	4,730,815						5,397,023	5,466,352						15,462,916	15,748,668							87,999,131	89,166,547						140,458,521	139,206,873
Investors Partner Loan Payables					97,138														61,036							4,572									153,336																													1,149,915							1,465,997
Contra Investors Partner Loan					(97,138)														(61,036)							(4,572)									(153,336)																													(1,149,915)							(1,465,997)
Accounts Payable & Accrued Exp	2,018,815	2,361,942			50,228	61,165							5,461	5,811					19,140	118,416						51,107	49,520								18,669	18,661						8,192	54,146						71,192	85,621						196,455	211,249							1,019,021	884,807						1,439,465	1,489,395
Advance Rental Pymts & Security Dep	3,944,741	3,636,704			176,827	187,355													175,850	147,570						93,472	85,841								29,033	24,499						96,673	87,189						66,703	68,827						321,725	262,993							2,059,402	1,919,814						3,019,685	2,784,087
Total Liabilities	137,635,188	144,054,168			8,519,343	8,655,151							2,072,839	2,124,801					10,194,990	7,202,087						5,046,047	5,100,129								1,715,701	1,711,161						4,775,184	4,872,149						5,534,918	5,620,800						15,981,097	16,222,911							91,077,554	91,971,168						144,917,671	143,480,356
Partners' Capital	(19,495,018)	(22,515,678)	(21,677,705)	(21,310,852)	697,529	935,722							575,469	514,137					(2,116,602)	1,007,400						609,157	845,687								244,733	364,134						2,167,705	2,495,641						1,519,648	1,690,453						5,171,379	5,771,535							16,758,697	21,215,906						25,627,712	34,840,816
Total Liabilities and Partners' Capital	118,140,170	121,538,490			9,216,871	9,590,873							2,648,307	2,638,938					8,078,388	8,209,487						5,655,204	5,945,816								1,960,434	2,075,295						6,942,889	7,367,990						7,054,565	7,311,253						21,152,475	21,994,446							107,836,250	113,187,073						170,545,384	178,321,171
Share of partners capital in investments							$ 348,764	$ 467,861							$ 287,734	$ 257,068						$ (1,058,301)	$ 503,700						$ 304,578	$ 422,844								$ 122,366	$ 182,067						$ 1,083,852	$ 1,247,920						$ 759,824	$ 845,227							$ 2,585,689	$ 2,885,768						$ 6,703,479	$ 8,486,362			$ 11,137,986	$ 15,298,817	$ 4,434,508	$ 6,812,455	$ 6,703,479	$ 8,486,362
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%					40.00%	40.00%	40.00%					50.00%	50.00%	40.00%	40.00%
Total units/ condominiums
Total					49	49			48	48	1	1	1	1			1	1	40	40	40			40	40	176	176	176			175	175	1	1	120	120	20			120	120	48	48	168			48	48	42	42	42			42	42	148	148		280			148	148	409	409	409			409	409	1,033	1,033					1,030	1,030	3	3
Units to be retained					49	49							1	1					40	40						49	49	49														48	48	48					42	42						148	148							409	409						786	786
Units to be sold																										127	127								120	120																																			247	247
Units sold	0																									127	127	127							105	105																						137													232	232
Unsold units																																			15	15																																			15	15

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SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $)	6 Months Ended		0 Months Ended		6 Months Ended			6 Months Ended
	Jun. 30, 2013 item	Jun. 30, 2012	Jan. 03, 2012 Class A units	Aug. 20, 2007 Class A units	Jun. 30, 2013 Minimum	Jun. 30, 2013 Minimum Cash and cash equivalents	Jun. 30, 2013 Maximum	Jun. 30, 2013 Maximum Cash and cash equivalents	Jun. 30, 2013 Investment Properties/Joint Venture item	Jun. 30, 2013 Investment Properties/Joint Venture Minimum	Jun. 30, 2013 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
Income Taxes
Provision for income taxes	$ 0
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
Income Per Unit
Dilutive units	0
Concentration of Credit Risks and Financial Instruments
Interest rate on interest bearing accounts (as a percent)						0.00%		0.45%
Federally uninsured amounts of cash and cash equivalents, and security deposits included in prepaid expenses and other assets	4,330,000	6,253,000
Advertising Expense
Advertising expense	16,167	34,544
Interest Capitalized
Criteria of capitalization of interest on property based on specified period of construction					1 year
Capitalized interest	$ 0	$ 0

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TAXABLE INCOME AND TAX BASIS

6 Months Ended

Jun. 30, 2013

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.  In May 2013, the Partnership sold the Nashoba Apartments in Acton, Massachusetts for $4,300,000 and had a book gain of approximately $3,679,000.  The Partnership structured a tax free exchange in accordance with the Internal Revenue Service’s rule under Sec. 1031 of the Internal Revenue Code.  The gain will be deferred for 2013 for income tax purposes.

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 consolidated financial statements.

Allowable accelerated depreciation deductions have been reduced for 2013.  This may result in higher taxable income. 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 June 30, 2013, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2007 forward.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2013

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 9. COMMITMENTS AND CONTINGENCIES

From time to time, the Partnership is involved in various ordinary routine litigation incidentals 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

6 Months Ended

Jun. 30, 2013

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 16. SUBSEQUENT EVENTS

On July 7, 2013, Boylston Downtown LP, a wholly owned subsidiary of the Partnership, refinanced the property located at 62 Boylston Street, Boston, Massachusetts.  The new $40,000,000 mortgage has an interest rate of 3.97%.  The terms of the loan are interest only for the first three years, with a 30 year amortization thereafter until maturity in August 2028.  Approximately $19,500,000 of loan proceeds was used to pay off the existing mortgage.  The balance of the funds, approximately $20,000,000, after closing costs, is included in the Partnership’s cash reserves.

On July 15, 2013, Hamilton Green Apartments, LLC, a newly formed subsidiary of the Partnership, purchased Windsor Green at Andover, a 193 unit apartment complex located at 311 and 319 Lowell Street, Andover, Massachusetts.  The purchase price was $62,500,000.  To fund this purchase, the Partnership obtained short term financing of approximately $40,000,000, used the funds of approximately $2,100,000 from the like kind exchange of the Nashoba Apartments, and the balance from the Partnership’s cash reserves.  The mortgage has a maturity date of October 15, 2013; and is interest only with an interest rate of LIBOR plus 225 points (currently 2.45%).  The Partnership is currently working on long term financing.

On August 1, 2013, Hamilton Bay Unit Sales paid down $350,000 of its outstanding mortgage.  This entity intends to pay off the remaining balance of $1,318,000 by the end of September 2013.  The Partnership will need to contribute approximately $800,000 to complete this transaction.

Through August 9, 2013, the Partnership purchased a total of 12,000 Depositary Receipts.  The price was $41.50 per receipt or $1,245.00 Class A unit.  The total cost was $498,000.  The Partnership is required to repurchase approximately 95 Class B Units and 5 General Partner units at a cost of $118,275 and $6,225, respectively.  There were no repurchases during the fiscal quarter ended June 30, 2013.

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

6 Months Ended

Jun. 30, 2013

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.  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 three months ended March 31, 2012 was $18,807.  There was no interest paid on this loan in 2013.  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 balance of the mortgage at June 30, 2013 is approximately $88,000,000.  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 condominiums 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 June 30, 2013, the balance of the mortgage is approximately $ 4,670,000.  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.  At June 30, 2013, 15 of the 20 units are still owned by the Partnership.  As of August 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 six months ended June 30, 2013. The balance on the new mortgage is approximately $1,668,000 at June 30, 2013. On August 1, 2013, Hamilton Bay Unit Sales paid down $350,000 of its outstanding mortgage.  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 balance on Hamilton Essex 81, LLC on June 30, 2013 is approximately $8,292,000 amortizing over 30 years at 5.79% due in August 2016.  The mortgage balance on Essex Development, LLC, at June 30, 2013 and the parking lot is approximately $2,067,000 with a variable interest rate of 2.25% over the daily Libor rate (0.1947% at June 30, 2013). This loan was extended to August 2014 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 $4,901,000 at June 30, 2013.  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 June 30, 2013, the balance of this mortgage is approximately $5,397,000.  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, 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 June 30, 2013, the remaining balance on the mortgage is approximately $15,463,000.

In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts.  In June 2013, the property was refinanced with a 15 year mortgage in the amount of $10,000,000 at 3.87%,  interest only for 3 years and is amortized on a 30-year schedule for the balance of the term. At June 30, 2013, the mortgage balance is $10,000,000.  This investment is referred to as 345 Franklin, LLC.

Summary financial information as of June 30, 2013

			Hamilton								Hamilton	Hamilton
	Hamilton		Essex	345		Hamilton		Hamilton		Hamilton	Minuteman	on Main	Dexter
	Essex 81		Development	Franklin		1025		Bay Sales		Bay Apts	Apts	Apts	Park		Total
ASSETS
Rental Properties*	8,947,591		2,616,965	7,686,993		5,505,467		1,805,125		6,827,232	6,919,386	20,659,589	104,817,498		165,785,845
Cash & Cash Equivalents	3,147		29,108	231,329		9,023		23,732		10,077	25,303	174,000	659,245		1,164,964
Rent Receivable	51,080		—	8,863		6,872		4,062		4,887	9,600	10,730	104,164		200,257
Real Estate Tax Escrow	83,964		—	23,711		74,507		—		53,440	34,783	68,934	420,641		759,979
Due From Investment Properties	—		—	—		—		—		—	—	—	—		—
Investors Partner Loan Receivables	97,138		—	61,036		4,572		153,336		—	—	—	1,149,915		1,465,997
- Contra Investors Partner Loan	(97,138	)	—	(61,036	)	(4,572	)	(153,336	)	—	—	—	(1,149,915	)	(1,465,997	)
Prepaid Expenses & Other Assets***	75,717		1,153	27,615		42,202		123,516		24,192	51,529	228,073	1,464,682		2,038,677
Financing & Leasing Fees	55,373		1,081	99,877		17,132		4,000		23,062	13,965	11,150	370,020		595,661
Total Assets	9,216,871		2,648,307	8,078,388		5,655,204		1,960,434		6,942,889	7,054,565	21,152,475	107,836,250		170,545,384
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	8,292,287		2,067,378	10,000,000		4,901,467		1,668,000		4,670,319	5,397,023	15,462,916	87,999,131		140,458,521
Due to Investment Properties	—		—	—		—		—		—	—	—	—		—
Investors Partner Loan Payables	97,138		—	61,036		4,572		153,336		—	—	—	1,149,915		1,465,997
- Contra Investors Partner Loan	(97,138	)	—	(61,036	)	(4,572	)	(153,336	)	—	—	—	(1,149,915	)	(1,465,997	)
Accounts Payable& Accrued Exp***	50,228		5,461	19,140		51,107		18,669		8,192	71,192	196,455	1,019,021		1,439,465
Advance Rental Pymts& Security Dep	176,827		—	175,850		93,472		29,033		96,673	66,703	321,725	2,059,402		3,019,685
Total Liabilities	8,519,343		2,072,839	10,194,990		5,046,047		1,715,701		4,775,184	5,534,918	15,981,097	91,077,554		144,917,671
Partners’ Capital**	697,529		575,469	(2,116,602	)	609,157		244,733		2,167,705	1,519,648	5,171,379	16,758,697		25,627,712
Total Liabilities and Capital	9,216,871		2,648,307	8,078,388		5,655,204		1,960,434		6,942,889	7,054,565	21,152,475	107,836,250		170,545,384
Partners’ Capital - NERA 50%	348,764		287,734	(1,058,301	)	304,578		122,366		1,083,852	759,824	2,585,689			4,434,508
NERA 40%													6,703,479		6,703,479
															11,137,986

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 August 1, 2013	—	—	—	127	105	—	—	—	—	232
Unsold units	—	—	—	—	15	—	—	—	—	15
Unsold units with deposits for future sale as of August 1, 2013	—	—	—	—	—	—	—	—	—	—

Financial information for the six months ended June 30, 2013

			Hamilton										Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	663,919		143,792		616,034		441,883		121,472		441,443		432,789		1,353,188		6,331,670		10,546,189
Laundry and Sundry Income	8,997		—		1,933		—		—		—		675		17,281		46,429		75,316
	672,916		143,792		617,968		441,883		121,472		441,443		433,464		1,370,469		6,378,099		10,621,505
Expenses
Administrative	9,928		703		14,431		3,805		3,586		7,551		2,465		18,408		113,724		174,601
Depreciation and Amortization**	212,066		4,488		215,739		120,215		41,098		153,638		157,933		488,767		2,878,479		4,272,422
Management Fees	26,015		5,752		25,782		18,186		4,987		17,887		17,076		57,339		133,507		306,530
Operating	63,549		—		40,044		712		1,962		617		41,947		191,181		564,660		904,672
Renting	9,550		—		1,788		3,925		1,425		7,250		4,042		3,305		26,654		57,939
Repairs and Maintenance	64,094		3,700		38,179		157,409		45,986		147,694		25,537		165,706		454,017		1,102,323
Taxes and Insurance	111,759		24,407		56,255		77,131		20,619		71,147		61,948		169,290		742,955		1,335,512
	496,961		39,051		392,218		381,383		119,663		405,784		310,947		1,093,996		4,913,995		8,153,999
Income Before Other Income	175,955		104,741		225,750		60,499		1,809		35,658		122,516		276,473		1,464,104		2,467,506
Other Income (Loss)
Interest Expense	(243,202	)	(29,266	)	(257,547	)	(141,481	)	(48,689	)	(132,973	)	(155,538	)	(409,587	)	(2,495,453	)	(3,913,736	)
Interest Income	—		—		26		2		86		—		—		—		57		171
Interest Income from Note	—		—		—		—		2,007		—		—		—		—		2,007
Gain on Sale of Real Estate	—		—		—		—		—		—		—		—		—		—
Other Income (Expenses)	—		—		(68,588	)	—		—		—		—		—		—		(68,588	)
	(243,202	)	(29,266	)	(326,109	)	(141,478	)	(46,596	)	(132,973	)	(155,538	)	(409,587	)	(2,495,396	)	(3,980,146	)
Net Income (Loss)	(67,247	)	75,475		(100,359	)	(80,979	)	(44,787	)	(97,315	)	(33,022	)	(133,114	)	(1,031,292	)	(1,512,639	)
Net Income (Loss) - NERA 50%	(33,623	)	37,737		(50,180	)	(40,489	)	(22,393	)	(48,657	)	(16,511	)	(66,557	)			(240,673	)
NERA 40%																	(412,517	)	(412,517	)
																			(653,190	)

Financial information for the three months ended June 30, 2013

			Hamilton										Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	335,464		71,896		311,745		221,666		61,864		222,162		216,932		676,242		3,171,661		5,289,631
Laundry and Sundry Income	5,151		—		1,288		—		—		—		464		7,510		24,997		39,411
	340,615		71,896		313,033		221,666		61,864		222,162		217,396		683,752		3,196,658		5,329,041
Expenses
Administrative	6,074		386		8,699		2,124		2,813		3,669		2,042		9,769		66,845		102,422
Depreciation and Amortization**	106,494		2,245		110,055		60,128		20,035		76,840		79,225		244,233		1,440,022		2,139,276
Management Fees	13,762		2,876		12,707		9,227		2,649		9,422		8,538		28,298		68,497		155,978
Operating	28,483		—		14,190		452		382		195		18,737		77,185		235,835		375,460
Renting	200		—		23		3,220		1,425		6,845		1,703		1,994		15,098		30,508
Repairs and Maintenance	41,851		3,150		24,593		81,300		23,216		72,781		15,442		79,801		272,433		614,565
Taxes and Insurance	55,878		12,209		28,069		38,381		10,389		35,468		31,082		84,473		346,742		642,690
	252,742		20,865		198,337		194,832		60,909		205,220		156,769		525,753		2,445,472		4,060,899
Income Before Other Income	87,873		51,031		114,696		26,834		955		16,941		60,627		157,999		751,186		1,268,143
Other Income (Loss)
Interest Expense	(122,047	)	(14,668	)	(138,605	)	(70,998	)	(24,507	)	(66,707	)	(78,076	)	(205,633	)	(1,252,195	)	(1,973,436	)
Interest Income	—		—		13		2		41		—		—		—		57		113
Interest Income from Note	—		—		—		—		911		—		—		—		—		911
Gain on Sale of Real Estate	—		—		—		—		—		—		—		—		—		—
Other Income (Expenses)	—		—		(68,588	)	—		—		—		—		—		—		(68,588	)
	(122,047	)	(14,668	)	(207,180	)	(70,996	)	(23,555	)	(66,707	)	(78,076	)	(205,633	)	(1,252,138	)	(2,041,000	)
Net Income (Loss)	(34,174	)	36,362		(92,484	)	(44,162	)	(22,600	)	(49,765	)	(17,449	)	(47,633	)	(500,951	)	(772,857	)
Net Income (Loss) - NERA 50%	(17,087	)	18,181		(46,242	)	(22,081	)	(11,300	)	(24,883	)	(8,725	)	(23,817	)			(135,953	)
NERA 40%																	(200,380	)	(200,380	)
																			(336,333	)

Future annual mortgage maturities at June 30, 2013 are as follows:

			Hamilton
	Hamilon		Essex 81		345		Hamilton		Hamilton		Hamilton		Hamilton		Hamilton on		Dexter
	Essex 81		Development		Franklin		1025		Bay Sales		Bay Apts		Minuteman		Main Apts		Park
	March		March		November		March		October		October		August		August		October
Period End	2005		2005		2001		2005		2005		2005		2004		2004		2009		Total
3/31/2014	129,342		2,067,378				67,037		1,668,000		68,027		73,421		300,942		1,311,782		5,685,930
3/31/2015	137,033						70,994				71,915		77,755		15,161,974		1,386,742		16,906,414
3/31/2016	145,181						74,427				76,024		81,510				1,465,987		1,843,129
3/31/2017	7,880,731				177,340		4,689,009				4,454,353		5,164,338				1,549,759		23,915,528
3/31/2018					187,209												1,638,319		1,825,528
Thereafter					9,635,451												80,646,542		90,281,993
	$	8,292,287	$	2,067,378	$	10,000,000	$	4,901,467	$	1,668,000	$	4,670,319	$	5,397,024	$	15,462,916	$	87,999,131	$	140,458,522

At June 30, 2013 the weighted average interest rate on the above mortgages was 5.39%.  The effective rate was 5.47% including the amortization expense of deferred financing costs.

Summary financial information as of June 30, 2012

	Hamilton Essex 81	Hamilton Essex Development	345 Franklin	Hamilton 1025	Hamilton Bay Sales	Hamilton Bay Apts	Hamilton Minuteman	Hamilton on Main  Apts	Dexter Park	Total
ASSETS
Rental Properties	9,261,771	2,611,819	8,049,593	5,744,197	1,882,240	7,118,237	7,152,206	21,534,347	110,257,477	173,611,888
Cash & Cash Equivalents	58,404	24,262	26,170	296	24,634	17,487	18,057	51,045	577,044	797,399
Rent Receivable	70,337	—	9,048	12,082	2,563	5,692	4,380	10,138	132,465	246,705
Real Estate Tax Escrow	49,442	—	21,015	69,257	—	93,063	42,103	107,470	483,938	866,288
Prepaid Expenses & Other Assets	85,426	1,110	91,415	97,825	161,820	104,087	76,573	273,435	1,306,813	2,198,503
Financing & Leasing Fees	65,493	1,747	12,247	22,159	4,037	29,424	17,934	18,012	429,336	600,388
Total Assets	9,590,873	2,638,938	8,209,487	5,945,816	2,075,295	7,367,990	7,311,253	21,994,446	113,187,073	178,321,171
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	8,406,631	2,118,990	6,936,102	4,964,768	1,668,000	4,730,815	5,466,352	15,748,668	89,166,547	139,206,873
Accounts Payable & Accrued Expense	61,165	5,811	118,416	49,520	18,661	54,146	85,621	211,249	884,807	1,489,395
Advance Rental Pmts & Security Dep	187,355	—	147,570	85,841	24,499	87,189	68,827	262,993	1,919,814	2,784,087
Total Liabilities	8,655,151	2,124,801	7,202,087	5,100,129	1,711,161	4,872,149	5,620,800	16,222,911	91,971,168	143,480,356
Partners’ Capital	935,722	514,137	1,007,400	845,687	364,134	2,495,641	1,690,453	5,771,535	21,215,906	34,840,816
Total Liabilities & Capital	9,590,873	2,638,938	8,209,487	5,945,816	2,075,295	7,367,990	7,311,253	21,994,446	113,187,073	178,321,171
Partners’ Capital — NERA 50%	467,861	257,068	503,700	422,844	182,067	1,247,920	845,227	2,885,768
NERA 40%									8,486,362	8,486,362
										15,298,817
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 August 1, 2012	—	—	—	127	105	—	—	—	—	232
Unsold units	—	—	—	—	15	—	—	—	—	15
Unsold units with deposits for future sale as of August 1, 2012	—	—	—	—	—	—	—	—	—	—

Summary financial information for the six months ended June 30, 2012

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay Apts		Hamilton Minuteman		Hamilton on Main Apts		Dexter Park		Total
Revenues
Rental Income	626,002		144,092		578,703		421,727		111,192		436,161		398,676		1,297,371		6,062,838		10,076,761
Laundry and Sundry Income	7,073		—		1,188		—		—		—		491		9,980		43,855		62,587
	633,075		144,092		579,891		421,727		111,192		436,161		399,167		1,307,350		6,106,693		10,139,348
Expenses
Administrative	7,606		1,114		15,366		2,480		4,103		23,711		2,931		26,098		109,434		192,842
Depreciation and Amortization	206,865		6,485		222,140		126,593		39,472		149,087		158,546		476,667		2,870,999		4,256,855
Management Fees	27,026		5,764		24,116		16,885		4,587		16,992		16,016		52,207		129,568		293,161
Operating	53,132		—		29,481		635		927		905		37,721		178,324		547,102		848,227
Renting	2,090		—		141		2,328		1,450		3,271		1,993		6,580		41,798		59,652
Repairs and Maintenance	54,878		4,525		44,319		146,192		32,177		133,219		29,497		197,892		429,952		1,072,650
Taxes and Insurance	100,878		25,186		50,561		73,592		23,560		81,677		50,868		168,309		744,643		1,319,275
	452,475		43,074		386,125		368,706		106,276		408,862		297,573		1,106,077		4,873,495		8,042,662
Income Before Other Income	180,601		101,018		193,766		53,021		4,916		27,299		101,594		201,274		1,233,197		2,096,686
Other Income (Loss)
Interest Expense	(248,551	)	(30,327	)	(245,913	)	(143,846	)	(48,871	)	(135,267	)	(158,370	)	(418,707	)	(2,540,630	)	(3,970,481	)
Interest Income	—		—		24		41		114		—		—		—		—		178
Interest Income from Note	—		—		—		—		3,442		—		—		—		—		3,442
	(248,551	)	(30,327	)	(245,889	)	(143,805	)	(45,315	)	(135,267	)	(158,370	)	(418,707	)	(2,540,630	)	(3,966,860	)
Net Income (loss)	(67,950	)	70,691		(52,123	)	(90,784	)	(40,398	)	(107,968	)	(56,776	)	(217,433	)	(1,307,433	)	(1,870,174	)
Net Income (loss) - NERA 50%	(33,975	)	35,345		(26,061	)	(45,392	)	(20,199	)	(53,984	)	(28,388	)	(108,717	)			(281,371	)
NERA 40%																	(522,973	)	(522,973	)
																			(804,344	)

Summary financial information for the three months ended June 30, 2012

	Hamilton Essex 81		Hamilton Essex Development		345 Franklin		Hamilton 1025		Hamilton Bay Sales		Hamilton Bay Apts		HamiltonMinuteman		Hamilton on Main Apts		Dexter Park		Total
Revenues
Rental Income	333,509		72,046		287,052		211,699		59,714		216,498		201,973		649,487		3,051,260		5,083,238
Laundry and Sundry Income	3,540		—		600		—		—		—		83		4,617		21,355		30,195
	337,049		72,046		287,652		211,699		59,714		216,498		202,056		654,104		3,072,615		5,113,433
Expenses
Administrative	4,330		547		8,864		2,189		1,895		15,351		1,982		12,303		66,572		114,031
Depreciation and Amortization	103,742		3,243		112,159		63,477		19,736		74,723		79,613		240,010		1,438,955		2,135,656
Management Fees	14,208		2,882		12,115		8,333		2,537		8,599		7,978		26,698		66,306		149,656
Operating	22,810		—		14,338		570		256		217		13,014		73,937		243,755		368,896
Renting	150		—		—		659		535		2,377		1,083		4,556		10,807		20,169
Repairs and Maintenance	32,326		4,150		28,474		76,398		15,410		68,837		17,521		103,533		285,183		631,833
Taxes and Insurance	50,693		12,844		25,296		36,671		11,918		40,902		25,458		83,186		364,513		651,482
	228,259		23,666		201,245		188,296		52,287		211,006		146,648		544,223		2,476,092		4,071,723
Income Before Other Income	108,790		48,380		86,406		23,403		7,426		5,492		55,408		109,981		596,522		1,041,709
Other Income (Loss)
Interest expense	(124,068	)	(15,034	)	(121,314	)	(71,826	)	(24,445	)	(67,577	)	(79,013	)	(208,988	)	(1,267,892	)	(1,980,156	)
Interest income	—		—		12		21		53		—		—		—		—		86
Interest income from Note	—		—		—		—		1,635		—		—		—		—		1,635
	(124,068	)	(15,034	)	(121,302	)	(71,805	)	(22,757	)	(67,577	)	(79,013	)	(208,988	)	(1,267,892	)	(1,978,435	)
Net Income (Loss)	(15,278	)	33,346		(34,895	)	(48,402	)	(15,331	)	(62,085	)	(23,605	)	(99,107	)	(671,370	)	(936,726	)
Net Loss - NERA 50%	(7,639	)	16,673		(17,448	)	(24,201	)	(7,665	)	(31,043	)	(11,802	)	(49,553	)			(132,678	)
NERA 40%																	(268,548	)	(268,548	)
																			(401,226	)

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2013
Entity Registrant Name	NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP
Entity Central Index Key	0000746514
Document Type	10-Q
Document Period End Date	Jun. 30, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding	3,120,952
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Class A
Entity Common Stock, Shares Outstanding	104,032
Class B
Entity Common Stock, Shares Outstanding	24,708

XML

DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2013

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

NOTE 15. DISCONTINUED OPERATIONS

The following tables summarize income from discontinued operations for the property held for sale for the six months ended June 30, 2013 and 2012.

	June 30,		June 30,
	2013		2012
Total Revenues	$	193,274	$	227,960
Operating and other expenses	171,290		160,746
Depreciation and amortization	2,111		22,714
	173,401		183,460
Income from discontinued operations	$	19,873	$	44,500

Gain on the Sale of Nashoba in the second quarter of 2013:

Sale price	$	4,300,000
Net book value	476,766
Expense of sale	144,455
Gain on the sale of real estate	$	3,678,779