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

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

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 November 4, 2014, there were 102,550 of the registrant’s Class A units (3,076,500 Depositary Receipts) of limited partnership issued and outstanding and 24,397 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 September  30, 2014 and December 31, 2013	3
	Consolidated Statements of Income for the Three Months and Nine Months Ended September 30, 2014 and 2013	4
	Consolidated Statements of Changes in Partners’ Capital for the Nine Months Ended September 30, 2014 and 2013	5
	Consolidated Statements of Cash Flows for the Nine Months Ended September 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	26
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 three and nine month periods ended September 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

	September 30,			December 31,
	2014			2013
	(Unaudited)
ASSETS
Rental Properties	$	149,759,026		$	152,904,661
Cash and Cash Equivalents	13,744,651			14,013,380
Rents Receivable	568,560			496,149
Real Estate Tax Escrows	304,398			375,560
Prepaid Expenses and Other Assets	3,364,841			3,895,189
Investments in Unconsolidated Joint Ventures	9,343,093			12,025,142
Financing Fees	1,775,187			1,635,076
Total Assets	$	178,859,756		$	185,345,157
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	196,103,164			198,520,478
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	1,375,332			1,252,346
Accounts Payable and Accrued Expenses	2,908,670			3,178,495
Advance Rental Payments and Security Deposits	4,350,638			4,242,401
Total Liabilities	204,737,804			207,193,720
Commitments and Contingent Liabilities (Notes 3 and 9)	—			—
Partners’ Capital 128,407 and 129,487 units outstanding in 2014 and 2013 respectively	(25,878,048		)	(21,848,563		)
Total Liabilities and Partners’ Capital	$	178,859,756		$	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						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Revenues
Rental income	$	10,546,055		$	9,859,135		$	31,500,342		$	27,687,903
Laundry and sundry income	96,973			108,617			321,150			302,305
	10,643,028			9,967,752			31,821,492			27,990,208
Expenses
Administrative	543,704			451,268			1,643,185			1,601,123
Depreciation and amortization	2,463,708			2,824,318			7,935,355			5,758,310
Management fee	438,319			400,588			1,303,780			1,144,462
Operating	838,728			786,179			3,540,985			3,032,964
Renting	155,865			78,874			301,334			135,540
Repairs and maintenance	2,087,290			1,641,608			4,899,746			4,238,821
Taxes and insurance	1,388,807			1,301,388			4,180,961			3,667,180
	7,916,421			7,484,223			23,805,346			19,578,400
Income Before Other Income (Expenses) and Discontinued Operations	2,726,607			2,483,529			8,016,146			8,411,808
Other Income (Expense)
Interest income	209			230			592			945
Interest expense	(2,393,427		)	(2,142,817		)	(7,160,489		)	(5,746,533		)
Gain on the sale of equipment	—			2,250			0			2,250
(Loss) from investments in unconsolidated joint ventures	(151,902		)	(375,412		)	(422,535		)	(1,028,602		)
	(2,545,120		)	(2,515,749		)	(7,582,432		)	(6,771,940		)
Income (loss) From Continuing Operations	181,487			(32,220		)	433,714			1,639,868
Discontinued Operations
Income (loss) from discontinued operations	—			(654		)	—			19,160
Gain on sale of real estate	—			—			—			3,678,839
	—			(654		)	—			3,697,999
Net Income (loss)	$	181,487		$	(32,874	)	$	433,714		$	5,337,867
Income (loss) per Unit
Income (loss) before discontinued operations	$	1.41		$	(0.25	)	$	3.36		$	12.62
Income (loss) from discontinued operations	—			(0.01		)	—			28.45
Net Income (loss) per Unit	$	1.41		$	(0.26	)	$	3.36		$	41.07
Weighted Average Number of Units Outstanding	128,587			129,719			129,149			129,981

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	—	—	—	—	—	—		(2,337,714		)	(555,208		)	(29,221		)	(2,922,143		)
Stock Buyback					905	(905	)	(819,240		)	(192,610		)	(10,137		)	(1,021,987		)
Net Income	—	—	—	—	—	—		4,270,294			1,014,195			53,379			5,337,867
Balance September 30, 2013	144,180	34,243	1,802	180,225	50,686	129,539		$	(16,903,742	)	$	(4,007,289	)	$	(210,908	)	$	(21,121,940	)
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	—	—	—	—	—	—		(2,319,041		)	(550,772		)	(28,988		)	(2,898,801		)
Stock Buyback	—	—	—	—	1,080	(1,080	)	(1,258,399		)	(290,698		)	(15,300		)	(1,564,397		)
Net Income	—	—	—	—	—	—		346,971			82,406			4,337			433,714
Balance September 30, 2014	144,180	34,243	1,802	180,225	51,818	128,407		$	(20,715,796	)	$	(4,904,141	)	$	(258,111	)	$	(25,878,048	)

See notes to consolidated financial statements.

5

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2014			2013
Cash Flows from Operating Activities
Net income	$	433,714		$	5,337,867
Adjustments to reconcile net income to net cash provided by operating activities
Gain on sale of real estate	—			(3,678,839		)
Gain on the sale of equipment	—			(2,250		)
Depreciation and amortization	7,935,355			5,758,310
Loss from investments in joint venture	422,535			1,028,601
Depreciation and amortization - discontinued operations	—			2,111
Change in operating assets and liabilities
(Increase) in rents receivable	(72,411		)	(89,114		)
(Decrease) increase in accounts payable and accrued expense	(269,825		)	181,883
Decrease in real estate tax escrow	71,162			186,865
(Increase) in prepaid expenses and other assets	(408,753		)	(2,402,166		)
Increase in advance rental payments and security deposits	108,237			389,939
Total Adjustments	7,786,300			1,375,340
Net cash provided by operating activities	8,220,014			6,713,207
Cash Flows from Investing Activities
Proceeds from unconsolidated joint ventures	2,346,690			920,472
Net proceeds from the sale of equipment				2,250
Net proceeds from sale of real estate	—			2,155,546
Distribution in excess of investment in unconsolidated joint ventures	185,000			1,640,250
(Investment in) unconsolidated joint ventures	(149,190		)	(255,722		)
Improvement of rental properties	(3,701,170		)	(3,400,894		)
Purchase of rental property	—			(20,884,105		)
Net cash (used in) investing activities	(1,318,670		)	(19,822,203		)
Cash Flows from Financing Activities
Payment of financing costs	(289,561		)	(588,448		)
Proceeds of mortgage notes payable	1,109,555			20,500,000
Principal payments and payoffs of mortgage notes payable	(3,526,869		)	(4,581,283		)
Stock buyback	(1,564,397		)	(1,021,987		)
Distributions to partners	(2,898,801		)	(2,922,143		)
Net cash provided by (used in) financing activities	(7,170,073		)	11,386,139
Net (Decrease) in Cash and Cash Equivalents	(268,729		)	(1,722,857		)
Cash and Cash Equivalents, at beginning of period	14,013,380			6,981,906
Cash and Cash Equivalents, at end of period	$	13,744,651		$	5,259,049

See notes to consolidated financial statements.

6

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 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 792 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 September 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 September 30, 2014 and December 31, 2013, respectively approximately $13,372,000 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 $79,346 and $23,483 for the nine months ended September 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 nine months ended September 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 September 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 September 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 September 30, 2014 with a total of 792 units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

Rental properties consist of the following:

	September 30, 2014			December 31, 2013			Useful Life
Land, improvements and parking lots	$	44,300,508		$	43,919,728		15–40 years
Buildings and improvements	152,926,255			152,130,635			15–40 years
Kitchen cabinets	6,791,528			5,956,078			5–10 years
Carpets	6,601,426			5,820,516			5–10 years
Air conditioning	736,933			707,928			5–10 years
Laundry equipment	422,552			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	5,476,998			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	5,967,285			5,564,621			5–7 years
Smoke alarms	236,719			216,223			5–7 years
Total fixed assets	225,155,456			221,454,286
Less: Accumulated depreciation	(75,396,430		)	(68,549,625		)
	$	149,759,026		$	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 15 year 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. This refinancing required additional capital of approximately $1,846,000 from the Partnership. The closing costs associated with this refinancing were approximately $346,000.

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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 including discontinued operations were approximately $1,304,000 and $1,153,000 for the nine months ended September 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 nine months ended September 30, 2014 and 2013, approximately $630,000 and $817,000, 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 $256,000 consisted of repairs and maintenance, $261,000 of administrative expense and $6,000 for rental commission. Approximately $107,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2014, the Hamilton Company received approximately $684,000 from the Investment Properties of which approximately $489,000 was the management fee, approximately $64,000 was for maintenance services, approximately $95,000 was for construction and capital improvement projects and approximately $36,000 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 $2,385,000 and $2,170,000 for the nine months ended September 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 nine months ended September 30, 2014 and 2013, the Management Company charged the Partnership $93,750 ($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 nine months ended September 30, 2014 and 2013 this individual received fees of $56,250.

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 $2,066,000 and $2,053,000 of security deposits are included in prepaid expenses and other assets at September 30, 2014 and December 31, 2013, respectively. The security deposits and escrow accounts are restricted cash.

Included in prepaid expenses and other assets at September 30, 2014 and December 31, 2013 is approximately $234,000 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 $57,000 net of accumulated amortization of approximately $1,695,000 and approximately $978,000 net of accumulated amortization of approximately $774,000 at September 30, 2014 and December 31, 2013, respectively.

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Financing fees of approximately $1,775,000 and $1,635,000 are net of accumulated amortization of approximately $557,000 and $548,000 at September 30, 2014 and December 31, 2013, respectively.

NOTE 5. MORTGAGE NOTES PAYABLE AND LINE OF CREDIT

Mortgage Notes Payable

At September 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 September 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 September 30, 2014, the weighted average interest rate on the above mortgages was 4.81%. The effective rate of 4.92% 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 September 30, 2014 are as follows:

2015—current maturities	$	133,000
2016	726,000
2017	1,821,000
2018	7,840,000
2019	1,912,000
Thereafter	183,671,000
	$	196,103,000

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 Partnership’s 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.

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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 $89,000.

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 mortgage matures in August 2024.  The costs associated with the refinancing were approximately $75,000.

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%. The costs associated with the line of credit were approximately $125,000.  As of September 30, 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.

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 September 30, 2014, amounts received for prepaid rents of approximately $1,538,000 are included in cash and cash equivalents, and security deposits of approximately $2,066,000 are included in prepaid expenses and other assets and are restricted cash.

NOTE 7. PARTNERS’ CAPITAL

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

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

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In 2014, the Partnership paid quarterly distributions of $7.50 per unit ($0.25 per receipt) on March 31, June 30, and 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) for the 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:

	Nine Months Ended September30,
	2014		2013
Income per Depositary Receipt before Discontinued Operations	$	0.11	$	0.42
Income per Depository Receipt from Discontinued Operations	0.00		0.95
Net Income per Depositary Receipt after Discontinued Operations	$	0.11	$	1.37
Distributions per Depositary Receipt	$	0.75	$	0.75

NOTE 8. TREASURY UNITS

Treasury Units at September 30, 2014 are as follows:

Class A	41,455
Class B	9,845
General Partnership	518
	51,818

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 September 30, 2014, the Partnership has repurchased 1,268,811 Depositary Receipts at an average price of $25.32 per receipt (or $759.60 per underlying Class A Unit), 2,308 Class B Units and 122 General Partnership Units, both at an average price of $726.25 per Unit, totaling approximately $34,045,000 including brokerage fees paid by the Partnership.

During the nine months ended September 30, 2014, the Partnership purchased a total of 25,920 Depositary Receipts. The average price was $47.22 per receipt or $1,416.60 per unit. The total cost including commission was $1,258,399. The Partnership was required to repurchase 205 Class B Units and 11 General Partnership units at a cost of $290,698 and $15,300 respectively.

From October 1, 2014 through November 4, 2014, the Partnership purchased a total of 5,277 Depositary Receipts. The average price was $47.37 per receipt or $1,421.10 per unit. The total cost was $257,098. The Partnership is required to repurchase 41.8 Class B Units and 2.2 General Partnership Units at a cost of $59,369 and $3,125 respectively.

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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 nine months ended September 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 September 30, 2014 as follows:

	Commercial Property Leases
2015	$	2,754,000
2016	2,299,000
2017	1,532,000
2018	1,188,000
2019	794,000
Thereafter	837,000
	$	9,404,000

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 $532,000 and $489,000 for the nine months ended September 30, 2014 and 2013 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately 29% 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 September 30,
2015	$	386,561	20,703	11	13	%
2016	685,229		24,656	7	23	%
2017	576,040		20,023	9	20	%
2018	340,173		10,377	6	11	%
2019	632,886		22,657	7	21	%
2020	141,831		3,056	2	5	%
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	$	2,984,963	108,043	44	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $570,000 and $344,000 at September 30, 2014 and December 31, 2013. Included in rents receivable at September 30, 2014 is approximately $183,000 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 September 30, 2014 also includes approximately $68,000 representing the deferral of rental concession primarily related to the residential properties.

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For the nine months ended September 30, 2014, rent at the commercial properties includes approximately $2,000 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 nine months ended September 30, 2014 and 2013, cash paid for interest was approximately $6,444,000, and $5,795,000 respectively.  Cash paid for state income taxes was approximately $50,000 and $59,000 during the nine months ended September 30, 2014 and 2013 respectively.

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At September 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 September 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 September 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 September 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 September 30, 2014	$	196,103,164	$	205,947,641
At December 31, 2013	$	198,520,478	$	196,059,827
Investment Properties
At September 30, 2014	$	138,334,647	$	147,420,121
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 September 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

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statements since September 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 September 30, 2014, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2008 forward.

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

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

On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, referred to as Dexter Park, is a 409 unit residential complex. The purchase price was $129,500,000. The total mortgage was $89,914,000 with an interest rate of 5.57% and it matures in 2019. The mortgage calls for interest only payments for the first two years of the loan and amortized over 30 years thereafter. The balance of this mortgage is approximately $86,567,000 at September 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. 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. 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 September 30, 2014, the balance of the mortgage is approximately $4,590,000. 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.  Six units have been sold during the first nine

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months of 2014 with a gain of approximately $351,000.  As of November 1, 2014, nine 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 may 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 $8,141,000, at September 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 $2,001,000 with a variable interest rate of 2.25% over the daily Libor rate (0.156%) at September 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 $4,824,000 at September 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.  The Partnership sold 137 units as condominiums. The assets were combined with Hamilton on Main Apartments. 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. In August 2014, the property was refinanced with a 10 year mortgage in the amount of $16,900,000 at 4.34% interest only.  The Joint Venture Partnership paid off the prior mortgage of approximately $15,205,000 with the proceeds of the new mortgage and distributed $850,000 to the Partnership.

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 Joint Venture 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 September 30, 2014, the balance of this mortgage is approximately $5,312,000. 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 September 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	$	8,619,846		$	2,622,203		$	7,230,839		$	5,215,054		$	1,011,453		$	6,473,921		$	6,628,931		$	19,644,258		$	98,343,487		$	155,789,992
Cash & Cash Equivalents	28,937			149,705			203,001			7,697			741,509			4,188			111,378			2,404,047			1,231,163			4,881,625
Rent Receivable	17,700			—			1,703			14,718			3,049			1,102			2,326			9,845			149,200			199,643
Real Estate Tax Escrow	98,555			—			41,934			71,690			—			43,591			40,212			52,130			356,155			704,267
Prepaid Expenses & Other Assets	95,311			895			50,550			44,962			27,327			44,461			44,558			96,377			1,657,149			2,061,590
Financing & Leasing Fees	33,515			7,753			91,554			10,849			—			15,110			9,005			159,175			295,874			622,835
Total Assets	$	8,893,864		$	2,780,556		$	7,619,581		$	5,364,970		$	1,783,338		$	6,582,373		$	6,836,410		$	22,365,832		$	102,033,028		$	164,259,952
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,140,592		$	2,001,159		$	10,000,000		$	4,823,762		$	—		$	4,590,276		$	5,311,923		$	16,900,000		$	86,566,934		$	138,334,646
Accounts Payable & Accrued Expense	150,481			55,616			172,833			27,905			724,100			16,076			123,765			2,142,549			931,507			4,344,832
Advance Rental Pmts & Security Deposits	174,103			—			197,412			103,182			13,487			88,756			95,052			301,976			2,205,078			3,179,046
Total Liabilities	8,465,176			2,056,775			10,370,245			4,954,849			737,587			4,695,108			5,530,740			19,344,525			89,703,519			145,858,524
Partners’ Capital	428,688			723,781			(2,750,664		)	410,121			1,045,751			1,887,265			1,305,670			3,021,307			12,329,509			18,401,428
Total Liabilities and Capital	$	8,893,864		$	2,780,556		$	7,619,581		$	5,364,970		$	1,783,338		$	6,582,373		$	6,836,410		$	22,365,832		$	102,033,028		$	164,259,952
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	214,344		$	361,891		$	—		$	205,061		$	522,876		$	943,633		$	652,833		$	1,510,654		$	4,931,804		9,343,093
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,375,332	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,375,332		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	7,967,761
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 November 1, 2014	—			—			—			127			111			—			—			—			—			238
Unsold units	—			—			—			—			9			—			—			—			—			9
Unsold units with deposits for future sale as of November 1, 2014	—			—			—			—			—			—			—			—			—			—

19

Financial information for the nine months ended September 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	$	1,043,460		$	218,995		$	994,756		$	698,401		$	151,937		$	704,397		$	683,025		$	2,177,950		$	10,143,620		$	16,816,541
Laundry and Sundry Income	12,425			—			(425		)	—			—			—			844			29,213			75,213			117,270
	1,055,885			218,995			994,331			698,401			151,937			704,397			683,869			2,207,163			10,218,833			16,933,811
Expenses
Administrative	23,376			1,180			32,580			6,784			3,388			14,493			8,104			42,799			181,661			314,365
Depreciation and Amortization	324,833			8,466			300,816			180,524			57,524			238,744			240,486			716,092			4,048,679			6,116,164
Management Fees	43,937			8,760			41,823			27,973			5,888			28,206			28,489			86,429			217,031			488,536
Operating	96,904			—			45,984			523			1,028			1,683			60,631			288,912			960,938			1,456,603
Renting	11,875			—			11,368			5,918			753			5,042			7,571			21,131			156,856			220,514
Repairs and Maintenance	125,411			3,150			56,421			246,576			74,719			223,566			58,132			292,004			927,771			2,007,750
Taxes and Insurance	172,802			40,498			87,842			119,861			30,025			120,392			89,496			279,034			1,155,775			2,095,725
	799,138			62,054			576,834			588,159			173,325			632,126			492,909			1,726,401			7,648,711			12,699,657
Income Before Other Income	256,747			156,941			417,497			110,242			(21,388		)	72,271			190,960			480,762			2,570,122			4,234,154
Other Income (Loss)
Interest Expense	(361,857		)	(41,932		)	(293,469		)	(210,158		)	(485		)	(197,633		)	(231,196		)	(610,958		)	(3,710,651		)	(5,658,339		)
Interest Income	—			—			—			15			—			—			—			—			—			—
Interest Income from Note	—			—			—			—			468			—			—			—			—			—
Gain on Sale of Real Estate	—			—			—			—			350,523			—			—			—			—			—
	(361,857		)	(41,932		)	(293,469		)	(210,143		)	350,506			(197,633		)	(231,196		)	(610,958		)	(3,710,651		)	(5,658,339		)
Net Income (Loss)	$	(105,110	)	$	115,009		$	124,028		$	(99,901	)	$	329,118		$	(125,362	)	$	(40,236	)	$	(130,196	)	$	(1,140,529	)	$	(1,424,185	)
Net Income (Loss) - NERA 50%	$	(52,555	)	$	57,505		$	62,014		$	(49,951	)	$	164,560		$	(62,681	)	$	(20,118	)	$	(65,097	)				33,677
Net Income (Loss) - NERA 40%																									$	(456,212	)	(456,212		)
																												$	(422,535	)

20

Financial information for the three months ended September 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	$	373,304		$	72,523		$	336,267		$	250,921		$	45,216		$	242,294		$	226,213		$	737,588		$	3,433,856		$	5,718,182
Laundry and Sundry Income	4,306			—			(660		)	—			—			—			676			10,065			26,620			41,007
	377,610			72,523			335,607			250,921			45,216			242,294			226,889			747,653			3,460,476			5,759,189
Expenses
Administrative	6,235			350			12,719			2,624			715			3,916			2,661			12,037			64,668			105,925
Depreciation and Amortization	108,663			2,822			100,712			60,204			19,174			80,047			81,233			242,960			1,354,577			2,050,392
Management Fees	14,832			2,901			13,319			9,330			1,613			9,606			9,536			28,609			68,588			158,334
Operating	27,938			—			13,390			171			423			643			16,528			82,442			224,085			365,620
Renting	908			—			7,745			(459		)	—			—			1,482			3,034			99,320			112,030
Repairs and Maintenance	51,584			—			25,489			82,066			27,069			79,825			19,697			101,601			413,587			800,918
Taxes and Insurance	55,807			12,859			29,643			38,487			7,360			38,387			30,264			87,450			398,451			698,708
	265,967			18,932			203,017			192,423			56,354			212,424			161,401			558,133			2,623,276			4,291,927
Income Before Other Income	111,643			53,591			132,590			58,498			(11,138		)	29,870			65,488			189,520			837,200			1,467,262
Other Income (Loss)
Interest Expense	(121,659		)	(14,036		)	(97,895		)	(70,528		)	(86		)	(66,300		)	(77,635		)	(208,944		)	(1,245,694		)	(1,902,777		)
Interest Income	—			—			—			6			—			—			—			—			—			6
Interest Income from Note	—			—			—			—			—			—			—			—			—			—
Gain on Sale of Real Estate	—			—			—			—			50,001			—			—			—			—			50,001
	(121,659		)	(14,036		)	(97,895		)	(70,522		)	49,915			(66,300		)	(77,635		)	(208,944		)	(1,245,694		)	(1,852,770		)
Net Income (Loss)	$	(10,016	)	$	39,555		$	34,695		$	(12,024	)	$	38,777		$	(36,430	)	$	(12,147	)	$	(19,424	)	$	(408,494	)	$	(385,508	)
Net Income (Loss) - NERA 50%	$	(5,007	)	$	19,778		$	17,348		$	(6,011	)	$	19,389		$	(18,215	)	$	(6,074	)	$	(9,711	)				11,496
Net Income (Loss) - NERA 40%																									$	(163,398	)	(163,398		)
																												$	(151,902	)

21

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

			Hamilton
	Hamilton		Essex 81		345		Hamilton		Hamilton		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Development		Franklin		1025		Bay Apts		Minuteman		Main Apts		Park		Total
9/30/2015	$	138,298	$	2,001,159	$	—	$	71,689	$	72,279	$	78,516	$	—	$	1,620,796	$	3,982,737
9/30/2016	8,002,294		—		42,990		75,155		76,732		82,308		—		1,479,627		9,759,106
9/30/2017	—		—		180,476		4,676,918		4,441,265		5,151,099		—		1,564,180		16,013,938
9/30/2018	—		—		189,025		—		—		—		—		1,653,563		1,842,588
9/30/2019	—		—		196,473		—		—		—		—		1,748,055		1,944,528
Thereafter	—		—		9,391,036		—		—		—		16,900,000		78,500,713		104,791,749
	$	8,140,592	$	2,001,159	$	10,000,000	$	4,823,762	$	4,590,276	$	5,311,923	$	16,900,000	$	86,566,934	$	138,334,646

At September  30, 2014 the weighted average interest rate on the above mortgages was 5.28%. The effective rate was 5. 36% including the amortization expense of deferred financing costs.

22

Summary financial information as of September 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	$	8,855,213		$	2,617,557		$	7,596,004		$	5,448,764		$	1,785,933		$	6,752,521		$	6,851,307		$	20,455,309		$	103,516,956		$	163,879,564
Cash & Cash Equivalents	18,578			24,337			15,400			743			901			14,460			60,794			15,593			919,270			1,070,076
Rent Receivable	25,174			—			3,684			5,841			4,019			10,560			—			8,402			72,166			129,846
Real Estate Tax Escrow	92,679			—			39,518			77,637			—			51,134			38,025			70,460			417,391			786,844
Prepaid Expenses & Other Assets	89,720			889			43,130			46,234			113,082			28,815			51,583			306,657			1,532,522			2,212,632
Financing & Leasing Fees	51,002			9,067			98,212			15,876			—			21,472			12,973			9,435			355,190			573,227
Total Assets	$	9,132,366		$	2,651,850		$	7,795,948		$	5,595,095		$	1,903,935		$	6,878,962		$	7,014,682		$	20,865,856		$	106,813,495		$	168,652,189
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,263,635		$	2,054,475		$	10,000,000		$	4,885,643		$	1,318,000		$	4,655,194		$	5,379,695		$	15,390,766		$	87,707,013		$	139,654,421
Accounts Payable & Accrued Expense	50,122			5,642			76,207			52,855			21,118			8,792			77,740			188,156			1,037,568			1,518,200
Advance Rental Pmts & Security Deposits	160,109			—			162,242			86,196			26,410			89,430			73,462			276,764			2,107,529			2,982,142
Total Liabilities	8,473,866			2,060,117			10,238,449			5,024,694			1,365,528			4,753,416			5,530,897			15,855,686			90,852,110			144,154,763
Partners’ Capital	658,500			591,733			(2,442,501		)	570,401			538,407			2,125,546			1,483,785			5,010,170			15,961,385			24,497,426
Total Liabilities and Capital	$	9,132,366		$	2,651,850		$	7,795,948		$	5,595,095		$	1,903,935		$	6,878,962		$	7,014,682		$	20,865,856		$	106,813,495		$	168,652,189
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	329,250		$	295,867		$	—		$	285,201		$	269,204		$	1,062,773		$	741,893		$	2,505,085		$	6,384,554		11,873,825
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,221,250	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,221,250		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	10,652,575
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 November 1, 2013	—			—			—			127			105			—			—			—			—			232
Unsold units	—			—			—			—			15			—			—			—			—			15
Unsold units with deposits for future sale as of November 1, 2013	—			—			—			—			—			—			—			—			—			—

23

Financial information for the nine months ended September 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	$	1,006,954		$	215,601		$	931,629		$	666,484		$	189,661		$	676,641		$	638,208		$	2,046,366		$	9,487,525		$	15,859,069
Laundry and Sundry Income	12,144			—			3,483			—			—			—			675			27,391			70,846			114,538
	1,019,097			215,601			935,112			666,484			189,661			676,641			638,883			2,073,756			9,558,371			15,973,608
Expenses
Administrative	15,037			1,021			18,796			7,968			9,502			14,367			4,253			26,848			191,418			289,209
Depreciation and Amortization	319,895			6,671			321,730			180,399			60,895			230,538			237,847			733,437			4,326,808			6,418,221
Management Fees	41,713			8,624			38,633			27,108			7,614			26,682			25,801			83,965			203,719			463,860
Operating	94,588			—			53,310			927			2,038			1,232			56,899			252,383			802,142			1,263,520
Renting	10,831			—			1,788			5,378			1,425			9,753			6,096			4,331			66,105			105,705
Repairs and Maintenance	93,194			4,400			62,553			239,752			70,217			224,156			50,840			278,025			843,069			1,866,206
Taxes and Insurance	164,374			37,050			85,152			114,730			31,912			109,188			91,893			257,239			1,170,929			2,062,466
	739,632			57,765			581,962			576,261			183,604			615,915			473,628			1,636,229			7,604,189			12,469,187
Income Before Other Income (Loss)	279,465			157,835			353,150			90,223			6,057			60,726			165,255			437,527			1,954,182			3,504,421
Other Income (Loss)
Interest Expense	(366,060		)	(43,776		)	(355,345		)	(212,962		)	(70,021		)	(200,200		)	(234,140		)	(616,349		)	(3,757,844		)	(5,856,697		)
Interest Income	—			—			26			5			122			—			—			—			57			210
Interest Income from Note	—			—			—			—			2,729			—			—			—			—			2,729
Gain on Sale of Real Estate	—			—			—			—			—			—			—			—			—			—
Other Income (Expenses)	—			—			(68,588		)	—			—			—			—			—			—			(68,588		)
	(366,060		)	(43,776		)	(423,908		)	(212,957		)	(67,170		)	(200,200		)	(234,140		)	(616,349		)	(3,757,786		)	(5,922,346		)
Net Income (Loss)	$	(86,594	)	$	114,059		$	(70,758	)	$	(122,734	)	$	(61,113	)	$	(139,474	)	$	(68,884	)	$	(178,822	)	$	(1,803,605	)	$	(2,417,925	)
Net Income (Loss) - NERA 50%	$	(43,297	)	$	57,029		$	(35,379	)	$	(61,367	)	$	(30,556	)	$	(69,737	)	$	(34,442	)	$	(89,411	)				$	(307,160	)
NERA 40%																									$	(721,442	)	(721,442		)
																												$	(1,028,602	)

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Financial information for the three months ended September 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	$	343,035		$	71,809		$	315,594		$	224,602		$	68,189		$	235,198		$	205,420		$	693,178		$	3,155,855		$	5,312,880
Laundry and Sundry Income	3,146			—			1,550			—			—			—			—			10,109			24,417			39,222
	346,181			71,809			317,144			224,602			68,189			235,198			205,420			703,287			3,180,272			5,352,102
Expenses
Administrative	5,109			317			4,365			4,162			5,916			6,816			1,788			8,440			77,694			114,608
Depreciation and Amortization	107,829			2,182			105,992			60,185			19,797			76,900			79,914			244,670			1,448,329			2,145,798
Management Fees	15,699			2,872			12,851			8,922			2,627			8,795			8,725			26,626			70,212			157,330
Operating	31,039			—			13,266			215			77			615			14,951			61,202			237,482			358,848
Renting	1,281			—			—			1,453			—			2,503			2,054			1,026			39,451			47,766
Repairs and Maintenance	29,100			700			24,374			82,343			24,231			76,461			25,303			112,318			389,052			763,882
Taxes and Insurance	52,614			12,642			28,897			37,599			11,293			38,040			29,945			87,950			427,973			726,954
	242,671			18,715			189,745			194,878			63,942			210,131			162,681			542,233			2,690,194			4,315,188
Income Before Other Income (Loss)	103,510			53,095			127,399			29,724			4,248			25,068			42,739			161,054			490,078			1,036,914
Other Income (Loss)
Interest Expense	(122,858		)	(14,510		)	(97,798		)	(71,481		)	(21,332		)	(67,226		)	(78,601		)	(206,762		)	(1,262,391		)	(1,942,961		)
Interest Income	—			—			—			2			36			—			—			—			—			39
Interest Income from Note	—			—			—			—			722			—			—			—			—			722
Gain on Sale of Real Estate	—			—			—			—			—			—			—			—			—			—
Other Income (Expenses)	—			—			—			—			—			—			—			—			—			—
	(122,858		)	(14,510		)	(97,798		)	(71,479		)	(20,574		)	(67,226		)	(78,601		)	(206,762		)	(1,262,391		)	(1,942,200		)
Net Income (Loss)	$	(19,348	)	$	38,584		$	29,601		$	(41,755	)	$	(16,326	)	$	(42,159	)	$	(35,862	)	$	(45,708	)	$	(772,312	)	$	(905,286	)
Net Income (Loss) - NERA 50%	$	(9,674	)	$	19,292		$	14,801		$	(20,878	)	$	(8,163	)	$	(21,079	)	$	(17,931	)	$	(22,854	)				$	(66,487	)
NERA 40%																									$	(308,925	)	(308,925		)
																												$	(375,412	)

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NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In August 2014, the FASB issued ASU 2014-15, which requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for the annual period ended December 31,2016 and for annual periods and interim periods thereafter with early adoption permitted. The adoption of ASU 2014-15 is not expected to materially impact the Partnership’s consolidated financial statements.

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 nine months ended September 30, 2014 and 2013:

	2014		2013
Total Revenues	$	—	$	193,857
Operating and other expenses	—		172,586
Depreciation and amortization	—		2,111
	—		174,697
Income from discontinued operations	$	—	$	19,160

NOTE 17—SUBSEQUENT EVENTS

Depository Receipts

Pursuant to the Repurchase Program, from October 1, 2014 through November 4, 2014, the Partnership purchased a total of 5,277 Depositary Receipts. The average price was $47.37 per receipt or $1,421.10 per unit. The total cost was $257,098. Under the terms of the Repurchase Program, the Partnership is required to repurchase 41.8 Class B Units and 2.2 General Partnership Units at a cost of $59,369 and $3,125 respectively.

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.

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The continued strong demand for rental housing in Greater Boston kept upward pressure on both occupancy levels and rental rate increases throughout the 2014 rental season.  The Partnership experienced an average vacancy rate of less than 2.0% during the quarter and executed new leases on residential units, averaging rental increases of 4.3%.  The performance of the core operations demonstrated a 13.7% increase in revenues and a 21.6% increase in Net Operating Income (income before depreciation, amortization and interest) . Same store revenue increases were 6.3% year to date and operating expense increases were 4.8% year to date, resulting in a 9.2% increase in Net Operating Income. Based on current occupancy and contractual rents in place for the next 9-12 months, Management expects a continued annual revenue growth for same store rent revenue for the better part of 2015.  Management anticipates both the urban and suburban portfolio’s occupancy level will be on par with last year’s occupancy levels for the upcoming three quarters.  While Management continues to forecast improving employment gains in our market area, the increase in rental housing stock throughout Greater Boston may mute revenue gains in the Partnership’s portfolio by the fourth quarter of 2015.  Forecasted declines in utility costs, a levelling off of rising real estate taxes and a seasonally average winter may result in slower operating expense growth improving bottom line NOI for 2015.

The Partnership has completed three refinancings during 2014.  Hamilton on Main, LLC, an unconsolidated joint venture, refinanced its mortgage during the third quarter, raising $1.9 million in additional cash, while reducing debt service by $350,000 annually, or $3.5 million for the next 10 years.

Since the first of the year, Management has used existing cash reserves to purchase 31,197 Depository Receipts and anticipates a steady purchase of receipts, per its trading plan, for the balance of the year.

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 $89,000.

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 mortgage matures in August 2024.  The costs associated with the refinancing were approximately $75,000.

On July 31, 2014, the Partnership executed a $25 million line of credit with Key Bank, N.A.  The credit line has a three year term and can be used for acquisitions, retirement of debt, capital improvements, working capital and certain other needs of the Partnership. The credit line is subject to certain covenants.  As of November 1, 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.

The Stock Repurchase Program that was initiated in 2007 has purchased 1,268,811 Depositary Receipts through September 30, 2014 or approximately 30% of the outstanding Class A Depositary Receipts.  During the third quarter, the Partnership repurchased 9,989 Class A Depositary Receipts, 79 Class B units, and 4 General Partnership Units at a cost of approximately $501,000, $116,000 and $6,000 respectively for a total cost of approximately $623,000.  This purchase of receipts is in line with the Partnership’s trading plan.

At November 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 described in Note 3, 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

27

pays Hamilton for repairs and maintenance services, legal services, construction services and accounting services. The costs charged by Hamilton for these services are at the same hourly rate charged to all entities managed by Hamilton, and management believes such rates are competitive in the marketplace.

Residential tenants typically sign a one year lease. During the nine months ended September 30, 2014, tenant renewals were approximately 65% with an average rental increase of approximately 3.5%, new leases accounted for approximately 35% with rental rate increases of approximately 6.7%.  During the nine months ended September 30, 2014, leasing commissions were approximately $178,000 compared to approximately $76,000 for the nine months ended September 30, 2013, an increase of approximately $102,000 (134.2%) from 2013. Tenant concessions were approximately $27,000 in for the nine months ended September 30, 2014, compared to approximately $34,000 for the nine months ended September 30, 2013, a decrease of approximately $7,000 (20.6%).  Tenant improvements were approximately $2,040,000 for the nine months ended September 30, 2014, compared to approximately $1,437,000 for the nine months ended September 30, 2013, an increase of approximately $603,000 (42.0%).

Hamilton accounted for approximately 5.2% of the repair and maintenance expense of the Partnership during the nine months ended September 30, 2014 and 5.0% during the nine months ended September 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 $167,000 (75.8%) and approximately $162,000 (73.0%) of the legal expense of the Partnership during the nine months ended September 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 nine months ended September 30, 2014, Hamilton provided the Partnership approximately $107,000 in construction and architectural services, compared to approximately $68,000 for the nine months ended September 30, 2013.

Hamilton’s accounting staff perform bookkeeping and accounting functions for the Partnership. During the nine months ended September 30, 2014, Hamilton charged the Partnership $93,750 for bookkeeping and accounting services. For more information on related party transactions, see Note 3 to the Consolidated Financial Statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

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

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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 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 nine 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 would only recognize 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.

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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 September 30, 2014 and September 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 $2,727,000 during the three months ended September 30, 2014, compared to approximately $2,484,000 for the three months ended September 30, 2013, an increase of approximately $243,000 (9.8%).

The rental activity is summarized as follows:

	Occupancy Date
	November 1, 2014		November 1, 2013
Residential
Units	2,431		2,431
Vacancies	99		101
Vacancy rate	4.1	%	4.2	%
Commercial
Total square feet	108,043		108,043
Vacancy	0		9,653
Vacancy rate	0.0	%	8.9	%

	Rental Income (in thousands) Three Months Ended September 30,
	2014						2013
	Total Operations			Continuing Operations			Total Operations			Continuing Operations
Total rents	$	10,546		$	10,546		$	9,859		$	9,859
Residential percentage	91		%	91		%	92		%	92		%
Commercial percentage	9		%	9		%	8		%	8		%
Contingent rentals	$	217		$	217		$	144		$	144

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

	Three Months Ended September 30,						Dollar			Percent
	2014			2013			Change			Change
Revenues
Rental income	$	10,546,055		$	9,859,135		$	686,920		7.0	%
Laundry and sundry income	96,973			108,617			(11,644		)	(10.7	)%
	10,643,028			9,967,752			675,276			6.8	%
Expenses
Administrative	543,704			451,268			92,436			20.5	%
Depreciation and amortization	2,463,708			2,824,318			(360,610		)	(12.8	)%
Management fee	438,319			400,588			37,731			9.4	%
Operating	838,728			786,179			52,549			6.7	%
Renting	155,865			78,874			76,991			97.6	%
Repairs and maintenance	2,087,290			1,641,608			445,682			27.1	%
Taxes and insurance	1,388,807			1,301,388			87,419			6.7	%
	7,916,421			7,484,223			432,198			5.8	%
Income Before Other Income (Expenses) and Discontinued Operations	2,726,607			2,483,529			243,078			9.8	%
Other Income (Expense)
Interest income	209			230			(21		)	(9.1	)%
Interest expense	(2,393,427		)	(2,142,817		)	(250,610		)	11.7	%
Gain on the sale of equipment	—			2,250			(2,250		)	(100.0	)%
(Loss) from investments in unconsolidated joint ventures	(151,902		)	(375,412		)	223,510			(59.5	)%
	(2,545,120		)	(2,515,749		)	(29,371		)	1.2	%
Income (Loss) From Continuing Operations	181,487			(32,220		)	213,707			(663.3	)%
Discontinued Operations
(Loss) from discontinued operations	—			(654		)	654			(100.0	)%
Net Income (Loss)	$	181,487		$	(32,874	)	$	214,361		(652.1	)%

Rental income from continuing operations for the three months ended September 30, 2014 was approximately $10,546,000, compared to approximately $9,859,000 for the three months ended September 30, 2013, an increase of approximately $687,000 (7.0%). 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 $85,000 and rental rate increases of approximately 6.7% in 2014. The Partnership Properties with the most significant increases in rental income include: 1144 Commonwealth Avenue, Hamilton Cypress, 62 Boylston Street, Westgate Woburn, Staples Plaza, Hamilton Oaks, and 140 North Beacon Street with increases of approximately $101,000, $85,000, $78,000, $62,000, $44,000, $38,000 and $31,000, 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 September 30, 2014 were approximately $7,916,000 compared to approximately $7,484,000 for the three months ended September 30, 2013, an increase of approximately $432,000 (5.8%).  The factors contributing to this net increase are an increase in administrative expenses of approximately $92,000 (20.5%) due primarily to an increase in maintenance service fees of the management company, and professional fees for a change in the Partnership’s filing status; an increase in repairs and maintenance expenses of approximately $446,000 (27.1%)  due to an increase in demand for repairs to the properties; an increase in operating expenses of approximately $53,000 ( 6.7%) due to increases in utility costs; an increase in taxes and insurance of approximately $87,000 (6.7%) due to increases in real estate taxes; and an increase in renting expenses of approximately $77,000 ( 97.6%) due to an increase in rental commissions, partially offset by a decrease in depreciation and amortization of approximately $361,000 (12.8%) due to a decrease in amortization costs of intangible assets for the period.

Interest expense for the three months ended September 30, 2014 was approximately $2,393,000 compared to approximately $2,143,000 for the three months ended September 30, 2013, an increase of approximately $250,000 (11.7%). Approximately $237,000 of this increase represents the interest increase on the mortgage on Hamilton Green.  In addition, the Partnership refinanced four properties in 2013 and two properties in 2014 which resulted in a higher average level of debt in the first nine months of 2014 compared to 2013.

At September 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.

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As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net loss from the Investment Properties was approximately $152,000 for the three months ended September 30, 2014 , compared to approximately $375,000 for the three months ended September 30, 2013, a decrease in the loss of approximately $223,000 (59.5%). This decrease is primarily due to an increase in rental revenue of approximately $176,000, and a gain of approximately $50,000 on the sale of one unit at Hamilton Bay LLC. Included in the loss for the three months ended September 30, 2014 is depreciation and amortization expense of approximately $890,000. The allocable loss for the three months ended September 30, 2014 associated with the October 2009 investment in Dexter Park is approximately $163,000, of which approximately $542,000 is depreciation and amortization.

As a result of the changes discussed above, net income for the three months ended September 30, 2014 was approximately $181,000 compared to a net loss of approximately $33,000 for the three months ended September 30, 2013, an increase in income of approximately $214,000. The net increase in net income is primarily due to the decrease in the net loss in the unconsolidated Joint Ventures, as noted above.

Nine Months Ended September 30, 2014 Compared to Nine Months Ended September 30, 2013

The Partnership and its subsidiary Partnerships earned income before other income and discontinued operations of approximately $8,016,000 for the nine months ended September 30, 2014, compared to approximately $8,412,000 for the nine months ended September 30, 2013, a decrease of approximately $396,000 (4.7%).  The following is a summary of the Partnership’s operations for the nine months ended September 30, 2014 and 2013:

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	Nine Months Ended September 30,						Dollar			Percent
	2014			2013			Change			Change
Revenues
Rental income	$	31,500,342		$	27,687,903		$	3,812,439		13.8	%
Laundry and sundry income	321,150			302,305			18,845			6.2	%
	31,821,492			27,990,208			3,831,284			13.7	%
Expenses
Administrative	1,643,185			1,601,123			42,062			2.6	%
Depreciation and amortization	7,935,355			5,758,310			2,177,045			37.8	%
Management fee	1,303,780			1,144,462			159,318			13.9	%
Operating	3,540,985			3,032,964			508,021			16.7	%
Renting	301,334			135,540			165,794			122.3	%
Repairs and maintenance	4,899,746			4,238,821			660,925			15.6	%
Taxes and insurance	4,180,961			3,667,180			513,781			14.0	%
	23,805,346			19,578,400			4,226,946			21.6	%
Income Before Other Income (Expense) and Discontinued Operations	8,016,146			8,411,808			(395,662		)	(4.7	)%
Other Income (expense)
Interest income	592			945			(353		)	(37.4	)%
Interest expense	(7,160,489		)	(5,746,533		)	(1,413,956		)	24.6	%
Gain on the sale of equipment	—			2,250			(2,250		)	(100.0	)%
(Loss) from investments in unconsolidated joint ventures	(422,535		)	(1,028,602		)	606,067			(58.9	)%
	(7,582,432		)	(6,771,940		)	(810,492		)	12.0	%
Income From Continuing Operations	433,714			1,639,868			(1,206,154		)	(73.6	)%
Discontinued Operations
Income from discontinued operations	—			19,160			(19,160		)	(100.0	)%
Gain on the sale of real estate from discontinued operations	—			3,678,839			(3,678,839		)	(100.0	)%
				3,697,999			(3,697,999		)	(100.0	)%
Net Income	$	433,714		$	5,337,867		$	(4,904,153	)	(91.9	)%

Rental income from continuing operations for the nine months ended September 30, 2014 was approximately $31,500,000 compared to approximately $27,688,000 for the nine months ended September 30, 2013, an increase of approximately $3,812,000 (13.8%).  The increase in rental income from Hamilton Green acquired in July 2013 represents approximately $2,130,000 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, 1144 Commonwealth Avenue, Hamilton Cypress, Hamilton Oaks, Westgate Apartments, 9 School Street, and 140 North Beacon Street, with increases of approximately $264,000, $225,000, $173,000, $165,000, $145,000, $108,000 and $80,000 respectively.

Expenses from continuing operations for the nine months ended September 30, 2014 were approximately $23,805,000 compared to approximately $19,578,000 for the nine months ended September 30, 2013, an increase of approximately $4,227,000 (21.6%). The factors contributing to this increase are an increase in depreciation and amortization costs of approximately $2,177,000 (37.8%) primarily due to the increase in depreciation expenses related to Hamilton Green; an increase in repairs and maintenance of approximately $661,000 (15.6%) primarily due to an increase in demand for repairs; an increase in taxes and insurance of approximately $514,000 (14.0%)  due to an increase in both real estate taxes and insurance; and an increase in operating expenses of approximately $508,000 ( 16.7%) primarily due to an increase in utility costs.

Interest expense for the nine months ended September 30, 2014 was approximately $7,160,000 compared to approximately $5,747,000 for the nine months ended September 30, 2013, an increase of approximately $1,414,000 (24.6%). Approximately $1,348,000 of this increase represents the interest on the mortgage on Hamilton Green.  In addition, the Partnership refinanced four properties in 2013 and two properties in 2014 which resulted in a higher average level of debt in the first nine months of 2014 compared to 2013.

At September 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

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information of each Investment Property.

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of loss from these Investment Properties was approximately $423,000 for the nine months ended September 30, 2014 compared to a loss of approximately $1,029,000 for the nine months ended September 30, 2013, a decrease of approximately $606,000 (58.9%). The decrease is primarily due to a gain of approximately $351,000 on the sale of six rental units at the property of Hamilton Bay, LLC.  Included in the loss for the nine months ended September 30, 2014 is depreciation and amortization of approximately $2,653,000 compared to approximately $2,776,000 in 2013. The allocable loss for the nine months ended September 30, 2014 associated with the October 2009 investment in Dexter Park is approximately $456,000 of which approximately $1,619,000 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 nine months ended September 30, 2014 was approximately $434,000 compared to net income of $5,338,000, a decrease of approximately $4,904,000 (91.9%).  The decrease in net income is primarily due to the gain on the sale of Nashoba Apartments in 2013, and the increased loss of approximately $2,362,000 from Hamilton Green.

LIQUIDITY AND CAPITAL RESOURCES

The Partnership’s principal source of cash during the first nine 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 $13,744,651 at September 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 $268,729 at September 30, 2014 is summarized as follows:

	Nine Months Ended September 30,
	2014			2013
Cash provided by operating activities	$	8,220,014		$	6,713,207
Cash (used in) investing activities	(1,318,670		)	(19,822,203		)
Cash provided by (used in) financing activities	(2,706,875		)	15,330,269
Repurchase of Depositary Receipts, Class B and General Partner Units	(1,564,397		)	(1,021,987		)
Distributions paid	(2,898,801		)	(2,922,143		)
Net (decrease) in cash and cash equivalents	$	(268,729	)	$	(1,722,857	)

The cash provided by operating activities is primarily due to collections of rent less cash operating expenses. The decrease in cash used in investing activities is due to an increase 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 payment and payoffs of mortgage notes payable.

During the nine months ended September 30, 2014, the Partnership purchased 25,920 Depositary Receipts for an average price of $47.22 for a total cost, including commissions, of $1,258,399; 205 Class B Units for a cost of $290,698 and 11 General Partnership Units for a cost of $15,300 for a total cost of $1,564,397.

During 2014, the Partnership and its Subsidiary Partnerships completed improvements to certain of the Properties at a total cost of approximately $3,701,000. 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, Westgate Woburn 62 Boylston Street, School Street 9 Associates, Hamilton Green, Dean Street Associates, 1131 Commonwealth, and Westside Colonial, at a cost of approximately $584,000, $333,000, $327,000, $305,000, $297,000, $245,000, $237,000, and $216,000, respectively.

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

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proceeds were used to pay off the existing mortgage. The mortgage matures in August, 2024. The costs associated with the refinancing were approximately $75,000.

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 September 2024. The costs associated with the refinancing were approximately $89,000. 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. The costs associated with the refinancing were approximately $346,000.

During the nine months ended September 30, 2014 and 2013 the Partnership received distributions of approximately $2,383,000 and $2,305,000 from the investment properties respectively.  Included in these distributions is the amount from Dexter Park of $610,000 and $690,000 for the nine months ended September 30, 2014 and 2013 respectively. The Partnership received approximately $1,000,000 from Hamilton on Main LLC for the nine months ended September 30, 2014, primarily due to the refinancing of the property. The Partnership received distributions of approximately $1,562,000 from 345 Franklin Street LLC in the first nine 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, June 30, 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 September 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 September 30, 2014, our proportionate share of the non-recourse debt related to these investments was approximately $60,511,000. 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.

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

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

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

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

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

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

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

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

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

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

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

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

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

·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.

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

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

As of September 30, 2014, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have approximately $334,438,000 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 2029. 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 have not been any changes in the Partnership’s internal control over financial reporting ( as such term is defined in Rule 13a-15(f) and 15d-15(f)  under the Exchange Act) during the third 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 10-K 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 third quarter of 2014:

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				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)
July 1-31, 2014	$	50.24	4,764	237,669
August 1-31, 2014	$	50.19	3,360	234,309
September 1-30, 2014	$	49.96	1,865	232,444
Total			9,989

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 September 30, 2014, the Partnership has repurchased 1,268,811 Depositary Receipts at an average price of $25.32 per receipt (or $759.60 per underlying Class A Unit), 2,308 Class B Units and 122 General Partnership Units, both at an average price of $726.25 per Unit, totaling approximately $ 34,045,000 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.

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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: November 7, 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 Executive Officer)	November 7, 2014
Ronald Brown
/s/ HAROLD BROWN	Treasurer and Director of the General Partner (Principal Financial Officer and Principal Accounting Officer)	November 7, 2014
Harold Brown
/s/ GUILLIAEM AERTSEN	Director of the General Partner	November 7, 2014
Guilliaem Aertsen
/s/ DAVID ALOISE	Director of the General Partner	November 7, 2014
David Aloise
/s/ EUNICE HARPS	Director of the General Partner	November 7, 2014
Eunice Harps

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EXHIBIT INDEX

Exhibit No.	Description of Exhibit
(10.1)	Credit Agreement dated July 31, 2014, among the Partnership, Keybank National Association (“Keybank”), and certain Lenders (filed as Exhibit 10.1 to the Partnership’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 6, 2014 and incorporated herein by reference).
(10.2)	Note dated July 31, 2014, in the principal amount of $25,000,000 made by Partnership (filed as Exhibit 10.2 to the Partnership’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 6, 2014 and incorporated herein by reference).
(10.3)	Non-Recourse Carve Out Guaranty dated July 31, 2014, in favor of Keybank, (filed as Exhibit 10.31 to the Partnership’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 6, 2014 and incorporated herein by reference).
(10.4)	Ownership Interest Pledge and Security Agreement dated July 31, 2014, among the Partnership, Keybank and certain Lenders (filed as Exhibit 10.4 to the Partnership’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 6, 2014 and incorporated herein by reference).
(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 September 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).

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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: November 7 , 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: November 7, 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 nine months ended September 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: November 7, 2014
	/s/ Harold Brown
	Harold Brown
	Principal Financial Officer
	(Treasurer and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: November 7, 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.

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MORTGAGE NOTES PAYABLE (Details) - 10Q (USD $)	9 Months Ended		85 Months Ended	0 Months Ended			0 Months Ended									9 Months Ended	0 Months Ended		0 Months Ended		0 Months Ended		0 Months Ended		0 Months Ended	1 Months Ended	0 Months Ended		0 Months Ended		1 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Jul. 31, 2014 Line of Credit [Member]	Sep. 30, 2014 Line of Credit [Member]	Jul. 31, 2014 Line of Credit [Member] item	Jul. 31, 2014 Base Rate [Member] Line of Credit [Member]	Jul. 31, 2014 Prime Rate [Member] Line of Credit [Member]	Jul. 31, 2014 Federal Funds Rate [Member] Line of Credit [Member]	Jul. 31, 2014 London Interbank Offered Rate (LIBOR) [Member] Line of Credit [Member]	Jul. 15, 2013 Hamilton Green	Jul. 31, 2014 Minimum Line of Credit [Member]	Jul. 31, 2014 Minimum Base Rate [Member] Line of Credit [Member]	Jul. 31, 2014 Maximum Line of Credit [Member]	Jul. 31, 2014 Maximum Base Rate [Member] Line of Credit [Member]	Sep. 30, 2014 Mortgages payable	Dec. 20, 2013 Mortgages payable Hamilton Green	Dec. 20, 2013 Mortgages payable Hamilton Green	Jun. 11, 2014 Mortgages payable NERA Dean Street Associates, LLC	Jun. 11, 2014 Mortgages payable NERA Dean Street Associates, LLC	Oct. 01, 2013 Mortgages payable Westgate Apartments LLC	Oct. 01, 2013 Mortgages payable Westgate Apartments LLC	Jul. 11, 2014 Mortgages payable Westgate Apartments Burlington LLC [Member]	Jul. 11, 2014 Mortgages payable Westgate Apartments Burlington LLC [Member]	Feb. 25, 2013 Mortgages payable Hamilton Cypress LLC Commercial-1031Exchange Brookline, Massachusetts	Feb. 28, 2014 Mortgages payable Hamilton Cypress LLC Commercial-1031Exchange Brookline, Massachusetts	Mar. 11, 2013 Mortgages payable Property located at School Street	Mar. 11, 2013 Mortgages payable Property located at School Street	Jul. 07, 2013 Mortgages payable Boylston Downtown L.P. Residential Apartments Boston, Massachusetts	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	Sep. 30, 2014 Mortgages payable Minimum	Sep. 30, 2014 Mortgages payable Maximum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)																		4.67%		4.22%		4.65%		4.31%				3.70%		3.97%			3.76%	5.97%
Amount of monthly installments including principal																$ 808,000
Weighted average interest rate (as a percent)																4.81%
Effective interest rate (as a percent)	5.46%		5.46%													4.92%
Annual maturities of mortgage debt
2015-current maturities	133,000		133,000
2016	726,000		726,000
2017	1,821,000		1,821,000
2018	7,840,000		7,840,000
2019	1,912,000		1,912,000
Thereafter	183,671,000		183,671,000
Total	196,103,000		196,103,000
Long-term Debt, Maturities, Repayments of Principal in Next Rolling Twelve Months	133,000		133,000
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																	38,500,000		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		10 years				3 years
Term of debt				3 years													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		2,010,000				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																	346,000		89,000		190,000								279,000
Closing costs associated with financing											38,000						346,000
Amount of new loan																		38,500,000						2,500,000
Repurchase of depository receipts	25,920		1,268,811
Repurchase price of depository receipts	$ 47.22		$ 25.32
Repurchase price of units	$ 1,416.60
Repurchase of depository receipts	1,258,399
Repurchase of units	1,080	905
Total cost of repurchase	1,564,397	1,021,987	34,045,000
Amount of refinancing costs						125,000																		75,000
Maximum borrowings						25,000,000
Reference rate used in calculation of Base Rate							base	Prime	Federal Funds	one month LIBOR
Basis of effective interest rate used in calculation of Base Rate (as a percent)									0.50%	1.00%
Debt Instrument, Basis Spread on Variable Rate													2.50%		3.50%
Funds drawn by the company					$ 0
Pledged interests rate of the Partnership's ownership interest (as a percent)												49.00%		100.00%
Number of properties in which borrowing amount collateralized						23
Commitment fee for unused amount (as a percent)												0.15%		0.20%

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details) - 10Q (USD $)	9 Months Ended		12 Months Ended	0 Months Ended		0 Months Ended				0 Months Ended				1 Months Ended				0 Months Ended	3 Months Ended	9 Months Ended			1 Months Ended		0 Months Ended			0 Months Ended	1 Months Ended			0 Months Ended	1 Months Ended					0 Months Ended			1 Months Ended				1 Months Ended						1 Months Ended	12 Months Ended		1 Months Ended			1 Months Ended												0 Months Ended			9 Months Ended
	Sep. 30, 2014 item	Sep. 30, 2013	Dec. 31, 2013 item	Oct. 18, 2013 Limited Partnerships	Sep. 30, 2014 Limited Partnerships	Oct. 28, 2008 Dexter Park	Sep. 30, 2013 Dexter Park item	Oct. 28, 2009 Dexter Park	Oct. 28, 2008 Dexter Park item	Oct. 28, 2009 Dexter Park Mortgages payable	Oct. 28, 2008 Dexter Park Mortgages payable	Sep. 30, 2014 Dexter Park Mortgages payable	Oct. 28, 2009 Dexter Park Mortgages payable	Feb. 28, 2007 Hamilton Bay Apartments	Sep. 30, 2013 Hamilton Bay Apartments item	Oct. 03, 2005 Hamilton Bay Apartments item	Sep. 30, 2014 Hamilton Bay Apartments Mortgages payable	Oct. 18, 2013 Hamilton Bay Sales	Sep. 30, 2014 Hamilton Bay Sales	Sep. 30, 2014 Hamilton Bay Sales	Nov. 01, 2014 Hamilton Bay Sales item	Sep. 30, 2013 Hamilton Bay Sales item	Apr. 30, 2008 Hamilton Bay Sales Mortgages payable item	Mar. 07, 2005 Hamilton Essex Development, LLC and Hamilton Essex 81, LLC	Mar. 07, 2005 Hamilton Essex Development, LLC and Hamilton Essex 81, LLC Mortgages payable	Sep. 30, 2013 Hamilton Essex 81 item	Mar. 07, 2005 Hamilton Essex 81 item	Sep. 30, 2014 Hamilton Essex 81 Mortgages payable	Aug. 31, 2008 Hamilton Essex 81 Mortgages payable	Sep. 30, 2013 Hamilton Essex Development item	Mar. 07, 2005 Hamilton Essex Development item	Sep. 30, 2014 Hamilton Essex Development Mortgages payable	Sep. 30, 2013 Hamilton Essex Development Mortgages payable	Aug. 31, 2008 Hamilton Essex Development Mortgages payable	Sep. 30, 2014 Hamilton Essex Development Mortgages payable	Sep. 30, 2013 Hamilton 1025 item	Mar. 02, 2005 Hamilton 1025 item	Mar. 02, 2005 Hamilton 1025 Mortgages payable	Sep. 30, 2014 Hamilton 1025 Mortgages payable	Mar. 02, 2005 Hamilton 1025 Mortgages payable	Oct. 31, 2004 Hamilton Minuteman	Sep. 30, 2013 Hamilton Minuteman item	Dec. 31, 2006 Hamilton Minuteman	Sep. 30, 2004 Hamilton Minuteman item	Jan. 31, 2007 Hamilton Minuteman Mortgages payable	Oct. 31, 2004 Hamilton Minuteman Mortgages payable	Sep. 30, 2014 Hamilton Minuteman Mortgages payable	Sep. 30, 2013 Hamilton on Main Apts item	May 31, 2008 Hamilton on Main Apts item	Aug. 31, 2004 Hamilton on Main Apts item	Aug. 31, 2014 Hamilton on Main Apartments, LLC Mortgages payable	Dec. 31, 2005 Hamilton on Main Apartments, LLC Mortgages payable item	Sep. 30, 2014 Hamilton on Main Apartments, LLC Mortgages payable	Jun. 30, 2013 345 Franklin	Sep. 30, 2013 345 Franklin item	Nov. 30, 2001 345 Franklin item	Jun. 30, 2013 345 Franklin Mortgages payable	Sep. 30, 2013 Residential buildings Dexter Park item	Sep. 30, 2013 Residential buildings Hamilton Bay Apartments item	Sep. 30, 2013 Residential buildings Hamilton Bay Sales item	Sep. 30, 2013 Residential buildings Hamilton Essex 81 item	Sep. 30, 2013 Residential buildings Hamilton 1025 item	Sep. 30, 2013 Residential buildings Hamilton Minuteman item	Sep. 30, 2013 Residential buildings Hamilton on Main Apts item	Sep. 30, 2013 Residential buildings 345 Franklin item	Sep. 30, 2013 Commercial Hamilton Essex 81 item	Sep. 30, 2013 Commercial Hamilton Essex Development item	Sep. 30, 2013 Commercial Hamilton 1025 item	Oct. 28, 2009 HBC Dexter Park Mortgages payable	Oct. 28, 2008 HBC Dexter Park Mortgages payable	Oct. 28, 2009 HBC Dexter Park Mortgages payable	Sep. 30, 2014 Management Company item	Sep. 30, 2014 Minimum Mortgages payable	Sep. 30, 2014 Minimum Limited Partnerships	Sep. 30, 2014 Minimum Harold Brown	Sep. 30, 2014 Maximum Mortgages payable	Sep. 30, 2014 Maximum Limited Partnerships	Sep. 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 in the investment properties																																																																								6
Investments in joint venture	$ 9,343,093		$ 12,025,142		$ 9,343,093		$ 6,384,554		$ 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						48	168						120	20			49	48			1						176	176					42		42				148		280					40	40		409	48	120	48	175	42	148	40	1	1	1
Number of properties																											1																									3
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			8,141,000				2,001,000						5,000,000							5,500,000	8,025,000					16,900,000	16,825,000					10,000,000													7,168,000
Interest rate (as a percent)													5.57%	5.57%									5.75%						5.79%											5.67%					5.67%						4.34%	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	196,103,164		198,520,478				87,707,013					86,567,000			4,655,194		4,590,000					1,318,000				8,263,635				2,054,475						4,885,643			4,824,000			5,379,695					5,312,000	15,390,766					16,900,000		10,000,000
Investments funded using cash reserves						8,757,000
Term of debt																																						10 years							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																																	4,443	4,301
Interest paid	6,444,000	5,795,000
Capital contributions				660,000														660,000
Gain on Sale of Real Estate		3,678,839																	50,001	350,523
Gain on sale of real estate																				351,000
Number of units retained for long-term investment							409								48	48										49				1						49	49					42						148							40
Number of units retained																					9
Number of units sold																120						105														127	127												137
Units to be sold																						120														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)																																			0.156%
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
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
Distribution to the Partnership	2,898,801	2,922,143																																																				1,610,000
Carrying value of investment to discontinue applying the equity method	0																																																					0
Debt Instrument, Loan Proceeds Utilized to Pay Off Existing Mortgage																																																			15,205,000
Debt Instrument, Loan Proceeds distributed to the Partnership																																																			$ 850,000

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FAIR VALUE MEASUREMENTS (Details) - 10Q (USD $)	Sep. 30, 2014	Dec. 31, 2013
Mortgage Notes Payable
Carrying Amount	$ 196,103,164	$ 198,520,478
Wholly owned properties
Mortgage Notes Payable
Carrying Amount	196,103,164	198,520,478
Estimated Fair Value	205,947,641	196,059,827
Partially owned properties
Mortgage Notes Payable
Carrying Amount	138,334,647	137,875,515
Estimated Fair Value	$ 147,420,121	$ 147,975,521

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SIGNIFICANT ACCOUNTING POLICIES (Details) - 10Q	Sep. 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	792
Area of property (in square feet)	12,500
Partially owned properties | Residential and mixed-use properties | Minimum
Line of Business
Percentage of ownership interest	40.00%
Partially owned properties | Residential and mixed-use properties | Maximum
Line of Business
Percentage of ownership interest	50.00%
Partially owned properties | Car parking lot
Line of Business
Capacity of real estate property (in cars per lot)	50

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RENTAL PROPERTIES (Tables) - 10Q

9 Months Ended

Sep. 30, 2014

RENTAL PROPERTIES

Schedule of rental properties

	September 30, 2014			December 31, 2013			Useful Life
Land, improvements and parking lots	$	44,300,508		$	43,919,728		15–40 years
Buildings and improvements	152,926,255			152,130,635			15–40 years
Kitchen cabinets	6,791,528			5,956,078			5–10 years
Carpets	6,601,426			5,820,516			5–10 years
Air conditioning	736,933			707,928			5–10 years
Laundry equipment	422,552			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	5,476,998			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	5,967,285			5,564,621			5–7 years
Smoke alarms	236,719			216,223			5–7 years
Total fixed assets	225,155,456			221,454,286
Less: Accumulated depreciation	(75,396,430		)	(68,549,625		)
	$	149,759,026		$	152,904,661

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 3) - 10Q (USD $)	3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended		3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Hamilton Essex 81	Sep. 30, 2013 Hamilton Essex 81	Sep. 30, 2014 Hamilton Essex 81	Sep. 30, 2013 Hamilton Essex 81	Sep. 30, 2014 Hamilton Essex 81 NERA 50%	Sep. 30, 2013 Hamilton Essex 81 NERA 50%	Sep. 30, 2014 Hamilton Essex 81 NERA 50%	Sep. 30, 2013 Hamilton Essex 81 NERA 50%	Sep. 30, 2014 Hamilton Essex Development	Sep. 30, 2013 Hamilton Essex Development	Sep. 30, 2014 Hamilton Essex Development	Sep. 30, 2013 Hamilton Essex Development	Sep. 30, 2014 Hamilton Essex Development NERA 50%	Sep. 30, 2013 Hamilton Essex Development NERA 50%	Sep. 30, 2014 Hamilton Essex Development NERA 50%	Sep. 30, 2013 Hamilton Essex Development NERA 50%	Sep. 30, 2014 345 Franklin	Sep. 30, 2013 345 Franklin	Sep. 30, 2014 345 Franklin	Sep. 30, 2013 345 Franklin	Nov. 30, 2001 345 Franklin	Sep. 30, 2014 345 Franklin NERA 50%	Sep. 30, 2013 345 Franklin NERA 50%	Sep. 30, 2014 345 Franklin NERA 50%	Sep. 30, 2013 345 Franklin NERA 50%	Sep. 30, 2014 Hamilton 1025	Sep. 30, 2013 Hamilton 1025	Sep. 30, 2014 Hamilton 1025	Sep. 30, 2013 Hamilton 1025	Mar. 02, 2005 Hamilton 1025	Sep. 30, 2014 Hamilton 1025 NERA 50%	Sep. 30, 2013 Hamilton 1025 NERA 50%	Sep. 30, 2014 Hamilton 1025 NERA 50%	Sep. 30, 2013 Hamilton 1025 NERA 50%	Sep. 30, 2014 Hamilton Bay Sales	Sep. 30, 2013 Hamilton Bay Sales	Sep. 30, 2014 Hamilton Bay Sales	Sep. 30, 2013 Hamilton Bay Sales	Sep. 30, 2014 Hamilton Bay Sales NERA 50%	Sep. 30, 2013 Hamilton Bay Sales NERA 50%	Sep. 30, 2014 Hamilton Bay Sales NERA 50%	Sep. 30, 2013 Hamilton Bay Sales NERA 50%	Sep. 30, 2014 Hamilton Bay Apartments	Sep. 30, 2013 Hamilton Bay Apartments	Sep. 30, 2014 Hamilton Bay Apartments	Sep. 30, 2013 Hamilton Bay Apartments	Oct. 03, 2005 Hamilton Bay Apartments	Sep. 30, 2014 Hamilton Bay Apartments NERA 50%	Sep. 30, 2013 Hamilton Bay Apartments NERA 50%	Sep. 30, 2014 Hamilton Bay Apartments NERA 50%	Sep. 30, 2013 Hamilton Bay Apartments NERA 50%	Sep. 30, 2014 Hamilton Minuteman	Sep. 30, 2013 Hamilton Minuteman	Sep. 30, 2014 Hamilton Minuteman	Sep. 30, 2013 Hamilton Minuteman	Sep. 30, 2004 Hamilton Minuteman	Sep. 30, 2014 Hamilton Minuteman NERA 50%	Sep. 30, 2013 Hamilton Minuteman NERA 50%	Sep. 30, 2014 Hamilton Minuteman NERA 50%	Sep. 30, 2013 Hamilton Minuteman NERA 50%	Sep. 30, 2014 Hamilton on Main Apts	Sep. 30, 2013 Hamilton on Main Apts	Sep. 30, 2014 Hamilton on Main Apts	Sep. 30, 2013 Hamilton on Main Apts	Aug. 31, 2004 Hamilton on Main Apts	Sep. 30, 2014 Hamilton on Main Apts NERA 50%	Sep. 30, 2013 Hamilton on Main Apts NERA 50%	Sep. 30, 2014 Hamilton on Main Apts NERA 50%	Sep. 30, 2013 Hamilton on Main Apts NERA 50%	Sep. 30, 2014 Dexter Park	Sep. 30, 2013 Dexter Park	Sep. 30, 2014 Dexter Park	Sep. 30, 2013 Dexter Park	Oct. 28, 2008 Dexter Park	Sep. 30, 2014 Dexter Park NERA 40%	Sep. 30, 2013 Dexter Park NERA 40%	Sep. 30, 2014 Dexter Park NERA 40%	Sep. 30, 2013 Dexter Park NERA 40%	Sep. 30, 2014 Total	Sep. 30, 2013 Total	Sep. 30, 2014 Total	Sep. 30, 2013 Total	Sep. 30, 2014 Total NERA 50%	Sep. 30, 2013 Total NERA 50%	Sep. 30, 2014 Total NERA 50%	Sep. 30, 2013 Total NERA 50%	Sep. 30, 2014 Total NERA 40%	Sep. 30, 2013 Total NERA 40%	Sep. 30, 2014 Total NERA 40%	Sep. 30, 2013 Total NERA 40%
Revenues
Rental income	$ 10,546,055	$ 9,859,135	$ 31,500,342	$ 27,687,903	$ 373,304	$ 343,035	$ 1,043,460	$ 1,006,954					$ 72,523	$ 71,809	$ 218,995	$ 215,601					$ 336,267	$ 315,594	$ 994,756	$ 931,629						$ 250,921	$ 224,602	$ 698,401	$ 666,484						$ 45,216	$ 68,189	$ 151,937	$ 189,661					$ 242,294	$ 235,198	$ 704,397	$ 676,641						$ 226,213	$ 205,420	$ 683,025	$ 638,208						$ 737,588	$ 693,178	$ 2,177,950	$ 2,046,366						$ 3,433,856	$ 3,155,855	$ 10,143,620	$ 9,487,525						$ 5,718,182	$ 5,312,880	$ 16,816,541	$ 15,859,069
Laundry and sundry income	96,973	108,617	321,150	302,305	4,306	3,146	12,425	12,144													(660)	1,550	(425)	3,483																																676		844	675						10,065	10,109	29,213	27,391						26,620	24,417	75,213	70,846						41,007	39,222	117,270	114,538
Total Revenues	10,643,028	9,967,752	31,821,492	27,990,208	377,610	346,181	1,055,885	1,019,097					72,523	71,809	218,995	215,601					335,607	317,144	994,331	935,112						250,921	224,602	698,401	666,484						45,216	68,189	151,937	189,661					242,294	235,198	704,397	676,641						226,889	205,420	683,869	638,883						747,653	703,287	2,207,163	2,073,756						3,460,476	3,180,272	10,218,833	9,558,371						5,759,189	5,352,102	16,933,811	15,973,608
Expenses
Administrative	543,704	451,268	1,643,185	1,601,123	6,235	5,109	23,376	15,037					350	317	1,180	1,021					12,719	4,365	32,580	18,796						2,624	4,162	6,784	7,968						715	5,916	3,388	9,502					3,916	6,816	14,493	14,367						2,661	1,788	8,104	4,253						12,037	8,440	42,799	26,848						64,668	77,694	181,661	191,418						105,925	114,608	314,365	289,209
Depreciation and amortization	2,463,708	2,824,318	7,935,355	5,758,310	108,663	107,829	324,833	319,895					2,822	2,182	8,466	6,671					100,712	105,992	300,816	321,730						60,204	60,185	180,524	180,399						19,174	19,797	57,524	60,895					80,047	76,900	238,744	230,538						81,233	79,914	240,486	237,847						242,960	244,670	716,092	733,437						1,354,577	1,448,329	4,048,679	4,326,808						2,050,392	2,145,798	6,116,164	6,418,221
Management fees					14,832	15,699	43,937	41,713					2,901	2,872	8,760	8,624					13,319	12,851	41,823	38,633						9,330	8,922	27,973	27,108						1,613	2,627	5,888	7,614					9,606	8,795	28,206	26,682						9,536	8,725	28,489	25,801						28,609	26,626	86,429	83,965						68,588	70,212	217,031	203,719						158,334	157,330	488,536	463,860
Operating	838,728	786,179	3,540,985	3,032,964	27,938	31,039	96,904	94,588													13,390	13,266	45,984	53,310						171	215	523	927						423	77	1,028	2,038					643	615	1,683	1,232						16,528	14,951	60,631	56,899						82,442	61,202	288,912	252,383						224,085	237,482	960,938	802,142						365,620	358,848	1,456,603	1,263,520
Renting	155,865	78,874	301,334	135,540	908	1,281	11,875	10,831													7,745		11,368	1,788						(459)	1,453	5,918	5,378								753	1,425						2,503	5,042	9,753						1,482	2,054	7,571	6,096						3,034	1,026	21,131	4,331						99,320	39,451	156,856	66,105						112,030	47,766	220,514	105,705
Repairs and maintenance	2,087,290	1,641,608	4,899,746	4,238,821	51,584	29,100	125,411	93,194						700	3,150	4,400					25,489	24,374	56,421	62,553						82,066	82,343	246,576	239,752						27,069	24,231	74,719	70,217					79,825	76,461	223,566	224,156						19,697	25,303	58,132	50,840						101,601	112,318	292,004	278,025						413,587	389,052	927,771	843,069						800,918	763,882	2,007,750	1,866,206
Taxes and insurance	1,388,807	1,301,388	4,180,961	3,667,180	55,807	52,614	172,802	164,374					12,859	12,642	40,498	37,050					29,643	28,897	87,842	85,152						38,487	37,599	119,861	114,730						7,360	11,293	30,025	31,912					38,387	38,040	120,392	109,188						30,264	29,945	89,496	91,893						87,450	87,950	279,034	257,239						398,451	427,973	1,155,775	1,170,929						698,708	726,954	2,095,725	2,062,466
Total Expenses	7,916,421	7,484,223	23,805,346	19,578,400	265,967	242,671	799,138	739,632					18,932	18,715	62,054	57,765					203,017	189,745	576,834	581,962						192,423	194,878	588,159	576,261						56,354	63,942	173,325	183,604					212,424	210,131	632,126	615,915						161,401	162,681	492,909	473,628						558,133	542,233	1,726,401	1,636,229						2,623,276	2,690,194	7,648,711	7,604,189						4,291,927	4,315,188	12,699,657	12,469,187
Income Before Other Income	2,726,607	2,483,529	8,016,146	8,411,808	111,643	103,510	256,747	279,465					53,591	53,095	156,941	157,835					132,590	127,399	417,497	353,150						58,498	29,724	110,242	90,223						(11,138)	4,248	(21,388)	6,057					29,870	25,068	72,271	60,726						65,488	42,739	190,960	165,255						189,520	161,054	480,762	437,527						837,200	490,078	2,570,122	1,954,182						1,467,262	1,036,914	4,234,154	3,504,421
Other Income (loss)
Interest expense	(2,393,427)	(2,142,817)	(7,160,489)	(5,746,533)	(121,659)	(122,858)	(361,857)	(366,060)					(14,036)	(14,510)	(41,932)	(43,776)					(97,895)	(97,798)	(293,469)	(355,345)						(70,528)	(71,481)	(210,158)	(212,962)						(86)	(21,332)	(485)	(70,021)					(66,300)	(67,226)	(197,633)	(200,200)						(77,635)	(78,601)	(231,196)	(234,140)						(208,944)	(206,762)	(610,958)	(616,349)						(1,245,694)	(1,262,391)	(3,710,651)	(3,757,844)						(1,902,777)	(1,942,961)	(5,658,339)	(5,856,697)
Interest Income	209	230	592	945																				26						6	2	15	5							36		122																																			57						6	39		210
Interest Income from Note																																								722	468	2,729																																										722		2,729
Gain on Sale of Real Estate				3,678,839																																			50,001		350,523																																										50,001
Other Income (Expenses)																								(68,588)																																																														(68,588)
Total Other Income (loss)	(2,545,120)	(2,515,749)	(7,582,432)	(6,771,939)	(121,659)	(122,858)	(361,857)	(366,060)					(14,036)	(14,510)	(41,932)	(43,776)					(97,895)	(97,798)	(293,469)	(423,908)						(70,522)	(71,479)	(210,143)	(212,957)						49,915	(20,574)	350,506	(67,170)					(66,300)	(67,226)	(197,633)	(200,200)						(77,635)	(78,601)	(231,196)	(234,140)						(208,944)	(206,762)	(610,958)	(616,349)						(1,245,694)	(1,262,391)	(3,710,651)	(3,757,786)						(1,852,770)	(1,942,200)	(5,658,339)	(5,922,346)
Net Income (Loss)	181,487	(32,874)	433,714	5,337,867	(10,016)	(19,348)	(105,110)	(86,594)					39,555	38,584	115,009	114,059					34,695	29,601	124,028	(70,758)						(12,024)	(41,755)	(99,901)	(122,734)						38,777	(16,326)	329,118	(61,113)					(36,430)	(42,159)	(125,362)	(139,474)						(12,147)	(35,862)	(40,236)	(68,884)						(19,424)	(45,708)	(130,196)	(178,822)						(408,494)	(772,312)	(1,140,529)	(1,803,605)						(385,508)	(905,286)	(1,424,185)	(2,417,925)
Proportionate share of net loss									$ (5,007)	$ (9,674)	$ (52,555)	$ (43,297)					$ 19,778	$ 19,292	$ 57,505	$ 57,029						$ 17,348	$ 14,801	$ 62,014	$ (35,379)						$ (6,011)	$ (20,878)	$ (49,951)	$ (61,367)					$ 19,389	$ (8,163)	$ 164,560	$ (30,556)						$ (18,215)	$ (21,079)	$ (62,681)	$ (69,737)						$ (6,074)	$ (17,931)	$ (20,118)	$ (34,442)						$ (9,711)	$ (22,854)	$ (65,097)	$ (89,411)						$ (163,398)	$ (308,925)	$ (456,212)	$ (721,442)	$ (151,902)	$ (375,412)	$ (422,535)	$ (1,028,602)	$ 11,496	$ (66,487)	$ 33,677	$ (307,160)	$ (163,398)	$ (308,925)	$ (456,212)	$ (721,442)
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%

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TREASURY UNITS (Details) - 10Q (USD $)	0 Months Ended		9 Months Ended		85 Months Ended					1 Months Ended	2 Months Ended	9 Months Ended		85 Months Ended			9 Months Ended		85 Months Ended	1 Months Ended	2 Months Ended	9 Months Ended		85 Months Ended	1 Months Ended	2 Months Ended
	Aug. 08, 2008	Aug. 20, 2007	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Mar. 06, 2008	Jan. 30, 2008	Jan. 15, 2008	Aug. 20, 2007	Nov. 04, 2014 Subsequent event	Nov. 30, 2014 Subsequent event	Sep. 30, 2014 Class A	Sep. 30, 2013 Class A	Sep. 30, 2014 Class A	Jan. 03, 2012 Class A	Aug. 20, 2007 Class A	Sep. 30, 2014 Class B	Sep. 30, 2013 Class B	Sep. 30, 2014 Class B	Nov. 04, 2014 Class B Subsequent event	Nov. 30, 2014 Class B Subsequent event	Sep. 30, 2014 General Partnership	Sep. 30, 2013 General Partnership	Sep. 30, 2014 General Partnership	Nov. 04, 2014 General Partnership Subsequent event	Nov. 30, 2014 General Partnership Subsequent event
Treasury units			51,818		51,818							41,455		41,455			9,845		9,845			518		518
Period for repurchase of depository receipts	12 months	12 months
Depository receipts authorized to be repurchased						1,500,000	900,000	600,000	300,000
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			25,920		1,268,811					5,277	5,277								2,308					122
Repurchase price of depository receipts			$ 47.22		$ 25.32					$ 47.37	$ 47.37
Repurchase price of units			$ 1,416.60							$ 1,421.10	$ 1,421.10			$ 759.60					$ 726.25
Repurchase of units			1,080	905													205			41.8	41.8	11			2.2	2.2
Total cost of repurchase			$ 1,564,397	$ 1,021,987	$ 34,045,000							$ 1,258,399	$ 819,240				$ 290,698	$ 192,610		$ 59,369		$ 15,300	$ 10,137		$ 3,125
Repurchase of depository receipts			$ 1,258,399							$ 257,098	$ 257,098

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RELATED PARTY TRANSACTIONS (Details) - 10Q (USD $)	3 Months Ended		9 Months Ended				9 Months Ended				12 Months Ended	9 Months Ended		3 Months Ended		6 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 item	Sep. 30, 2013	Sep. 30, 2014 Limited Partnerships Minimum	Sep. 30, 2014 Limited Partnerships Maximum	Sep. 30, 2014 General Partner or Management Company	Sep. 30, 2013 General Partner or Management Company	Sep. 30, 2014 Management Company item	Sep. 30, 2013 Management Company	Dec. 31, 2013 Management Company	Sep. 30, 2014 Hamilton Company	Sep. 30, 2014 Dexter Park	Mar. 31, 2014 President of Management Company	Mar. 31, 2013 President of Management Company	Sep. 30, 2014 President of Management Company	Sep. 30, 2013 President of Management Company	Sep. 30, 2014 Harold Brown Minimum	Sep. 30, 2014 Harold Brown Maximum
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue			4.00%									4.00%	2.00%
Management fee as a percentage of gross receipts rental revenue of Linewt, LLC			3.00%
Management fees of related party			$ 1,304,000	$ 1,153,000
Costs related to professional services							630,000	817,000
Repairs and maintenance	2,087,290	1,641,608	4,899,746	4,238,821			256,000					64,000
Administrative expense	543,704	451,268	1,643,185	1,601,123			261,000					36,000
Rental commission							6,000
Expenses for construction, architectural services and supervision of capital projects							107,000					95,000
Amount paid to related party												684,000
Management fee	438,319	400,588	1,303,780	1,144,462								489,000
Reimbursement to related party for payroll transfers									2,385,000	2,170,000
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									93,750	93,750
Fees for accounting and bookkeeping services per year									125,000
Quarterly fee for asset management consulting services														$ 56,250	$ 56,250	$ 56,250	$ 56,250
Number of limited partnerships and limited liability companies in which the entity has invested			9
Percentage of ownership interest					40.00%	50.00%												43.20%	60.00%
Number of employees having ownership interest in the investment properties									6

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DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE (Details) - 10Q (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Gain on the sale of real estate property
Total Revenues			$ 193,857
Operating and other expenses			172,586
Depreciation and amortization		0	2,111
Total Expenses			174,697
Income from discontinued operations	$ (654)	$ 0	$ 19,160

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TAXABLE INCOME AND TAX BASIS (Details) - 10Q (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
Reconciliation of GAAP net income to taxable income
Book/Tax differences from Investment Properties	1,100,000
Nashoba Apartments in Acton, Massachusetts
Reconciliation of GAAP net income to taxable income
Book/Tax differences from Investment Properties	$ 3,700,000

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RELATED PARTY TRANSACTIONS - 10Q

9 Months Ended

Sep. 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 including discontinued operations were approximately $1,304,000 and $1,153,000 for the nine months ended September 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 nine months ended September 30, 2014 and 2013, approximately $630,000 and $817,000, 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 $256,000 consisted of repairs and maintenance, $261,000 of administrative expense and $6,000 for rental commission. Approximately $107,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2014, the Hamilton Company received approximately $684,000 from the Investment Properties of which approximately $489,000 was the management fee, approximately $64,000 was for maintenance services, approximately $95,000 was for construction and capital improvement projects and approximately $36,000 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 $2,385,000 and $2,170,000 for the nine months ended September 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 nine months ended September 30, 2014 and 2013, the Management Company charged the Partnership $93,750 ($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 nine months ended September 30, 2014 and 2013 this individual received fees of $56,250.

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.

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RENTAL INCOME (Details) - 10Q (USD $)	9 Months Ended
	Sep. 30, 2014 sqft item	Sep. 30, 2013	Dec. 31, 2013
Minimum future rental income
2015	$ 2,754,000
2016	2,299,000
2017	1,532,000
2018	1,188,000
2019	794,000
Thereafter	837,000
Commercial Property Leases	9,404,000
Annual base rent for expiring leases	2,984,963
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	570,000		344,000
Recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis	183,000
Deferred rental concession	68,000
Amortization of deferred rents	2,000
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%
Aggregate contingent rentals from continuing operations	532,000	489,000
Through September 30, 2015
Minimum future rental income
Annual base rent for expiring leases	386,561
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 September 30, 2016
Minimum future rental income
Annual base rent for expiring leases	685,229
Total square feet for expiring leases	26,744
Total number of leases expiring	8
Percentage of annual base rent for expiring leases	23.00%
Through September 30, 2017
Minimum future rental income
Annual base rent for expiring leases	576,040
Total square feet for expiring leases	18,157
Total number of leases expiring	7
Percentage of annual base rent for expiring leases	20.00%
Through September 30, 2018
Minimum future rental income
Annual base rent for expiring leases	340,173
Total square feet for expiring leases	10,725
Total number of leases expiring	7
Percentage of annual base rent for expiring leases	11.00%
Through September 30, 2019
Minimum future rental income
Annual base rent for expiring leases	632,886
Total square feet for expiring leases	6,403
Total number of leases expiring	4
Percentage of annual base rent for expiring leases	21.00%
Through September 30, 2020
Minimum future rental income
Annual base rent for expiring leases	141,831
Total square feet for expiring leases	18,932
Total number of leases expiring	4
Percentage of annual base rent for expiring leases	5.00%
Through September 30, 2021
Minimum future 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 September 30, 2022
Minimum future 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 September 30, 2023
Minimum future 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 September 30, 2024
Minimum future 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) - 10Q

9 Months Ended

Sep. 30, 2014

RENTAL INCOME

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

	Commercial Property Leases
2015	$	2,754,000
2016	2,299,000
2017	1,532,000
2018	1,188,000
2019	794,000
Thereafter	837,000
	$	9,404,000

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 September 30,
2015	$	386,561	20,703	11	13	%
2016	685,229		24,656	7	23	%
2017	576,040		20,023	9	20	%
2018	340,173		10,377	6	11	%
2019	632,886		22,657	7	21	%
2020	141,831		3,056	2	5	%
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	$	2,984,963	108,043	44	100	%

XML

TREASURY UNITS (Tables) - 10Q

9 Months Ended

Sep. 30, 2014

TREASURY UNITS

Schedule of treasury units

Class A	41,455
Class B	9,845
General Partnership	518
	51,818

XML

RENTAL INCOME (Details 2) - 10Q (Commercial rental income)	9 Months Ended
	Sep. 30, 2014
Commercial rental income
Concentration Risk [Line Items]
Concentration risk percentage	29.00%

XML

FAIR VALUE MEASUREMENTS (Tables) - 10Q

9 Months Ended

Sep. 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 September 30, 2014	$	196,103,164	$	205,947,641
At December 31, 2013	$	198,520,478	$	196,059,827
Investment Properties
At September 30, 2014	$	138,334,647	$	147,420,121
At December 31, 2013	$	137,875,515	$	147,975,521

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables) - 10Q

9 Months Ended

Sep. 30, 2014

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

Summary of financial position relating to investment in unconsolidated joint ventures

Summary financial information as of September 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	$	8,619,846		$	2,622,203		$	7,230,839		$	5,215,054		$	1,011,453		$	6,473,921		$	6,628,931		$	19,644,258		$	98,343,487		$	155,789,992
Cash & Cash Equivalents	28,937			149,705			203,001			7,697			741,509			4,188			111,378			2,404,047			1,231,163			4,881,625
Rent Receivable	17,700			—			1,703			14,718			3,049			1,102			2,326			9,845			149,200			199,643
Real Estate Tax Escrow	98,555			—			41,934			71,690			—			43,591			40,212			52,130			356,155			704,267
Prepaid Expenses & Other Assets	95,311			895			50,550			44,962			27,327			44,461			44,558			96,377			1,657,149			2,061,590
Financing & Leasing Fees	33,515			7,753			91,554			10,849			—			15,110			9,005			159,175			295,874			622,835
Total Assets	$	8,893,864		$	2,780,556		$	7,619,581		$	5,364,970		$	1,783,338		$	6,582,373		$	6,836,410		$	22,365,832		$	102,033,028		$	164,259,952
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,140,592		$	2,001,159		$	10,000,000		$	4,823,762		$	—		$	4,590,276		$	5,311,923		$	16,900,000		$	86,566,934		$	138,334,646
Accounts Payable & Accrued Expense	150,481			55,616			172,833			27,905			724,100			16,076			123,765			2,142,549			931,507			4,344,832
Advance Rental Pmts & Security Deposits	174,103			—			197,412			103,182			13,487			88,756			95,052			301,976			2,205,078			3,179,046
Total Liabilities	8,465,176			2,056,775			10,370,245			4,954,849			737,587			4,695,108			5,530,740			19,344,525			89,703,519			145,858,524
Partners’ Capital	428,688			723,781			(2,750,664		)	410,121			1,045,751			1,887,265			1,305,670			3,021,307			12,329,509			18,401,428
Total Liabilities and Capital	$	8,893,864		$	2,780,556		$	7,619,581		$	5,364,970		$	1,783,338		$	6,582,373		$	6,836,410		$	22,365,832		$	102,033,028		$	164,259,952
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	214,344		$	361,891		$	—		$	205,061		$	522,876		$	943,633		$	652,833		$	1,510,654		$	4,931,804		9,343,093
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,375,332	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,375,332		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	7,967,761
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 November 1, 2014	—			—			—			127			111			—			—			—			—			238
Unsold units	—			—			—			—			9			—			—			—			—			9
Unsold units with deposits for future sale as of November 1, 2014	—			—			—			—			—			—			—			—			—			—

Summary financial information as of September 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	$	8,855,213		$	2,617,557		$	7,596,004		$	5,448,764		$	1,785,933		$	6,752,521		$	6,851,307		$	20,455,309		$	103,516,956		$	163,879,564
Cash & Cash Equivalents	18,578			24,337			15,400			743			901			14,460			60,794			15,593			919,270			1,070,076
Rent Receivable	25,174			—			3,684			5,841			4,019			10,560			—			8,402			72,166			129,846
Real Estate Tax Escrow	92,679			—			39,518			77,637			—			51,134			38,025			70,460			417,391			786,844
Prepaid Expenses & Other Assets	89,720			889			43,130			46,234			113,082			28,815			51,583			306,657			1,532,522			2,212,632
Financing & Leasing Fees	51,002			9,067			98,212			15,876			—			21,472			12,973			9,435			355,190			573,227
Total Assets	$	9,132,366		$	2,651,850		$	7,795,948		$	5,595,095		$	1,903,935		$	6,878,962		$	7,014,682		$	20,865,856		$	106,813,495		$	168,652,189
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,263,635		$	2,054,475		$	10,000,000		$	4,885,643		$	1,318,000		$	4,655,194		$	5,379,695		$	15,390,766		$	87,707,013		$	139,654,421
Accounts Payable & Accrued Expense	50,122			5,642			76,207			52,855			21,118			8,792			77,740			188,156			1,037,568			1,518,200
Advance Rental Pmts & Security Deposits	160,109			—			162,242			86,196			26,410			89,430			73,462			276,764			2,107,529			2,982,142
Total Liabilities	8,473,866			2,060,117			10,238,449			5,024,694			1,365,528			4,753,416			5,530,897			15,855,686			90,852,110			144,154,763
Partners’ Capital	658,500			591,733			(2,442,501		)	570,401			538,407			2,125,546			1,483,785			5,010,170			15,961,385			24,497,426
Total Liabilities and Capital	$	9,132,366		$	2,651,850		$	7,795,948		$	5,595,095		$	1,903,935		$	6,878,962		$	7,014,682		$	20,865,856		$	106,813,495		$	168,652,189
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	329,250		$	295,867		$	—		$	285,201		$	269,204		$	1,062,773		$	741,893		$	2,505,085		$	6,384,554		11,873,825
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,221,250	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,221,250		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	10,652,575
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 November 1, 2013	—			—			—			127			105			—			—			—			—			232
Unsold units	—			—			—			—			15			—			—			—			—			15
Unsold units with deposits for future sale as of November 1, 2013	—			—			—			—			—			—			—			—			—			—

Summary of income statement relating to investment in unconsolidated joint ventures

Financial information for the nine months ended September 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	$	1,043,460		$	218,995		$	994,756		$	698,401		$	151,937		$	704,397		$	683,025		$	2,177,950		$	10,143,620		$	16,816,541
Laundry and Sundry Income	12,425			—			(425		)	—			—			—			844			29,213			75,213			117,270
	1,055,885			218,995			994,331			698,401			151,937			704,397			683,869			2,207,163			10,218,833			16,933,811
Expenses
Administrative	23,376			1,180			32,580			6,784			3,388			14,493			8,104			42,799			181,661			314,365
Depreciation and Amortization	324,833			8,466			300,816			180,524			57,524			238,744			240,486			716,092			4,048,679			6,116,164
Management Fees	43,937			8,760			41,823			27,973			5,888			28,206			28,489			86,429			217,031			488,536
Operating	96,904			—			45,984			523			1,028			1,683			60,631			288,912			960,938			1,456,603
Renting	11,875			—			11,368			5,918			753			5,042			7,571			21,131			156,856			220,514
Repairs and Maintenance	125,411			3,150			56,421			246,576			74,719			223,566			58,132			292,004			927,771			2,007,750
Taxes and Insurance	172,802			40,498			87,842			119,861			30,025			120,392			89,496			279,034			1,155,775			2,095,725
	799,138			62,054			576,834			588,159			173,325			632,126			492,909			1,726,401			7,648,711			12,699,657
Income Before Other Income	256,747			156,941			417,497			110,242			(21,388		)	72,271			190,960			480,762			2,570,122			4,234,154
Other Income (Loss)
Interest Expense	(361,857		)	(41,932		)	(293,469		)	(210,158		)	(485		)	(197,633		)	(231,196		)	(610,958		)	(3,710,651		)	(5,658,339		)
Interest Income	—			—			—			15			—			—			—			—			—			—
Interest Income from Note	—			—			—			—			468			—			—			—			—			—
Gain on Sale of Real Estate	—			—			—			—			350,523			—			—			—			—			—
	(361,857		)	(41,932		)	(293,469		)	(210,143		)	350,506			(197,633		)	(231,196		)	(610,958		)	(3,710,651		)	(5,658,339		)
Net Income (Loss)	$	(105,110	)	$	115,009		$	124,028		$	(99,901	)	$	329,118		$	(125,362	)	$	(40,236	)	$	(130,196	)	$	(1,140,529	)	$	(1,424,185	)
Net Income (Loss) - NERA 50%	$	(52,555	)	$	57,505		$	62,014		$	(49,951	)	$	164,560		$	(62,681	)	$	(20,118	)	$	(65,097	)				33,677
Net Income (Loss) - NERA 40%																									$	(456,212	)	(456,212		)
																												$	(422,535	)

Financial information for the three months ended September 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	$	373,304		$	72,523		$	336,267		$	250,921		$	45,216		$	242,294		$	226,213		$	737,588		$	3,433,856		$	5,718,182
Laundry and Sundry Income	4,306			—			(660		)	—			—			—			676			10,065			26,620			41,007
	377,610			72,523			335,607			250,921			45,216			242,294			226,889			747,653			3,460,476			5,759,189
Expenses
Administrative	6,235			350			12,719			2,624			715			3,916			2,661			12,037			64,668			105,925
Depreciation and Amortization	108,663			2,822			100,712			60,204			19,174			80,047			81,233			242,960			1,354,577			2,050,392
Management Fees	14,832			2,901			13,319			9,330			1,613			9,606			9,536			28,609			68,588			158,334
Operating	27,938			—			13,390			171			423			643			16,528			82,442			224,085			365,620
Renting	908			—			7,745			(459		)	—			—			1,482			3,034			99,320			112,030
Repairs and Maintenance	51,584			—			25,489			82,066			27,069			79,825			19,697			101,601			413,587			800,918
Taxes and Insurance	55,807			12,859			29,643			38,487			7,360			38,387			30,264			87,450			398,451			698,708
	265,967			18,932			203,017			192,423			56,354			212,424			161,401			558,133			2,623,276			4,291,927
Income Before Other Income	111,643			53,591			132,590			58,498			(11,138		)	29,870			65,488			189,520			837,200			1,467,262
Other Income (Loss)
Interest Expense	(121,659		)	(14,036		)	(97,895		)	(70,528		)	(86		)	(66,300		)	(77,635		)	(208,944		)	(1,245,694		)	(1,902,777		)
Interest Income	—			—			—			6			—			—			—			—			—			6
Interest Income from Note	—			—			—			—			—			—			—			—			—			—
Gain on Sale of Real Estate	—			—			—			—			50,001			—			—			—			—			50,001
	(121,659		)	(14,036		)	(97,895		)	(70,522		)	49,915			(66,300		)	(77,635		)	(208,944		)	(1,245,694		)	(1,852,770		)
Net Income (Loss)	$	(10,016	)	$	39,555		$	34,695		$	(12,024	)	$	38,777		$	(36,430	)	$	(12,147	)	$	(19,424	)	$	(408,494	)	$	(385,508	)
Net Income (Loss) - NERA 50%	$	(5,007	)	$	19,778		$	17,348		$	(6,011	)	$	19,389		$	(18,215	)	$	(6,074	)	$	(9,711	)				11,496
Net Income (Loss) - NERA 40%																									$	(163,398	)	(163,398		)
																												$	(151,902	)

Financial information for the nine months ended September 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	$	1,006,954		$	215,601		$	931,629		$	666,484		$	189,661		$	676,641		$	638,208		$	2,046,366		$	9,487,525		$	15,859,069
Laundry and Sundry Income	12,144			—			3,483			—			—			—			675			27,391			70,846			114,538
	1,019,097			215,601			935,112			666,484			189,661			676,641			638,883			2,073,756			9,558,371			15,973,608
Expenses
Administrative	15,037			1,021			18,796			7,968			9,502			14,367			4,253			26,848			191,418			289,209
Depreciation and Amortization	319,895			6,671			321,730			180,399			60,895			230,538			237,847			733,437			4,326,808			6,418,221
Management Fees	41,713			8,624			38,633			27,108			7,614			26,682			25,801			83,965			203,719			463,860
Operating	94,588			—			53,310			927			2,038			1,232			56,899			252,383			802,142			1,263,520
Renting	10,831			—			1,788			5,378			1,425			9,753			6,096			4,331			66,105			105,705
Repairs and Maintenance	93,194			4,400			62,553			239,752			70,217			224,156			50,840			278,025			843,069			1,866,206
Taxes and Insurance	164,374			37,050			85,152			114,730			31,912			109,188			91,893			257,239			1,170,929			2,062,466
	739,632			57,765			581,962			576,261			183,604			615,915			473,628			1,636,229			7,604,189			12,469,187
Income Before Other Income (Loss)	279,465			157,835			353,150			90,223			6,057			60,726			165,255			437,527			1,954,182			3,504,421
Other Income (Loss)
Interest Expense	(366,060		)	(43,776		)	(355,345		)	(212,962		)	(70,021		)	(200,200		)	(234,140		)	(616,349		)	(3,757,844		)	(5,856,697		)
Interest Income	—			—			26			5			122			—			—			—			57			210
Interest Income from Note	—			—			—			—			2,729			—			—			—			—			2,729
Gain on Sale of Real Estate	—			—			—			—			—			—			—			—			—			—
Other Income (Expenses)	—			—			(68,588		)	—			—			—			—			—			—			(68,588		)
	(366,060		)	(43,776		)	(423,908		)	(212,957		)	(67,170		)	(200,200		)	(234,140		)	(616,349		)	(3,757,786		)	(5,922,346		)
Net Income (Loss)	$	(86,594	)	$	114,059		$	(70,758	)	$	(122,734	)	$	(61,113	)	$	(139,474	)	$	(68,884	)	$	(178,822	)	$	(1,803,605	)	$	(2,417,925	)
Net Income (Loss) - NERA 50%	$	(43,297	)	$	57,029		$	(35,379	)	$	(61,367	)	$	(30,556	)	$	(69,737	)	$	(34,442	)	$	(89,411	)				$	(307,160	)
NERA 40%																									$	(721,442	)	(721,442		)
																												$	(1,028,602	)

Financial information for the three months ended September 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	$	343,035		$	71,809		$	315,594		$	224,602		$	68,189		$	235,198		$	205,420		$	693,178		$	3,155,855		$	5,312,880
Laundry and Sundry Income	3,146			—			1,550			—			—			—			—			10,109			24,417			39,222
	346,181			71,809			317,144			224,602			68,189			235,198			205,420			703,287			3,180,272			5,352,102
Expenses
Administrative	5,109			317			4,365			4,162			5,916			6,816			1,788			8,440			77,694			114,608
Depreciation and Amortization	107,829			2,182			105,992			60,185			19,797			76,900			79,914			244,670			1,448,329			2,145,798
Management Fees	15,699			2,872			12,851			8,922			2,627			8,795			8,725			26,626			70,212			157,330
Operating	31,039			—			13,266			215			77			615			14,951			61,202			237,482			358,848
Renting	1,281			—			—			1,453			—			2,503			2,054			1,026			39,451			47,766
Repairs and Maintenance	29,100			700			24,374			82,343			24,231			76,461			25,303			112,318			389,052			763,882
Taxes and Insurance	52,614			12,642			28,897			37,599			11,293			38,040			29,945			87,950			427,973			726,954
	242,671			18,715			189,745			194,878			63,942			210,131			162,681			542,233			2,690,194			4,315,188
Income Before Other Income (Loss)	103,510			53,095			127,399			29,724			4,248			25,068			42,739			161,054			490,078			1,036,914
Other Income (Loss)
Interest Expense	(122,858		)	(14,510		)	(97,798		)	(71,481		)	(21,332		)	(67,226		)	(78,601		)	(206,762		)	(1,262,391		)	(1,942,961		)
Interest Income	—			—			—			2			36			—			—			—			—			39
Interest Income from Note	—			—			—			—			722			—			—			—			—			722
Gain on Sale of Real Estate	—			—			—			—			—			—			—			—			—			—
Other Income (Expenses)	—			—			—			—			—			—			—			—			—			—
	(122,858		)	(14,510		)	(97,798		)	(71,479		)	(20,574		)	(67,226		)	(78,601		)	(206,762		)	(1,262,391		)	(1,942,200		)
Net Income (Loss)	$	(19,348	)	$	38,584		$	29,601		$	(41,755	)	$	(16,326	)	$	(42,159	)	$	(35,862	)	$	(45,708	)	$	(772,312	)	$	(905,286	)
Net Income (Loss) - NERA 50%	$	(9,674	)	$	19,292		$	14,801		$	(20,878	)	$	(8,163	)	$	(21,079	)	$	(17,931	)	$	(22,854	)				$	(66,487	)
NERA 40%																									$	(308,925	)	(308,925		)
																												$	(375,412	)

Schedule of future annual mortgage maturities

			Hamilton
	Hamilton		Essex 81		345		Hamilton		Hamilton		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Development		Franklin		1025		Bay Apts		Minuteman		Main Apts		Park		Total
9/30/2015	$	138,298	$	2,001,159	$	—	$	71,689	$	72,279	$	78,516	$	—	$	1,620,796	$	3,982,737
9/30/2016	8,002,294		—		42,990		75,155		76,732		82,308		—		1,479,627		9,759,106
9/30/2017	—		—		180,476		4,676,918		4,441,265		5,151,099		—		1,564,180		16,013,938
9/30/2018	—		—		189,025		—		—		—		—		1,653,563		1,842,588
9/30/2019	—		—		196,473		—		—		—		—		1,748,055		1,944,528
Thereafter	—		—		9,391,036		—		—		—		16,900,000		78,500,713		104,791,749
	$	8,140,592	$	2,001,159	$	10,000,000	$	4,823,762	$	4,590,276	$	5,311,923	$	16,900,000	$	86,566,934	$	138,334,646

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RENTAL PROPERTIES - 10Q

9 Months Ended

Sep. 30, 2014

RENTAL PROPERTIES

RENTAL PROPERTIES

NOTE 2. RENTAL PROPERTIES

As of September 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 September 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 September 30, 2014 with a total of 792 units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

Rental properties consist of the following:

	September 30, 2014			December 31, 2013			Useful Life
Land, improvements and parking lots	$	44,300,508		$	43,919,728		15–40 years
Buildings and improvements	152,926,255			152,130,635			15–40 years
Kitchen cabinets	6,791,528			5,956,078			5–10 years
Carpets	6,601,426			5,820,516			5–10 years
Air conditioning	736,933			707,928			5–10 years
Laundry equipment	422,552			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	5,476,998			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	5,967,285			5,564,621			5–7 years
Smoke alarms	236,719			216,223			5–7 years
Total fixed assets	225,155,456			221,454,286
Less: Accumulated depreciation	(75,396,430		)	(68,549,625		)
	$	149,759,026		$	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 15 year 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. This refinancing required additional capital of approximately $1,846,000 from the Partnership. The closing costs associated with this refinancing were approximately $346,000.

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DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE (Tables) - 10Q

9 Months Ended

Sep. 30, 2014

DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE

Summary of income from discontinued operations

	2014		2013
Total Revenues	$	—	$	193,857
Operating and other expenses	—		172,586
Depreciation and amortization	—		2,111
	—		174,697
Income from discontinued operations	$	—	$	19,160

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ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS (Details) - 10Q (USD $)	9 Months Ended
	Sep. 30, 2014
ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS
Period for advance rental payment	1 month
Amount received for prepaid rent	$ 1,538,000
Security deposits	$ 2,066,000

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SUBSEQUENT EVENTS (Details) - 10Q (USD $)	9 Months Ended		85 Months Ended	9 Months Ended		85 Months Ended	9 Months Ended		85 Months Ended	1 Months Ended	2 Months Ended	1 Months Ended	2 Months Ended	1 Months Ended	2 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2014 Class B	Sep. 30, 2013 Class B	Sep. 30, 2014 Class B	Sep. 30, 2014 General Partnership	Sep. 30, 2013 General Partnership	Sep. 30, 2014 General Partnership	Nov. 04, 2014 Subsequent event	Nov. 30, 2014 Subsequent event	Nov. 04, 2014 Subsequent event Class B	Nov. 30, 2014 Subsequent event Class B	Nov. 04, 2014 Subsequent event General Partnership	Nov. 30, 2014 Subsequent event General Partnership
Subsequent events
Repurchase of depository receipts	25,920		1,268,811			2,308			122	5,277	5,277
Repurchase price of depository receipts	$ 47.22		$ 25.32							$ 47.37	$ 47.37
Repurchase price of units	$ 1,416.60					$ 726.25				$ 1,421.10	$ 1,421.10
Repurchase of depository receipts	$ 1,258,399									$ 257,098	$ 257,098
Repurchase of units	1,080	905		205			11					41.8	41.8	2.2	2.2
Total cost of repurchase	1,564,397	1,021,987	34,045,000	290,698	192,610		15,300	10,137				59,369		3,125
Gain on the sale		$ 3,678,839

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CONSOLIDATED BALANCE SHEETS (USD $)	Sep. 30, 2014	Dec. 31, 2013
ASSETS
Rental Properties	$ 149,759,026	$ 152,904,661
Cash and Cash Equivalents	13,744,651	14,013,380
Rents Receivable	568,560	496,149
Real Estate Tax Escrows	304,398	375,560
Prepaid Expenses and Other Assets	3,364,841	3,895,189
Investments in Unconsolidated Joint Ventures	9,343,093	12,025,142
Financing Fees	1,775,187	1,635,076
Total Assets	178,859,756	185,345,157
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	196,103,164	198,520,478
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	1,375,332	1,252,346
Accounts Payable and Accrued Expenses	2,908,670	3,178,495
Advance Rental Payments and Security Deposits	4,350,638	4,242,401
Total Liabilities	204,737,804	207,193,720
Commitments and Contingent Liabilities (Notes 3 and 9)
Partners' Capital 128,407 and 129,487 units outstanding in 2013 and 2012 respectively	(25,878,048)	(21,848,563)
Total Liabilities and Partners' Capital	$ 178,859,756	$ 185,345,157

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CASH FLOW INFORMATION (Details) - 10Q (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
CASH FLOW INFORMATION
Cash paid for interest	$ 6,444,000	$ 5,795,000
Cash paid for state income taxes	$ 50,000	$ 59,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash Flows from Operating Activities
Net income	$ 433,714	$ 5,337,867
Adjustments to reconcile net income to net cash provided by operating activities
Gain on the sale of real estate	0	(3,678,839)
Gain on the sale of equipment	0	(2,250)
Depreciation and amortization	7,935,355	5,758,310
Loss from investments in joint ventures	422,535	1,028,601
Depreciation and amortization - discontinued operations	0	2,111
Change in operating assets and liabilities
(Increase) in rents receivable	(72,411)	(89,114)
(Decrease) Increase in accounts payable and accrued expense	(269,825)	181,883
Decrease in real estate tax escrow	71,162	186,865
(Increase) in prepaid expenses and other assets	(408,753)	(2,402,166)
Increase in advance rental payments and security deposits	108,237	389,939
Total Adjustments	7,786,300	1,375,340
Net cash provided by operating activities	8,220,014	6,713,207
Cash Flows From Investing Activities
Proceed from unconsolidated joint ventures	2,346,690	920,472
Net proceeds from the sale of equipment	0	2,250
Net proceeds from sale of real estate	0	2,155,546
Distribution in excess of investment in unconsolidated joint ventures	185,000	1,640,250
(Investment in) unconsolidated joint ventures	(149,190)	(255,722)
Improvement of rental properties	(3,701,170)	(3,400,894)
Purchase of rental properties	0	(20,884,105)
Net cash (used in) investing activities	(1,318,670)	(19,822,203)
Cash Flows from Financing Activities
Payment of financing costs	(289,561)	(588,448)
Proceeds of mortgage notes payable	1,109,555	20,500,000
Principal payments and payoffs of mortgage notes payable	(3,526,869)	(4,581,283)
Stock buyback	(1,564,397)	(1,021,987)
Distributions to partners	(2,898,801)	(2,922,143)
Net cash provided by (used in) financing activities	(7,170,073)	11,386,139
Net (Decrease) in Cash and Cash Equivalents	(268,729)	(1,722,857)
Cash and Cash Equivalents, at beginning of period	14,013,380	6,981,906
Cash and Cash Equivalents, at end of period	$ 13,744,651	$ 5,259,049

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RENTAL PROPERTIES (Details) - 10Q (USD $)	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Rental properties
Total fixed assets	$ 225,155,456	$ 221,454,286
Less: Accumulated depreciation	(75,396,430)	(68,549,625)
Total fixed assets, net	149,759,026	152,904,661
Land, improvements and parking lots
Rental properties
Total fixed assets, net	44,300,508	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, net	152,926,255	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, net	6,791,528	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, net	6,601,426	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, net	736,933	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, net	422,552	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, net	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, net	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, net	5,476,998	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, net	86,657	86,657
Useful Life	5 years
Fences
Rental properties
Total fixed assets, net	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, net	5,967,285	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, net	$ 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	792
Number of properties	9
Residential and mixed-use properties | Partially owned properties | Minimum
RENTAL PROPERTIES
Percentage of ownership interest	40.00%
Residential and mixed-use properties | Partially owned properties | Maximum
RENTAL PROPERTIES
Percentage of ownership interest	50.00%
Condominium
RENTAL PROPERTIES
Number of units	19

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DISCONTINUED OPERATIONS AND SALES OF REAL ESTATE - 10Q

9 Months Ended

Sep. 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 nine months ended September 30, 2014 and 2013:

	2014		2013
Total Revenues	$	—	$	193,857
Operating and other expenses	—		172,586
Depreciation and amortization	—		2,111
	—		174,697
Income from discontinued operations	$	—	$	19,160

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RENTAL PROPERTIES (Details 3) - 10Q (USD $)			0 Months Ended		1 Months Ended		0 Months Ended
	Sep. 30, 2014	May 31, 2013	Jul. 15, 2013 Hamilton Green	Jul. 15, 2013 Hamilton Green item	May 31, 2013 Nashoba Apartments in Acton, Massachusetts	Sep. 30, 2014 Mortgages payable	Dec. 20, 2013 Mortgages payable Hamilton Green	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
Effective interest rate (as a percent)	5.46%					4.92%

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SIGNIFICANT ACCOUNTING POLICIES (Policies) - 10Q

9 Months Ended

Sep. 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 792 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 (Loss) 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 September 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 September 30, 2014 and December 31, 2013, respectively approximately $13,372,000 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 $79,346 and $23,483 for the nine months ended September 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 nine months ended September 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.

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SIGNIFICANT ACCOUNTING POLICIES - 10Q

9 Months Ended

Sep. 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 792 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 September 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 September 30, 2014 and December 31, 2013, respectively approximately $13,372,000 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 $79,346 and $23,483 for the nine months ended September 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 nine months ended September 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.

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CONSOLIDATED BALANCE SHEETS (Parenthetical)	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Dec. 31, 2012
CONSOLIDATED BALANCE SHEETS
Partners' Capital, units outstanding	128,407	129,487	129,539	130,444

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CASH FLOW INFORMATION - 10Q

9 Months Ended

Sep. 30, 2014

CASH FLOW INFORMATION

CASH FLOW INFORMATION

NOTE 11. CASH FLOW INFORMATION

During the nine months ended September 30, 2014 and 2013, cash paid for interest was approximately $6,444,000, and $5,795,000 respectively.  Cash paid for state income taxes was approximately $50,000 and $59,000 during the nine months ended September 30, 2014 and 2013 respectively.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 04, 2014 Class A	Nov. 04, 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	Sep. 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		102,550	24,397
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3

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FAIR VALUE MEASUREMENTS - 10Q

9 Months Ended

Sep. 30, 2014

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At September 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 September 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 September 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 September 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 September 30, 2014	$	196,103,164	$	205,947,641
At December 31, 2013	$	198,520,478	$	196,059,827
Investment Properties
At September 30, 2014	$	138,334,647	$	147,420,121
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 September 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 September 30, 2014 and current estimates of fair value may differ significantly from the amounts presented herein.

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CONSOLIDATED STATEMENTS OF INCOME (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenues
Rental income	$ 10,546,055	$ 9,859,135	$ 31,500,342	$ 27,687,903
Laundry and sundry income	96,973	108,617	321,150	302,305
Total Revenues	10,643,028	9,967,752	31,821,492	27,990,208
Expenses
Administrative	543,704	451,268	1,643,185	1,601,123
Depreciation and amortization	2,463,708	2,824,318	7,935,355	5,758,310
Management fee	438,319	400,588	1,303,780	1,144,462
Operating	838,728	786,179	3,540,985	3,032,964
Renting	155,865	78,874	301,334	135,540
Repairs and maintenance	2,087,290	1,641,608	4,899,746	4,238,821
Taxes and insurance	1,388,807	1,301,388	4,180,961	3,667,180
Total Expenses	7,916,421	7,484,223	23,805,346	19,578,400
Income Before Other Income	2,726,607	2,483,529	8,016,146	8,411,808
Other Income (Expense)
Interest income	209	230	592	945
Interest expense	(2,393,427)	(2,142,817)	(7,160,489)	(5,746,533)
Gain on the sale of equipment		2,250	0	2,250
(Loss) from investments in unconsolidated joint ventures	(151,902)	(375,412)	(422,535)	(1,028,601)
Total Other Income (loss)	(2,545,120)	(2,515,749)	(7,582,432)	(6,771,939)
Income (loss) From Continuing Operations	181,487	(32,220)	433,714	1,639,869
Discontinued Operations
Income from discontinued operations		(654)	0	19,160
Gain on the sale of real estate				3,678,839
Total Discontinued Operations		(654)		3,697,999
Net Income (Loss)	$ 181,487	$ (32,874)	$ 433,714	$ 5,337,867
Income (loss) per Unit
Income (loss) before discontinued operations	$ 1.41	$ (0.25)	$ 3.36	$ 12.62
Income from discontinued operations		$ (0.01)		$ 28.45
Net Income (loss) per Unit	$ 1.41	$ (0.26)	$ 3.36	$ 41.07
Weighted Average Number of Units Outstanding (in units)	128,587	129,719	129,149	129,981

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ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS - 10Q

9 Months Ended

Sep. 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 September 30, 2014, amounts received for prepaid rents of approximately $1,538,000 are included in cash and cash equivalents, and security deposits of approximately $2,066,000 are included in prepaid expenses and other assets and are restricted cash.

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MORTGAGE NOTES PAYABLE - 10Q

9 Months Ended

Sep. 30, 2014

MORTGAGE NOTES PAYABLE

MORTGAGE NOTES PAYABLE

NOTE 5. MORTGAGE NOTES PAYABLE AND LINE OF CREDIT

Mortgage Notes Payable

At September 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 September 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 September 30, 2014, the weighted average interest rate on the above mortgages was 4.81%. The effective rate of 4.92% 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 September 30, 2014 are as follows:

2015—current maturities	$	133,000
2016	726,000
2017	1,821,000
2018	7,840,000
2019	1,912,000
Thereafter	183,671,000
	$	196,103,000

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 Partnership’s 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 $89,000.

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 mortgage matures in August 2024.  The costs associated with the refinancing were approximately $75,000.

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%. The costs associated with the line of credit were approximately $125,000.  As of September 30, 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.

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SUBSEQUENT EVENTS - 10Q

9 Months Ended

Sep. 30, 2014

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 17—SUBSEQUENT EVENTS

Depository Receipts

Pursuant to the Repurchase Program, from October 1, 2014 through November 4, 2014, the Partnership purchased a total of 5,277 Depositary Receipts. The average price was $47.37 per receipt or $1,421.10 per unit. The total cost was $257,098. Under the terms of the Repurchase Program, the Partnership is required to repurchase 41.8 Class B Units and 2.2 General Partnership Units at a cost of $59,369 and $3,125 respectively.

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TAXABLE INCOME AND TAX BASIS - 10Q

9 Months Ended

Sep. 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 September 30, 2014, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2008 forward.

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COMMITMENTS AND CONTINGENCIES - 10Q

9 Months Ended

Sep. 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.

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PARTNERS' CAPITAL - 10Q

9 Months Ended

Sep. 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 31, June 30, and 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) for the 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:

	Nine Months Ended September30,
	2014		2013
Income per Depositary Receipt before Discontinued Operations	$	0.11	$	0.42
Income per Depository Receipt from Discontinued Operations	0.00		0.95
Net Income per Depositary Receipt after Discontinued Operations	$	0.11	$	1.37
Distributions per Depositary Receipt	$	0.75	$	0.75

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TREASURY UNITS - 10Q

9 Months Ended

Sep. 30, 2014

TREASURY UNITS

TREASURY UNITS

NOTE 8. TREASURY UNITS

Treasury Units at September 30, 2014 are as follows:

Class A	41,455
Class B	9,845
General Partnership	518
	51,818

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 September 30, 2014, the Partnership has repurchased 1,268,811 Depositary Receipts at an average price of $25.32 per receipt (or $759.60 per underlying Class A Unit), 2,308 Class B Units and 122 General Partnership Units, both at an average price of $726.25 per Unit, totaling approximately $34,045,000 including brokerage fees paid by the Partnership.

During the nine months ended September 30, 2014, the Partnership purchased a total of 25,920 Depositary Receipts. The average price was $47.22 per receipt or $1,416.60 per unit. The total cost including commission was $1,258,399. The Partnership was required to repurchase 205 Class B Units and 11 General Partnership units at a cost of $290,698 and $15,300 respectively.

From October 1, 2014 through November 4, 2014, the Partnership purchased a total of 5,277 Depositary Receipts. The average price was $47.37 per receipt or $1,421.10 per unit. The total cost was $257,098. The Partnership is required to repurchase 41.8 Class B Units and 2.2 General Partnership Units at a cost of $59,369 and $3,125 respectively.

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RENTAL INCOME - 10Q

9 Months Ended

Sep. 30, 2014

RENTAL INCOME

RENTAL INCOME

NOTE 10. RENTAL INCOME

During the nine months ended September 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 September 30, 2014 as follows:

	Commercial Property Leases
2015	$	2,754,000
2016	2,299,000
2017	1,532,000
2018	1,188,000
2019	794,000
Thereafter	837,000
	$	9,404,000

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 $532,000 and $489,000 for the nine months ended September 30, 2014 and 2013 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately 29% 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 September 30,
2015	$	386,561	20,703	11	13	%
2016	685,229		24,656	7	23	%
2017	576,040		20,023	9	20	%
2018	340,173		10,377	6	11	%
2019	632,886		22,657	7	21	%
2020	141,831		3,056	2	5	%
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	$	2,984,963	108,043	44	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $570,000 and $344,000 at September 30, 2014 and December 31, 2013. Included in rents receivable at September 30, 2014 is approximately $183,000 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 September 30, 2014 also includes approximately $68,000 representing the deferral of rental concession primarily related to the residential properties.

For the nine months ended September 30, 2014, rent at the commercial properties includes approximately $2,000 of amortization of deferred rents arising from the fair values assigned to in-place leases upon the purchase of Cypress Street in Brookline, Massachusetts.

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SIGNIFICANT ACCOUNTING POLICIES (Details 2) - 10Q (USD $)	9 Months Ended			0 Months Ended			9 Months Ended			9 Months Ended
	Sep. 30, 2014 item	Sep. 30, 2013	Dec. 31, 2013	Jan. 03, 2012 Class A	Jan. 03, 2012 Class A	Aug. 20, 2007 Class A	Sep. 30, 2014 Minimum	Sep. 30, 2014 Minimum Cash and cash equivalents	Sep. 30, 2014 Maximum	Sep. 30, 2014 Maximum Cash and cash equivalents	Sep. 30, 2014 Total item	Sep. 30, 2014 Total Minimum	Sep. 30, 2014 Total 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	13,372,000		15,275,000
Advertising Expense
Advertising expense	79,346	23,483
Interest Capitalized
Criteria of capitalization of interest on property based on specified period of construction							1 year
Capitalized interest	$ 0	$ 0

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 4) - 10Q (USD $)	Sep. 30, 2014
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
09/30/2015	$ 133,000
09/30/2016	726,000
09/30/2017	1,821,000
09/30/2018	7,840,000
09/30/2019	1,912,000
Thereafter	183,671,000
Total	196,103,000
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
09/30/2015	138,298
09/30/2016	8,002,294
Total	8,140,592
Hamilton Essex 81 Development
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
09/30/2015	2,001,159
Total	2,001,159
345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
09/30/2016	42,990
09/30/2017	180,476
09/30/2018	189,025
09/30/2019	196,473
Thereafter	9,391,036
Total	10,000,000
Hamilton 1025
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
09/30/2015	71,689
09/30/2016	75,155
09/30/2017	4,676,918
Total	4,823,762
Hamilton Bay Apartments
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
09/30/2015	72,279
09/30/2016	76,732
09/30/2017	4,441,265
Total	4,590,276
Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
09/30/2015	78,516
09/30/2016	82,308
09/30/2017	5,151,099
Total	5,311,923
Hamilton on Main Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Thereafter	16,900,000
Total	16,900,000
Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
09/30/2015	1,620,796
09/30/2016	1,479,627
09/30/2017	1,564,180
09/30/2018	1,653,563
09/30/2019	1,748,055
Thereafter	78,500,713
Total	86,566,934
Total
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
09/30/2015	3,982,737
09/30/2016	9,759,106
09/30/2017	16,013,938
09/30/2018	1,842,588
09/30/2019	1,944,528
Thereafter	104,791,749
Total	$ 138,334,646

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IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS - 10Q

9 Months Ended

Sep. 30, 2014

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In August 2014, the FASB issued ASU 2014-15, which requires management to evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, and to provide certain disclosures when it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for the annual period ended December 31,2016 and for annual periods and interim periods thereafter with early adoption permitted. The adoption of ASU 2014-15 is not expected to materially impact the Partnership’s consolidated financial statements.

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MORTGAGE NOTES PAYABLE (Tables) - 10Q

9 Months Ended

Sep. 30, 2014

MORTGAGE NOTES PAYABLE

Schedule of approximate annual maturities

2015—current maturities	$	133,000
2016	726,000
2017	1,821,000
2018	7,840,000
2019	1,912,000
Thereafter	183,671,000
	$	196,103,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 2) - 10Q (USD $)	Sep. 30, 2014	Dec. 31, 2013	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2014 Limited Partnerships	Sep. 30, 2013 Limited Partnerships	Sep. 30, 2014 Limited Partnerships NERA 50%	Sep. 30, 2013 Limited Partnerships NERA 50%	Sep. 30, 2014 Limited Partnerships NERA 40%	Sep. 30, 2013 Hamilton Essex 81 item	Mar. 07, 2005 Hamilton Essex 81 item	Sep. 30, 2014 Hamilton Essex 81 NERA 50% item	Sep. 30, 2013 Hamilton Essex 81 NERA 50%	Sep. 30, 2013 Hamilton Essex 81 Residential buildings item	Sep. 30, 2014 Hamilton Essex 81 Residential buildings NERA 50% item	Sep. 30, 2013 Hamilton Essex 81 Commercial item	Sep. 30, 2014 Hamilton Essex 81 Commercial NERA 50% item	Sep. 30, 2013 Hamilton Essex Development item	Sep. 30, 2014 Hamilton Essex Development NERA 50% item	Sep. 30, 2013 Hamilton Essex Development NERA 50%	Sep. 30, 2013 Hamilton Essex Development Commercial item	Sep. 30, 2014 Hamilton Essex Development Commercial NERA 50% item	Sep. 30, 2013 345 Franklin item	Nov. 30, 2001 345 Franklin item	Sep. 30, 2014 345 Franklin NERA 50% item	Sep. 30, 2013 345 Franklin NERA 50%	Sep. 30, 2013 345 Franklin Residential buildings item	Sep. 30, 2014 345 Franklin Residential buildings NERA 50% item	Sep. 30, 2013 Hamilton 1025 item	Mar. 02, 2005 Hamilton 1025 item	Sep. 30, 2014 Hamilton 1025 NERA 50% item	Sep. 30, 2013 Hamilton 1025 NERA 50%	Sep. 30, 2013 Hamilton 1025 Residential buildings item	Sep. 30, 2014 Hamilton 1025 Residential buildings NERA 50% item	Sep. 30, 2013 Hamilton 1025 Commercial item	Sep. 30, 2014 Hamilton 1025 Commercial NERA 50% item	Sep. 30, 2013 Hamilton Bay Sales item	Sep. 30, 2014 Hamilton Bay Sales NERA 50% item	Sep. 30, 2013 Hamilton Bay Sales NERA 50%	Sep. 30, 2013 Hamilton Bay Sales Residential buildings item	Sep. 30, 2014 Hamilton Bay Sales Residential buildings NERA 50% item	Sep. 30, 2013 Hamilton Bay Apartments item	Oct. 03, 2005 Hamilton Bay Apartments item	Sep. 30, 2014 Hamilton Bay Apartments NERA 50% item	Sep. 30, 2013 Hamilton Bay Apartments NERA 50%	Sep. 30, 2013 Hamilton Bay Apartments Residential buildings item	Sep. 30, 2014 Hamilton Bay Apartments Residential buildings NERA 50% item	Sep. 30, 2013 Hamilton Minuteman item	Sep. 30, 2004 Hamilton Minuteman item	Sep. 30, 2014 Hamilton Minuteman NERA 50% item	Sep. 30, 2013 Hamilton Minuteman NERA 50%	Sep. 30, 2013 Hamilton Minuteman Residential buildings item	Sep. 30, 2014 Hamilton Minuteman Residential buildings NERA 50% item	Sep. 30, 2013 Hamilton on Main Apts item	May 31, 2008 Hamilton on Main Apts item	Aug. 31, 2004 Hamilton on Main Apts item	Sep. 30, 2014 Hamilton on Main Apts NERA 50% item	Sep. 30, 2013 Hamilton on Main Apts NERA 50%	Sep. 30, 2013 Hamilton on Main Apts Residential buildings item	Sep. 30, 2014 Hamilton on Main Apts Residential buildings NERA 50% item	Sep. 30, 2013 Dexter Park item	Oct. 28, 2008 Dexter Park item	Sep. 30, 2014 Dexter Park NERA 40% item	Sep. 30, 2013 Dexter Park NERA 40%	Sep. 30, 2013 Dexter Park Residential buildings item	Sep. 30, 2014 Dexter Park Residential buildings NERA 40% item	Sep. 30, 2014 Total item	Sep. 30, 2013 Total item	Sep. 30, 2013 Total NERA 40%	Sep. 30, 2014 Total Residential buildings item	Sep. 30, 2013 Total Residential buildings item	Sep. 30, 2014 Total Commercial item	Sep. 30, 2013 Total Commercial item
ASSETS
Rental Properties	$ 149,759,026	$ 152,904,661								$ 8,855,213		$ 8,619,846						$ 2,617,557	$ 2,622,203				$ 7,596,004		$ 7,230,839				$ 5,448,764		$ 5,215,054						$ 1,785,933	$ 1,011,453				$ 6,752,521		$ 6,473,921				$ 6,851,307		$ 6,628,931				$ 20,455,309			$ 19,644,258				$ 103,516,956		$ 98,343,487				$ 155,789,992	$ 163,879,564
Cash & Cash Equivalents	13,744,651	14,013,380	5,259,049	6,981,906						18,578		28,937						24,337	149,705				15,400		203,001				743		7,697						901	741,509				14,460		4,188				60,794		111,378				15,593			2,404,047				919,270		1,231,163				4,881,625	1,070,076
Rent Receivable	568,560	496,149								25,174		17,700											3,684		1,703				5,841		14,718						4,019	3,049				10,560		1,102						2,326				8,402			9,845				72,166		149,200				199,643	129,846
Real Estate Tax Escrow	304,398	375,560								92,679		98,555											39,518		41,934				77,637		71,690											51,134		43,591				38,025		40,212				70,460			52,130				417,391		356,155				704,267	786,844
Prepaid Expenses & Other Assets	3,364,841	3,895,189								89,720		95,311						889	895				43,130		50,550				46,234		44,962						113,082	27,327				28,815		44,461				51,583		44,558				306,657			96,377				1,532,522		1,657,149				2,061,590	2,212,632
Financing & Leasing Fees	1,775,187	1,635,076								51,002		33,515						9,067	7,753				98,212		91,554				15,876		10,849											21,472		15,110				12,973		9,005				9,435			159,175				355,190		295,874				622,835	573,227
Total Assets	178,859,756	185,345,157								9,132,366		8,893,864						2,651,850	2,780,556				7,795,948		7,619,581				5,595,095		5,364,970						1,903,935	1,783,338				6,878,962		6,582,373				7,014,682		6,836,410				20,865,856			22,365,832				106,813,495		102,033,028				164,259,952	168,652,189
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	196,103,164	198,520,478								8,263,635		8,140,592						2,054,475	2,001,159				10,000,000		10,000,000				4,885,643		4,823,762						1,318,000					4,655,194		4,590,276				5,379,695		5,311,923				15,390,766			16,900,000				87,707,013		86,566,934				138,334,646	139,654,421
Accounts Payable and Accrued Expenses	2,908,670	3,178,495								50,122		150,481						5,642	55,616				76,207		172,833				52,855		27,905						21,118	724,100				8,792		16,076				77,740		123,765				188,156			2,142,549				1,037,568		931,507				4,344,832	1,518,200
Advance Rental Payments and Security Deposits	4,350,638	4,242,401								160,109		174,103											162,242		197,412				86,196		103,182						26,410	13,487				89,430		88,756				73,462		95,052				276,764			301,976				2,107,529		2,205,078				3,179,046	2,982,142
Total Liabilities	204,737,804	207,193,720								8,473,866		8,465,176						2,060,117	2,056,775				10,238,449		10,370,245				5,024,694		4,954,849						1,365,528	737,587				4,753,416		4,695,108				5,530,897		5,530,740				15,855,686			19,344,525				90,852,110		89,703,519				145,858,524	144,154,763
Partners' Capital	(25,878,048)	(21,848,563)	(21,121,940)	(22,515,677)						658,500		428,688						591,733	723,781				(2,442,501)		(2,750,664)				570,401		410,121						538,407	1,045,751				2,125,546		1,887,265				1,483,785		1,305,670				5,010,170			3,021,307				15,961,385		12,329,509				18,401,428	24,497,427
Total Liabilities and Partners' Capital	178,859,756	185,345,157								9,132,366		8,893,864						2,651,850	2,780,556				7,795,948		7,619,581				5,595,095		5,364,970						1,903,935	1,783,338				6,878,962		6,582,373				7,014,682		6,836,410				20,865,856			22,365,832				106,813,495		102,033,028				164,259,952	168,652,189
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	9,343,093	12,025,142			9,343,093		4,411,292	5,489,273	4,931,804			214,344	329,250						361,891	295,867				1,533,000						2,352,000	205,061	285,201						522,876	269,204				2,500,000	943,633	1,062,773				5,075,000	652,833	741,893					8,000,000	1,510,654	2,505,085			6,384,554	15,925,000	4,931,804					11,873,825	6,384,554
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	(1,375,332)	(1,252,346)																							(1,375,332)	(1,221,250)																																									(1,375,332)
Total Investment in Unconsolidated Joint Ventures (Net)						$ 10,652,575																																																													$ 7,967,761
Total units/ condominiums
Total										49	48	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	168	48		48	48	42	42	42		42	42	148		280	148		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						105	111					120												137												238	232
Unsold units																																					15	9																													9	15

XML

PARTNERS' CAPITAL (Details) - 10Q (USD $)	9 Months Ended					9 Months Ended	0 Months Ended				9 Months Ended			9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013	Jun. 30, 2013	Mar. 31, 2013	Sep. 30, 2014 Limited Partner item	Sep. 30, 2014 Class A	Jun. 30, 2014 Class A	Mar. 31, 2014 Class A	Jan. 03, 2012 Class A	Sep. 30, 2014 Class A	Jan. 03, 2012 Class A	Aug. 20, 2007 Class A	Sep. 30, 2014 Class B	Sep. 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 approved (in dollars per unit)							7.50	7.50	7.50
Quarterly distribution per unit (in dollars per unit)		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
Distribution per unit (in dollars per unit)			$ 30.00
Earnings per depository receipt
Income per Depositary Receipt before Discontinued Operations	0.11	0.42
Income from Discontinued Operations	0.00	0.95
Net Income per Depositary Receipt after Discontinued Operations	0.11	1.37
Distributions per Depositary Receipt (in dollars per share)	0.75	0.75	1.00

XML

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (USD $)	Subtotal	Class A USD ($)	Class B USD ($)	General Partnership USD ($)	Treasury Units	Total USD ($)
Balance at Dec. 31, 2012		$ (18,017,082)	$ (4,273,666)	$ (224,929)		$ (22,515,677)
Balance (in units) at Dec. 31, 2012	180,225	144,180	34,243	1,802	49,781	130,444
Increase (Decrease) in Partners' Capital
Distribution to Partners		(2,337,714)	(555,208)	(29,221)		(2,922,143)
Stock Buyback		(819,240)	(192,610)	(10,137)		(1,021,987)
Stock Buyback (in units)					905	(905)
Net income		4,270,294	1,014,195	53,379		5,337,867
Balance at Sep. 30, 2013		(16,903,742)	(4,007,289)	(210,908)		(21,121,940)
Balance (in units) at Sep. 30, 2013	180,225	144,180	34,243	1,802	50,686	129,539
Balance at Dec. 31, 2013		(17,485,327)	(4,145,076)	(218,160)		(21,848,563)
Balance (in units) at Dec. 31, 2013	180,225	144,180	34,243	1,802	50,738	129,487
Increase (Decrease) in Partners' Capital
Distribution to Partners		(2,319,041)	(550,772)	(28,988)		(2,898,801)
Stock Buyback		(1,258,399)	(290,698)	(15,300)		(1,564,397)
Stock Buyback (in units)			(205)	(11)	1,080	(1,080)
Net income		346,971	82,406	4,337		433,714
Balance at Sep. 30, 2014		$ (20,715,796)	$ (4,904,141)	$ (258,111)		$ (25,878,048)
Balance (in units) at Sep. 30, 2014	180,225	144,180	34,243	1,802	51,818	128,407

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OTHER ASSETS - 10Q

9 Months Ended

Sep. 30, 2014

OTHER ASSETS

OTHER ASSETS

NOTE 4. OTHER ASSETS

Approximately $2,066,000 and $2,053,000 of security deposits are included in prepaid expenses and other assets at September 30, 2014 and December 31, 2013, respectively. The security deposits and escrow accounts are restricted cash.

Included in prepaid expenses and other assets at September 30, 2014 and December 31, 2013 is approximately $234,000 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 $57,000 net of accumulated amortization of approximately $1,695,000 and approximately $978,000 net of accumulated amortization of approximately $774,000 at September 30, 2014 and December 31, 2013, respectively.

Financing fees of approximately $1,775,000 and $1,635,000 are net of accumulated amortization of approximately $557,000 and $548,000 at September 30, 2014 and December 31, 2013, respectively.

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PARTNERS' CAPITAL (Tables) - 10Q

9 Months Ended

Sep. 30, 2014

PARTNERS' CAPITAL

Schedule of information per depositary receipt

	Nine Months Ended September30,
	2014		2013
Income per Depositary Receipt before Discontinued Operations	$	0.11	$	0.42
Income per Depository Receipt from Discontinued Operations	0.00		0.95
Net Income per Depositary Receipt after Discontinued Operations	$	0.11	$	1.37
Distributions per Depositary Receipt	$	0.75	$	0.75

XML

OTHER ASSETS (Details) - 10Q (USD $)	Sep. 30, 2014	Dec. 31, 2013
OTHER ASSETS
Security deposits	$ 2,066,000	$ 2,053,000
Escrow deposits to fund future capital improvements	234,000	123,000
Intangible assets, net of accumulated amortization	57,000	978,000
Accumulated amortization on intangible assets in connection with the acquisition of Windsor Green	1,695,000	774,000
Financing fees, net	1,775,000	1,635,000
Accumulated amortization on financing and leasing fees	$ 557,000	$ 548,000

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES - 10Q

9 Months Ended

Sep. 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 $86,567,000 at September 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. 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. 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 September 30, 2014, the balance of the mortgage is approximately $4,590,000. 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.  Six units have been sold during the first nine months of 2014 with a gain of approximately $351,000.  As of November 1, 2014, nine 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 may 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 $8,141,000, at September 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 $2,001,000 with a variable interest rate of 2.25% over the daily Libor rate (0.156%) at September 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 $4,824,000 at September 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.  The Partnership sold 137 units as condominiums. The assets were combined with Hamilton on Main Apartments. 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. In August 2014, the property was refinanced with a 10 year mortgage in the amount of $16,900,000 at 4.34% interest only.  The Joint Venture Partnership paid off the prior mortgage of approximately $15,205,000 with the proceeds of the new mortgage and distributed $850,000 to the Partnership.

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 Joint Venture 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 September 30, 2014, the balance of this mortgage is approximately $5,312,000. 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 September 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	$	8,619,846		$	2,622,203		$	7,230,839		$	5,215,054		$	1,011,453		$	6,473,921		$	6,628,931		$	19,644,258		$	98,343,487		$	155,789,992
Cash & Cash Equivalents	28,937			149,705			203,001			7,697			741,509			4,188			111,378			2,404,047			1,231,163			4,881,625
Rent Receivable	17,700			—			1,703			14,718			3,049			1,102			2,326			9,845			149,200			199,643
Real Estate Tax Escrow	98,555			—			41,934			71,690			—			43,591			40,212			52,130			356,155			704,267
Prepaid Expenses & Other Assets	95,311			895			50,550			44,962			27,327			44,461			44,558			96,377			1,657,149			2,061,590
Financing & Leasing Fees	33,515			7,753			91,554			10,849			—			15,110			9,005			159,175			295,874			622,835
Total Assets	$	8,893,864		$	2,780,556		$	7,619,581		$	5,364,970		$	1,783,338		$	6,582,373		$	6,836,410		$	22,365,832		$	102,033,028		$	164,259,952
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,140,592		$	2,001,159		$	10,000,000		$	4,823,762		$	—		$	4,590,276		$	5,311,923		$	16,900,000		$	86,566,934		$	138,334,646
Accounts Payable & Accrued Expense	150,481			55,616			172,833			27,905			724,100			16,076			123,765			2,142,549			931,507			4,344,832
Advance Rental Pmts & Security Deposits	174,103			—			197,412			103,182			13,487			88,756			95,052			301,976			2,205,078			3,179,046
Total Liabilities	8,465,176			2,056,775			10,370,245			4,954,849			737,587			4,695,108			5,530,740			19,344,525			89,703,519			145,858,524
Partners’ Capital	428,688			723,781			(2,750,664		)	410,121			1,045,751			1,887,265			1,305,670			3,021,307			12,329,509			18,401,428
Total Liabilities and Capital	$	8,893,864		$	2,780,556		$	7,619,581		$	5,364,970		$	1,783,338		$	6,582,373		$	6,836,410		$	22,365,832		$	102,033,028		$	164,259,952
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	214,344		$	361,891		$	—		$	205,061		$	522,876		$	943,633		$	652,833		$	1,510,654		$	4,931,804		9,343,093
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,375,332	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,375,332		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	7,967,761
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 November 1, 2014	—			—			—			127			111			—			—			—			—			238
Unsold units	—			—			—			—			9			—			—			—			—			9
Unsold units with deposits for future sale as of November 1, 2014	—			—			—			—			—			—			—			—			—			—

Financial information for the nine months ended September 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	$	1,043,460		$	218,995		$	994,756		$	698,401		$	151,937		$	704,397		$	683,025		$	2,177,950		$	10,143,620		$	16,816,541
Laundry and Sundry Income	12,425			—			(425		)	—			—			—			844			29,213			75,213			117,270
	1,055,885			218,995			994,331			698,401			151,937			704,397			683,869			2,207,163			10,218,833			16,933,811
Expenses
Administrative	23,376			1,180			32,580			6,784			3,388			14,493			8,104			42,799			181,661			314,365
Depreciation and Amortization	324,833			8,466			300,816			180,524			57,524			238,744			240,486			716,092			4,048,679			6,116,164
Management Fees	43,937			8,760			41,823			27,973			5,888			28,206			28,489			86,429			217,031			488,536
Operating	96,904			—			45,984			523			1,028			1,683			60,631			288,912			960,938			1,456,603
Renting	11,875			—			11,368			5,918			753			5,042			7,571			21,131			156,856			220,514
Repairs and Maintenance	125,411			3,150			56,421			246,576			74,719			223,566			58,132			292,004			927,771			2,007,750
Taxes and Insurance	172,802			40,498			87,842			119,861			30,025			120,392			89,496			279,034			1,155,775			2,095,725
	799,138			62,054			576,834			588,159			173,325			632,126			492,909			1,726,401			7,648,711			12,699,657
Income Before Other Income	256,747			156,941			417,497			110,242			(21,388		)	72,271			190,960			480,762			2,570,122			4,234,154
Other Income (Loss)
Interest Expense	(361,857		)	(41,932		)	(293,469		)	(210,158		)	(485		)	(197,633		)	(231,196		)	(610,958		)	(3,710,651		)	(5,658,339		)
Interest Income	—			—			—			15			—			—			—			—			—			—
Interest Income from Note	—			—			—			—			468			—			—			—			—			—
Gain on Sale of Real Estate	—			—			—			—			350,523			—			—			—			—			—
	(361,857		)	(41,932		)	(293,469		)	(210,143		)	350,506			(197,633		)	(231,196		)	(610,958		)	(3,710,651		)	(5,658,339		)
Net Income (Loss)	$	(105,110	)	$	115,009		$	124,028		$	(99,901	)	$	329,118		$	(125,362	)	$	(40,236	)	$	(130,196	)	$	(1,140,529	)	$	(1,424,185	)
Net Income (Loss) - NERA 50%	$	(52,555	)	$	57,505		$	62,014		$	(49,951	)	$	164,560		$	(62,681	)	$	(20,118	)	$	(65,097	)				33,677
Net Income (Loss) - NERA 40%																									$	(456,212	)	(456,212		)
																												$	(422,535	)

Financial information for the three months ended September 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	$	373,304		$	72,523		$	336,267		$	250,921		$	45,216		$	242,294		$	226,213		$	737,588		$	3,433,856		$	5,718,182
Laundry and Sundry Income	4,306			—			(660		)	—			—			—			676			10,065			26,620			41,007
	377,610			72,523			335,607			250,921			45,216			242,294			226,889			747,653			3,460,476			5,759,189
Expenses
Administrative	6,235			350			12,719			2,624			715			3,916			2,661			12,037			64,668			105,925
Depreciation and Amortization	108,663			2,822			100,712			60,204			19,174			80,047			81,233			242,960			1,354,577			2,050,392
Management Fees	14,832			2,901			13,319			9,330			1,613			9,606			9,536			28,609			68,588			158,334
Operating	27,938			—			13,390			171			423			643			16,528			82,442			224,085			365,620
Renting	908			—			7,745			(459		)	—			—			1,482			3,034			99,320			112,030
Repairs and Maintenance	51,584			—			25,489			82,066			27,069			79,825			19,697			101,601			413,587			800,918
Taxes and Insurance	55,807			12,859			29,643			38,487			7,360			38,387			30,264			87,450			398,451			698,708
	265,967			18,932			203,017			192,423			56,354			212,424			161,401			558,133			2,623,276			4,291,927
Income Before Other Income	111,643			53,591			132,590			58,498			(11,138		)	29,870			65,488			189,520			837,200			1,467,262
Other Income (Loss)
Interest Expense	(121,659		)	(14,036		)	(97,895		)	(70,528		)	(86		)	(66,300		)	(77,635		)	(208,944		)	(1,245,694		)	(1,902,777		)
Interest Income	—			—			—			6			—			—			—			—			—			6
Interest Income from Note	—			—			—			—			—			—			—			—			—			—
Gain on Sale of Real Estate	—			—			—			—			50,001			—			—			—			—			50,001
	(121,659		)	(14,036		)	(97,895		)	(70,522		)	49,915			(66,300		)	(77,635		)	(208,944		)	(1,245,694		)	(1,852,770		)
Net Income (Loss)	$	(10,016	)	$	39,555		$	34,695		$	(12,024	)	$	38,777		$	(36,430	)	$	(12,147	)	$	(19,424	)	$	(408,494	)	$	(385,508	)
Net Income (Loss) - NERA 50%	$	(5,007	)	$	19,778		$	17,348		$	(6,011	)	$	19,389		$	(18,215	)	$	(6,074	)	$	(9,711	)				11,496
Net Income (Loss) - NERA 40%																									$	(163,398	)	(163,398		)
																												$	(151,902	)

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

			Hamilton
	Hamilton		Essex 81		345		Hamilton		Hamilton		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Development		Franklin		1025		Bay Apts		Minuteman		Main Apts		Park		Total
9/30/2015	$	138,298	$	2,001,159	$	—	$	71,689	$	72,279	$	78,516	$	—	$	1,620,796	$	3,982,737
9/30/2016	8,002,294		—		42,990		75,155		76,732		82,308		—		1,479,627		9,759,106
9/30/2017	—		—		180,476		4,676,918		4,441,265		5,151,099		—		1,564,180		16,013,938
9/30/2018	—		—		189,025		—		—		—		—		1,653,563		1,842,588
9/30/2019	—		—		196,473		—		—		—		—		1,748,055		1,944,528
Thereafter	—		—		9,391,036		—		—		—		16,900,000		78,500,713		104,791,749
	$	8,140,592	$	2,001,159	$	10,000,000	$	4,823,762	$	4,590,276	$	5,311,923	$	16,900,000	$	86,566,934	$	138,334,646

At September  30, 2014 the weighted average interest rate on the above mortgages was 5.28%. The effective rate was 5. 36% including the amortization expense of deferred financing costs.

Summary financial information as of September 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	$	8,855,213		$	2,617,557		$	7,596,004		$	5,448,764		$	1,785,933		$	6,752,521		$	6,851,307		$	20,455,309		$	103,516,956		$	163,879,564
Cash & Cash Equivalents	18,578			24,337			15,400			743			901			14,460			60,794			15,593			919,270			1,070,076
Rent Receivable	25,174			—			3,684			5,841			4,019			10,560			—			8,402			72,166			129,846
Real Estate Tax Escrow	92,679			—			39,518			77,637			—			51,134			38,025			70,460			417,391			786,844
Prepaid Expenses & Other Assets	89,720			889			43,130			46,234			113,082			28,815			51,583			306,657			1,532,522			2,212,632
Financing & Leasing Fees	51,002			9,067			98,212			15,876			—			21,472			12,973			9,435			355,190			573,227
Total Assets	$	9,132,366		$	2,651,850		$	7,795,948		$	5,595,095		$	1,903,935		$	6,878,962		$	7,014,682		$	20,865,856		$	106,813,495		$	168,652,189
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,263,635		$	2,054,475		$	10,000,000		$	4,885,643		$	1,318,000		$	4,655,194		$	5,379,695		$	15,390,766		$	87,707,013		$	139,654,421
Accounts Payable & Accrued Expense	50,122			5,642			76,207			52,855			21,118			8,792			77,740			188,156			1,037,568			1,518,200
Advance Rental Pmts & Security Deposits	160,109			—			162,242			86,196			26,410			89,430			73,462			276,764			2,107,529			2,982,142
Total Liabilities	8,473,866			2,060,117			10,238,449			5,024,694			1,365,528			4,753,416			5,530,897			15,855,686			90,852,110			144,154,763
Partners’ Capital	658,500			591,733			(2,442,501		)	570,401			538,407			2,125,546			1,483,785			5,010,170			15,961,385			24,497,426
Total Liabilities and Capital	$	9,132,366		$	2,651,850		$	7,795,948		$	5,595,095		$	1,903,935		$	6,878,962		$	7,014,682		$	20,865,856		$	106,813,495		$	168,652,189
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	329,250		$	295,867		$	—		$	285,201		$	269,204		$	1,062,773		$	741,893		$	2,505,085		$	6,384,554		11,873,825
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,221,250	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,221,250		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	10,652,575
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 November 1, 2013	—			—			—			127			105			—			—			—			—			232
Unsold units	—			—			—			—			15			—			—			—			—			15
Unsold units with deposits for future sale as of November 1, 2013	—			—			—			—			—			—			—			—			—			—

Financial information for the nine months ended September 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	$	1,006,954		$	215,601		$	931,629		$	666,484		$	189,661		$	676,641		$	638,208		$	2,046,366		$	9,487,525		$	15,859,069
Laundry and Sundry Income	12,144			—			3,483			—			—			—			675			27,391			70,846			114,538
	1,019,097			215,601			935,112			666,484			189,661			676,641			638,883			2,073,756			9,558,371			15,973,608
Expenses
Administrative	15,037			1,021			18,796			7,968			9,502			14,367			4,253			26,848			191,418			289,209
Depreciation and Amortization	319,895			6,671			321,730			180,399			60,895			230,538			237,847			733,437			4,326,808			6,418,221
Management Fees	41,713			8,624			38,633			27,108			7,614			26,682			25,801			83,965			203,719			463,860
Operating	94,588			—			53,310			927			2,038			1,232			56,899			252,383			802,142			1,263,520
Renting	10,831			—			1,788			5,378			1,425			9,753			6,096			4,331			66,105			105,705
Repairs and Maintenance	93,194			4,400			62,553			239,752			70,217			224,156			50,840			278,025			843,069			1,866,206
Taxes and Insurance	164,374			37,050			85,152			114,730			31,912			109,188			91,893			257,239			1,170,929			2,062,466
	739,632			57,765			581,962			576,261			183,604			615,915			473,628			1,636,229			7,604,189			12,469,187
Income Before Other Income (Loss)	279,465			157,835			353,150			90,223			6,057			60,726			165,255			437,527			1,954,182			3,504,421
Other Income (Loss)
Interest Expense	(366,060		)	(43,776		)	(355,345		)	(212,962		)	(70,021		)	(200,200		)	(234,140		)	(616,349		)	(3,757,844		)	(5,856,697		)
Interest Income	—			—			26			5			122			—			—			—			57			210
Interest Income from Note	—			—			—			—			2,729			—			—			—			—			2,729
Gain on Sale of Real Estate	—			—			—			—			—			—			—			—			—			—
Other Income (Expenses)	—			—			(68,588		)	—			—			—			—			—			—			(68,588		)
	(366,060		)	(43,776		)	(423,908		)	(212,957		)	(67,170		)	(200,200		)	(234,140		)	(616,349		)	(3,757,786		)	(5,922,346		)
Net Income (Loss)	$	(86,594	)	$	114,059		$	(70,758	)	$	(122,734	)	$	(61,113	)	$	(139,474	)	$	(68,884	)	$	(178,822	)	$	(1,803,605	)	$	(2,417,925	)
Net Income (Loss) - NERA 50%	$	(43,297	)	$	57,029		$	(35,379	)	$	(61,367	)	$	(30,556	)	$	(69,737	)	$	(34,442	)	$	(89,411	)				$	(307,160	)
NERA 40%																									$	(721,442	)	(721,442		)
																												$	(1,028,602	)

Financial information for the three months ended September 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	$	343,035		$	71,809		$	315,594		$	224,602		$	68,189		$	235,198		$	205,420		$	693,178		$	3,155,855		$	5,312,880
Laundry and Sundry Income	3,146			—			1,550			—			—			—			—			10,109			24,417			39,222
	346,181			71,809			317,144			224,602			68,189			235,198			205,420			703,287			3,180,272			5,352,102
Expenses
Administrative	5,109			317			4,365			4,162			5,916			6,816			1,788			8,440			77,694			114,608
Depreciation and Amortization	107,829			2,182			105,992			60,185			19,797			76,900			79,914			244,670			1,448,329			2,145,798
Management Fees	15,699			2,872			12,851			8,922			2,627			8,795			8,725			26,626			70,212			157,330
Operating	31,039			—			13,266			215			77			615			14,951			61,202			237,482			358,848
Renting	1,281			—			—			1,453			—			2,503			2,054			1,026			39,451			47,766
Repairs and Maintenance	29,100			700			24,374			82,343			24,231			76,461			25,303			112,318			389,052			763,882
Taxes and Insurance	52,614			12,642			28,897			37,599			11,293			38,040			29,945			87,950			427,973			726,954
	242,671			18,715			189,745			194,878			63,942			210,131			162,681			542,233			2,690,194			4,315,188
Income Before Other Income (Loss)	103,510			53,095			127,399			29,724			4,248			25,068			42,739			161,054			490,078			1,036,914
Other Income (Loss)
Interest Expense	(122,858		)	(14,510		)	(97,798		)	(71,481		)	(21,332		)	(67,226		)	(78,601		)	(206,762		)	(1,262,391		)	(1,942,961		)
Interest Income	—			—			—			2			36			—			—			—			—			39
Interest Income from Note	—			—			—			—			722			—			—			—			—			722
Gain on Sale of Real Estate	—			—			—			—			—			—			—			—			—			—
Other Income (Expenses)	—			—			—			—			—			—			—			—			—			—
	(122,858		)	(14,510		)	(97,798		)	(71,479		)	(20,574		)	(67,226		)	(78,601		)	(206,762		)	(1,262,391		)	(1,942,200		)
Net Income (Loss)	$	(19,348	)	$	38,584		$	29,601		$	(41,755	)	$	(16,326	)	$	(42,159	)	$	(35,862	)	$	(45,708	)	$	(772,312	)	$	(905,286	)
Net Income (Loss) - NERA 50%	$	(9,674	)	$	19,292		$	14,801		$	(20,878	)	$	(8,163	)	$	(21,079	)	$	(17,931	)	$	(22,854	)				$	(66,487	)
NERA 40%																									$	(308,925	)	(308,925		)
																												$	(375,412	)