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, 2014

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

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

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

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 August 5, 2014, there were 102,891 of the registrant’s Class A units (3,086,717 Depositary Receipts) of limited partnership issued and outstanding and 24,476 Class B units issued and outstanding.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP

INDEX

PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets as of June  30, 2014 and December 31, 2013	3
	Consolidated Statements of Income for the Three Months and Six Months Ended June 30, 2014 and 2013	4
	Consolidated Statements of Changes in Partners’ Capital for the Six Months Ended June 30, 2014 and 2013	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2014 and 2013	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosure	38
Item 5.	Other Information	38
Item 6.	Exhibits	38
SIGNATURES		39

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, 2013 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, 2013.

The results of operations for the six month period ended June 30, 2014 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,
	2014			2013
	Unaudited
ASSETS
Rental Properties	$	150,029,401		$	152,904,661
Cash and Cash Equivalents	12,613,346			14,013,380
Rents Receivable	556,853			496,149
Real Estate Tax Escrows	294,366			375,560
Prepaid Expenses and Other Assets	3,575,816			3,895,189
Investments in Unconsolidated Joint Ventures	10,999,842			12,025,142
Financing Fees	1,636,903			1,635,076
Total Assets	$	179,706,527		$	185,345,157
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	195,634,372			198,520,478
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	1,347,680			1,252,346
Accounts Payable and Accrued Expenses	2,622,206			3,178,495
Advance Rental Payments and Security Deposits	4,575,466			4,242,401
Total Liabilities	204,179,724			207,193,720
Commitments and Contingent Liabilities (Notes 3 and 9)	—			—
Partners’ Capital 128,823 and 129,487 units outstanding in 2014 and 2013 respectively	(24,473,197		)	(21,848,563		)
Total Liabilities and Partners’ Capital	$	179,706,527		$	185,345,157

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,
	2014			2013			2014			2013
Revenues
Rental income	$	10,439,568		$	8,904,762		$	20,954,287		$	17,828,769
Laundry and sundry income	120,967			98,000			224,177			193,686
	10,560,535			9,002,762			21,178,464			18,022,455
Expenses
Administrative	568,915			697,238			1,099,482			1,149,855
Depreciation and amortization	2,747,467			1,479,860			5,471,646			2,933,991
Management fee	438,068			374,622			865,461			743,874
Operating	1,020,323			814,609			2,702,257			2,246,784
Renting	108,612			26,815			145,469			56,666
Repairs and maintenance	1,601,307			1,515,934			2,812,456			2,597,213
Taxes and insurance	1,351,043			1,204,862			2,792,153			2,365,792
	7,835,735			6,113,940			15,888,924			12,094,175
Income Before Other Income and Discontinued Operations	2,724,800			2,888,822			5,289,540			5,928,280
Other Income (Expense)
Interest income	199			351			382			715
Interest expense	(2,380,896		)	(1,762,647		)	(4,767,062		)	(3,603,716		)
(Loss) from investments in unconsolidated joint ventures	(62,382		)	(336,332		)	(270,633		)	(653,189		)
	(2,443,079		)	(2,098,628		)	(5,037,313		)	(4,256,190		)
Income From Continuing Operations	281,721			790,194			252,227			1,672,090
Discontinued Operations
Income from discontinued operations	—			143			—			19,873
Gain on sale of real estate	—			3,678,779			—			3,678,779
	—			3,678,922						3,698,652
Net Income	$	281,721		$	4,469,116		$	252,227		$	5,370,742
Income per Unit
Income before discontinued operations	$	2.18		$	6.08		$	1.95		$	12.85
Income from discontinued operations	—			28.29			—			28.43
Net Income per Unit	$	2.18		$	34.37		$	1.95		$	41.28
Weighted Average Number of Units Outstanding	128,988			130,040			129,149			130,114

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, 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	)
Balance January 1, 2014	144,180	34,243	1,802	180,225	50,738	129,487		$	(17,485,327	)	$	(4,145,076	)	$	(218,160	)	$	(21,848,563	)
Distribution to Partners	—	—	—	—	—	—		(1,548,307		)	(367,723		)	(19,354		)	(1,935,384		)
Stock Buyback	—	—	—	—	664	(664	)	(757,246		)	(175,019		)	(9,212		)	(941,477		)
Net Income	—	—	—	—	—	—		201,782			47,923			2,522			252,227
Balance June 30, 2014	144,180	34,243	1,802	180,225	51,402	128,823		$	(19,589,098	)	$	(4,639,895	)	$	(244,204	)	$	(24,473,197	)

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,
	2014			2013
Cash Flows from Operating Activities
Net income	$	252,227		$	5,370,742
Adjustments to reconcile net income to net cash provided by operating activities
Gain on sale of real estate	—			(3,678,779		)
Depreciation and amortization	5,471,646			2,933,991
Loss from investments in joint venture	270,633			653,189
Depreciation and amortization - discontinued operations	—			2,111
Change in operating assets and liabilities
(Increase) Decrease in rents receivable	(60,704		)	45,591
(Decrease) in accounts payable and accrued expense	(556,289		)	(343,127		)
Decrease in real estate tax escrow	81,194			102,232
(Increase) in prepaid expenses and other assets	(434,134		)	(265,100		)
Increase in advance rental payments and security deposits	333,065			308,037
Total Adjustments	5,105,411			(241,855		)
Net cash provided by operating activities	5,357,638			5,128,887
Cash Flows from Investing Activities
Proceeds from unconsolidated joint ventures	867,741			2,205,880
Net proceeds from sale of real estate	—			2,155,546
Distribution in excess of investment in unconsolidated joint ventures	100,000			—
(Investment in) unconsolidated joint ventures	(117,741		)	(10,880		)
Deposit and escrow held for the acquisition of real estate	—			(4,103,906		)
Improvement of rental properties	(1,642,788		)	(2,189,413		)
Net cash (used in) investing activities	(792,788		)	(1,942,773		)
Cash Flows from Financing Activities
Payment of financing costs	(201,917		)	(142,362		)
Proceeds of mortgage notes payable	609,555			15,000,000
Principal payments and payoffs of mortgage notes payable	(3,495,661		)	(19,383,890		)
Stock buyback	(941,477		)	(399,487		)
Distributions to partners	(1,935,384		)	(1,950,596		)
Net cash (used in) financing activities	(5,964,884		)	(6,876,335		)
Net (Decrease) Increase in Cash and Cash Equivalents	(1,400,034		)	(3,690,221		)
Cash and Cash Equivalents, at beginning of period	14,013,380			6,981,906
Cash and Cash Equivalents, at end of period	$	12,613,346		$	3,291,685

See notes to consolidated financial statements.

6

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2014

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Line of Business:  New England Realty Associates Limited Partnership (“NERA” or the “Partnership”) was organized in Massachusetts in 1977. NERA and its subsidiaries own 24 properties which include 16 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,412 apartment units, 19 condominium units and 108,043 square feet of commercial space. Additionally, the Partnership also owns a 40-50% interest in 9 residential and mixed use properties consisting of 793 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. Generally, the Partnership would discontinue applying the equity method when the investment (and any advances) is reduced to zero and would not provide for additional losses unless the Partnership has guaranteed obligations of the venture or is otherwise committed to providing further financial support for the investee. If the venture subsequently generates income, the Partnership only recognizes its share of such income to the extent it exceeds its share of previously unrecognized losses. In 2013, the carrying value of an investment fell below zero. We intend to fund our share of the investments’ future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund operating deficits. (See Note 14: Investment in Unconsolidated Joint Ventures.)

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 equity’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. The primary beneficiary is defined by the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the variable interest entity’s performance; and (2) the obligation to absorb losses and rights to receive the returns from VIE that would be significant to the VIE.

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

7

(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.

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. Rental concessions 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.

8

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 2014 or 2013 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 2014 or 2013. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At June 30, 2014, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01% to 0.35%.  At June 30, 2014 and December 31, 2013, respectively approximately $13,551,000 and $15,275,000 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 $56,662 and $16,167 for the six months ended June 30, 2014 and 2013, respectively.

Discontinued Operations and Rental Property Held for Sale:  When significant 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, 2014 and 2013 there was no capitalized interest.

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

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

9

NOTE 2. RENTAL PROPERTIES

As of June 30, 2014, the Partnership and its Subsidiary Partnerships owned 2,412 residential apartment units in 20 residential and mixed-use complexes (collectively, the “Apartment Complexes”). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the “Condominium Units”). The Apartment Complexes and Condominium Units are located primarily in the metropolitan Boston area of Massachusetts.

Additionally, as of June 30, 2014, the Partnership and Subsidiary Partnerships owned a commercial shopping center in Framingham, commercial buildings in Newton and Brookline and mixed-use properties in Boston, Brockton and Newton, all in Massachusetts. These properties are referred to collectively as the “Commercial Properties.”

The Partnership also owned a 40% to 50% ownership interest in nine residential and mixed use complexes (the “Investment Properties”) at June 30, 2014 with a total of 793 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, 2014			December 31, 2013			Useful Life
Land, improvements and parking lots	$	44,021,654		$	43,919,728		15–40 years
Buildings and improvements	152,403,653			152,130,635			15–40 years
Kitchen cabinets	6,308,459			5,956,078			5–10 years
Carpets	6,213,654			5,820,516			5–10 years
Air conditioning	720,908			707,928			5–10 years
Laundry equipment	420,737			404,775			5–7 years
Elevators	1,139,296			1,139,296			20–40 years
Swimming pools	444,629			444,629			10–30 years
Equipment	5,244,764			5,038,530			5–7 years
Motor vehicles	86,657			86,657			5 years
Fences	24,670			24,670			5–15 years
Furniture and fixtures	5,831,275			5,564,621			5–7 years
Smoke alarms	236,719			216,223			5–7 years
Total fixed assets	223,097,075			221,454,286
Less: Accumulated depreciation	(73,067,674		)	(68,549,625		)
	$	150,029,401		$	152,904,661

In May 2013 the Partnership sold the Nashoba Apartments located 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 in accordance with GAAP is approximately $3,679,000. The proceeds were subsequently used in the acquisition of the Hamilton Green Apartments described below.

On July 15, 2013, Hamilton Green Apartments, LLC, (“Hamilton Green”) 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. From the purchase price, the Partnership allocated approximately $1,656,000 to the value of the in-place leases and approximately $96,000 to the value of the tenant relationships. These amounts were amortized over 12 and 36 months respectively. 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 sale of the Nashoba Apartments, and the balance from the Partnership’s cash reserves. The closing costs associated with this short term financing were approximately $38,000. The original mortgage matured in November 2013. On December 20, 2013, the Partnership refinanced the mortgage on Hamilton Green. The new mortgage is $38,500,000, interest is fixed at 4.67% for 15 years, interest only for 2 years and the mortgage is amortized over 30 years. This refinancing required additional capital of approximately $1,846,000 from the Partnership. The closing costs associated with this refinancing were approximately $346,000.

10

NOTE 3. RELATED PARTY TRANSACTIONS

The Partnership’s properties are managed by an entity that is owned by the majority shareholder of the General Partner. The management fee is equal to 4% of gross receipts rental revenue and laundry income on the majority of the Partnership’s properties and 3% on Linewt. Total fees paid were approximately $865,000 and $752,000 for the six months ended June 30, 2014 and 2013, respectively.

The Partnership Agreement permits the General Partner or Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA. During the six months ended June 30, 2014 and 2013, approximately $372,000 and $453,000, was charged to NERA for legal, accounting, construction, maintenance, rental and architectural services and supervision of capital improvements. Of the 2014 expenses referred to above, approximately $148,000 consisted of repairs and maintenance, $162,000 of administrative expense and $6,000 for rental commission. Approximately $56,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2014, the Hamilton Company received approximately $403,000 from the Investment Properties of which approximately $330,000 was the management fee, approximately $46,000 was for maintenance services and approximately $25,000 was for administrative services. The management fee is equal to 4% of gross receipts rental income on the majority of investment properties and 2% on Dexter Park.

The Partnership reimburses the management company for the payroll and related expenses of the employees who work at the properties. Total reimbursement was approximately $1,565,000 and $1,388,000 for the six months ended June 30, 2014 and 2013, 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 during 2014 and 2013.

Bookkeeping and accounting functions are provided by the Management Company’s accounting staff, which consists of approximately 14 people. During the six months ended June 30, 2014 and 2013, the Management Company charged the Partnership $62,500 ($125,000 per year) for bookkeeping and accounting services included in administrative expenses above.

The President of the Management Company performs asset management consulting services and receives an asset management fee from the Partnership. The Partnership does not have a written agreement with this individual. During the six months ended June 30, 2014 and 2013 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 60%. See Note 14 for a description of the properties and their operations.

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

NOTE 4. OTHER ASSETS

Approximately $2,125,000 and $2,053,000 of security deposits are included in prepaid expenses and other assets at June 30, 2014 and December 31, 2013, respectively. The security deposits and escrow accounts are restricted cash.

Included in prepaid expenses and other assets at June 30, 2014 and December 31, 2013 is approximately $202,000 and $123,000, respectively, held in escrow to fund future capital improvements.

Intangible assets on the acquisition of Hamilton Green are included in prepaid expenses and other assets.  Intangible assets are approximately $134,000 net of accumulated amortization of approximately $1,618,000 and approximately $978,000 net of accumulated amortization of approximately $774,000 at June 30, 2014 and December 31, 2013, respectively.

11

Included in prepaid expenses and other assets at June 30, 2014 are approximately $90,000 of deposits and prepaid financing fees for the refinancing of Westgate Apartments Burlington, LLC and approximately $215,000 of deposits to be refunded from the refinancing of NERA Dean Street.  (See Note 5.)

Financing and leasing fees of approximately $1,637,000 and $1,635,000 are net of accumulated amortization of approximately $553,000 and $548,000 at June 30, 2014 and December 31, 2013 respectively.

NOTE 5. MORTGAGE NOTES PAYABLE

At June 30, 2014 and December 31, 2013, 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, 2014, the interest rates on these loans ranged from 3.76% to 5.97%, payable in monthly installments aggregating approximately $808,000 including principal, to various dates through 2029. The majority of the mortgages are subject to prepayment penalties. At June 30, 2014, the weighted average interest rate on the above mortgages was 4.82%. The effective rate of 4.94% 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, 2014 are as follows:

2015—current maturities	$	2,131,000
2016	504,000
2017	1,629,000
2018	1,821,000
2019	7,900,000
Thereafter	181,649,000
	$	195,634,000

On February 25, 2013, the Partnership paid off the mortgage of approximately $3,967,000 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 owned by School Street 9 LLC. 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. Principal payments will be on a 30 year amortization schedule. The Partnership paid off the prior mortgage in the amount of approximately $15,284,000 with the proceeds of the new mortgage and the Partnership’s cash reserves. The costs associated with this refinancing were approximately $159,000.

On July 7, 2013, the Partnership refinanced the property owned by Boylston Downtown LP. The new 15 year $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, were used in connection with the purchase of Hamilton Green Apartments. The costs associated with this refinancing are approximately $279,000.

On October 1, 2013, the Partnership refinanced the property owned by Westgate Apartments LLC. The new mortgage is $15,700,000; the interest rate is 4.65%, interest only payable in 10 years. Approximately $7,616,000 of the loan proceeds was used to pay off the existing mortgage. The mortgage matures in September 2023. The costs associated with the refinancing were approximately $190,000.

On December 20, 2013, the Partnership refinanced the property owned by Hamilton Green Apartments LLP. The new mortgage is $38,500,000; the interest rate is 4.67%; interest only for 2 years. After the first two years, principal is amortized on a 30-year amortization schedule through January 2029. The proceeds of the new mortgage as well as the Partnership’s cash reserves of approximately $1,846,000 were used to pay off the prior mortgage of $40,000,000 and cover the cost of this refinancing. The costs associated with the refinancing were approximately $346,000.

In February 2014, the Partnership paid off the mortgages on Linewt in the amount of  approximately $1,466,000 and Linhart in the amount of approximately $1,926,000. There were no prepayment penalties. The Partnership’s cash reserves were used to pay off these mortgages.

12

On June 11, 2014, the Partnership refinanced the property owned by NERA Dean Street Associates, LLC.  The new mortgage is $5,687,000; the interest rate is 4.22%, interest only payable in 10 years. Approximately $5,077,000 of the loan proceeds were used to pay off the existing mortgage.  The mortgage matures in June 2024. The costs associated with the refinancing were approximately $99,000.

As of June 30, 2014, the Partnership was in the process of refinancing the property owned by Westgate Apartments Burlington, LLC.  Included in prepaid expenses and other assets is approximately $90,000 in deposits and financing costs made by the Partnership for this refinancing.  The refinancing was completed on July 11, 2014.( See Note 17- Subsequent Events).

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, 2014, amounts received for prepaid rents of approximately $1,610,000 are included in cash and cash equivalents, and security deposits of approximately $2,125,000 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.

In 2014, the Partnership paid quarterly distributions of $7.50 per unit ($0.25 per receipt) on March 31and June 30, 2014.  The Board of Advisors approved a quarterly distribution of $7.50 per unit ($0.25 per receipt) payable September 30, 2014.

In 2013, 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) each year.

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

	Six Months Ended June 30,
	2014		2013
Income per Depositary Receipt before Discontinued Operations	$	0.07	$	0.43
Income from Discontinued Operations	0.00		0.95
Net Income per Depositary Receipt after Discontinued Operations	$	0.07	$	1.38
Distributions per Depositary Receipt	$	0.50	$	0.50

NOTE 8. TREASURY UNITS

Treasury Units at June 30, 2014 are as follows:

Class A	41,122
Class B	9,766
General Partnership	514
	51,402

13

On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program (“Repurchase Program”) under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one-tenth of a Class A Unit). On January 15, 2008, the General Partner authorized an increase in the Repurchase Program from 300,000 to 600,000 Depositary Receipts. On January 30, 2008 the General Partner authorized an increase the Repurchase Program from 600,000 to 900,000 Depositary Receipts. On March 6, 2008, the General Partner authorized the increase in the total number of Depositary Receipts that could be repurchased pursuant to the Repurchase Program from 900,000 to1, 500,000. On August 8, 2008, the General Partner re- authorized and renewed the Repurchase Program for an additional 12-month period ended August 19, 2009. On March 22, 2010, the General Partner re-authorized and renewed the Repurchase Program that expired on August 19, 2009. Under the terms of the renewed Repurchase Program, the Partnership may purchase up to 1,500,000 Depositary Receipts from the start of the program in 2007 through March 31, 2015. The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership’s Second Amended and Restate Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through June 30, 2014, the Partnership has repurchased 1,258,822 Depositary Receipts at an average price of $25.13 per receipt (or $753.90 per underlying Class A Unit),  2,229 Class B Units and 117 General Partnership Units, both at an average price of $700.12 per Unit, totaling approximately $33,422,000 including brokerage fees paid by the Partnership.

During the six months ended June 30, 2014, the Partnership purchased a total of 15,931  Depositary Receipts. The average price was $46.26 per receipt or $1,387.80 per unit. The total cost including commission was $757,246. The Partnership was required to repurchase 126 Class B Units and 7 General Partnership units at a cost of $175,019 and $9,212 respectively.

From July 1, 2014 through August 5, 2014, the Partnership purchased a total of 5,049 Depositary Receipts. The average price was $48.81 per receipt or $1,464.30 per unit. The total cost was $253,274. The Partnership is required to repurchase 40.0 Class B Units and 2.1 General Partnership Units at a cost of $58,532 and $3,081 respectively.

NOTE 9. COMMITMENTS AND CONTINGENCIES

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

NOTE 10. RENTAL INCOME

During the six months ended June 30, 2014, approximately 92% 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 8% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30, 2014 as follows:

	Commercial Property Leases
2015	$	2,615,000
2016	2,398,000
2017	1,602,000
2018	1,231,000
2019	863,000
Thereafter	973,000
	$	9,682,000

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 $315,000 and $345,000 for the six months ended June 30, 2014 and 2013 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately 30% of the total commercial rental income.

14

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,
2015	$	400,427	20,511	12	13	%
2016	718,834		26,744	8	24	%
2017	525,725		18,157	7	18	%
2018	352,082		10,725	7	12	%
2019	206,836		6,403	4	7	%
2020	556,058		18,932	4	19	%
2021	64,800		1,800	1	2	%
2022	0		0	0	0	%
2023	0		0	0	0	%
2024	157,443		4,771	1	5	%
Totals	$	2,982,205	108,043	44	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $459,000 and $344,000 at June 30, 2014 and December 31, 2013. Included in rents receivable at June 30, 2014 is approximately $194,000 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, 2014 also includes approximately $49,000 representing the deferral of rental concession primarily related to the residential properties.

For the six months ended June 30, 2014 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, 2014 and 2013, cash paid for interest was approximately $4,074,000, and $3,652,000 respectively.  Cash paid for state income taxes was approximately $49,000 and $48,000 during the six months ended June 30, 2014 and 2013 respectively.

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At June 30, 2014 and December 31, 2013, 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, 2014 and December 31, 2013 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, and note payable, accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments or, the recent acquisition of these items.

At June 30, 2014 and December 31, 2013, 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, 2014 and December 31, 2013, 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.

15

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, 2014	$	195,634,372	$	203,344,074
At December 31, 2013	$	198,520,478	$	196,059,827
Investment Properties
At June 30, 2014	$	137,026,261	$	147,317,566
At December 31, 2013	$	137,875,515	$	147,975,521

Disclosure about fair value of financial instruments is based on pertinent information available to management as of June 30, 2014 and December 31, 2013. 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, 2014 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 $4,300,000 less than statement income for the year ended December 31, 2013. The primary reason for the decrease is due to tax free exchanges of approximately $3,700,000 from the sale of Nashoba and accelerated tax depreciation of approximately $1,100,000 at the related acquisition of Hamilton Green and other depreciation timing difference and accelerated depreciation in prior years. The cumulative tax basis of the Partnership’s real estate at December 31, 2013 is approximately $4,800,000, 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 $1,300,000 less than statement basis because of accelerated depreciation.

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

Allowable accelerated depreciation deductions have expired for 2014. This may result in higher taxable income in future years. Future tax law changes may significantly affect taxable income.

The Partnership adopted the amended provisions related to uncertain tax provisions of ASC 740, Income Taxes. As a result of the implementation of the guidance, the Partnership recognized no material adjustment 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, 2014, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are 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

16

Brown, the President of the Management Company and five other employees of the Management Company. Harold Brown’s ownership interest is between 43.2% and 57%, with the balance owned by the others. A description of each investment is as follows:

On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, referred to as Dexter Park, is a 409 unit residential complex. The purchase price was $129,500,000. The total mortgage was $89,914,000 with an interest rate of 5.57% and it matures in 2019. The mortgage calls for interest only payments for the first two years of the loan and amortized over 30 years thereafter. The balance of this mortgage is approximately $86,875,000 at June 30, 2014. 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. The loan was paid in full in April 2012.  A majority of the apartments were leased at the time of the acquisition. As a result, the Partnership amortized the intangible assets associated with the “in place” leases over a 12 month period which began in November 2009. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

On October 3, 2005, the Partnership invested $2,500,000 for a 50% ownership interest in a 168-unit apartment complex in Quincy, Massachusetts. The purchase price was $30,875,000. The Partnership sold 120 units as condominiums and retained 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, 2014, the balance of the mortgage is approximately $4,606,000. 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 matured in 2013. On October 18, 2013, the Partnership and its joint venture partner each made capital contributions to the entity of $660,000. The capital was used to pay off the outstanding mortgage.  Five units have been sold during the first six months of 2014 with a gain of approximately $301,000.   As of August 5, 2014, 10 units are still owned by the Partnership. 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 48 apartments, one commercial space and a 50-car surface parking lot located in Boston, Massachusetts. The purchase price was $14,300,000, with a $10,750,000 mortgage. The Partnership plans to operate the building and initiate development of the parking lot. In June 2007, the Partnership separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Partnership restructured the mortgages on both parcels at Essex 81 and transferred the residential apartments to Hamilton Essex 81, LLC. The mortgage on Hamilton Essex 81, LLC is approximately $8,171,000, at June 30, 2014, amortizing over 30 years at 5.79% due in August 2016. The mortgage on Essex Development, LLC, or the parking lot is approximately $2,014,000 with a variable interest rate of 2.25% over the daily Libor rate (0.155%) at June 30, 2014. This loan was extended to August 2013 with the same conditions except for the addition of fixed principal payments in the amount of $4,301 per month. The cost associated with the extension was approximately $6,000. In September 2013, the loan was extended for an additional two years to August 2015 with the same conditions except for the increased principal payments of $4,443 per month. The costs associated with the extension were approximately $9,000. 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 $4,840,000 at June 30, 2014. This investment is referred to as Hamilton 1025, 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

17

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. At June 30, 2014, the remaining balance on the mortgage is approximately $15,188,000.  Hamilton on Main, LLC is in the process of refinancing its mortgage and has paid approximately $357,000 in deposits for the refinancing.  These deposits are included in prepaid expenses and other assets on the unconsolidated joint ventures’ balance sheets.  The Partnership expects the refinancing will be completed in the fourth quarter of 2014.

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, 2014, the balance of this mortgage is approximately $5,330,000. This investment is referred to as Hamilton Minuteman,  LLC.

In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts. 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. The Partnership paid off the prior mortgage of approximately $6,776,000 with the proceeds of the new mortgage. After the refinancing, the property made a distribution of $1,610,000 to the Partnership. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting. Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed. This investment is referred to as 345 Franklin, LLC.

18

Summary financial information as of June 30, 2014

				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	$	8,575,457		$	2,622,910		$	7,320,301		$	5,272,805		$	1,148,912		$	6,533,725		$	6,684,183		$	19,873,809		$	99,637,389		$	157,669,491
Cash & Cash Equivalents	76,955			104,102			107,038			6,968			57,296			1,878			66,660			23,626			968,685			1,413,209
Rent Receivable	32,918			—			15,494			2,327			3,666			6,965			5,798			11,991			141,005			220,164
Real Estate Tax Escrow	101,117			—			18,132			68,872			—			28,886			39,093			45,741			369,900			671,741
Prepaid Expenses & Other Assets	83,547			1,230			38,090			43,044			548,734			41,408			42,658			748,027			1,728,976			3,275,714
Financing & Leasing Fees	37,887			9,868			93,219			12,106			—			16,700			9,997			4,286			310,703			494,766
Total Assets	$	8,907,881		$	2,738,111		$	7,592,274		$	5,406,122		$	1,758,607		$	6,629,562		$	6,848,389		$	20,707,480		$	103,156,658		$	163,745,085
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,171,048		$	2,014,488		$	10,000,000		$	4,840,484		$	—		$	4,606,316		$	5,330,234		$	15,188,407		$	86,875,284		$	137,026,261
Accounts Payable & Accrued Expense	59,005			5,297			57,752			30,368			18,811			12,526			47,027			155,825			698,090			1,084,701
Advance Rental Pmts& Security Deposits	223,226			—			229,882			108,125			22,824			97,026			93,312			322,519			2,645,283			3,742,197
Total Liabilities	8,453,279			2,019,785			10,287,634			4,978,977			41,635			4,715,869			5,470,574			15,666,750			90,218,657			141,853,159
Partners’ Capital	454,602			718,325			(2,695,360		)	427,145			1,716,973			1,913,694			1,377,815			5,040,730			12,938,001			21,891,926
Total Liabilities and Capital	$	8,907,881		$	2,738,111		$	7,592,274		$	5,406,122		$	1,758,607		$	6,629,562		$	6,848,389		$	20,707,480		$	103,156,658		$	163,745,085
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	227,301		$	359,163		$	—		$	213,573		$	858,486		$	956,847		$	688,907		$	2,520,365		$	5,175,200		10,999,842
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,347,680	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,347,680		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	9,652,162
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, 2014	—			—			—			127			110			—			—			—			—			237
Unsold units	—			—			—			—			10			—			—			—			—			10
Unsold units with deposits for future sale as of August 1, 2014	—			—			—			—			—			—			—			—			—			—

19

Financial information for the six months ended June 30, 2014

				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	$	670,157		$	146,472		$	658,488		$	447,481		$	106,721		$	462,103		$	456,812		$	1,440,362		$	6,709,764		$	11,098,360
Laundry and Sundry Income	8,120			—			235			—			—			—			168			19,148			48,593			76,262
	678,277			146,472			658,723			447,481			106,721			462,103			456,980			1,459,510			6,758,357			11,174,622
Expenses
Administrative	17,141			830			19,861			4,161			2,674			10,577			5,443			30,762			116,993			208,441
Depreciation and Amortization	216,170			5,644			200,104			120,320			38,350			158,697			159,254			473,132			2,694,103			4,065,772
Management Fees	29,105			5,859			28,505			18,643			4,275			18,600			18,953			57,820			148,442			330,201
Operating	68,967			—			32,593			353			605			1,039			44,102			206,470			736,853			1,090,983
Renting	10,967			—			3,623			6,376			753			5,042			6,088			18,097			57,536			108,481
Repairs and Maintenance	73,827			3,150			30,932			164,511			47,651			143,741			38,434			190,403			514,184			1,206,833
Taxes and Insurance	116,996			27,640			58,200			81,375			22,666			82,006			59,236			191,586			757,325			1,397,028
	533,173			43,123			373,817			395,737			116,973			419,702			331,509			1,168,270			5,025,436			8,407,740
Income Before Other Income	145,104			103,349			284,906			51,743			(10,252		)	42,401			125,471			291,240			1,732,921			2,766,883
Other Income (Loss)
Interest Expense	(240,198		)	(27,896		)	(195,574		)	(139,629		)	(399		)	(131,333		)	(153,561		)	(402,014		)	(2,464,957		)	(3,755,560		)
Interest Income	—			—			—			10			—			—			—			—			—			10
Interest Income from Note	—			—			—			—			468			—			—			—			—			468
Gain on Sale of Real Estate	—			—			—			—			300,522			—			—			—			—			300,522
	(240,198		)	(27,896		)	(195,574		)	(139,620		)	300,591			(131,333		)	(153,561		)	(402,014		)	(2,464,957		)	(3,454,561		)
Net Income (Loss)	$	(95,094	)	$	75,453		$	89,332		$	(87,877	)	$	290,339		$	(88,932	)	$	(28,090	)	$	(110,774	)	$	(732,036	)	$	(687,678	)
Net Income (Loss) - NERA 50%	$	(47,547	)	$	37,727		$	44,666		$	(43,938	)	$	145,170		$	(44,466	)	$	(14,045	)	$	(55,386	)				22,181
Net Income (Loss) - NERA 40%																									$	(292,814	)	(292,814		)
																												$	(270,633	)

20

Financial information for the three months ended June 30, 2014

				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	$	341,387		$	73,236		$	330,748		$	216,294		$	43,923		$	223,212		$	232,870		$	722,682		$	3,352,710		$	5,537,062
Laundry and Sundry Income	4,200			—			657			—			—			—			(2		)	9,692			23,213			37,761
	345,587			73,236			331,406			216,294			43,923			223,212			232,869			732,375			3,375,923			5,574,823
Expenses
Administrative	13,963			513			13,038			2,193			1,969			5,732			2,440			21,277			62,450			123,574
Depreciation and Amortization	108,267			2,823			100,379			60,167			19,175			79,383			79,852			237,117			1,348,640			2,035,802
Management Fees	15,829			2,929			14,839			9,412			1,891			9,140			9,643			29,557			76,544			169,784
Operating	23,995			—			7,770			193			355			580			11,248			64,310			248,068			356,520
Renting	10,850			—			180			624			—			1,550			3,623			11,268			38,946			67,040
Repairs and Maintenance	41,549			3,150			18,595			84,068			23,827			70,304			21,547			99,885			317,690			680,615
Taxes and Insurance	58,712			14,070			28,555			40,771			10,768			41,247			29,664			95,947			376,140			695,874
	273,165			23,485			183,356			197,427			57,984			207,936			158,017			559,361			2,468,477			4,129,208
Income Before Other Income	72,422			49,751			148,049			18,867			(14,061		)	15,276			74,852			173,013			907,445			1,445,615
Other Income (Loss)
Interest Expense	(120,829		)	(13,977		)	(97,821		)	(70,070		)	(205		)	(65,868		)	(77,061		)	(201,634		)	(1,237,262		)	(1,884,727		)
Interest Income	—			—			—			5			—			—			—			—			—			5
Interest Income from Note	—			—			—			—			135			—			—			—			—			135
Gain on Sale of Real Estate	—			—			—			—			248,239			—			—			—			—			248,239
	(120,829		)	(13,977		)	(97,821		)	(70,065		)	248,169			(65,868		)	(77,061		)	(201,634		)	(1,237,262		)	(1,636,348		)
Net Income (Loss)	$	(48,407	)	$	35,774		$	50,228		$	(51,198	)	$	234,108		$	(50,592	)	$	(2,209	)	$	(28,621	)	$	(329,817	)	$	(190,733	)
Net Income (Loss) - NERA 50%	$	(24,203	)	$	17,887		$	25,114		$	(25,598	)	$	117,054		$	(25,296	)	$	(1,104	)	$	(14,310	)				69,545
Net Income (Loss) - NERA 40%																									$	(131,927	)	(131,927		)
																												$	(62,382	)

21

Future annual mortgage maturities at June  30, 2014 are as follows:

			Hamilton
	Hamilon		Essex 81		345		Hamilton		Hamilton		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Development		Franklin		1025		Bay Apts		Minuteman		Main Apts		Park		Total
6/30/2015	133,411		53,316				70,660		75,940		77,390		15,188,407		1,571,909		17,171,033
6/30/2016	144,484		1,961,172				80,814		76,024		81,127				1,459,214		3,802,835
6/30/2017	7,893,152				177,340		4,689,009		4,454,353		5,171,718				1,542,599		23,928,170
6/30/2018					187,209										1,630,749		1,817,958
6/30/2019					194,584										1,723,938		1,918,522
Thereafter					9,440,867										78,946,875		88,387,742
	$	8,171,048	$	2,014,488	$	10,000,000	$	4,840,484	$	4,606,316	$	5,330,234	$	15,188,407	$	86,875,284	$	137,026,261

At June  30, 2014 the weighted average interest rate on the above mortgages was 5.38%. The effective rate was 5.46% including the amortization expense of deferred financing costs.

22

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		$	165,785,846
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	51,079			—			8,863			6,873			4,061			4,886			9,599			10,729			104,164			200,255
Real Estate Tax Escrow	83,964			—			23,711			74,507			—			53,440			34,783			68,934			420,641			759,980
Prepaid Expenses & Other Assets	75,717			1,153			27,615			42,202			123,516			24,192			51,529			228,073			1,464,682			2,038,679
Financing & Leasing Fees	55,373			1,081			99,877			17,132			4,000			23,062			13,965			11,150			370,020			595,660
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
Accounts Payable & Accrued Expense	50,228			5,461			19,140			51,107			18,669			8,192			71,192			196,455			1,019,021			1,439,465
Advance Rental Pmts& Security Deposits	176,827			—			175,850			93,473			29,033			96,673			66,703			321,725			2,059,401			3,019,685
Total Liabilities	8,519,342			2,072,839			10,194,990			5,046,047			1,715,702			4,775,184			5,534,918			15,981,096			91,077,553			144,917,671
Partners’ Capital	697,529			575,469			(2,116,602		)	609,157			244,732			2,167,705			1,519,647			5,171,379			16,758,697			25,627,713
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		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	348,764		$	287,734		$	—		$	304,578		$	122,366		$	1,083,852		$	759,824		$	2,585,689		$	6,703,479		12,196,283
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,058,301	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,058,301		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	11,137,982
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	—			—			—			—			—			—			—			—			—			—

23

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		$	10,546,190
Laundry and Sundry Income	8,997			—			1,933			—			—			—			675			17,281			46,429			75,315
	672,916			143,792			617,967			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			4,272,423
Management Fees	26,015			5,752			25,782			18,186			4,987			17,887			17,076			57,339			133,507			306,531
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			1,102,322
Taxes and Insurance	111,759			24,407			56,255			77,131			20,619			71,147			61,948			169,290			742,955			1,335,511
	496,961			39,050			392,218			381,383			119,663			405,784			310,948			1,093,996			4,913,996			8,153,999
Income Before Other Income	175,955			104,742			225,749			60,500			1,809			35,659			122,516			276,473			1,464,103			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	—						30			2			86												57			175
Interest Income from Note	—												2,007															2,007
Other Income (Expenses)	—			—			(68,588		)	—			—			—			—			—			—			(68,588		)
	(243,202		)	(29,266		)	(326,105		)	(141,479		)	(46,596		)	(132,973		)	(155,538		)	(409,587		)	(2,495,396		)	(3,980,142		)
Net Income (Loss)	$	(67,247	)	$	75,476		$	(100,356	)	$	(80,979	)	$	(44,787	)	$	(97,314	)	$	(33,022	)	$	(133,114	)	$	(1,031,293	)	$	(1,512,636	)
Net Income (Loss) - NERA 50%	$	(33,624	)	$	37,738		$	(50,178	)	$	(40,490	)	$	(22,394	)	$	(48,657	)	$	(16,511	)	$	(66,557	)				(240,672		)
Net Income (Loss) - NERA 40%																									$	(412,517	)	(412,517		)
																												$	(653,189	)

24

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		$	5,289,632
Laundry and Sundry Income	5,151			—			1,288			—			—			—			464			7,510			24,997			39,410
	340,615			71,896			313,033			221,666			61,864			222,162			217,396			683,752			3,196,658			5,329,042
Expenses
Administrative	6,074			386			8,699			2,124			2,813			3,669			2,042			9,769			66,845			102,421
Depreciation and Amortization	106,494			2,245			110,055			60,128			20,035			76,840			79,225			244,233			1,440,022			2,139,277
Management Fees	13,762			2,876			12,707			9,227			2,649			9,422			8,538			28,298			68,497			155,976
Operating	28,483			—			14,190			452			382			195			18,737			77,185			235,835			375,459
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			614,567
Taxes and Insurance	55,878			12,209			28,069			38,381			10,389			35,468			31,082			84,473			346,742			642,691
	252,742			20,866			198,336			194,832			60,909			205,220			156,769			525,753			2,445,472			4,060,899
Income Before Other Income	87,873			51,030			114,697			26,834			955			16,942			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	—			—			15			2			41			—			—			—			57			115
Interest Income from Note	—			—			—			—			911			—			—			—			—			911
Other Income (Expenses)	—			—			(68,588		)	—			—			—			—			—			—			(68,588		)
	(122,047		)	(14,668		)	(207,178		)	(70,996		)	(23,555		)	(66,707		)	(78,076		)	(205,633		)	(1,252,138		)	(2,040,998		)
Net Income (Loss)	$	(34,174	)	$	36,362		$	(92,481	)	$	(44,162	)	$	(22,600	)	$	(49,765	)	$	(17,449	)	$	(47,634	)	$	(500,952	)	$	(772,855	)
Net Income (Loss) - NERA 50%	$	(17,087	)	$	18,181		$	(46,241	)	$	(22,081	)	$	(11,300	)	$	(24,883	)	$	(8,725	)	$	(23,817	)				(135,952		)
Net Income (Loss) - NERA 40%																									$	(200,381	)	(200,381		)
																												$	(336,332	)

25

NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In April 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This update changes the criteria for reporting a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. Only disposals representing a strategic shift in operations should be presented as discontinued operations.  This accounting standard update is effective for annual filings beginning on or after December 15, 2014. Early adoption is permitted. The impact of the adoption of ASU 2014-08 on the Partnership’s results of operations, financial position, cash flows and disclosures will be based on the Partnership’s future disposal activity.

NOTE 16. DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

The following tables summarize income from discontinued operations and the related realized gain on sale of rental property for the six months ended June 30, 2014 and 2013:

	2014		2013
Total Revenues	$	—	$	193,274
Operating and other expenses	—		171,290
Depreciation and amortization	—		2,111
	—		173,401
Income from discontinued operations	$	—	$	19,873

NOTE 17—SUBSEQUENT EVENTS

Depository Receipts

From July 1, 2014 through August 5, 2014, the Partnership purchased a total of 5,049 Depositary Receipts. The average price was $48.81  per receipt or $1,464.30 per unit. The total cost was $253,274. The Partnership is required to repurchase 40.0 Class B Units and 2.1General Partnership Units at a cost of $58,532 and $3,081 respectively.

Refinancing

On July 11, 2014, the Partnership refinanced the property owned by Westgate Apartments Burlington, LLC.  The new mortgage is $2,500,000; the interest rate is 4.31%; interest only, payable in 10 years.  Approximately $2,010,000 of loan proceeds were used to pay off the existing mortgage.  The balance of the funds is approximately $435,000 after closing costs.  The costs associated with the refinancing were approximately $90,000.

Line of Credit

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit.  The term of the line is three years with a floating interest rate equal to a base rate of the greater of (a) the Prime Rate (b) the Federal Funds Rate plus one-half of one percent per annum, or (c) the LIBOR Rate for a period of one month plus 1% per annum, plus an applicable margin of 2.5% to 3.5%. As of August 5, 2014, no funds have been drawn on this credit line.

The line of credit may be used for acquisition, refinancing, improvements, working capital and other needs of the Partnership. The line may not be used to pay dividends, make distributions or acquire equity interests of the Partnership.

The line of credit is collateralized by varying percentages of the Partnership’s ownership interest in 23 of its subsidiary properties and joint ventures. Pledged interests range from 49% to 100% of the Partnership’s ownership interest in the respective entities.

The Partnership paid fees to secure the line of credit. Any unused balance of the line of credit is subject to a fee ranging from 15 to 20 basis points per annum.

The line of credit agreement contains several covenants including, but not limited to, providing cash flow projections and compliance certificates, as well as other financial information. Additional covenants include certain restrictions on additional encumbrances of Partnership assets, limitations on debt, maintenance of leverage ratios, minimum tangible net worth, limitations on total aggregate indebtedness, minimum ratio of net operating income to total indebtedness debt service, disposition of properties, and other items.

See Form 8-K filed on August 6, 2014 for additional information.

26

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 2014 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 investment 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.

As anticipated, the Partnership’s occupancy levels for the six months ended June 30, 2014 were on par with the first six months of 2013.  For the coming quarters, Management expects both the urban and suburban portfolio occupancy levels to exceed last year’s levels.  Revenue gains adopted last year in September continue to reveal themselves in the operating statement.  Based upon current leasing activity, Management expects continued revenue gains for the balance of the calendar year for the entire portfolio.  Local employment gains coupled with the portfolio’s curb appeal and locations combine for improving top line gains for 2014 and 2015.  Increases in “same store” revenue were  6.2% and “same store” operating expenses were up  2.4% resulting in a  9.5% increase in “same store” Net Operating Income (“NOI” — income less operating expenses excluding depreciation). Rising real estate taxes, insurance and utility costs made up for the majority of the operating cost increases.

The Partnership has successfully closed on its two scheduled refinancings for 2014.  Hamilton on Main, one of the unconsolidated joint ventures, will be refinanced in the fourth quarter.  With the current terms committed, the expected total additional funds raised by the partnership will be over $2 million. However, interest expense will decline by approximately $84,000.  Coupled with the 10 years of no principal amortization, the net cash flow will improve by over $350,000 annually or $3,500,000 for the next 10 years.

Since the first of the year Management has used existing cash reserves to purchase 15,931 Depository Receipts and anticipates a steady purchase of receipts, per its trading plan, for the balance of the year.

On July 31, 2014, the Partnership executed a $25 million line of credit.  The credit line has a three year term and can be used for acquisitions, capital improvements and to retire debt. The credit line is subject to certain covenants. ( See Note 17 - Subsequent Events to the consolidated financial statements).  As of August 5, 2014 no funds have been drawn from this credit line.  Management believes that the credit line and the Partnership’s cash reserves put the Partnership in position to capitalize on investment opportunities should they reveal themselves in the near future.

In February 2014, the Partnership paid off the mortgages on Linewt in the amount of approximately $1,466,000 and Linhart in the amount of approximately $1,926,000. There were no prepayment penalties. The Partnership’s cash reserves were used to pay off these mortgages.

On June 11, 2014, the Partnership refinanced the property owned by NERA Dean Street Associates, LLC.  The new mortgage is $5,687,000; the interest rate is 4.22%, interest only payable in 10 years. Approximately $5,077,000 of the loan proceeds were used to pay off the existing mortgage.  The mortgage matures in June 2024. The costs associated with the refinancing were approximately $99,000.

The Stock Repurchase Program that was initiated in 2007 has purchased 1,258,822 Depositary Receipts through June 30, 2014 or 30% of the outstanding Class A Depositary Receipts.  During the second quarter, the Partnership repurchased 9,418 Class A Depositary Receipts, 75 Class B units, and 4 General Partnership Units at a cost of approximately

27

$452,000, $105,000 and $5,500 respectively for a total cost of  $562,500.  This purchase of receipts is in line with the Partnership’s trading plan.

At August 1, 2014, Harold Brown, his brother Ronald Brown and the President of Hamilton, Carl Valeri, collectively own approximately 40% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons’ family members). Harold Brown also controls 75% of the Partnership’s Class B Units, 75% of the capital stock of NewReal, Inc. (“NewReal”), the Partnership’s sole general partner, and all of the outstanding stock of Hamilton. Ronald Brown also owns 25% of the Partnership’s Class B Units and 25% of NewReal’s capital stock. In addition, Ronald Brown is the President and director of NewReal and Harold Brown is NewReal’s Treasurer and a director. The 75% of the issued and outstanding Class B units of the Partnership, controlled by Harold Brown, are owned by HBC Holdings LLC, an entity of which he is the manager.

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

Residential tenants sign a one year lease. During the six months ended June 30, 2014, tenant renewals were approximately 66% with an average rental increase of approximately 4.3%, new leases accounted for approximately 34% with rental rate increases of approximately 7.2%.  During the six months ended June 30, 2014, leasing commissions were approximately $73,000 compared to approximately $22,000 for the six months ended June 30, 2013, an increase of approximately $51,000 (231.8%) from 2013. Tenant concessions were approximately $14,000 in for the six months ended June 30, 2014, compared to approximately $19,000 for the six months ended June 30, 2013, a decrease of approximately $5,000 (27.0%).  Tenant improvements were approximately $1,029,000 for the six months ended June 30, 2014, compared to approximately $826,000 for the six months ended June 30, 2013, an increase of approximately $203,000 (24.6%).

Hamilton accounted for approximately 5.3% of the repair and maintenance expense paid for by the Partnership during the six months ended June 30, 2014 and 6.0% during the six months ended June 30, 2013. 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 $99,000 (79.0%) and approximately $106,000 (74.6%) of the legal services paid for by the Partnership during the six months ended June 30, 2014 and 2013, 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.  During the six months ended June 30, 2014, Hamilton provided the Partnership approximately $43,000 in construction and architectural services, compared to approximately $34,000 for the six months ended June 30, 2013.

Hamilton’s accounting staff perform bookkeeping and accounting functions for the Partnership. During the six months ended June 30, 2014, Hamilton charged the Partnership $62,500 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

28

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

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

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

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

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

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

29

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 during the first six months of 2014.

Investments in 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. Generally, the Partnership would discontinue applying the equity method when the investment (and any advances) is reduced to zero and would not provide for additional losses unless the Partnership has guaranteed obligations of the venture or is otherwise committed to providing further financial support for the investee. If the venture subsequently generates income, the Partnership only recognizes its share of such income to the extent it exceeds its share of previously unrecognized losses. In 2013, the carrying value of an investment fell below zero. We intend to fund our share of the investments’ future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund operating deficits. (See Note 14: Investment in Unconsolidated Joint Ventures.)

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 equity’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. The primary beneficiary is defined by the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the variable interest entity’s performance; and (2) the obligation to absorb losses and rights to receive the returns from VIE that would be significant to the VIE.

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

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

RESULTS OF OPERATIONS

Three Months Ended June 30, 2014 and June 30, 2013

The Partnership and its Subsidiary Partnerships earned income before interest expense, loss from investments in unconsolidated joint ventures and other income and expense of approximately $2,725,000 during the three months ended June 30, 2014 , compared to approximately $2,889,000 for the three months ended June 30, 2013, a decrease of approximately $164,000 (5.7%).

The rental activity is summarized as follows:

	Occupancy Date
	August  1, 2014		August 1, 2013
Residential
Units	2,431		2,238
Vacancies	97		97
Vacancy rate	4.0	%	4.3	%
Commercial
Total square feet	108,043		108,043
Vacancy	0		11,603
Vacancy rate	0	%	10.7	%

30

	Rental Income (in thousands) Three Months Ended June 30,
	2014						2013
	Total Operations			Continuing Operations			Total Operations			Continuing Operations
Total rents	$	10,440		$	10,440		$	8,981		$	8,905
Residential percentage	92		%	92		%	91		%	91		%
Commercial percentage	8		%	8		%	9		%	9		%
Contingent rentals	$	162		$	162		$	170		$	170

Three Months Ended June 30, 2014 Compared to Three Months Ended June 30, 2013:

	Three Months Ended June 30,						Dollar			Percent
	2014			2013			Change			Change
Revenues
Rental income	$	10,439,568		$	8,904,762		$	1,534,806		17.2	%
Laundry and sundry income	120,967			98,000			22,967			23.4	%
	10,560,535			9,002,762			1,557,773			17.3	%
Expenses
Administrative	568,915			697,238			(128,323		)	(18.4	)%
Depreciation and amortization	2,747,467			1,479,860			1,267,607			85.7	%
Management fee	438,068			374,622			63,446			16.9	%
Operating	1,020,323			814,609			205,714			25.3	%
Renting	108,612			26,815			81,797			305.0	%
Repairs and maintenance	1,601,307			1,515,934			85,373			5.6	%
Taxes and insurance	1,351,043			1,204,862			146,181			12.1	%
	7,835,735			6,113,940			1,721,795			28.2	%
Income Before Other Income and Discontinued Operations	2,724,800			2,888,822			(164,022		)	(5.7	)%
Other Income (Expense)
Interest income	199			351			(152		)	(43.3	)%
Interest expense	(2,380,896		)	(1,762,647		)	(618,249		)	35.1	%
(Loss) from investments in unconsolidated joint ventures	(62,382		)	(336,332		)	273,950			(81.5	)%
	(2,443,079		)	(2,098,628		)	(344,451		)	16.4	%
Income From Continuing Operations	281,721			790,194			(508,473		)	(64.3	)%
Discontinued Operations
Income from discontinued operations	—			143			(143		)	(100.0	)%
Gain on the sale of real estate from discontinued operations	—			3,678,779			(3,678,779		)	(100.0	)%
				3,678,922			(3,678,922		)	(100.0	)%
Net Income	$	281,721		$	4,469,116		$	(4,187,395	)	(93.7	)%

Rental income from continuing operations for the three months ended June 30, 2014 was approximately $10,440,000, compared to approximately 8,905,000 for the three months ended June 30, 2013, an increase of approximately $1,535,000 (17.2%). The factors which can be attributed to this increase are as follows: the acquisition of the Hamilton Green Apartments in July 2013 resulted in an increase in rental income of approximately $1,001,000 and rental rate increases of approximately 6.2% in 2014. The Partnership Properties with the most significant increases in rental income include, 62 Boylston Street, Hamilton Cypress, 1144 Commonwealth Avenue, Hamilton Oaks,  Westgate Woburn, School Street and Westside Colonial  with increases of approximately $78,000, $75,000, $62,000, $55,000, $42,000, $36,000 and $34,000, respectively. Included in rental income is contingent rentals collected on commercial properties. Contingent rentals include such charges as bill backs of common area maintenance charges, real estate taxes, and utility charges.

Operating expenses from continuing operations for the three months ended June 30, 2014 were approximately $7,836,000 compared to approximately $6,114,000 for the three months ended June 30, 2013, an increase of approximately $1,722,000 (28.2%).  The operating expenses associated with  Hamilton Green are approximately $1,747,000 for the three months ended June 30, 2014. Excluding Hamilton Green’s operating expenses, there is a net decrease of approximately $34,000 in operating expenses from continuing operations for the three months ended June 30,  2014.   The  factors contributing to this net decrease, which are unrelated to Hamilton Green, are a decrease  in administrative expenses of approximately $174,000, due primarily to a decrease in financial costs; a decrease in repairs and maintenance expenses of approximately $65,000 due to less demand for repairs to the properties; an increase in operating expenses of approximately $ 99,000  due to  increases in utility costs; an increase in taxes and insurance of approximately $35,000 due to increases in real estate taxes; and an increase in renting expenses of approximately $62,000, due to an increase in rental commissions .

31

Interest expense for the three months ended June 30, 2014 was approximately $2,381,000 compared to approximately $1,763,000 for the three months ended June 30, 2013, an increase of approximately $618,000 (35.1%). Approximately $449,000 of this increase represents the interest on the mortgage on Hamilton Green.  In addition, the Partnership refinanced four properties in 2013 which resulted in a higher average level of debt in the first six months of 2014 compared to 2013.

At June 30, 2014, the Partnership has between a 40% and 50% ownership interests in nine different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 14 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net loss from the Investment Properties was approximately $62,000 for the three months ended June 30, 2014 , compared to approximately $336,000 for the three months ended June 30, 2013, a decrease in the loss of approximately $274,000 (81.5%). This decrease is primarily due to a gain of approximately $248,000 on the sale of four  units at Hamilton Bay LLC. Included in the loss for the three months ended June 30, 2014 is depreciation and amortization expense of approximately $883,000. The allocable loss for the three months ended June 30, 2014 associated with the October 2009 investment in Dexter Park is approximately $132,000 of which approximately $539,000 is depreciation and amortization.

As a result of the changes discussed above, net income for the three months ended June 30, 2014 was approximately $282,000 compared to income of approximately $4,469,000 for the three months ended June 30, 2013, a decrease in income of approximately $4,187,000 (93.7%). The decrease in net income is primarily due to the gain on the sale of Nashoba Apartments in 2013 and the loss of approximately $1.2 million from Hamilton Green.

Six Months Ended June 30, 2014 Compared to  Six Months Ended June 30, 2013

The Partnership and its subsidiary Partnerships earned income before other income and discontinued operations of approximately $5,289,000 for the six months ended June  30, 2014, compared to approximately $5,928,000 for the six months ended June  30, 2013, a decrease of approximately $639,000 (10.8%).  The following is a summary of the Partnership’s operations for the six months ended June 30, 2014 and 2013:

32

	Six Months Ended June 30,						Dollar			Percent
	2014			2013			Change			Change
Revenues
Rental income	$	20,954,287		$	17,828,769		$	3,125,518		17.5	%
Laundry and sundry income	224,177			193,686			30,491			15.7	%
	21,178,464			18,022,455			3,156,009			17.5	%
Expenses
Administrative	1,099,482			1,149,855			(50,373		)	(4.4	)%
Depreciation and amortization	5,471,646			2,933,991			2,537,655			86.5	%
Management fee	865,461			743,874			121,587			16.3	%
Operating	2,702,257			2,246,784			455,473			20.3	%
Renting	145,469			56,666			88,803			156.7	%
Repairs and maintenance	2,812,456			2,597,213			215,243			8.3	%
Taxes and insurance	2,792,153			2,365,792			426,361			18.0	%
	15,888,924			12,094,175			3,794,749			31.4	%
Income Before Other Income and Discontinued Operations	5,289,540			5,928,280			(638,740		)	(10.8	)%
Other Income (expense)
Interest income	382			715			(333		)	(46.6	)%
Interest expense	(4,767,062		)	(3,603,716		)	(1,163,346		)	32.3	%
(Loss) from investments in unconsolidated joint ventures	(270,633		)	(653,189		)	382,556			(58.6	)%
	(5,037,313		)	(4,256,190		)	(781,123		)	18.4	%
Income From Continuing Operations	252,227			1,672,090			(1,419,863		)	(84.9	)%
Discontinued Operations
Income from discontinued operations	—			19,873			(19,873		)	(100.0	)%
Gain on the sale of real estate from discontinued operations	—			3,678,779			(3,678,779		)	(100.0	)%
				3,698,652			(3,698,652		)	(100.0	)%
Net Income	$	252,227		$	5,370,742		$	(5,118,515	)	(95.3	)%

Rental income from continuing operations for the six months ended June  30, 2014 was approximately $20,954,000 compared to approximately $17,829,000 for the six months ended June 30, 2013, an increase of approximately $3,125,000 (17.5%).  Rental income from Hamilton Green acquired in July 2013 represents approximately $2,044,000 of this increase.  Rental income has increased at a number of other properties due to increased demand and increases in rental rates.  The following properties experienced rental income increases:  62 Boylston Street, Hamilton Oaks, 1144 Commonwealth Avenue, Hamilton Cypress, Westgate Apartments, 9 School Street, and Westside Colonial,  with increases of approximately $185,000, $127,000, $123,000, $87,000, $83,000, $82,000 and $52,000 respectively.

Expenses from continuing operations for the six months ended June 30, 2014 were approximately $15,889,000 compared to approximately $12,094,000 for the six months ended June 30, 2013, an increase of approximately $3,795,000 (31.4%). The operating expenses associated with  Hamilton Green were approximately $3,499,000 for the six months ended June 30, 2014. Excluding Hamilton Green’s operating expenses, there is a net increase in operating expenses of approximately $296,000 from continuing operations for the six months ended June 30, 2014. The factors contributing to this increase which are unrelated to Hamilton Green are an increase in operating expenses of approximately $243,000, primarily due to an increase in utility costs; an increase in taxes and insurance of approximately $134,000 due to an increase in both real estate taxes and insurance, partially offset by a decrease in administrative costs of approximately $124,000, primarily due to a decrease in financial costs.

Interest expense for the six months ended June 30, 2014 was approximately $4,767,000 compared to approximately $3,604,000 for the six months ended June 30, 2013, an increase of approximately $1,163,000 (32.3%). Approximately $899,000 of this increase represents the interest on the mortgage on Hamilton Green.  In addition, the Partnership refinanced four properties in 2013 which resulted in a higher average level of debt in the first six months of 2014 compared to 2013.

At June 30, 2014, 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.

33

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of loss from these Investment Properties was approximately $271,000 for the six months ended June 30, 2014 compared to a loss of approximately $653,000 for the six months ended June 30, 2013, a decrease of approximately $382,000. The decrease is primarily due to a gain of approximately $301,000 on the sale of five rental units at the property of Hamilton Bay, LLC.  Included in the loss for the six months ended June 30, 2014 is depreciation and amortization of approximately $1,763,000 compared to approximately $1,848,000 in 2013. The allocable loss for the six months ended June 30, 2014 associated with the October 2009 investment in Dexter Park is approximately $293,000 of which approximately $1,078,000 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.

As a result of the changes discussed above, net income for the six months ended June 30, 2014 was approximately $252,000 compared to net income of $5,371,000 a decrease of approximately $5,119,000 (95.3%).  The decrease in net income is primarily due to the gain on the sale of Nashoba Apartments in 2013, and the loss of approximately $2.4 million from Hamilton Green.

LIQUIDITY AND CAPITAL RESOURCES

The Partnership’s principal source of cash during the first six months of 2014 was the collection of rents.  The Partnership’s principal source of cash in 2013 was the collection of rents, proceeds on the sale and refinancing of real estate. The majority of cash and cash equivalents of $12,613,346 at June 30, 2014 and $14,013,380 at December 31, 2013 were held in interest bearing accounts at creditworthy financial institutions.

The decrease in cash of $1,400,034 at June 30, 2014 is summarized as follows:

	Six Months Ended June 30,
	2014			2013
Cash provided by operating activities	$	5,357,638		$	5,128,887
Cash (used in) investing activities	(792,788		)	(1,942,773		)
Cash (used in) financing activities	(3,088,023		)	(4,526,252		)
Repurchase of Depositary Receipts, Class B and General Partner Units	(941,477		)	(399,487		)
Distributions paid	(1,935,384		)	(1,950,596		)
Net (decrease) in cash and cash equivalents	$	(1,400,034	)	$	(3,690,221	)

The increase in cash provided by operating activities is primarily due to an increase in  rent collections and a decrease in cash operating expenses. The decrease in cash used in investing activities is due to a decrease in the improvements to rental properties in 2014 compared to the same period in 2013.  The change in cash used in financing activities is due to the refinancing of the mortgages which required more cash contributions in 2013 compared to 2014.

During the six months ended June 30, 2014, the Partnership purchased 15,931 Depositary Receipts for an average price of $46.26 for a total cost of $757,246; 126 Class B Units for a cost of $175,019 and 7 General Partnership Units for a cost of $9,212 for a total cost of $941,477.

During 2014, the Partnership and its Subsidiary Partnerships completed improvements to certain of the Properties at a total cost of approximately $1,643,000. These improvements were funded from cash reserves. These sources have been adequate to fully fund improvements. The most significant improvements were made at Redwood Hills,1137 Commonwealth, Hamilton Green,   Westgate Woburn, and Westside Colonial, at a cost of approximately $220,000, $177,000, $162,000, $156,000, and $141,000 respectively. The Partnership plans to invest approximately $1,667,000 in additional capital improvements in 2014.

34

On June 11, 2014, the Partnership refinanced the property owned by NERA Dean Street Associates, LLC.  The new mortgage is $5,687,000; the interest rate is 4.22%, interest only, payable in 10 years. Approximately $5,077,000 of the loan proceeds were used to pay off the existing mortgage.  The mortgage matures in June 2024. The costs associated with the refinancing were approximately $99,000. Approximately $610,000 in cash was received from this refinancing.

In February 2014, the Partnership paid off the mortgages on Linewt in the amount of approximately $1,466,000 and Linhart in the amount of approximately $1,926,000.

On July 15, 2013, the Partnership, purchased Windsor Green at Andover, a 193 unit apartment complex located in 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 sale of the Nashoba Apartments, and the balance from the Partnership’s cash reserves. The original mortgage matured in November 2013. On December 20, 2013, the Partnership refinanced the mortgage on Hamilton Green. The new mortgage is $38,500,000, interest is fixed at 4.67% for 15 years, interest only for 2 years and the mortgage is amortized over 30 years. This refinancing required additional capital of approximately $1,846,000 from the Partnership.

During the six months ended June 30, 2014 and 2013 the Partnership received distributions of approximately $968,000 and $2,206,000 from the investment properties respectively.  Included in these distributions is the amount from Dexter Park of $530,000 and $600,000 for the six months ended June 30, 2014 and 2013 respectively.  The Partnership received distributions of approximately $1,463,000 from 345 Franklin Street LLC in the first six months of 2013, primarily due to the refinancing of the property.

In 2014, the Partnership approved distributions of $7.50 per unit ($0.25 per receipt) payable on March 31, 2014, June 30, 2014, and September 30, 2014.

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, 2014, 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, 2014, our proportionate share of the non-recourse debt related to these investments was approximately $59,826,000. 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.

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

35

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.

·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.

36

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, 2014, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have approximately $332,661,000 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.  The Partnership’s management, with the participation of the Partnership’s principal executive officer and principal financial officer, has evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report.  Based on such evaluation, the Partnership’s principal executive officer and principal financial officer have concluded that, as of the end of such period, the Partnership’s disclosure controls and procedures were effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by the Partnership in the reports that it files or submits under the Exchange Act.

Changes in Internal Control over Financial Reporting.  There were no changes in our internal control over financial reporting during the second quarter of 2014 that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.  Legal Proceedings

There are no material legal proceedings, other than ordinary routine litigation incidental to its business, to which the Partnership is a party to or to which any of the Properties is subject.

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, 2013.

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

(a)None

(b)None

(c)           Issuer Purchase of Equity Securities during the second quarter of 2014:

				Remaining number of Depositary
			Depositary Receipts	Receipts that may be purchased
Period	Average Price Paid		Purchased as Part of Publicly Announced Plan	Under the Plan (as Amended)
April 1-30, 2014	$	46.95	3,547	248,304
May 1-31, 2014	$	47.73	4,516	243,788
June 1-30, 2014	$	51.61	1,355	242,433
Total			9,418

37

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, 2014, the Partnership has repurchased 1,258,822 Depositary Receipts at an average price of $25.13 per receipt (or $753.90 per underlying Class A Unit), 2,229 Class B Units and 117 General Partnership Units, both at an average price of $700.12 per Unit, totaling approximately $ 33,422,000 including brokerage fees paid by the Partnership.

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.

38

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 8, 2014

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	August 8, 2014
Ronald Brown	Executive Officer)
/s/ HAROLD BROWN	Treasurer and Director of the General Partner (Principal	August 8, 2014
Harold Brown	Financial Officer and Principal Accounting Officer)
/s/ GUILLIAEM AERTSEN	Director of the General Partner	August 8, 2014
Guilliaem Aertsen
/s/ DAVID ALOISE	Director of the General Partner	August 8, 2014
David Aloise
/s/ EUNICE HARPS	Director of the General Partner	August 8, 2014
Eunice Harps

39

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
(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, 2014 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).

40

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 8, 2014

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 8, 2014

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, 2014, 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 8, 2014
	/s/ Harold Brown
	Harold Brown
	Principal Financial Officer
	(Treasurer and Director of the
	Partnership’s General Partner, NewReal, Inc.)
Date: August 8, 2014

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.

XML

MORTGAGE NOTES PAYABLE (Details) (USD $)		0 Months Ended		1 Months Ended	6 Months Ended	0 Months Ended						1 Months Ended
	Jun. 30, 2014	Jul. 15, 2013 Hamilton Green	Jun. 30, 2014 Westgate Apartments Burlington, LLC	Feb. 28, 2014 Mortgages payable	Jun. 30, 2014 Mortgages payable	Dec. 20, 2013 Mortgages payable Hamilton Green	Jun. 11, 2014 Mortgages payable NERA Dean Street Associates, LLC	Oct. 02, 2013 Mortgages payable Westgate Apartments LLC	Feb. 25, 2013 Mortgages payable Hamilton Cypress LLC Commercial-1031Exchange Brookline, Massachusetts	Mar. 11, 2013 Mortgages payable Property located at School Street	Jul. 07, 2013 Mortgages payable Boylston Downtown L.P. Residential Apartments Boston, Massachusetts	Feb. 28, 2014 Mortgages payable Hamilton Linewt LLC Commercial-1031Exchange Newton, Massachusetts	Feb. 28, 2014 Mortgages payable Linhart L.P. Residential/Commercial Newton, Massachusetts	Jun. 30, 2014 Mortgages payable Minimum	Jun. 30, 2014 Mortgages payable Maximum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)						4.67%	4.22%	4.65%		3.70%	3.97%			3.76%	5.97%
Amount of monthly installments including principal					$ 808,000
Weighted average interest rate (as a percent)					4.82%
Effective interest rate (as a percent)	5.46%				4.94%
Annual maturities of mortgage debt
2015-current maturities	2,131,000
2016	504,000
2017	1,629,000
2018	1,821,000
2019	7,900,000
Thereafter	181,649,000
Total	195,634,000
Additional disclosures related to mortgages
Amount of mortgage paid off						40,000,000			3,967,000			1,466,000	1,926,000
Mortgage prepayment penalties				0					0
Amount of new loan							5,687,000	15,700,000		15,000,000	40,000,000
Period of interest only payments on loans						2 years	10 years	10 years		3 years
Term of debt						15 years					15 years
Period for which the entity is required to make interest only payments						2 years					3 years
Amortization period of debt						30 years				30 years	30 years
Amount of loan proceeds utilized for pay off the existing mortgage						1,846,000	5,077,000	7,616,000		15,284,000	19,500,000
Deferred financing cost associated with mortgage										159,000
Net proceed from the loan - cash back											20,000,000
Refinancing cost											279,000
Closing costs associated with financing		38,000				346,000	99,000	190,000
Amount of new loan						38,500,000
Deposits and financing costs for refinancing included in other assets			$ 90,000

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details) (USD $)	3 Months Ended	6 Months Ended			0 Months Ended		6 Months Ended		0 Months Ended	1 Months Ended				1 Months Ended	0 Months Ended	3 Months Ended	6 Months Ended		1 Months Ended		1 Months Ended			1 Months Ended	3 Months Ended			1 Months Ended		6 Months Ended				0 Months Ended	1 Months Ended				1 Months Ended							6 Months Ended	12 Months Ended	1 Months Ended			1 Months Ended										0 Months Ended	1 Months Ended	6 Months Ended			6 Months Ended				6 Months Ended
	Jun. 30, 2013	Jun. 30, 2014 item	Jun. 30, 2013	Dec. 31, 2013	Oct. 18, 2013 Dexter Park	Oct. 28, 2009 Dexter Park item	Jun. 30, 2014 Dexter Park item	Jun. 30, 2013 Dexter Park item	Oct. 28, 2009 Dexter Park Mortgage loan	Oct. 31, 2009 Dexter Park Mortgage loan	Jun. 30, 2014 Hamilton Bay Apartments, LLC item	Jun. 30, 2013 Hamilton Bay Apartments, LLC item	Oct. 03, 2005 Hamilton Bay Apartments, LLC item	Feb. 28, 2007 Hamilton Bay Apartments, LLC Mortgage loan	Oct. 18, 2013 Hamilton Bay Sales	Jun. 30, 2014 Hamilton Bay Sales item	Jun. 30, 2014 Hamilton Bay Sales item	Jun. 30, 2013 Hamilton Bay Sales item	Apr. 30, 2008 Hamilton Bay Sales Mortgage loan item	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, 2014 Hamilton Essex 81, LLC item	Jun. 30, 2013 Hamilton Essex 81, LLC item	Aug. 31, 2008 Hamilton Essex 81, LLC Mortgage loan	Jun. 30, 2014 Hamilton Essex 81, LLC Mortgage loan	Jun. 30, 2014 Hamilton Essex Development, LLC item	Jun. 30, 2013 Hamilton Essex Development, LLC item	Sep. 30, 2013 Hamilton Essex Development, LLC Mortgage loan	Aug. 31, 2008 Hamilton Essex Development, LLC Mortgage loan	Jun. 30, 2014 Hamilton Essex Development, LLC Mortgage loan	Jun. 30, 2014 Hamilton 1025, LLC item	Jun. 30, 2013 Hamilton 1025, LLC item	Mar. 02, 2005 Hamilton 1025, LLC item	Mar. 02, 2005 Hamilton 1025, LLC Mortgage loan	Oct. 31, 2004 Hamilton Minuteman, LLC	Jun. 30, 2014 Hamilton Minuteman, LLC item	Jun. 30, 2013 Hamilton Minuteman, LLC item	Sep. 30, 2004 Hamilton Minuteman, LLC item	Jan. 31, 2007 Hamilton Minuteman, LLC Mortgage loan	Oct. 31, 2004 Hamilton Minuteman, LLC Mortgage loan	Dec. 31, 2006 Hamilton Minuteman, LLC Mortgage loan	Jun. 30, 2014 Hamilton Place item	Jun. 30, 2013 Hamilton Place item	May 31, 2008 Hamilton Place item	Aug. 31, 2004 Hamilton Place item	Jun. 30, 2014 Hamilton on Main Apartments, LLC	Dec. 31, 2005 Hamilton on Main Apartments, LLC Mortgage loan item	Jun. 30, 2013 345 Franklin, LLC item	Jun. 30, 2014 345 Franklin, LLC item	Nov. 30, 2001 345 Franklin, LLC item	Jun. 30, 2013 345 Franklin, LLC Mortgage loan	Mar. 07, 2005 Apartment Hamilton Essex 81, LLC item	Jun. 30, 2014 Commercial Hamilton Essex 81, LLC item	Jun. 30, 2013 Commercial Hamilton Essex 81, LLC item	Mar. 07, 2005 Commercial Hamilton Essex 81, LLC item	Jun. 30, 2014 Commercial Hamilton Essex Development, LLC item	Jun. 30, 2013 Commercial Hamilton Essex Development, LLC item	Jun. 30, 2014 Commercial Hamilton 1025, LLC item	Jun. 30, 2013 Commercial Hamilton 1025, LLC item	Mar. 07, 2005 Car parking lot Hamilton Essex Development, LLC item	Oct. 28, 2009 HBC Dexter Park Mortgage loan	Oct. 31, 2009 HBC Dexter Park Mortgage loan	Jun. 30, 2014 Management Company item	Jun. 30, 2014 Minimum Mortgage loan	Jun. 30, 2014 Minimum Limited Partnerships	Jun. 30, 2014 Minimum Hamilton on Main Apartments, LLC	Jun. 30, 2014 Minimum Harold Brown	Jun. 30, 2014 Maximum Mortgage loan	Jun. 30, 2014 Maximum Limited Partnerships	Jun. 30, 2014 Maximum Hamilton on Main Apartments, LLC	Jun. 30, 2014 Maximum Harold Brown
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of limited partnerships and limited liability companies in which the entity has invested		9
Number of partnerships investing in commercial property		3
Percentage of ownership interest						40.00%							50.00%							50.00%													50.00%					50.00%							50.00%					50.00%															40.00%		43.20%		50.00%		60.00%
Number of employees having ownership interest																																																															5
Investments in joint venture		$ 10,999,842		$ 12,025,142		$ 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	120	20			49	49			1	1				176	176	176			42	42	42				148	148		280		3	40	40	40		48	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				8,171,000				2,014,000					5,000,000					5,500,000	8,025,000							16,825,000															7,168,000
Interest rate (as a percent)									5.57%					5.57%					5.75%					5.79%										5.67%					5.67%								5.18%				3.87%										6.00%			3.76%				5.97%
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		195,634,372		198,520,478			86,875,284	87,999,131			4,606,316	4,670,319						1,668,000				8,171,048	8,292,287			2,014,488	2,067,378				4,840,484	4,901,467				5,330,234	5,397,023					15,188,407	15,462,916			15,188,000		10,000,000	10,000,000
Deposits and refinancing included in other assets																																														357,000
Investments funded using cash reserves						8,757,000
Term of debt																																		10 years					10 years								10 years				15 years										4 years
Notice period for principal paydown of debt																																																													6 months
Repayment of loan																																																6,776,000
Principal payments elected to be made																													4,301	4,443
Interest paid		4,074,000	3,652,000
Amortization period of intangible assets							12 months
Capital contributions					660,000										660,000
Gain on Sale of Real Estate	3,678,779		3,678,779													248,239	300,522
Gain on sale of real estate																	301,000
Number of units retained for long-term investment							409	409			48	48	48									49	49			1	1				49	49	49			42	42					148	148					40	40
Number of units retained																10	10
Number of units sold													120			110	110	105													127	127	127											137
Number of units sold during period																5	5
Units to be sold																120	120	120													127	127
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)																														0.155%
Cost associated with loan extension																												9,000	6,000
Extended term of debt																												2 years
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
Refinanced amount																																																			10,000,000
Distribution to the Partnership		1,935,384	1,950,596																																																1,610,000
Carrying value of investment to discontinue applying the equity method		$ 0																																														$ 0

XML

FAIR VALUE MEASUREMENTS (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Mortgage Notes Payable
Carrying Amount	$ 195,634,372	$ 198,520,478
Partnership Properties
Mortgage Notes Payable
Carrying Amount	195,634,372	198,520,478
Estimated Fair Value	203,344,074	196,059,827
Investment Properties
Mortgage Notes Payable
Carrying Amount	137,026,261	137,875,515
Estimated Fair Value	$ 147,317,566	$ 147,975,521

XML

SIGNIFICANT ACCOUNTING POLICIES (Details)	Jun. 30, 2014 item
Residential and mixed-use properties
Line of Business
Number of properties	20
Number of units	2,412
Condominium
Line of Business
Number of units	19
Wholly owned properties
Line of Business
Number of properties	24
Wholly owned properties | Residential buildings
Line of Business
Number of properties	16
Number of units	2,412
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)	108,043
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	793
Area of property (in square feet)	12,500
Partially owned properties | Residential and mixed-use properties | Minimum
Line of Business
Percentage of ownership interest	40.00%
Partially owned properties | Residential and mixed-use properties | Maximum
Line of Business
Percentage of ownership interest	50.00%
Partially owned properties | Car parking lot
Line of Business
Capacity of real estate property (in cars per lot)	50

XML

RENTAL PROPERTIES (Tables)

6 Months Ended

Jun. 30, 2014

RENTAL PROPERTIES

Schedule of rental properties

	June 30, 2014			December 31, 2013			Useful Life
Land, improvements and parking lots	$	44,021,654		$	43,919,728		15–40 years
Buildings and improvements	152,403,653			152,130,635			15–40 years
Kitchen cabinets	6,308,459			5,956,078			5–10 years
Carpets	6,213,654			5,820,516			5–10 years
Air conditioning	720,908			707,928			5–10 years
Laundry equipment	420,737			404,775			5–7 years
Elevators	1,139,296			1,139,296			20–40 years
Swimming pools	444,629			444,629			10–30 years
Equipment	5,244,764			5,038,530			5–7 years
Motor vehicles	86,657			86,657			5 years
Fences	24,670			24,670			5–15 years
Furniture and fixtures	5,831,275			5,564,621			5–7 years
Smoke alarms	236,719			216,223			5–7 years
Total fixed assets	223,097,075			221,454,286
Less: Accumulated depreciation	(73,067,674		)	(68,549,625		)
	$	150,029,401		$	152,904,661

XML

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, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 Hamilton Essex 81	Jun. 30, 2013 Hamilton Essex 81	Jun. 30, 2014 Hamilton Essex 81	Jun. 30, 2013 Hamilton Essex 81	Jun. 30, 2014 Hamilton Essex 81 NERA 50%	Jun. 30, 2013 Hamilton Essex 81 NERA 50%	Jun. 30, 2014 Hamilton Essex 81 NERA 50%	Jun. 30, 2013 Hamilton Essex 81 NERA 50%	Jun. 30, 2014 Hamilton Essex Development	Jun. 30, 2013 Hamilton Essex Development	Jun. 30, 2014 Hamilton Essex Development	Jun. 30, 2013 Hamilton Essex Development	Jun. 30, 2014 Hamilton Essex Development NERA 50%	Jun. 30, 2013 Hamilton Essex Development NERA 50%	Jun. 30, 2014 Hamilton Essex Development NERA 50%	Jun. 30, 2013 Hamilton Essex Development NERA 50%	Jun. 30, 2014 345 Franklin	Jun. 30, 2013 345 Franklin	Jun. 30, 2014 345 Franklin	Jun. 30, 2013 345 Franklin	Nov. 30, 2001 345 Franklin	Jun. 30, 2014 345 Franklin NERA 50%	Jun. 30, 2013 345 Franklin NERA 50%	Jun. 30, 2014 345 Franklin NERA 50%	Jun. 30, 2013 345 Franklin NERA 50%	Jun. 30, 2014 Hamilton 1025	Jun. 30, 2013 Hamilton 1025	Jun. 30, 2014 Hamilton 1025	Jun. 30, 2013 Hamilton 1025	Mar. 02, 2005 Hamilton 1025	Jun. 30, 2014 Hamilton 1025 NERA 50%	Jun. 30, 2013 Hamilton 1025 NERA 50%	Jun. 30, 2014 Hamilton 1025 NERA 50%	Jun. 30, 2013 Hamilton 1025 NERA 50%	Jun. 30, 2014 Hamilton Bay Sales	Jun. 30, 2013 Hamilton Bay Sales	Jun. 30, 2014 Hamilton Bay Sales	Jun. 30, 2013 Hamilton Bay Sales	Jun. 30, 2014 Hamilton Bay Sales NERA 50%	Jun. 30, 2013 Hamilton Bay Sales NERA 50%	Jun. 30, 2014 Hamilton Bay Sales NERA 50%	Jun. 30, 2013 Hamilton Bay Sales NERA 50%	Jun. 30, 2014 Hamilton Bay Apartments	Jun. 30, 2013 Hamilton Bay Apartments	Jun. 30, 2014 Hamilton Bay Apartments	Jun. 30, 2013 Hamilton Bay Apartments	Oct. 03, 2005 Hamilton Bay Apartments	Jun. 30, 2014 Hamilton Bay Apartments NERA 50%	Jun. 30, 2013 Hamilton Bay Apartments NERA 50%	Jun. 30, 2014 Hamilton Bay Apartments NERA 50%	Jun. 30, 2013 Hamilton Bay Apartments NERA 50%	Jun. 30, 2014 Hamilton Minuteman	Jun. 30, 2013 Hamilton Minuteman	Jun. 30, 2014 Hamilton Minuteman	Jun. 30, 2013 Hamilton Minuteman	Sep. 30, 2004 Hamilton Minuteman	Jun. 30, 2014 Hamilton Minuteman NERA 50%	Jun. 30, 2013 Hamilton Minuteman NERA 50%	Jun. 30, 2014 Hamilton Minuteman NERA 50%	Jun. 30, 2013 Hamilton Minuteman NERA 50%	Jun. 30, 2014 Hamilton on Main	Jun. 30, 2013 Hamilton on Main	Jun. 30, 2014 Hamilton on Main	Jun. 30, 2013 Hamilton on Main	Aug. 31, 2004 Hamilton on Main	Jun. 30, 2014 Hamilton on Main NERA 50%	Jun. 30, 2013 Hamilton on Main NERA 50%	Jun. 30, 2014 Hamilton on Main NERA 50%	Jun. 30, 2013 Hamilton on Main NERA 50%	Jun. 30, 2014 Dexter Park	Jun. 30, 2013 Dexter Park	Jun. 30, 2014 Dexter Park	Jun. 30, 2013 Dexter Park	Oct. 28, 2009 Dexter Park	Jun. 30, 2014 Dexter Park NERA 40%	Jun. 30, 2013 Dexter Park NERA 40%	Jun. 30, 2014 Dexter Park NERA 40%	Jun. 30, 2013 Dexter Park NERA 40%	Jun. 30, 2014 Total	Jun. 30, 2013 Total	Jun. 30, 2014 Total	Jun. 30, 2013 Total	Jun. 30, 2014 Total NERA 50%	Jun. 30, 2013 Total NERA 50%	Jun. 30, 2014 Total NERA 50%	Jun. 30, 2013 Total NERA 50%	Jun. 30, 2014 Total NERA 40%	Jun. 30, 2013 Total NERA 40%	Jun. 30, 2014 Total NERA 40%	Jun. 30, 2013 Total NERA 40%
Revenues
Rental income	$ 10,439,568	$ 8,904,762	$ 20,954,287	$ 17,828,769	$ 341,387	$ 335,464	$ 670,157	$ 663,919					$ 73,236	$ 71,896	$ 146,472	$ 143,792					$ 330,748	$ 311,745	$ 658,488	$ 616,034						$ 216,294	$ 221,666	$ 447,481	$ 441,883						$ 43,923	$ 61,864	$ 106,721	$ 121,472					$ 223,212	$ 222,162	$ 462,103	$ 441,443						$ 232,870	$ 216,932	$ 456,812	$ 432,789						$ 722,682	$ 676,242	$ 1,440,362	$ 1,353,188						$ 3,352,710	$ 3,171,661	$ 6,709,764	$ 6,331,670						$ 5,537,062	$ 5,289,632	$ 11,098,360	$ 10,546,190
Laundry and sundry income	120,967	98,000	224,177	193,686	4,200	5,151	8,120	8,997													657	1,288	235	1,933																																(2)	464	168	675						9,692	7,510	19,148	17,281						23,213	24,997	48,593	46,429						37,761	39,410	76,262	75,315
Total Revenues	10,560,535	9,002,762	21,178,464	18,022,455	345,587	340,615	678,277	672,916					73,236	71,896	146,472	143,792					331,406	313,033	658,723	617,967						216,294	221,666	447,481	441,883						43,923	61,864	106,721	121,472					223,212	222,162	462,103	441,443						232,869	217,396	456,980	433,464						732,375	683,752	1,459,510	1,370,469						3,375,923	3,196,658	6,758,357	6,378,099						5,574,823	5,329,042	11,174,622	10,621,505
Expenses
Administrative	568,915	697,238	1,099,482	1,149,855	13,963	6,074	17,141	9,928					513	386	830	703					13,038	8,699	19,861	14,431						2,193	2,124	4,161	3,805						1,969	2,813	2,674	3,586					5,732	3,669	10,577	7,551						2,440	2,042	5,443	2,465						21,277	9,769	30,762	18,408						62,450	66,845	116,993	113,724						123,574	102,421	208,441	174,601
Depreciation and amortization	2,747,467	1,479,860	5,471,646	2,933,991	108,267	106,494	216,170	212,066					2,823	2,245	5,644	4,488					100,379	110,055	200,104	215,739						60,167	60,128	120,320	120,215						19,175	20,035	38,350	41,098					79,383	76,840	158,697	153,638						79,852	79,225	159,254	157,933						237,117	244,233	473,132	488,767						1,348,640	1,440,022	2,694,103	2,878,479						2,035,802	2,139,277	4,065,772	4,272,423
Management fees					15,829	13,762	29,105	26,015					2,929	2,876	5,859	5,752					14,839	12,707	28,505	25,782						9,412	9,227	18,643	18,186						1,891	2,649	4,275	4,987					9,140	9,422	18,600	17,887						9,643	8,538	18,953	17,076						29,557	28,298	57,820	57,339						76,544	68,497	148,442	133,507						169,784	155,976	330,201	306,531
Operating	1,020,323	814,609	2,702,257	2,246,784	23,995	28,483	68,967	63,549													7,770	14,190	32,593	40,044						193	452	353	712						355	382	605	1,962					580	195	1,039	617						11,248	18,737	44,102	41,947						64,310	77,185	206,470	191,181						248,068	235,835	736,853	564,660						356,520	375,459	1,090,983	904,672
Renting	108,612	26,815	145,469	56,666	10,850	200	10,967	9,550													180	23	3,623	1,788						624	3,220	6,376	3,925							1,425	753	1,425					1,550	6,845	5,042	7,250						3,623	1,703	6,088	4,042						11,268	1,994	18,097	3,305						38,946	15,098	57,536	26,654						67,040	30,508	108,481	57,939
Repairs and maintenance	1,601,307	1,515,934	2,812,456	2,597,213	41,549	41,851	73,827	64,094					3,150	3,150	3,150	3,700					18,595	24,593	30,932	38,179						84,068	81,300	164,511	157,409						23,827	23,216	47,651	45,986					70,304	72,781	143,741	147,694						21,547	15,442	38,434	25,537						99,885	79,801	190,403	165,706						317,690	272,433	514,184	454,017						680,615	614,567	1,206,833	1,102,322
Taxes and insurance	1,351,043	1,204,862	2,792,153	2,365,792	58,712	55,878	116,996	111,759					14,070	12,209	27,640	24,407					28,555	28,069	58,200	56,255						40,771	38,381	81,375	77,131						10,768	10,389	22,666	20,619					41,247	35,468	82,006	71,147						29,664	31,082	59,236	61,948						95,947	84,473	191,586	169,290						376,140	346,742	757,325	742,955						695,874	642,691	1,397,028	1,335,511
Total Expenses	7,835,735	6,113,940	15,888,924	12,094,175	273,165	252,742	533,173	496,961					23,485	20,866	43,123	39,050					183,356	198,336	373,817	392,218						197,427	194,832	395,737	381,383						57,984	60,909	116,973	119,663					207,936	205,220	419,702	405,784						158,017	156,769	331,509	310,948						559,361	525,753	1,168,270	1,093,996						2,468,477	2,445,472	5,025,436	4,913,996						4,129,208	4,060,899	8,407,740	8,153,999
Income Before Other Income and Discontinued Operations	2,724,800	2,888,822	5,289,540	5,928,280	72,422	87,873	145,104	175,955					49,751	51,030	103,349	104,742					148,049	114,697	284,906	225,749						18,867	26,834	51,743	60,500						(14,061)	955	(10,252)	1,809					15,276	16,942	42,401	35,659						74,852	60,627	125,471	122,516						173,013	157,999	291,240	276,473						907,445	751,186	1,732,921	1,464,103						1,445,615	1,268,143	2,766,883	2,467,506
Other Income (loss)
Interest expense	(2,380,896)	(1,762,647)	(4,767,062)	(3,603,716)	(120,829)	(122,047)	(240,198)	(243,202)					(13,977)	(14,668)	(27,896)	(29,266)					(97,821)	(138,605)	(195,574)	(257,547)						(70,070)	(70,998)	(139,629)	(141,481)						(205)	(24,507)	(399)	(48,689)					(65,868)	(66,707)	(131,333)	(132,973)						(77,061)	(78,076)	(153,561)	(155,538)						(201,634)	(205,633)	(402,014)	(409,587)						(1,237,262)	(1,252,195)	(2,464,957)	(2,495,453)						(1,884,727)	(1,973,436)	(3,755,560)	(3,913,736)
Interest Income	199	351	382	715																		15		30						5	2	10	2							41		86																																	57		57						5	115	10	175
Interest Income from Note																																							135	911	468	2,007																																									135	911	468	2,007
Gain on Sale of Real Estate		3,678,779		3,678,779																																			248,239		300,522																																										248,239		300,522
Other Income (Expenses)																						(68,588)		(68,588)																																																												(68,588)		(68,588)
Total Other Income (loss)	(2,443,079)	(2,098,628)	(5,037,313)	(4,256,190)	(120,829)	(122,047)	(240,198)	(243,202)					(13,977)	(14,668)	(27,896)	(29,266)					(97,821)	(207,178)	(195,574)	(326,105)						(70,065)	(70,996)	(139,620)	(141,479)						248,169	(23,555)	300,591	(46,596)					(65,868)	(66,707)	(131,333)	(132,973)						(77,061)	(78,076)	(153,561)	(155,538)						(201,634)	(205,633)	(402,014)	(409,587)						(1,237,262)	(1,252,138)	(2,464,957)	(2,495,396)						(1,636,348)	(2,040,998)	(3,454,561)	(3,980,142)
Net Income	281,721	4,469,116	252,227	5,370,742	(48,407)	(34,174)	(95,094)	(67,247)					35,774	36,362	75,453	75,476					50,228	(92,481)	89,332	(100,356)						(51,198)	(44,162)	(87,877)	(80,979)						234,108	(22,600)	290,339	(44,787)					(50,592)	(49,765)	(88,932)	(97,314)						(2,209)	(17,449)	(28,090)	(33,022)						(28,621)	(47,634)	(110,774)	(133,114)						(329,817)	(500,952)	(732,036)	(1,031,293)						(190,733)	(772,855)	(687,678)	(1,512,636)
Proportionate share of net loss									$ (24,203)	$ (17,087)	$ (47,547)	$ (33,624)					$ 17,887	$ 18,181	$ 37,727	$ 37,738						$ 25,114	$ (46,241)	$ 44,666	$ (50,178)						$ (25,598)	$ (22,081)	$ (43,938)	$ (40,490)					$ 117,054	$ (11,300)	$ 145,170	$ (22,394)						$ (25,296)	$ (24,883)	$ (44,466)	$ (48,657)						$ (1,104)	$ (8,725)	$ (14,045)	$ (16,511)						$ (14,310)	$ (23,817)	$ (55,386)	$ (66,557)						$ (131,927)	$ (200,381)	$ (292,814)	$ (412,517)	$ (62,382)	$ (336,332)	$ (270,633)	$ (653,189)	$ 69,545	$ (135,952)	$ 22,181	$ (240,672)	$ (131,927)	$ (200,381)	$ (292,814)	$ (412,517)
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%

XML

TREASURY UNITS (Details) (USD $)	0 Months Ended		6 Months Ended		82 Months Ended				1 Months Ended	6 Months Ended		82 Months Ended			6 Months Ended		82 Months Ended	1 Months Ended	6 Months Ended		82 Months Ended	1 Months Ended
	Aug. 08, 2008	Aug. 20, 2007	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Mar. 06, 2008	Jan. 30, 2008	Jan. 15, 2008	Aug. 05, 2014 Subsequent event	Jun. 30, 2014 Class A Treasury Units	Jun. 30, 2013 Class A Treasury Units	Jun. 30, 2014 Class A Treasury Units	Jan. 03, 2012 Class A Treasury Units	Aug. 20, 2007 Class A Treasury Units	Jun. 30, 2014 Class B Treasury Units	Jun. 30, 2013 Class B Treasury Units	Jun. 30, 2014 Class B Treasury Units	Aug. 05, 2014 Class B Treasury Units Subsequent event	Jun. 30, 2014 General Partnership	Jun. 30, 2013 General Partnership	Jun. 30, 2014 General Partnership	Aug. 05, 2014 General Partnership Subsequent event
Treasury units			51,402		51,402					41,122		41,122			9,766		9,766		514		514
Period for repurchase of depository receipts	12 months	12 months
Depository receipts authorized to be repurchased		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			15,931		1,258,822				5,049								2,229
Repurchase price of depository receipts			$ 46.26		$ 25.13				$ 48.81
Repurchase price of units			$ 1,387.80						$ 1,464.30			$ 753.90					$ 700.12				$ 700.12
Repurchase of units			664	404											126			40.0	7		117	2.1
Total cost of repurchase			$ 941,477	$ 399,487	$ 33,422,000					$ 757,246	$ 321,240				$ 175,019	$ 74,335		$ 58,532	$ 9,212	$ 3,912		$ 3,081
Repurchase of depository receipts			$ 757,246						$ 253,274

XML

RELATED PARTY TRANSACTIONS (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 item	Jun. 30, 2013
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue			4.00%
Management fee as a percentage of gross receipts rental revenue of Linewt, LLC			3.00%
Management fees of related party			$ 865,000	$ 752,000
Repairs and maintenance	1,601,307	1,515,934	2,812,456	2,597,213
Administrative expense	568,915	697,238	1,099,482	1,149,855
Management fee	438,068	374,622	865,461	743,874
Number of limited partnerships and limited liability companies in which the entity has invested			9
Limited Partnerships | Minimum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest	40.00%		40.00%
Limited Partnerships | Maximum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest	50.00%		50.00%
General Partner or Management Company
RELATED PARTY TRANSACTIONS
Costs related to professional services			372,000	453,000
Repairs and maintenance			148,000
Administrative expense			162,000
Rental commission			6,000
Expenses for construction, architectural services and supervision of capital projects			56,000
Management Company
RELATED PARTY TRANSACTIONS
Reimbursement to related party for payroll transfers			1,565,000	1,388,000
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
Fees for accounting and bookkeeping services per year			125,000
Number of employees having ownership interest			5
Hamilton Company
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue			4.00%
Repairs and maintenance			46,000
Administrative expense			25,000
Amount paid to related party			403,000
Management fee			330,000
Dexter Park
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue			2.00%
President of Management Company
RELATED PARTY TRANSACTIONS
Fee for asset management consulting services			$ 37,500	$ 37,500
Harold Brown | Minimum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest	43.20%		43.20%
Harold Brown | Maximum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest	60.00%		60.00%

XML

DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE (Details) (USD $)	3 Months Ended	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2013
DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE
Total Revenues		$ 193,274
Operating and other expenses		171,290
Depreciation and amortization		2,111
Total Expenses		173,401
Income from discontinued operations	$ 143	$ 19,873

XML

TAXABLE INCOME AND TAX BASIS (Details) (USD $)	12 Months Ended
	Dec. 31, 2013
TAXABLE INCOME AND TAX BASIS
Excess amount of statement income over taxable income	$ 4,300,000
Excess amount of cumulative statement basis over cumulative taxable basis	4,800,000
Excess amount of statement income from joint venture investments over taxable income	1,300,000
Hamilton Green
TAXABLE INCOME AND TAX BASIS
Book/Tax differences from depreciation and amortization	1,100,000
Nashoba Apartments in Acton, Massachusetts
TAXABLE INCOME AND TAX BASIS
Book/Tax differences on tax free exchanges	$ 3,700,000

XML

RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2014

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 3. RELATED PARTY TRANSACTIONS

The Partnership’s properties are managed by an entity that is owned by the majority shareholder of the General Partner. The management fee is equal to 4% of gross receipts rental revenue and laundry income on the majority of the Partnership’s properties and 3% on Linewt. Total fees paid were approximately $865,000 and $752,000 for the six months ended June 30, 2014 and 2013, respectively.

The Partnership Agreement permits the General Partner or Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA. During the six months ended June 30, 2014 and 2013, approximately $372,000 and $453,000, was charged to NERA for legal, accounting, construction, maintenance, rental and architectural services and supervision of capital improvements. Of the 2014 expenses referred to above, approximately $148,000 consisted of repairs and maintenance, $162,000 of administrative expense and $6,000 for rental commission. Approximately $56,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2014, the Hamilton Company received approximately $403,000 from the Investment Properties of which approximately $330,000 was the management fee, approximately $46,000 was for maintenance services and approximately $25,000 was for administrative services. The management fee is equal to 4% of gross receipts rental income on the majority of investment properties and 2% on Dexter Park.

The Partnership reimburses the management company for the payroll and related expenses of the employees who work at the properties. Total reimbursement was approximately $1,565,000 and $1,388,000 for the six months ended June 30, 2014 and 2013, 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 during 2014 and 2013.

Bookkeeping and accounting functions are provided by the Management Company’s accounting staff, which consists of approximately 14 people. During the six months ended June 30, 2014 and 2013, the Management Company charged the Partnership $62,500 ($125,000 per year) for bookkeeping and accounting services included in administrative expenses above.

The President of the Management Company performs asset management consulting services and receives an asset management fee from the Partnership. The Partnership does not have a written agreement with this individual. During the six months ended June 30, 2014 and 2013 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 60%. See Note 14 for a description of the properties and their operations.

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

XML

RENTAL INCOME (Details) (USD $)	6 Months Ended
	Jun. 30, 2014 sqft item	Jun. 30, 2013	Dec. 31, 2013
RENTAL INCOME
Percentage of rental income related to residential apartments and condominium units with leases of one year or less	92.00%
Maximum period of non-cancelable operating lease	1 year
Percentage of rental income related to commercial properties	8.00%
Minimum future rental income
2015	$ 2,615,000
2016	2,398,000
2017	1,602,000
2018	1,231,000
2019	863,000
Thereafter	973,000
Commercial Property Leases	9,682,000
Aggregate contingent rentals from continuing operations	315,000	345,000
RENTAL INCOME
Annual base rent for expiring leases	2,982,205
Total square feet for expiring leases	108,043
Total number of leases expiring	44
Percentage of annual base rent for expiring leases	100.00%
Allowance for doubtful rent receivable	459,000		344,000
Recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis	194,000
Deferred rental concession	49,000
Amortization of deferred rents	1,100
Through March 31, 2015
RENTAL INCOME
Annual base rent for expiring leases	400,427
Total square feet for expiring leases	20,511
Total number of leases expiring	12
Percentage of annual base rent for expiring leases	13.00%
Through March 31, 2016
RENTAL INCOME
Annual base rent for expiring leases	718,834
Total square feet for expiring leases	26,744
Total number of leases expiring	8
Percentage of annual base rent for expiring leases	24.00%
Through March 31, 2017
RENTAL INCOME
Annual base rent for expiring leases	525,725
Total square feet for expiring leases	18,157
Total number of leases expiring	7
Percentage of annual base rent for expiring leases	18.00%
Through March 31, 2018
RENTAL INCOME
Annual base rent for expiring leases	352,082
Total square feet for expiring leases	10,725
Total number of leases expiring	7
Percentage of annual base rent for expiring leases	12.00%
Through March 31, 2019
RENTAL INCOME
Annual base rent for expiring leases	206,836
Total square feet for expiring leases	6,403
Total number of leases expiring	4
Percentage of annual base rent for expiring leases	7.00%
Through March 31, 2020
RENTAL INCOME
Annual base rent for expiring leases	556,058
Total square feet for expiring leases	18,932
Total number of leases expiring	4
Percentage of annual base rent for expiring leases	19.00%
Through March 31, 2021
RENTAL INCOME
Annual base rent for expiring leases	64,800
Total square feet for expiring leases	1,800
Total number of leases expiring	1
Percentage of annual base rent for expiring leases	2.00%
Through March 31, 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 March 31, 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%
Through March 31, 2024
RENTAL INCOME
Annual base rent for expiring leases	$ 157,443
Total square feet for expiring leases	4,771
Total number of leases expiring	1
Percentage of annual base rent for expiring leases	5.00%

XML

RENTAL INCOME (Tables)

6 Months Ended

Jun. 30, 2014

RENTAL INCOME

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

Approximately 8% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30, 2014 as follows:

	Commercial Property Leases
2015	$	2,615,000
2016	2,398,000
2017	1,602,000
2018	1,231,000
2019	863,000
Thereafter	973,000
	$	9,682,000

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,
2015	$	400,427	20,511	12	13	%
2016	718,834		26,744	8	24	%
2017	525,725		18,157	7	18	%
2018	352,082		10,725	7	12	%
2019	206,836		6,403	4	7	%
2020	556,058		18,932	4	19	%
2021	64,800		1,800	1	2	%
2022	0		0	0	0	%
2023	0		0	0	0	%
2024	157,443		4,771	1	5	%
Totals	$	2,982,205	108,043	44	100	%

XML

TREASURY UNITS (Tables)

6 Months Ended

Jun. 30, 2014

TREASURY UNITS

Schedule of treasury units

Treasury Units at June 30, 2014 are as follows:

Class A	41,122
Class B	9,766
General Partnership	514
	51,402

XML

RENTAL INCOME (Details 2) (Commercial rental income, Staples and Trader Joes)	6 Months Ended
	Jun. 30, 2014
Commercial rental income | Staples and Trader Joes
Rental Income
Concentration risk percentage	30.00%

XML

FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2014

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, 2014	$	195,634,372	$	203,344,074
At December 31, 2013	$	198,520,478	$	196,059,827
Investment Properties
At June 30, 2014	$	137,026,261	$	147,317,566
At December 31, 2013	$	137,875,515	$	147,975,521

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables)

6 Months Ended

Jun. 30, 2014

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

Summary of financial position relating to investment in unconsolidated joint ventures

Summary financial information as of June 30, 2014

				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	$	8,575,457		$	2,622,910		$	7,320,301		$	5,272,805		$	1,148,912		$	6,533,725		$	6,684,183		$	19,873,809		$	99,637,389		$	157,669,491
Cash & Cash Equivalents	76,955			104,102			107,038			6,968			57,296			1,878			66,660			23,626			968,685			1,413,209
Rent Receivable	32,918			—			15,494			2,327			3,666			6,965			5,798			11,991			141,005			220,164
Real Estate Tax Escrow	101,117			—			18,132			68,872			—			28,886			39,093			45,741			369,900			671,741
Prepaid Expenses & Other Assets	83,547			1,230			38,090			43,044			548,734			41,408			42,658			748,027			1,728,976			3,275,714
Financing & Leasing Fees	37,887			9,868			93,219			12,106			—			16,700			9,997			4,286			310,703			494,766
Total Assets	$	8,907,881		$	2,738,111		$	7,592,274		$	5,406,122		$	1,758,607		$	6,629,562		$	6,848,389		$	20,707,480		$	103,156,658		$	163,745,085
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,171,048		$	2,014,488		$	10,000,000		$	4,840,484		$	—		$	4,606,316		$	5,330,234		$	15,188,407		$	86,875,284		$	137,026,261
Accounts Payable & Accrued Expense	59,005			5,297			57,752			30,368			18,811			12,526			47,027			155,825			698,090			1,084,701
Advance Rental Pmts& Security Deposits	223,226			—			229,882			108,125			22,824			97,026			93,312			322,519			2,645,283			3,742,197
Total Liabilities	8,453,279			2,019,785			10,287,634			4,978,977			41,635			4,715,869			5,470,574			15,666,750			90,218,657			141,853,159
Partners’ Capital	454,602			718,325			(2,695,360		)	427,145			1,716,973			1,913,694			1,377,815			5,040,730			12,938,001			21,891,926
Total Liabilities and Capital	$	8,907,881		$	2,738,111		$	7,592,274		$	5,406,122		$	1,758,607		$	6,629,562		$	6,848,389		$	20,707,480		$	103,156,658		$	163,745,085
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	227,301		$	359,163		$	—		$	213,573		$	858,486		$	956,847		$	688,907		$	2,520,365		$	5,175,200		10,999,842
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,347,680	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,347,680		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	9,652,162
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, 2014	—			—			—			127			110			—			—			—			—			237
Unsold units	—			—			—			—			10			—			—			—			—			10
Unsold units with deposits for future sale as of August 1, 2014	—			—			—			—			—			—			—			—			—			—

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		$	165,785,846
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	51,079			—			8,863			6,873			4,061			4,886			9,599			10,729			104,164			200,255
Real Estate Tax Escrow	83,964			—			23,711			74,507			—			53,440			34,783			68,934			420,641			759,980
Prepaid Expenses & Other Assets	75,717			1,153			27,615			42,202			123,516			24,192			51,529			228,073			1,464,682			2,038,679
Financing & Leasing Fees	55,373			1,081			99,877			17,132			4,000			23,062			13,965			11,150			370,020			595,660
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
Accounts Payable & Accrued Expense	50,228			5,461			19,140			51,107			18,669			8,192			71,192			196,455			1,019,021			1,439,465
Advance Rental Pmts& Security Deposits	176,827			—			175,850			93,473			29,033			96,673			66,703			321,725			2,059,401			3,019,685
Total Liabilities	8,519,342			2,072,839			10,194,990			5,046,047			1,715,702			4,775,184			5,534,918			15,981,096			91,077,553			144,917,671
Partners’ Capital	697,529			575,469			(2,116,602		)	609,157			244,732			2,167,705			1,519,647			5,171,379			16,758,697			25,627,713
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		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	348,764		$	287,734		$	—		$	304,578		$	122,366		$	1,083,852		$	759,824		$	2,585,689		$	6,703,479		12,196,283
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,058,301	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,058,301		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	11,137,982
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 of income statement relating to investment in unconsolidated joint ventures

Financial information for the six months ended June 30, 2014

				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	$	670,157		$	146,472		$	658,488		$	447,481		$	106,721		$	462,103		$	456,812		$	1,440,362		$	6,709,764		$	11,098,360
Laundry and Sundry Income	8,120			—			235			—			—			—			168			19,148			48,593			76,262
	678,277			146,472			658,723			447,481			106,721			462,103			456,980			1,459,510			6,758,357			11,174,622
Expenses
Administrative	17,141			830			19,861			4,161			2,674			10,577			5,443			30,762			116,993			208,441
Depreciation and Amortization	216,170			5,644			200,104			120,320			38,350			158,697			159,254			473,132			2,694,103			4,065,772
Management Fees	29,105			5,859			28,505			18,643			4,275			18,600			18,953			57,820			148,442			330,201
Operating	68,967			—			32,593			353			605			1,039			44,102			206,470			736,853			1,090,983
Renting	10,967			—			3,623			6,376			753			5,042			6,088			18,097			57,536			108,481
Repairs and Maintenance	73,827			3,150			30,932			164,511			47,651			143,741			38,434			190,403			514,184			1,206,833
Taxes and Insurance	116,996			27,640			58,200			81,375			22,666			82,006			59,236			191,586			757,325			1,397,028
	533,173			43,123			373,817			395,737			116,973			419,702			331,509			1,168,270			5,025,436			8,407,740
Income Before Other Income	145,104			103,349			284,906			51,743			(10,252		)	42,401			125,471			291,240			1,732,921			2,766,883
Other Income (Loss)
Interest Expense	(240,198		)	(27,896		)	(195,574		)	(139,629		)	(399		)	(131,333		)	(153,561		)	(402,014		)	(2,464,957		)	(3,755,560		)
Interest Income	—			—			—			10			—			—			—			—			—			10
Interest Income from Note	—			—			—			—			468			—			—			—			—			468
Gain on Sale of Real Estate	—			—			—			—			300,522			—			—			—			—			300,522
	(240,198		)	(27,896		)	(195,574		)	(139,620		)	300,591			(131,333		)	(153,561		)	(402,014		)	(2,464,957		)	(3,454,561		)
Net Income (Loss)	$	(95,094	)	$	75,453		$	89,332		$	(87,877	)	$	290,339		$	(88,932	)	$	(28,090	)	$	(110,774	)	$	(732,036	)	$	(687,678	)
Net Income (Loss) - NERA 50%	$	(47,547	)	$	37,727		$	44,666		$	(43,938	)	$	145,170		$	(44,466	)	$	(14,045	)	$	(55,386	)				22,181
Net Income (Loss) - NERA 40%																									$	(292,814	)	(292,814		)
																												$	(270,633	)

Financial information for the three months ended June 30, 2014

				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	$	341,387		$	73,236		$	330,748		$	216,294		$	43,923		$	223,212		$	232,870		$	722,682		$	3,352,710		$	5,537,062
Laundry and Sundry Income	4,200			—			657			—			—			—			(2		)	9,692			23,213			37,761
	345,587			73,236			331,406			216,294			43,923			223,212			232,869			732,375			3,375,923			5,574,823
Expenses
Administrative	13,963			513			13,038			2,193			1,969			5,732			2,440			21,277			62,450			123,574
Depreciation and Amortization	108,267			2,823			100,379			60,167			19,175			79,383			79,852			237,117			1,348,640			2,035,802
Management Fees	15,829			2,929			14,839			9,412			1,891			9,140			9,643			29,557			76,544			169,784
Operating	23,995			—			7,770			193			355			580			11,248			64,310			248,068			356,520
Renting	10,850			—			180			624			—			1,550			3,623			11,268			38,946			67,040
Repairs and Maintenance	41,549			3,150			18,595			84,068			23,827			70,304			21,547			99,885			317,690			680,615
Taxes and Insurance	58,712			14,070			28,555			40,771			10,768			41,247			29,664			95,947			376,140			695,874
	273,165			23,485			183,356			197,427			57,984			207,936			158,017			559,361			2,468,477			4,129,208
Income Before Other Income	72,422			49,751			148,049			18,867			(14,061		)	15,276			74,852			173,013			907,445			1,445,615
Other Income (Loss)
Interest Expense	(120,829		)	(13,977		)	(97,821		)	(70,070		)	(205		)	(65,868		)	(77,061		)	(201,634		)	(1,237,262		)	(1,884,727		)
Interest Income	—			—			—			5			—			—			—			—			—			5
Interest Income from Note	—			—			—			—			135			—			—			—			—			135
Gain on Sale of Real Estate	—			—			—			—			248,239			—			—			—			—			248,239
	(120,829		)	(13,977		)	(97,821		)	(70,065		)	248,169			(65,868		)	(77,061		)	(201,634		)	(1,237,262		)	(1,636,348		)
Net Income (Loss)	$	(48,407	)	$	35,774		$	50,228		$	(51,198	)	$	234,108		$	(50,592	)	$	(2,209	)	$	(28,621	)	$	(329,817	)	$	(190,733	)
Net Income (Loss) - NERA 50%	$	(24,203	)	$	17,887		$	25,114		$	(25,598	)	$	117,054		$	(25,296	)	$	(1,104	)	$	(14,310	)				69,545
Net Income (Loss) - NERA 40%																									$	(131,927	)	(131,927		)
																												$	(62,382	)

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		$	10,546,190
Laundry and Sundry Income	8,997			—			1,933			—			—			—			675			17,281			46,429			75,315
	672,916			143,792			617,967			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			4,272,423
Management Fees	26,015			5,752			25,782			18,186			4,987			17,887			17,076			57,339			133,507			306,531
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			1,102,322
Taxes and Insurance	111,759			24,407			56,255			77,131			20,619			71,147			61,948			169,290			742,955			1,335,511
	496,961			39,050			392,218			381,383			119,663			405,784			310,948			1,093,996			4,913,996			8,153,999
Income Before Other Income	175,955			104,742			225,749			60,500			1,809			35,659			122,516			276,473			1,464,103			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	—						30			2			86												57			175
Interest Income from Note	—												2,007															2,007
Other Income (Expenses)	—			—			(68,588		)	—			—			—			—			—			—			(68,588		)
	(243,202		)	(29,266		)	(326,105		)	(141,479		)	(46,596		)	(132,973		)	(155,538		)	(409,587		)	(2,495,396		)	(3,980,142		)
Net Income (Loss)	$	(67,247	)	$	75,476		$	(100,356	)	$	(80,979	)	$	(44,787	)	$	(97,314	)	$	(33,022	)	$	(133,114	)	$	(1,031,293	)	$	(1,512,636	)
Net Income (Loss) - NERA 50%	$	(33,624	)	$	37,738		$	(50,178	)	$	(40,490	)	$	(22,394	)	$	(48,657	)	$	(16,511	)	$	(66,557	)				(240,672		)
Net Income (Loss) - NERA 40%																									$	(412,517	)	(412,517		)
																												$	(653,189	)

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		$	5,289,632
Laundry and Sundry Income	5,151			—			1,288			—			—			—			464			7,510			24,997			39,410
	340,615			71,896			313,033			221,666			61,864			222,162			217,396			683,752			3,196,658			5,329,042
Expenses
Administrative	6,074			386			8,699			2,124			2,813			3,669			2,042			9,769			66,845			102,421
Depreciation and Amortization	106,494			2,245			110,055			60,128			20,035			76,840			79,225			244,233			1,440,022			2,139,277
Management Fees	13,762			2,876			12,707			9,227			2,649			9,422			8,538			28,298			68,497			155,976
Operating	28,483			—			14,190			452			382			195			18,737			77,185			235,835			375,459
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			614,567
Taxes and Insurance	55,878			12,209			28,069			38,381			10,389			35,468			31,082			84,473			346,742			642,691
	252,742			20,866			198,336			194,832			60,909			205,220			156,769			525,753			2,445,472			4,060,899
Income Before Other Income	87,873			51,030			114,697			26,834			955			16,942			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	—			—			15			2			41			—			—			—			57			115
Interest Income from Note	—			—			—			—			911			—			—			—			—			911
Other Income (Expenses)	—			—			(68,588		)	—			—			—			—			—			—			(68,588		)
	(122,047		)	(14,668		)	(207,178		)	(70,996		)	(23,555		)	(66,707		)	(78,076		)	(205,633		)	(1,252,138		)	(2,040,998		)
Net Income (Loss)	$	(34,174	)	$	36,362		$	(92,481	)	$	(44,162	)	$	(22,600	)	$	(49,765	)	$	(17,449	)	$	(47,634	)	$	(500,952	)	$	(772,855	)
Net Income (Loss) - NERA 50%	$	(17,087	)	$	18,181		$	(46,241	)	$	(22,081	)	$	(11,300	)	$	(24,883	)	$	(8,725	)	$	(23,817	)				(135,952		)
Net Income (Loss) - NERA 40%																									$	(200,381	)	(200,381		)
																												$	(336,332	)

Schedule of future annual mortgage maturities

Future annual mortgage maturities at June  30, 2014 are as follows:

			Hamilton
	Hamilon		Essex 81		345		Hamilton		Hamilton		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Development		Franklin		1025		Bay Apts		Minuteman		Main Apts		Park		Total
6/30/2015	133,411		53,316				70,660		75,940		77,390		15,188,407		1,571,909		17,171,033
6/30/2016	144,484		1,961,172				80,814		76,024		81,127				1,459,214		3,802,835
6/30/2017	7,893,152				177,340		4,689,009		4,454,353		5,171,718				1,542,599		23,928,170
6/30/2018					187,209										1,630,749		1,817,958
6/30/2019					194,584										1,723,938		1,918,522
Thereafter					9,440,867										78,946,875		88,387,742
	$	8,171,048	$	2,014,488	$	10,000,000	$	4,840,484	$	4,606,316	$	5,330,234	$	15,188,407	$	86,875,284	$	137,026,261

XML

RENTAL PROPERTIES

6 Months Ended

Jun. 30, 2014

RENTAL PROPERTIES

RENTAL PROPERTIES

NOTE 2. RENTAL PROPERTIES

As of June 30, 2014, the Partnership and its Subsidiary Partnerships owned 2,412 residential apartment units in 20 residential and mixed-use complexes (collectively, the “Apartment Complexes”). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the “Condominium Units”). The Apartment Complexes and Condominium Units are located primarily in the metropolitan Boston area of Massachusetts.

Additionally, as of June 30, 2014, the Partnership and Subsidiary Partnerships owned a commercial shopping center in Framingham, commercial buildings in Newton and Brookline and mixed-use properties in Boston, Brockton and Newton, all in Massachusetts. These properties are referred to collectively as the “Commercial Properties.”

The Partnership also owned a 40% to 50% ownership interest in nine residential and mixed use complexes (the “Investment Properties”) at June 30, 2014 with a total of 793 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, 2014			December 31, 2013			Useful Life
Land, improvements and parking lots	$	44,021,654		$	43,919,728		15–40 years
Buildings and improvements	152,403,653			152,130,635			15–40 years
Kitchen cabinets	6,308,459			5,956,078			5–10 years
Carpets	6,213,654			5,820,516			5–10 years
Air conditioning	720,908			707,928			5–10 years
Laundry equipment	420,737			404,775			5–7 years
Elevators	1,139,296			1,139,296			20–40 years
Swimming pools	444,629			444,629			10–30 years
Equipment	5,244,764			5,038,530			5–7 years
Motor vehicles	86,657			86,657			5 years
Fences	24,670			24,670			5–15 years
Furniture and fixtures	5,831,275			5,564,621			5–7 years
Smoke alarms	236,719			216,223			5–7 years
Total fixed assets	223,097,075			221,454,286
Less: Accumulated depreciation	(73,067,674		)	(68,549,625		)
	$	150,029,401		$	152,904,661

In May 2013 the Partnership sold the Nashoba Apartments located 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 in accordance with GAAP is approximately $3,679,000. The proceeds were subsequently used in the acquisition of the Hamilton Green Apartments described below.

On July 15, 2013, Hamilton Green Apartments, LLC, (“Hamilton Green”) 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. From the purchase price, the Partnership allocated approximately $1,656,000 to the value of the in-place leases and approximately $96,000 to the value of the tenant relationships. These amounts were amortized over 12 and 36 months respectively. 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 sale of the Nashoba Apartments, and the balance from the Partnership’s cash reserves. The closing costs associated with this short term financing were approximately $38,000. The original mortgage matured in November 2013. On December 20, 2013, the Partnership refinanced the mortgage on Hamilton Green. The new mortgage is $38,500,000, interest is fixed at 4.67% for 15 years, interest only for 2 years and the mortgage is amortized over 30 years. This refinancing required additional capital of approximately $1,846,000 from the Partnership. The closing costs associated with this refinancing were approximately $346,000.

XML

DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE (Tables)

6 Months Ended

Jun. 30, 2014

DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

Summary of income from discontinued operations

The following tables summarize income from discontinued operations and the related realized gain on sale of rental property for the six months ended June 30, 2014 and 2013:

	2014		2013
Total Revenues	$	—	$	193,274
Operating and other expenses	—		171,290
Depreciation and amortization	—		2,111
	—		173,401
Income from discontinued operations	$	—	$	19,873

XML

ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS (Details) (USD $)	6 Months Ended
	Jun. 30, 2014
ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS
Period for advance rental payment	1 month
Amount received for prepaid rent	$ 1,610,000
Security deposits	$ 2,125,000

XML

SUBSEQUENT EVENTS (Details) (USD $)	6 Months Ended		82 Months Ended			6 Months Ended		82 Months Ended	6 Months Ended		82 Months Ended	1 Months Ended	0 Months Ended		0 Months Ended									1 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2014 Mortgage loan Minimum	Jun. 30, 2014 Mortgage loan Maximum	Jun. 30, 2014 Class B	Jun. 30, 2013 Class B	Jun. 30, 2014 Class B	Jun. 30, 2014 General Partnership units	Jun. 30, 2013 General Partnership units	Jun. 30, 2014 General Partnership units	Aug. 05, 2014 Subsequent events	Jul. 31, 2014 Subsequent events Revolving line of credit item	Aug. 05, 2014 Subsequent events Revolving line of credit	Jul. 31, 2014 Subsequent events Revolving line of credit Minimum	Jul. 31, 2014 Subsequent events Revolving line of credit Maximum	Jul. 31, 2014 Subsequent events Revolving line of credit Base rate	Jul. 31, 2014 Subsequent events Revolving line of credit Base rate Minimum	Jul. 31, 2014 Subsequent events Revolving line of credit Base rate Maximum	Jul. 31, 2014 Subsequent events Revolving line of credit Prime rate	Jul. 31, 2014 Subsequent events Revolving line of credit Federal Funds Rate	Jul. 31, 2014 Subsequent events Revolving line of credit London Interbank Offered Rate LIBOR	Jul. 11, 2014 Subsequent events Mortgage loan Westgate Apartments Burlington, LLC	Aug. 05, 2014 Subsequent events Class B	Aug. 05, 2014 Subsequent events General Partnership units
Subsequent events
Repurchase of depository receipts	15,931		1,258,822					2,229				5,049
Repurchase price of depository receipts	$ 46.26		$ 25.13									$ 48.81
Repurchase price of units	$ 1,387.80							$ 700.12			$ 700.12	$ 1,464.30
Repurchase of depository receipts	$ 757,246											$ 253,274
Repurchase of units	664	404				126			7		117													40.0	2.1
Total cost of repurchase	941,477	399,487	33,422,000			175,019	74,335		9,212	3,912														58,532	3,081
Amount of new loan																							2,500,000
Interest rate (as a percent)				3.76%	5.97%																		4.31%
Period of interest only payments on loans																							10 years
Amount of loan proceeds utilized for pay off the existing mortgage																							2,010,000
Net proceed from the loan - cash reserves																							435,000
Amount of refinancing costs																							90,000
Maximum borrowings													25,000,000
Term period													3 years
Reference rate used in calculation of Base Rate																				Prime	Federal Funds	one month LIBOR
Basis of effective interest rate used in calculation of Base Rate (as a percent)																					0.50%	1.00%
Variable interest rate																	Base
Applicable margin of variable interest rate (as a percent)																		2.50%	3.50%
Funds drawn by the company														$ 0
Number of properties in which borrowing amount collateralized													23
Pledged interests rate of the Partnership's ownership interest (as a percent)															49.00%	100.00%
Commitment fee for unused amount (as a percent)															0.15%	0.20%

XML

CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2014	Dec. 31, 2013
ASSETS
Rental Properties	$ 150,029,401	$ 152,904,661
Cash and Cash Equivalents	12,613,346	14,013,380
Rents Receivable	556,853	496,149
Real Estate Tax Escrows	294,366	375,560
Prepaid Expenses and Other Assets	3,575,816	3,895,189
Investments in Unconsolidated Joint Ventures	10,999,842	12,025,142
Financing Fees	1,636,903	1,635,076
Total Assets	179,706,527	185,345,157
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	195,634,372	198,520,478
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	1,347,680	1,252,346
Accounts Payable and Accrued Expenses	2,622,206	3,178,495
Advance Rental Payments and Security Deposits	4,575,466	4,242,401
Total Liabilities	204,179,724	207,193,720
Commitments and Contingent Liabilities (Notes 3 and 9)
Partners' Capital 128,823 and 129,487 units outstanding in 2014 and 2013 respectively	(24,473,197)	(21,848,563)
Total Liabilities and Partners' Capital	$ 179,706,527	$ 185,345,157

XML

CASH FLOW INFORMATION (Details) (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOW INFORMATION
Cash paid for interest	$ 4,074,000	$ 3,652,000
Cash paid for state income taxes	$ 49,000	$ 48,000

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash Flows from Operating Activities
Net income	$ 252,227	$ 5,370,742
Adjustments to reconcile net income to net cash provided by operating activities
Gain on sale of real estate		(3,678,779)
Depreciation and amortization	5,471,646	2,933,991
Loss from investments in joint venture	270,633	653,189
Depreciation and amortization - discontinued operations		2,111
Change in operating assets and liabilities
(Increase) Decrease in rents receivable	(60,704)	45,591
(Decrease) in accounts payable and accrued expense	(556,289)	(343,127)
Decrease in real estate tax escrow	81,194	102,232
(Increase) in prepaid expenses and other assets	(434,134)	(265,100)
Increase in advance rental payments and security deposits	333,065	308,037
Total Adjustments	5,105,411	(241,855)
Net cash provided by operating activities	5,357,638	5,128,887
Cash Flows from Investing Activities
Proceeds from unconsolidated joint ventures	867,741	2,205,880
Net proceeds from sale of real estate		2,155,546
Distribution in excess of investment in unconsolidated joint ventures	100,000
(Investment in) unconsolidated joint ventures	(117,741)	(10,880)
Deposit and escrow held for the acquisition of real estate		(4,103,906)
Improvement of rental properties	(1,642,788)	(2,189,413)
Net cash (used in) investing activities	(792,788)	(1,942,773)
Cash Flows from Financing Activities
Payment of financing costs	(201,917)	(142,362)
Proceeds of mortgage notes payable	609,555	15,000,000
Principal payments and payoffs of mortgage notes payable	(3,495,661)	(19,383,890)
Stock buyback	(941,477)	(399,487)
Distributions to partners	(1,935,384)	(1,950,596)
Net cash (used in) financing activities	(5,964,884)	(6,876,335)
Net (Decrease) Increase in Cash and Cash Equivalents	(1,400,034)	(3,690,221)
Cash and Cash Equivalents, at beginning of period	14,013,380	6,981,906
Cash and Cash Equivalents, at end of period	$ 12,613,346	$ 3,291,685

XML

RENTAL PROPERTIES (Details) (USD $)	6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Rental properties
Total fixed assets	$ 223,097,075	$ 221,454,286
Less: Accumulated depreciation	(73,067,674)	(68,549,625)
Total fixed assets, net	150,029,401	152,904,661
Land, improvements and parking lots
Rental properties
Total fixed assets	44,021,654	43,919,728
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	152,403,653	152,130,635
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	6,308,459	5,956,078
Kitchen cabinets | Minimum
Rental properties
Useful Life	5 years
Kitchen cabinets | Maximum
Rental properties
Useful Life	10 years
Carpets
Rental properties
Total fixed assets	6,213,654	5,820,516
Carpets | Minimum
Rental properties
Useful Life	5 years
Carpets | Maximum
Rental properties
Useful Life	10 years
Air conditioning
Rental properties
Total fixed assets	720,908	707,928
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	420,737	404,775
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	444,629	444,629
Swimming pools | Minimum
Rental properties
Useful Life	10 years
Swimming pools | Maximum
Rental properties
Useful Life	30 years
Equipment
Rental properties
Total fixed assets	5,244,764	5,038,530
Equipment | Minimum
Rental properties
Useful Life	5 years
Equipment | Maximum
Rental properties
Useful Life	7 years
Motor vehicles
Rental properties
Total fixed assets	86,657	86,657
Useful Life	5 years
Fences
Rental properties
Total fixed assets	24,670	24,670
Fences | Minimum
Rental properties
Useful Life	5 years
Fences | Maximum
Rental properties
Useful Life	15 years
Furniture and fixtures
Rental properties
Total fixed assets	5,831,275	5,564,621
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	$ 236,719	$ 216,223
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	2,412
Number of properties	20
Residential and mixed-use properties | Partially owned properties
RENTAL PROPERTIES
Number of units	793
Number of properties	9
Residential and mixed-use properties | Partially owned properties | Minimum
RENTAL PROPERTIES
Percentage of ownership interest	40.00%
Residential and mixed-use properties | Partially owned properties | Maximum
RENTAL PROPERTIES
Percentage of ownership interest	50.00%
Condominium
RENTAL PROPERTIES
Number of units	19

XML

DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

6 Months Ended

Jun. 30, 2014

DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

NOTE 16. DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

The following tables summarize income from discontinued operations and the related realized gain on sale of rental property for the six months ended June 30, 2014 and 2013:

	2014		2013
Total Revenues	$	—	$	193,274
Operating and other expenses	—		171,290
Depreciation and amortization	—		2,111
	—		173,401
Income from discontinued operations	$	—	$	19,873

XML

RENTAL PROPERTIES (Details 2) (USD $)		0 Months Ended	1 Months Ended	0 Months Ended
	May 31, 2013	Jul. 15, 2013 Hamilton Green item	May 31, 2013 Nashoba Apartments L.P. Residential Apartments Acton, Massachusetts	Dec. 20, 2013 Mortgages payable Hamilton Green
RENTAL PROPERTIES
Sales price of real estate properties			$ 4,300,000
Amount of sale proceeds transferred to Investment Property	2,100,000
Gain on sale of property			3,679,000
Number of units		193
Purchase price of real estate properties		62,500,000
Purchase price allocated to the value of the in-place leases		1,656,000
Purchase price allocated to the value of the tenant relationships		96,000
Amortization period of value of the in-place leases		12 months
Amortization period of value of the tenant relationships		36 months
Short term finance for real estate properties		40,000,000
Proceeds from sale of discontinued operations		2,100,000
Closing costs associated with financing		38,000		346,000
Amount of new loan				38,500,000
Interest rate (as a percent)				4.67%
Term of debt				15 years
Period for which the entity is required to make interest only payments				2 years
Amortization period of debt				30 years
Additional capital required for refinancing				$ 1,846,000

XML

SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2014

SIGNIFICANT ACCOUNTING POLICIES

Line of Business

Line of Business:  New England Realty Associates Limited Partnership (“NERA” or the “Partnership”) was organized in Massachusetts in 1977. NERA and its subsidiaries own 24 properties which include 16 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,412 apartment units, 19 condominium units and 108,043 square feet of commercial space. Additionally, the Partnership also owns a 40-50% interest in 9 residential and mixed use properties consisting of 793 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. Generally, the Partnership would discontinue applying the equity method when the investment (and any advances) is reduced to zero and would not provide for additional losses unless the Partnership has guaranteed obligations of the venture or is otherwise committed to providing further financial support for the investee. If the venture subsequently generates income, the Partnership only recognizes its share of such income to the extent it exceeds its share of previously unrecognized losses. In 2013, the carrying value of an investment fell below zero. We intend to fund our share of the investments’ future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund operating deficits. (See Note 14: Investment in Unconsolidated Joint Ventures.)

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 equity’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. The primary beneficiary is defined by the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the variable interest entity’s performance; and (2) the obligation to absorb losses and rights to receive the returns from VIE that would be significant to the VIE.

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.

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. Rental concessions 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 2014 or 2013 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 2014 or 2013. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At June 30, 2014, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01% to 0.35%.  At June 30, 2014 and December 31, 2013, respectively approximately $13,551,000 and $15,275,000 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 $56,662 and $16,167 for the six months ended June 30, 2014 and 2013, respectively.

Discontinued Operations and Rental Property Held for Sale

Discontinued Operations and Rental Property Held for Sale:  When significant 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, 2014 and 2013 there was no capitalized interest.

Extinguishment of Debt

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

Reclassifications

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

XML

SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2014

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Line of Business:  New England Realty Associates Limited Partnership (“NERA” or the “Partnership”) was organized in Massachusetts in 1977. NERA and its subsidiaries own 24 properties which include 16 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,412 apartment units, 19 condominium units and 108,043 square feet of commercial space. Additionally, the Partnership also owns a 40-50% interest in 9 residential and mixed use properties consisting of 793 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. Generally, the Partnership would discontinue applying the equity method when the investment (and any advances) is reduced to zero and would not provide for additional losses unless the Partnership has guaranteed obligations of the venture or is otherwise committed to providing further financial support for the investee. If the venture subsequently generates income, the Partnership only recognizes its share of such income to the extent it exceeds its share of previously unrecognized losses. In 2013, the carrying value of an investment fell below zero. We intend to fund our share of the investments’ future operating deficits should the need arise. However, we have no legal obligation to pay for any of the liabilities of such investments nor do we have any legal obligation to fund operating deficits. (See Note 14: Investment in Unconsolidated Joint Ventures.)

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 equity’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. The primary beneficiary is defined by the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the variable interest entity’s performance; and (2) the obligation to absorb losses and rights to receive the returns from VIE that would be significant to the VIE.

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.

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. Rental concessions 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 2014 or 2013 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 2014 or 2013. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At June 30, 2014, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01% to 0.35%.  At June 30, 2014 and December 31, 2013, respectively approximately $13,551,000 and $15,275,000 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 $56,662 and $16,167 for the six months ended June 30, 2014 and 2013, respectively.

Discontinued Operations and Rental Property Held for Sale:  When significant 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, 2014 and 2013 there was no capitalized interest.

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

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

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical)	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013	Dec. 31, 2012
CONSOLIDATED BALANCE SHEETS
Partners' Capital, units outstanding	128,823	129,487	130,040	130,444

XML

CASH FLOW INFORMATION

6 Months Ended

Jun. 30, 2014

CASH FLOW INFORMATION

CASH FLOW INFORMATION

NOTE 11. CASH FLOW INFORMATION

During the six months ended June 30, 2014 and 2013, cash paid for interest was approximately $4,074,000, and $3,652,000 respectively.  Cash paid for state income taxes was approximately $49,000 and $48,000 during the six months ended June 30, 2014 and 2013 respectively.

XML

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 05, 2014 Class A	Aug. 05, 2014 Class B
Entity Registrant Name	NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP
Entity Central Index Key	0000746514
Document Type	10-Q
Document Period End Date	Jun. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		102,891	24,476
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2

XML

FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2014

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At June 30, 2014 and December 31, 2013, 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, 2014 and December 31, 2013 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, and note payable, accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments or, the recent acquisition of these items.

At June 30, 2014 and December 31, 2013, 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, 2014 and December 31, 2013, 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, 2014	$	195,634,372	$	203,344,074
At December 31, 2013	$	198,520,478	$	196,059,827
Investment Properties
At June 30, 2014	$	137,026,261	$	147,317,566
At December 31, 2013	$	137,875,515	$	147,975,521

Disclosure about fair value of financial instruments is based on pertinent information available to management as of June 30, 2014 and December 31, 2013. 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, 2014 and current estimates of fair value may differ significantly from the amounts presented herein.

XML

CONSOLIDATED STATEMENTS OF INCOME (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues
Rental income	$ 10,439,568	$ 8,904,762	$ 20,954,287	$ 17,828,769
Laundry and sundry income	120,967	98,000	224,177	193,686
Total Revenues	10,560,535	9,002,762	21,178,464	18,022,455
Expenses
Administrative	568,915	697,238	1,099,482	1,149,855
Depreciation and amortization	2,747,467	1,479,860	5,471,646	2,933,991
Management fee	438,068	374,622	865,461	743,874
Operating	1,020,323	814,609	2,702,257	2,246,784
Renting	108,612	26,815	145,469	56,666
Repairs and maintenance	1,601,307	1,515,934	2,812,456	2,597,213
Taxes and insurance	1,351,043	1,204,862	2,792,153	2,365,792
Total Expenses	7,835,735	6,113,940	15,888,924	12,094,175
Income Before Other Income and Discontinued Operations	2,724,800	2,888,822	5,289,540	5,928,280
Other Income (Expense)
Interest income	199	351	382	715
Interest expense	(2,380,896)	(1,762,647)	(4,767,062)	(3,603,716)
(Loss) from investments in unconsolidated joint ventures	(62,382)	(336,332)	(270,633)	(653,189)
Total Other Income (loss)	(2,443,079)	(2,098,628)	(5,037,313)	(4,256,190)
Income From Continuing Operations	281,721	790,194	252,227	1,672,090
Discontinued Operations
Income from discontinued operations		143		19,873
Gain on sale of real estate		3,678,779		3,678,779
Total Discontinued Operations		3,678,922		3,698,652
Net Income	$ 281,721	$ 4,469,116	$ 252,227	$ 5,370,742
Income per Unit
Income before discontinued operations (in dollars per unit)	$ 2.18	$ 6.08	$ 1.95	$ 12.85
Income from discontinued operations (in dollars per unit)		$ 28.29		$ 28.43
Net Income per Unit (in dollars per unit)	$ 2.18	$ 34.37	$ 1.95	$ 41.28
Weighted Average Number of Units Outstanding (in units)	128,988	130,040	129,149	130,114

XML

ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

6 Months Ended

Jun. 30, 2014

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, 2014, amounts received for prepaid rents of approximately $1,610,000 are included in cash and cash equivalents, and security deposits of approximately $2,125,000 are included in prepaid expenses and other assets and are restricted cash.

XML

MORTGAGE NOTES PAYABLE

6 Months Ended

Jun. 30, 2014

MORTGAGE NOTES PAYABLE

MORTGAGE NOTES PAYABLE

NOTE 5. MORTGAGE NOTES PAYABLE

At June 30, 2014 and December 31, 2013, 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, 2014, the interest rates on these loans ranged from 3.76% to 5.97%, payable in monthly installments aggregating approximately $808,000 including principal, to various dates through 2029. The majority of the mortgages are subject to prepayment penalties. At June 30, 2014, the weighted average interest rate on the above mortgages was 4.82%. The effective rate of 4.94% 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, 2014 are as follows:

2015—current maturities	$	2,131,000
2016	504,000
2017	1,629,000
2018	1,821,000
2019	7,900,000
Thereafter	181,649,000
	$	195,634,000

On February 25, 2013, the Partnership paid off the mortgage of approximately $3,967,000 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 owned by School Street 9 LLC. 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. Principal payments will be on a 30 year amortization schedule. The Partnership paid off the prior mortgage in the amount of approximately $15,284,000 with the proceeds of the new mortgage and the Partnership’s cash reserves. The costs associated with this refinancing were approximately $159,000.

On July 7, 2013, the Partnership refinanced the property owned by Boylston Downtown LP. The new 15 year $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, were used in connection with the purchase of Hamilton Green Apartments. The costs associated with this refinancing are approximately $279,000.

On October 1, 2013, the Partnership refinanced the property owned by Westgate Apartments LLC. The new mortgage is $15,700,000; the interest rate is 4.65%, interest only payable in 10 years. Approximately $7,616,000 of the loan proceeds was used to pay off the existing mortgage. The mortgage matures in September 2023. The costs associated with the refinancing were approximately $190,000.

On December 20, 2013, the Partnership refinanced the property owned by Hamilton Green Apartments LLP. The new mortgage is $38,500,000; the interest rate is 4.67%; interest only for 2 years. After the first two years, principal is amortized on a 30-year amortization schedule through January 2029. The proceeds of the new mortgage as well as the Partnership’s cash reserves of approximately $1,846,000 were used to pay off the prior mortgage of $40,000,000 and cover the cost of this refinancing. The costs associated with the refinancing were approximately $346,000.

In February 2014, the Partnership paid off the mortgages on Linewt in the amount of  approximately $1,466,000 and Linhart in the amount of approximately $1,926,000. There were no prepayment penalties. The Partnership’s cash reserves were used to pay off these mortgages.

On June 11, 2014, the Partnership refinanced the property owned by NERA Dean Street Associates, LLC.  The new mortgage is $5,687,000; the interest rate is 4.22%, interest only payable in 10 years. Approximately $5,077,000 of the loan proceeds were used to pay off the existing mortgage.  The mortgage matures in June 2024. The costs associated with the refinancing were approximately $99,000.

As of June 30, 2014, the Partnership was in the process of refinancing the property owned by Westgate Apartments Burlington, LLC.  Included in prepaid expenses and other assets is approximately $90,000 in deposits and financing costs made by the Partnership for this refinancing.  The refinancing was completed on July 11, 2014.( See Note 17- Subsequent Events).

XML

SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2014

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 17. SUBSEQUENT EVENTS

Depository Receipts

From July 1, 2014 through August 5, 2014, the Partnership purchased a total of 5,049 Depositary Receipts. The average price was $48.81  per receipt or $1,464.30 per unit. The total cost was $253,274. The Partnership is required to repurchase 40.0 Class B Units and 2.1General Partnership Units at a cost of $58,532 and $3,081 respectively.

Refinancing

On July 11, 2014, the Partnership refinanced the property owned by Westgate Apartments Burlington, LLC.  The new mortgage is $2,500,000; the interest rate is 4.31%; interest only, payable in 10 years.  Approximately $2,010,000 of loan proceeds were used to pay off the existing mortgage.  The balance of the funds is approximately $435,000 after closing costs.  The costs associated with the refinancing were approximately $90,000.

Line of Credit

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit.  The term of the line is three years with a floating interest rate equal to a base rate of the greater of (a) the Prime Rate (b) the Federal Funds Rate plus one-half of one percent per annum, or (c) the LIBOR Rate for a period of one month plus 1% per annum, plus an applicable margin of 2.5% to 3.5%. As of August 5, 2014, no funds have been drawn on this credit line.

The line of credit may be used for acquisition, refinancing, improvements, working capital and other needs of the Partnership. The line may not be used to pay dividends, make distributions or acquire equity interests of the Partnership.

The line of credit is collateralized by varying percentages of the Partnership’s ownership interest in 23 of its subsidiary properties and joint ventures. Pledged interests range from 49% to 100% of the Partnership’s ownership interest in the respective entities.

The Partnership paid fees to secure the line of credit. Any unused balance of the line of credit is subject to a fee ranging from 15 to 20 basis points per annum.

The line of credit agreement contains several covenants including, but not limited to, providing cash flow projections and compliance certificates, as well as other financial information. Additional covenants include certain restrictions on additional encumbrances of Partnership assets, limitations on debt, maintenance of leverage ratios, minimum tangible net worth, limitations on total aggregate indebtedness, minimum ratio of net operating income to total indebtedness debt service, disposition of properties, and other items.

See Form 8-K filed on August 6, 2014 for additional information.

XML

TAXABLE INCOME AND TAX BASIS

6 Months Ended

Jun. 30, 2014

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 $4,300,000 less than statement income for the year ended December 31, 2013. The primary reason for the decrease is due to tax free exchanges of approximately $3,700,000 from the sale of Nashoba and accelerated tax depreciation of approximately $1,100,000 at the related acquisition of Hamilton Green and other depreciation timing difference and accelerated depreciation in prior years. The cumulative tax basis of the Partnership’s real estate at December 31, 2013 is approximately $4,800,000, 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 $1,300,000 less than statement basis because of accelerated depreciation.

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

Allowable accelerated depreciation deductions have expired for 2014. This may result in higher taxable income in future years. Future tax law changes may significantly affect taxable income.

The Partnership adopted the amended provisions related to uncertain tax provisions of ASC 740, Income Taxes. As a result of the implementation of the guidance, the Partnership recognized no material adjustment 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, 2014, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2007 forward.

XML

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2014

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 9. COMMITMENTS AND CONTINGENCIES

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

XML

PARTNERS' CAPITAL

6 Months Ended

Jun. 30, 2014

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.

In 2014, the Partnership paid quarterly distributions of $7.50 per unit ($0.25 per receipt) on March 31and June 30, 2014.  The Board of Advisors approved a quarterly distribution of $7.50 per unit ($0.25 per receipt) payable September 30, 2014.

In 2013, 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) each year.

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

	Six Months Ended June 30,
	2014		2013
Income per Depositary Receipt before Discontinued Operations	$	0.07	$	0.43
Income from Discontinued Operations	0.00		0.95
Net Income per Depositary Receipt after Discontinued Operations	$	0.07	$	1.38
Distributions per Depositary Receipt	$	0.50	$	0.50

XML

TREASURY UNITS

6 Months Ended

Jun. 30, 2014

TREASURY UNITS

TREASURY UNITS

NOTE 8. TREASURY UNITS

Treasury Units at June 30, 2014 are as follows:

Class A	41,122
Class B	9,766
General Partnership	514
	51,402

On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program (“Repurchase Program”) under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one-tenth of a Class A Unit). On January 15, 2008, the General Partner authorized an increase in the Repurchase Program from 300,000 to 600,000 Depositary Receipts. On January 30, 2008 the General Partner authorized an increase the Repurchase Program from 600,000 to 900,000 Depositary Receipts. On March 6, 2008, the General Partner authorized the increase in the total number of Depositary Receipts that could be repurchased pursuant to the Repurchase Program from 900,000 to1, 500,000. On August 8, 2008, the General Partner re- authorized and renewed the Repurchase Program for an additional 12-month period ended August 19, 2009. On March 22, 2010, the General Partner re-authorized and renewed the Repurchase Program that expired on August 19, 2009. Under the terms of the renewed Repurchase Program, the Partnership may purchase up to 1,500,000 Depositary Receipts from the start of the program in 2007 through March 31, 2015. The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership’s Second Amended and Restate Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through June 30, 2014, the Partnership has repurchased 1,258,822 Depositary Receipts at an average price of $25.13 per receipt (or $753.90 per underlying Class A Unit),  2,229 Class B Units and 117 General Partnership Units, both at an average price of $700.12 per Unit, totaling approximately $33,422,000 including brokerage fees paid by the Partnership.

During the six months ended June 30, 2014, the Partnership purchased a total of 15,931  Depositary Receipts. The average price was $46.26 per receipt or $1,387.80 per unit. The total cost including commission was $757,246. The Partnership was required to repurchase 126 Class B Units and 7 General Partnership units at a cost of $175,019 and $9,212 respectively.

From July 1, 2014 through August 5, 2014, the Partnership purchased a total of 5,049 Depositary Receipts. The average price was $48.81 per receipt or $1,464.30 per unit. The total cost was $253,274. The Partnership is required to repurchase 40.0 Class B Units and 2.1 General Partnership Units at a cost of $58,532 and $3,081 respectively.

XML

RENTAL INCOME

6 Months Ended

Jun. 30, 2014

RENTAL INCOME

RENTAL INCOME

NOTE 10. RENTAL INCOME

During the six months ended June 30, 2014, approximately 92% 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 8% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30, 2014 as follows:

	Commercial Property Leases
2015	$	2,615,000
2016	2,398,000
2017	1,602,000
2018	1,231,000
2019	863,000
Thereafter	973,000
	$	9,682,000

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 $315,000 and $345,000 for the six months ended June 30, 2014 and 2013 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately 30% of the total commercial rental income.

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,
2015	$	400,427	20,511	12	13	%
2016	718,834		26,744	8	24	%
2017	525,725		18,157	7	18	%
2018	352,082		10,725	7	12	%
2019	206,836		6,403	4	7	%
2020	556,058		18,932	4	19	%
2021	64,800		1,800	1	2	%
2022	0		0	0	0	%
2023	0		0	0	0	%
2024	157,443		4,771	1	5	%
Totals	$	2,982,205	108,043	44	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $459,000 and $344,000 at June 30, 2014 and December 31, 2013. Included in rents receivable at June 30, 2014 is approximately $194,000 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, 2014 also includes approximately $49,000 representing the deferral of rental concession primarily related to the residential properties.

For the six months ended June 30, 2014 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.

XML

SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $)	6 Months Ended			0 Months Ended		6 Months Ended			6 Months Ended
	Jun. 30, 2014 item	Jun. 30, 2013	Dec. 31, 2013	Jan. 03, 2012 Class A	Aug. 20, 2007 Class A	Jun. 30, 2014 Minimum	Jun. 30, 2014 Minimum Cash and cash equivalents	Jun. 30, 2014 Maximum	Jun. 30, 2014 Maximum Cash and cash equivalents	Jun. 30, 2014 Investment Properties/Joint Venture item	Jun. 30, 2014 Investment Properties/Joint Venture Minimum	Jun. 30, 2014 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%
Value of equity method investment to discontinued partnership	$ 0
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 (Loss) 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)							0.01%		0.35%
Federally uninsured amounts of cash and cash equivalents, and security deposits included in prepaid expenses and other assets	13,551,000		15,275,000
Advertising Expense
Advertising expense	56,662	16,167
Interest Capitalized
Criteria of capitalization of interest on property based on specified period of construction						1 year
Capitalized interest	$ 0	$ 0

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 4) (USD $)	Jun. 30, 2014
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Total	$ 195,634,000
Weighted average interest rate (as a percent)	5.38%
Effective interest rate (as a percent)	5.46%
Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2015	133,411
06/30/2016	144,484
06/30/2017	7,893,152
Total	8,171,048
Hamilton Essex 81 Development
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2015	53,316
06/30/2016	1,961,172
Total	2,014,488
345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2017	177,340
06/30/2018	187,209
06/30/2019	194,584
Thereafter	9,440,867
Total	10,000,000
Hamilton 1025
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2015	70,660
06/30/2016	80,814
06/30/2017	4,689,009
Total	4,840,484
Hamilton Bay Apartments
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2015	75,940
06/30/2016	76,024
06/30/2017	4,454,353
Total	4,606,316
Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2015	77,390
06/30/2016	81,127
06/30/2017	5,171,718
Total	5,330,234
Hamilton on Main
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2015	15,188,407
Total	15,188,407
Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2015	1,571,909
06/30/2016	1,459,214
06/30/2017	1,542,599
06/30/2018	1,630,749
06/30/2019	1,723,938
Thereafter	78,946,875
Total	86,875,284
Total
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2015	17,171,033
06/30/2016	3,802,835
06/30/2017	23,928,170
06/30/2018	1,817,958
06/30/2019	1,918,522
Thereafter	88,387,742
Total	$ 137,026,261

XML

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

6 Months Ended

Jun. 30, 2014

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In April 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This update changes the criteria for reporting a discontinued operation and requires new disclosures of both discontinued operations and certain other disposals that do not meet the definition of a discontinued operation. Only disposals representing a strategic shift in operations should be presented as discontinued operations.  This accounting standard update is effective for annual filings beginning on or after December 15, 2014. Early adoption is permitted. The impact of the adoption of ASU 2014-08 on the Partnership’s results of operations, financial position, cash flows and disclosures will be based on the Partnership’s future disposal activity.

XML

MORTGAGE NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2014

MORTGAGE NOTES PAYABLE

Schedule of approximate annual maturities

Approximate annual maturities at June 30, 2014 are as follows:

2015—current maturities	$	2,131,000
2016	504,000
2017	1,629,000
2018	1,821,000
2019	7,900,000
Thereafter	181,649,000
	$	195,634,000

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 2) (USD $)	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2014 Hamilton Essex 81 item	Jun. 30, 2013 Hamilton Essex 81 item	Jun. 30, 2014 Hamilton Essex 81 NERA 50%	Jun. 30, 2013 Hamilton Essex 81 NERA 50%	Jun. 30, 2014 Hamilton Essex 81 Apartments item	Jun. 30, 2013 Hamilton Essex 81 Apartments item	Jun. 30, 2014 Hamilton Essex 81 Commercial item	Jun. 30, 2013 Hamilton Essex 81 Commercial item	Jun. 30, 2014 Hamilton Essex Development item	Jun. 30, 2013 Hamilton Essex Development item	Jun. 30, 2014 Hamilton Essex Development NERA 50%	Jun. 30, 2013 Hamilton Essex Development NERA 50%	Jun. 30, 2014 Hamilton Essex Development Commercial item	Jun. 30, 2013 Hamilton Essex Development Commercial item	Jun. 30, 2014 345 Franklin item	Jun. 30, 2013 345 Franklin item	Nov. 30, 2001 345 Franklin item	Jun. 30, 2014 345 Franklin NERA 50%	Jun. 30, 2013 345 Franklin NERA 50%	Jun. 30, 2014 345 Franklin Apartments item	Jun. 30, 2013 345 Franklin Apartments item	Jun. 30, 2014 Hamilton 1025 item	Jun. 30, 2013 Hamilton 1025 item	Mar. 02, 2005 Hamilton 1025 item	Jun. 30, 2014 Hamilton 1025 NERA 50%	Jun. 30, 2013 Hamilton 1025 NERA 50%	Jun. 30, 2014 Hamilton 1025 Apartments item	Jun. 30, 2013 Hamilton 1025 Apartments item	Jun. 30, 2014 Hamilton 1025 Commercial item	Jun. 30, 2013 Hamilton 1025 Commercial item	Jun. 30, 2014 Hamilton Bay Sales item	Jun. 30, 2013 Hamilton Bay Sales item	Jun. 30, 2014 Hamilton Bay Sales NERA 50%	Jun. 30, 2013 Hamilton Bay Sales NERA 50%	Jun. 30, 2014 Hamilton Bay Sales Apartments item	Jun. 30, 2013 Hamilton Bay Sales Apartments item	Jun. 30, 2014 Hamilton Bay Apartments item	Jun. 30, 2013 Hamilton Bay Apartments item	Oct. 03, 2005 Hamilton Bay Apartments item	Jun. 30, 2014 Hamilton Bay Apartments NERA 50%	Jun. 30, 2013 Hamilton Bay Apartments NERA 50%	Jun. 30, 2014 Hamilton Bay Apartments Apartments item	Jun. 30, 2013 Hamilton Bay Apartments Apartments item	Jun. 30, 2014 Hamilton Minuteman item	Jun. 30, 2013 Hamilton Minuteman item	Sep. 30, 2004 Hamilton Minuteman item	Jun. 30, 2014 Hamilton Minuteman NERA 50%	Jun. 30, 2013 Hamilton Minuteman NERA 50%	Jun. 30, 2014 Hamilton Minuteman Apartments item	Jun. 30, 2013 Hamilton Minuteman Apartments item	Jun. 30, 2014 Hamilton on Main item	Jun. 30, 2013 Hamilton on Main item	May 31, 2008 Hamilton on Main item	Aug. 31, 2004 Hamilton on Main item	Jun. 30, 2014 Hamilton on Main NERA 50%	Jun. 30, 2013 Hamilton on Main NERA 50%	Jun. 30, 2014 Hamilton on Main Apartments item	Jun. 30, 2013 Hamilton on Main Apartments item	Jun. 30, 2014 Dexter Park item	Jun. 30, 2013 Dexter Park item	Oct. 28, 2009 Dexter Park item	Jun. 30, 2014 Dexter Park NERA 40%	Jun. 30, 2013 Dexter Park NERA 40%	Jun. 30, 2014 Dexter Park Apartments item	Jun. 30, 2013 Dexter Park Apartments item	Jun. 30, 2014 Total item	Jun. 30, 2013 Total item	Jun. 30, 2014 Total Apartments item	Jun. 30, 2013 Total Apartments item	Jun. 30, 2014 Total Commercial item	Jun. 30, 2013 Total Commercial item
ASSETS
Rental Properties	$ 150,029,401	$ 152,904,661			$ 8,575,457	$ 8,947,591							$ 2,622,910	$ 2,616,965					$ 7,320,301	$ 7,686,993						$ 5,272,805	$ 5,505,467								$ 1,148,912	$ 1,805,125					$ 6,533,725	$ 6,827,232						$ 6,684,183	$ 6,919,386						$ 19,873,809	$ 20,659,589							$ 99,637,389	$ 104,817,498						$ 157,669,491	$ 165,785,846
Cash & Cash Equivalents	12,613,346	14,013,380	3,291,685	6,981,906	76,955	3,147							104,102	29,108					107,038	231,329						6,968	9,023								57,296	23,732					1,878	10,077						66,660	25,303						23,626	174,000							968,685	659,245						1,413,209	1,164,964
Rent Receivable	556,853	496,149			32,918	51,079													15,494	8,863						2,327	6,873								3,666	4,061					6,965	4,886						5,798	9,599						11,991	10,729							141,005	104,164						220,164	200,255
Real Estate Tax Escrow	294,366	375,560			101,117	83,964													18,132	23,711						68,872	74,507														28,886	53,440						39,093	34,783						45,741	68,934							369,900	420,641						671,741	759,980
Prepaid Expenses & Other Assets	3,575,816	3,895,189			83,547	75,717							1,230	1,153					38,090	27,615						43,044	42,202								548,734	123,516					41,408	24,192						42,658	51,529						748,027	228,073							1,728,976	1,464,682						3,275,714	2,038,679
Financing & Leasing Fees	1,636,903	1,635,076			37,887	55,373							9,868	1,081					93,219	99,877						12,106	17,132									4,000					16,700	23,062						9,997	13,965						4,286	11,150							310,703	370,020						494,766	595,660
Total Assets	179,706,527	185,345,157			8,907,881	9,216,871							2,738,111	2,648,307					7,592,274	8,078,388						5,406,122	5,655,204								1,758,607	1,960,434					6,629,562	6,942,889						6,848,389	7,054,565						20,707,480	21,152,475							103,156,658	107,836,250						163,745,085	170,545,384
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	195,634,372	198,520,478			8,171,048	8,292,287							2,014,488	2,067,378					10,000,000	10,000,000						4,840,484	4,901,467									1,668,000					4,606,316	4,670,319						5,330,234	5,397,023						15,188,407	15,462,916							86,875,284	87,999,131						137,026,261	140,458,521
Accounts Payable and Accrued Expenses	2,622,206	3,178,495			59,005	50,228							5,297	5,461					57,752	19,140						30,368	51,107								18,811	18,669					12,526	8,192						47,027	71,192						155,825	196,455							698,090	1,019,021						1,084,701	1,439,465
Advance Rental Payments and Security Deposits	4,575,466	4,242,401			223,226	176,827													229,882	175,850						108,125	93,473								22,824	29,033					97,026	96,673						93,312	66,703						322,519	321,725							2,645,283	2,059,401						3,742,197	3,019,685
Total Liabilities	204,179,724	207,193,720			8,453,279	8,519,342							2,019,785	2,072,839					10,287,634	10,194,990						4,978,977	5,046,047								41,635	1,715,702					4,715,869	4,775,184						5,470,574	5,534,918						15,666,750	15,981,096							90,218,657	91,077,553						141,853,159	144,917,671
Partners' Capital	(24,473,197)	(21,848,563)	(19,495,018)	(22,515,677)	454,602	697,529							718,325	575,469					(2,695,360)	(2,116,602)						427,145	609,157								1,716,973	244,732					1,913,694	2,167,705						1,377,815	1,519,647						5,040,730	5,171,379							12,938,001	16,758,697						21,891,926	25,627,713
Total Liabilities and Partners' Capital	179,706,527	185,345,157			8,907,881	9,216,871							2,738,111	2,648,307					7,592,274	8,078,388						5,406,122	5,655,204								1,758,607	1,960,434					6,629,562	6,942,889						6,848,389	7,054,565						20,707,480	21,152,475							103,156,658	107,836,250						163,745,085	170,545,384
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%
Investment in Unconsolidated Joint Ventures	10,999,842	12,025,142					227,301	348,764							359,163	287,734					1,533,000							2,352,000	213,573	304,578							858,486	122,366					2,500,000	956,847	1,083,852					5,075,000	688,907	759,824						8,000,000	2,520,365	2,585,689					15,925,000	5,175,200	6,703,479			10,999,842	12,196,283
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	(1,347,680)	(1,252,346)																				(1,347,680)	(1,058,301)																																															(1,347,680)	(1,058,301)
Total Investment in Unconsolidated Joint Ventures (Net)	$ 9,652,162		$ 11,137,982
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			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																										127	127	127							110	105							120														137													237	232
Unsold units																																			10	15																																		10	15

XML

PARTNERS' CAPITAL (Details) (USD $)	3 Months Ended	6 Months Ended						6 Months Ended	0 Months Ended	6 Months Ended		6 Months Ended
	Sep. 30, 2014	Jun. 30, 2014	Jun. 30, 2013	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Mar. 31, 2013	Jun. 30, 2014 Limited Partner item	Jan. 03, 2012 Class A	Jun. 30, 2014 Class A	Aug. 20, 2007 Class A	Jun. 30, 2014 Class B	Jun. 30, 2014 General Partnership item
Number of classes of 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
Quarterly distribution per unit approved (in dollars per unit)	$ 7.50
Quarterly distributions per depositary receipt approved (in dollars per share)	$ 0.25
Distribution per unit (in dollars per unit)					$ 30.00
Number of depositary units exchanged for partnership units under the terms of the deposit agreement										30
Earnings per depository receipt
Income per Depositary Receipt before Discontinued Operations (in dollars per share)		$ 0.07	$ 0.43
Income from Discontinued Operations (in dollars per share)		$ 0.00	$ 0.95
Net Income per Depositary Receipt after Discontinued Operations (in dollars per share)		$ 0.07	$ 1.38
Distributions per Depositary Receipt (in dollars per share)		$ 0.50	$ 0.50		$ 1.00

XML

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (USD $)	Total USD ($)	Subtotal	Class A USD ($)	Class B USD ($)	General Partnership USD ($)	Treasury Units
Balance at Aug. 20, 2007
Increase (Decrease) in Partners' Capital
Stock Buyback	$ (33,422,000)
Stock Buyback (in units)					(117)
Balance at Jun. 30, 2014	(24,473,197)				(244,204)
Balance (in units) at Jun. 30, 2014	128,823	180,225			1,802
Balance at Dec. 31, 2012	(22,515,677)		(18,017,082)	(4,273,666)	(224,929)
Balance (in units) at Dec. 31, 2012	130,444	180,225	144,180	34,243	1,802	49,781
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
Balance at Dec. 31, 2013	(21,848,563)		(17,485,327)	(4,145,076)	(218,160)
Balance (in units) at Dec. 31, 2013	129,487	180,225	144,180	34,243	1,802	50,738
Increase (Decrease) in Partners' Capital
Distribution to Partners	(1,935,384)		(1,548,307)	(367,723)	(19,354)
Stock Buyback	(941,477)		(757,246)	(175,019)	(9,212)
Stock Buyback (in units)	(664)			(126)	(7)	664
Net Income	252,227		201,782	47,923	2,522
Balance at Jun. 30, 2014	$ (24,473,197)		$ (19,589,098)	$ (4,639,895)	$ (244,204)
Balance (in units) at Jun. 30, 2014	128,823	180,225	144,180	34,243	1,802	51,402

XML

OTHER ASSETS

6 Months Ended

Jun. 30, 2014

OTHER ASSETS

OTHER ASSETS

NOTE 4. OTHER ASSETS

Approximately $2,125,000 and $2,053,000 of security deposits are included in prepaid expenses and other assets at June 30, 2014 and December 31, 2013, respectively. The security deposits and escrow accounts are restricted cash.

Included in prepaid expenses and other assets at June 30, 2014 and December 31, 2013 is approximately $202,000 and $123,000, respectively, held in escrow to fund future capital improvements.

Intangible assets on the acquisition of Hamilton Green are included in prepaid expenses and other assets.  Intangible assets are approximately $134,000 net of accumulated amortization of approximately $1,618,000 and approximately $978,000 net of accumulated amortization of approximately $774,000 at June 30, 2014 and December 31, 2013, respectively.  Included in prepaid expenses and other assets at June 30, 2014 are approximately $90,000 of deposits and prepaid financing fees for the refinancing of Westgate Apartments Burlington, LLC and approximately $215,000 of deposits to be refunded from the refinancing of NERA Dean Street.  (See Note 5.)

Financing and leasing fees of approximately $1,637,000 and $1,635,000 are net of accumulated amortization of approximately $553,000 and $548,000 at June 30, 2014 and December 31, 2013 respectively.

XML

PARTNERS' CAPITAL (Tables)

6 Months Ended

Jun. 30, 2014

PARTNERS' CAPITAL

Schedule of information per depositary receipt

	Six Months Ended June 30,
	2014		2013
Income per Depositary Receipt before Discontinued Operations	$	0.07	$	0.43
Income from Discontinued Operations	0.00		0.95
Net Income per Depositary Receipt after Discontinued Operations	$	0.07	$	1.38
Distributions per Depositary Receipt	$	0.50	$	0.50

XML

OTHER ASSETS (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
OTHER ASSETS
Security deposits	$ 2,125,000	$ 2,053,000
Escrow deposits to fund future capital improvements	202,000	123,000
Intangible assets, net of accumulated amortization	134,000	978,000
Accumulated amortization on intangible assets in connection with the acquisition of Windsor Green	1,618,000	774,000
Deposits and prepaid financing fees for Westgate Apartments Burlington, LLC	90,000
Deposits to be refunded from refinancing of NERA Dean Street	215,000
Financing and leasing fees, net	1,637,000	1,635,000
Accumulated amortization on financing and leasing fees	$ 553,000	$ 548,000

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

6 Months Ended

Jun. 30, 2014

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

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

On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, referred to as Dexter Park, is a 409 unit residential complex. The purchase price was $129,500,000. The total mortgage was $89,914,000 with an interest rate of 5.57% and it matures in 2019. The mortgage calls for interest only payments for the first two years of the loan and amortized over 30 years thereafter. The balance of this mortgage is approximately $86,875,000 at June 30, 2014. 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. The loan was paid in full in April 2012.  A majority of the apartments were leased at the time of the acquisition. As a result, the Partnership amortized the intangible assets associated with the “in place” leases over a 12 month period which began in November 2009. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

On October 3, 2005, the Partnership invested $2,500,000 for a 50% ownership interest in a 168-unit apartment complex in Quincy, Massachusetts. The purchase price was $30,875,000. The Partnership sold 120 units as condominiums and retained 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, 2014, the balance of the mortgage is approximately $4,606,000. 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 matured in 2013. On October 18, 2013, the Partnership and its joint venture partner each made capital contributions to the entity of $660,000. The capital was used to pay off the outstanding mortgage.  Five units have been sold during the first six months of 2014 with a gain of approximately $301,000.   As of August 5, 2014, 10 units are still owned by the Partnership. 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 48 apartments, one commercial space and a 50-car surface parking lot located in Boston, Massachusetts. The purchase price was $14,300,000, with a $10,750,000 mortgage. The Partnership plans to operate the building and initiate development of the parking lot. In June 2007, the Partnership separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Partnership restructured the mortgages on both parcels at Essex 81 and transferred the residential apartments to Hamilton Essex 81, LLC. The mortgage on Hamilton Essex 81, LLC is approximately $8,171,000, at June 30, 2014, amortizing over 30 years at 5.79% due in August 2016. The mortgage on Essex Development, LLC, or the parking lot is approximately $2,014,000 with a variable interest rate of 2.25% over the daily Libor rate (0.155%) at June 30, 2014. This loan was extended to August 2013 with the same conditions except for the addition of fixed principal payments in the amount of $4,301 per month. The cost associated with the extension was approximately $6,000. In September 2013, the loan was extended for an additional two years to August 2015 with the same conditions except for the increased principal payments of $4,443 per month. The costs associated with the extension were approximately $9,000. 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 $4,840,000 at June 30, 2014. This investment is referred to as Hamilton 1025, 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. At June 30, 2014, the remaining balance on the mortgage is approximately $15,188,000.  Hamilton on Main, LLC is in the process of refinancing its mortgage and has paid approximately $357,000 in deposits for the refinancing.  These deposits are included in prepaid expenses and other assets on the unconsolidated joint ventures’ balance sheets.  The Partnership expects the refinancing will be completed in the fourth quarter of 2014.

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, 2014, the balance of this mortgage is approximately $5,330,000. This investment is referred to as Hamilton Minuteman,  LLC.

In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts. 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. The Partnership paid off the prior mortgage of approximately $6,776,000 with the proceeds of the new mortgage. After the refinancing, the property made a distribution of $1,610,000 to the Partnership. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting. Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed. This investment is referred to as 345 Franklin, LLC.

Summary financial information as of June 30, 2014

				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	$	8,575,457		$	2,622,910		$	7,320,301		$	5,272,805		$	1,148,912		$	6,533,725		$	6,684,183		$	19,873,809		$	99,637,389		$	157,669,491
Cash & Cash Equivalents	76,955			104,102			107,038			6,968			57,296			1,878			66,660			23,626			968,685			1,413,209
Rent Receivable	32,918			—			15,494			2,327			3,666			6,965			5,798			11,991			141,005			220,164
Real Estate Tax Escrow	101,117			—			18,132			68,872			—			28,886			39,093			45,741			369,900			671,741
Prepaid Expenses & Other Assets	83,547			1,230			38,090			43,044			548,734			41,408			42,658			748,027			1,728,976			3,275,714
Financing & Leasing Fees	37,887			9,868			93,219			12,106			—			16,700			9,997			4,286			310,703			494,766
Total Assets	$	8,907,881		$	2,738,111		$	7,592,274		$	5,406,122		$	1,758,607		$	6,629,562		$	6,848,389		$	20,707,480		$	103,156,658		$	163,745,085
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,171,048		$	2,014,488		$	10,000,000		$	4,840,484		$	—		$	4,606,316		$	5,330,234		$	15,188,407		$	86,875,284		$	137,026,261
Accounts Payable & Accrued Expense	59,005			5,297			57,752			30,368			18,811			12,526			47,027			155,825			698,090			1,084,701
Advance Rental Pmts& Security Deposits	223,226			—			229,882			108,125			22,824			97,026			93,312			322,519			2,645,283			3,742,197
Total Liabilities	8,453,279			2,019,785			10,287,634			4,978,977			41,635			4,715,869			5,470,574			15,666,750			90,218,657			141,853,159
Partners’ Capital	454,602			718,325			(2,695,360		)	427,145			1,716,973			1,913,694			1,377,815			5,040,730			12,938,001			21,891,926
Total Liabilities and Capital	$	8,907,881		$	2,738,111		$	7,592,274		$	5,406,122		$	1,758,607		$	6,629,562		$	6,848,389		$	20,707,480		$	103,156,658		$	163,745,085
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	227,301		$	359,163		$	—		$	213,573		$	858,486		$	956,847		$	688,907		$	2,520,365		$	5,175,200		10,999,842
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,347,680	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,347,680		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	9,652,162
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, 2014	—			—			—			127			110			—			—			—			—			237
Unsold units	—			—			—			—			10			—			—			—			—			10
Unsold units with deposits for future sale as of August 1, 2014	—			—			—			—			—			—			—			—			—			—

Financial information for the six months ended June 30, 2014

				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	$	670,157		$	146,472		$	658,488		$	447,481		$	106,721		$	462,103		$	456,812		$	1,440,362		$	6,709,764		$	11,098,360
Laundry and Sundry Income	8,120			—			235			—			—			—			168			19,148			48,593			76,262
	678,277			146,472			658,723			447,481			106,721			462,103			456,980			1,459,510			6,758,357			11,174,622
Expenses
Administrative	17,141			830			19,861			4,161			2,674			10,577			5,443			30,762			116,993			208,441
Depreciation and Amortization	216,170			5,644			200,104			120,320			38,350			158,697			159,254			473,132			2,694,103			4,065,772
Management Fees	29,105			5,859			28,505			18,643			4,275			18,600			18,953			57,820			148,442			330,201
Operating	68,967			—			32,593			353			605			1,039			44,102			206,470			736,853			1,090,983
Renting	10,967			—			3,623			6,376			753			5,042			6,088			18,097			57,536			108,481
Repairs and Maintenance	73,827			3,150			30,932			164,511			47,651			143,741			38,434			190,403			514,184			1,206,833
Taxes and Insurance	116,996			27,640			58,200			81,375			22,666			82,006			59,236			191,586			757,325			1,397,028
	533,173			43,123			373,817			395,737			116,973			419,702			331,509			1,168,270			5,025,436			8,407,740
Income Before Other Income	145,104			103,349			284,906			51,743			(10,252		)	42,401			125,471			291,240			1,732,921			2,766,883
Other Income (Loss)
Interest Expense	(240,198		)	(27,896		)	(195,574		)	(139,629		)	(399		)	(131,333		)	(153,561		)	(402,014		)	(2,464,957		)	(3,755,560		)
Interest Income	—			—			—			10			—			—			—			—			—			10
Interest Income from Note	—			—			—			—			468			—			—			—			—			468
Gain on Sale of Real Estate	—			—			—			—			300,522			—			—			—			—			300,522
	(240,198		)	(27,896		)	(195,574		)	(139,620		)	300,591			(131,333		)	(153,561		)	(402,014		)	(2,464,957		)	(3,454,561		)
Net Income (Loss)	$	(95,094	)	$	75,453		$	89,332		$	(87,877	)	$	290,339		$	(88,932	)	$	(28,090	)	$	(110,774	)	$	(732,036	)	$	(687,678	)
Net Income (Loss) - NERA 50%	$	(47,547	)	$	37,727		$	44,666		$	(43,938	)	$	145,170		$	(44,466	)	$	(14,045	)	$	(55,386	)				22,181
Net Income (Loss) - NERA 40%																									$	(292,814	)	(292,814		)
																												$	(270,633	)

Financial information for the three months ended June 30, 2014

				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	$	341,387		$	73,236		$	330,748		$	216,294		$	43,923		$	223,212		$	232,870		$	722,682		$	3,352,710		$	5,537,062
Laundry and Sundry Income	4,200			—			657			—			—			—			(2		)	9,692			23,213			37,761
	345,587			73,236			331,406			216,294			43,923			223,212			232,869			732,375			3,375,923			5,574,823
Expenses
Administrative	13,963			513			13,038			2,193			1,969			5,732			2,440			21,277			62,450			123,574
Depreciation and Amortization	108,267			2,823			100,379			60,167			19,175			79,383			79,852			237,117			1,348,640			2,035,802
Management Fees	15,829			2,929			14,839			9,412			1,891			9,140			9,643			29,557			76,544			169,784
Operating	23,995			—			7,770			193			355			580			11,248			64,310			248,068			356,520
Renting	10,850			—			180			624			—			1,550			3,623			11,268			38,946			67,040
Repairs and Maintenance	41,549			3,150			18,595			84,068			23,827			70,304			21,547			99,885			317,690			680,615
Taxes and Insurance	58,712			14,070			28,555			40,771			10,768			41,247			29,664			95,947			376,140			695,874
	273,165			23,485			183,356			197,427			57,984			207,936			158,017			559,361			2,468,477			4,129,208
Income Before Other Income	72,422			49,751			148,049			18,867			(14,061		)	15,276			74,852			173,013			907,445			1,445,615
Other Income (Loss)
Interest Expense	(120,829		)	(13,977		)	(97,821		)	(70,070		)	(205		)	(65,868		)	(77,061		)	(201,634		)	(1,237,262		)	(1,884,727		)
Interest Income	—			—			—			5			—			—			—			—			—			5
Interest Income from Note	—			—			—			—			135			—			—			—			—			135
Gain on Sale of Real Estate	—			—			—			—			248,239			—			—			—			—			248,239
	(120,829		)	(13,977		)	(97,821		)	(70,065		)	248,169			(65,868		)	(77,061		)	(201,634		)	(1,237,262		)	(1,636,348		)
Net Income (Loss)	$	(48,407	)	$	35,774		$	50,228		$	(51,198	)	$	234,108		$	(50,592	)	$	(2,209	)	$	(28,621	)	$	(329,817	)	$	(190,733	)
Net Income (Loss) - NERA 50%	$	(24,203	)	$	17,887		$	25,114		$	(25,598	)	$	117,054		$	(25,296	)	$	(1,104	)	$	(14,310	)				69,545
Net Income (Loss) - NERA 40%																									$	(131,927	)	(131,927		)
																												$	(62,382	)

Future annual mortgage maturities at June  30, 2014 are as follows:

			Hamilton
	Hamilon		Essex 81		345		Hamilton		Hamilton		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Development		Franklin		1025		Bay Apts		Minuteman		Main Apts		Park		Total
6/30/2015	133,411		53,316				70,660		75,940		77,390		15,188,407		1,571,909		17,171,033
6/30/2016	144,484		1,961,172				80,814		76,024		81,127				1,459,214		3,802,835
6/30/2017	7,893,152				177,340		4,689,009		4,454,353		5,171,718				1,542,599		23,928,170
6/30/2018					187,209										1,630,749		1,817,958
6/30/2019					194,584										1,723,938		1,918,522
Thereafter					9,440,867										78,946,875		88,387,742
	$	8,171,048	$	2,014,488	$	10,000,000	$	4,840,484	$	4,606,316	$	5,330,234	$	15,188,407	$	86,875,284	$	137,026,261

At June  30, 2014 the weighted average interest rate on the above mortgages was 5.38%. The effective rate was 5.46% including the amortization expense of deferred financing costs.

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		$	165,785,846
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	51,079			—			8,863			6,873			4,061			4,886			9,599			10,729			104,164			200,255
Real Estate Tax Escrow	83,964			—			23,711			74,507			—			53,440			34,783			68,934			420,641			759,980
Prepaid Expenses & Other Assets	75,717			1,153			27,615			42,202			123,516			24,192			51,529			228,073			1,464,682			2,038,679
Financing & Leasing Fees	55,373			1,081			99,877			17,132			4,000			23,062			13,965			11,150			370,020			595,660
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
Accounts Payable & Accrued Expense	50,228			5,461			19,140			51,107			18,669			8,192			71,192			196,455			1,019,021			1,439,465
Advance Rental Pmts& Security Deposits	176,827			—			175,850			93,473			29,033			96,673			66,703			321,725			2,059,401			3,019,685
Total Liabilities	8,519,342			2,072,839			10,194,990			5,046,047			1,715,702			4,775,184			5,534,918			15,981,096			91,077,553			144,917,671
Partners’ Capital	697,529			575,469			(2,116,602		)	609,157			244,732			2,167,705			1,519,647			5,171,379			16,758,697			25,627,713
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		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	348,764		$	287,734		$	—		$	304,578		$	122,366		$	1,083,852		$	759,824		$	2,585,689		$	6,703,479		12,196,283
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,058,301	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,058,301		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	11,137,982
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		$	10,546,190
Laundry and Sundry Income	8,997			—			1,933			—			—			—			675			17,281			46,429			75,315
	672,916			143,792			617,967			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			4,272,423
Management Fees	26,015			5,752			25,782			18,186			4,987			17,887			17,076			57,339			133,507			306,531
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			1,102,322
Taxes and Insurance	111,759			24,407			56,255			77,131			20,619			71,147			61,948			169,290			742,955			1,335,511
	496,961			39,050			392,218			381,383			119,663			405,784			310,948			1,093,996			4,913,996			8,153,999
Income Before Other Income	175,955			104,742			225,749			60,500			1,809			35,659			122,516			276,473			1,464,103			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	—						30			2			86												57			175
Interest Income from Note	—												2,007															2,007
Other Income (Expenses)	—			—			(68,588		)	—			—			—			—			—			—			(68,588		)
	(243,202		)	(29,266		)	(326,105		)	(141,479		)	(46,596		)	(132,973		)	(155,538		)	(409,587		)	(2,495,396		)	(3,980,142		)
Net Income (Loss)	$	(67,247	)	$	75,476		$	(100,356	)	$	(80,979	)	$	(44,787	)	$	(97,314	)	$	(33,022	)	$	(133,114	)	$	(1,031,293	)	$	(1,512,636	)
Net Income (Loss) - NERA 50%	$	(33,624	)	$	37,738		$	(50,178	)	$	(40,490	)	$	(22,394	)	$	(48,657	)	$	(16,511	)	$	(66,557	)				(240,672		)
Net Income (Loss) - NERA 40%																									$	(412,517	)	(412,517		)
																												$	(653,189	)

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		$	5,289,632
Laundry and Sundry Income	5,151			—			1,288			—			—			—			464			7,510			24,997			39,410
	340,615			71,896			313,033			221,666			61,864			222,162			217,396			683,752			3,196,658			5,329,042
Expenses
Administrative	6,074			386			8,699			2,124			2,813			3,669			2,042			9,769			66,845			102,421
Depreciation and Amortization	106,494			2,245			110,055			60,128			20,035			76,840			79,225			244,233			1,440,022			2,139,277
Management Fees	13,762			2,876			12,707			9,227			2,649			9,422			8,538			28,298			68,497			155,976
Operating	28,483			—			14,190			452			382			195			18,737			77,185			235,835			375,459
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			614,567
Taxes and Insurance	55,878			12,209			28,069			38,381			10,389			35,468			31,082			84,473			346,742			642,691
	252,742			20,866			198,336			194,832			60,909			205,220			156,769			525,753			2,445,472			4,060,899
Income Before Other Income	87,873			51,030			114,697			26,834			955			16,942			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	—			—			15			2			41			—			—			—			57			115
Interest Income from Note	—			—			—			—			911			—			—			—			—			911
Other Income (Expenses)	—			—			(68,588		)	—			—			—			—			—			—			(68,588		)
	(122,047		)	(14,668		)	(207,178		)	(70,996		)	(23,555		)	(66,707		)	(78,076		)	(205,633		)	(1,252,138		)	(2,040,998		)
Net Income (Loss)	$	(34,174	)	$	36,362		$	(92,481	)	$	(44,162	)	$	(22,600	)	$	(49,765	)	$	(17,449	)	$	(47,634	)	$	(500,952	)	$	(772,855	)
Net Income (Loss) - NERA 50%	$	(17,087	)	$	18,181		$	(46,241	)	$	(22,081	)	$	(11,300	)	$	(24,883	)	$	(8,725	)	$	(23,817	)				(135,952		)
Net Income (Loss) - NERA 40%																									$	(200,381	)	(200,381		)
																												$	(336,332	)