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 March 31, 2015

OR

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

For the transition period from         to         

Commission file number 001-31568

New England Realty Associates Limited Partnership

(Exact name of registrant as specified in its charter)

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

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

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

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

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

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

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

As of May 5, 2015, there were 101,475 of the registrant’s Class A units (3,044,257 Depositary Receipts) of limited partnership issued and outstanding and 24,254 Class B units issued and outstanding.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP

INDEX

PART I—FINANCIAL INFORMATION			3
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets as of March  31, 2015 and December 31, 2014	3
	Consolidated Statements of Income for the Three Months Ended March 31, 2015 and 2014	4
	Consolidated Statements of Changes in Partners’ Capital for the Three Months Ended March 31, 2015 and 2014	5
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2015 and 2014	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
PART II—OTHER INFORMATION			32
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosure	33
Item 5.	Other Information	33
Item 6.	Exhibits	33
SIGNATURES		33

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, 2014 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, 2014.

The results of operations for the three month period ended March 31, 2015 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

	March 31,			December 31,
	2015			2014
	Unaudited
ASSETS
Rental Properties	$	147,573,728		$	149,116,084
Cash and Cash Equivalents	14,036,371			14,015,898
Rents Receivable	500,001			474,225
Real Estate Tax Escrows	343,485			340,341
Prepaid Expenses and Other Assets	3,270,191			3,287,005
Investments in Unconsolidated Joint Ventures	8,268,172			8,807,868
Financing and Leasing Fees	1,680,700			1,735,652
Total Assets	$	175,672,648		$	177,777,073
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	196,038,642		$	196,071,540
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	1,487,939			1,425,369
Accounts Payable and Accrued Expenses	2,684,390			3,099,117
Advance Rental Payments and Security Deposits	4,589,471			4,548,729
Total Liabilities	204,800,442			205,144,755
Commitments and Contingent Liabilities (Notes 3 and 9)	—			—
Partners’ Capital 126,844 and 127,653 units outstanding in 2015 and 2014 respectively	(29,127,794		)	(27,367,682		)
Total Liabilities and Partners’ Capital	$	175,672,648		$	177,777,073

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended
	March 31,
	2015			2014
Revenues
Rental income	$	10,972,792		$	10,514,719
Laundry and sundry income	102,728			103,209
	11,075,520			10,617,928
Expenses
Administrative	533,077			530,567
Depreciation and amortization	2,484,294			2,724,180
Management fee	450,704			427,392
Operating	2,086,185			1,681,934
Renting	65,926			36,856
Repairs and maintenance	1,347,214			1,211,254
Taxes and insurance	1,462,976			1,441,123
	8,430,376			8,053,306
Income Before Other Income (Expense)	2,645,144			2,564,622
Other Income (Expense)
Interest income	195			183
Interest expense	(2,360,915		)	(2,386,167		)
Income (Loss) from investments in unconsolidated
joint ventures	125,234			(208,252		)
	(2,235,486		)	(2,594,236		)
Net Income (Loss)	$	409,658		$	(29,614	)
Net Income (loss) per Unit	$	3.22		$	(0.23	)
Weighted Average Number of Units Outstanding	127,073			129,312

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, 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	—	—	—	—	—	—			(775,366		)	(184,149		)	(9,692		)	(969,207		)
Stock Buyback	—	—	—	—	271	(271		)	(305,230		)	(70,470		)	(3,709		)	(379,409		)
Net (Loss)	—	—	—	—	—	—			(23,691		)	(5,627		)	(296		)	(29,614		)
Balance March 31, 2014	144,180	34,243	1,802	180,225	51,009	$	129,216		$	(18,589,614	)	$	(4,405,322	)	$	(231,857	)	$	(23,226,793	)
Balance January 1, 2015	144,180	34,243	1,802	180,225	52,572	127,653			$	(21,910,488	)	$	(5,184,335	)	$	(272,859	)	$	(27,367,682	)
Distribution to Partners	—	—	—	—	—	—			(761,064		)	(180,753		)	(9,513		)		(951,330	)
Stock Buyback	—	—	—	—	809	(809		)	(975,731		)	(230,574		)	(12,135		)		(1,218,440	)
Net Income	—	—	—	—	—	—			327,726			77,835			4,097				409,658
Balance March 31, 2015	144,180	34,243	1,802	180,225	53,381	126,844			$	(23,319,557	)	$	(5,517,827	)	$	(290,410	)	$	(29,127,794	)

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
	2015			2014
Cash Flows from Operating Activities
Net income (loss)	$	409,658		$	(29,614	)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	2,484,294			2,724,180
(Income) Loss from investments in joint venture	(125,234		)	208,252
Change in operating assets and liabilities
(Increase) in rents receivable	(25,776		)	(6,140		)
(Decrease) in accounts payable and accrued expense	(414,728		)	(506,471		)
(Increase) Decrease in real estate tax escrow	(3,144		)	85,858
Decrease (Increase) in prepaid expenses and other assets	1,994			(478,430		)
Increase in advance rental payments and security deposits	40,742			55,810
Total Adjustments	1,958,148			2,083,059
Net cash provided by operating activities	2,367,806			2,053,445
Cash Flows from Investing Activities
Proceeds from unconsolidated joint ventures	653,843			273,083
Distribution in excess of investment in unconsolidated joint ventures	82,500			100,000
(Investment in) unconsolidated joint ventures	(8,843		)	(108,083		)
Improvement of rental properties	(872,165		)	(548,564		)
Net cash (used in) investing activities	(144,665		)	(283,564		)
Cash Flows from Financing Activities
Principal payments and payoffs of mortgage notes payable	(32,898		)	(3,447,120		)
Stock buyback	(1,218,440		)	(379,409		)
Distributions to partners	(951,330		)	(969,207		)
Net cash (used in) financing activities	(2,202,668		)	(4,795,736		)
Net Increase (Decrease) in Cash and Cash Equivalents	20,473			(3,025,855		)
Cash and Cash Equivalents, at beginning of period	14,015,898			14,013,380
Cash and Cash Equivalents, at end of period	$	14,036,371		$	10,987,525

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2015

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 790 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 2015 or 2014 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 2015 or 2014. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At March 31, 2015, 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 March 31, 2015 and December 31, 2014, respectively approximately $15,144,000 and $15,118,000 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 $31,574 and $30,239 for the three months ended March 31, 2015 and 2014, respectively.

Discontinued Operations and Rental Property Held for Sale:  In April 2014, the FASB issued guidance related to the reporting of discontinued operation and disclosures of disposals of components of an entity. This guidance defines a discontinued operation as a component or group of components disposed or classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and final result; the guidance states that a strategic shift could include a disposal of a major geographical area of operations, a major line of business, a major equity method investment or other major parts of an entity.  The guidance also provides for additional disclosure requirements in connection with both discontinued operations and other dispositions not qualifying as discontinued operations.  The guidance will be effective for all companies for annual and interim periods beginning on or after December 15, 2014.  The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date.  All entities may early adopt the guidance for new disposals (or new classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance.  The Partnership has elected to early adopt this standard effective with the interim period beginning January 1, 2014.  Prior to January 1, 2014, properties identified as held for sale and/or disposed of were presented in discontinued operations for all periods presented.

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 three months ended March 31, 2015 and 2014 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.

9

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

NOTE 2. RENTAL PROPERTIES

As of March 31, 2015, 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 March 31, 2015, 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 March 31, 2015 with a total of 790 units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

Rental properties consist of the following:

	March 31, 2015			December 31, 2014			Useful Life
Land, improvements and parking lots	$	44,541,471		$	44,541,471		15—40 years
Buildings and improvements	153,342,470			153,059,430			15—40 years
Kitchen cabinets	7,080,552			6,865,348			5—10 years
Carpets	6,481,927			6,341,227			5—10 years
Air conditioning	705,116			705,116			5—10 years
Laundry equipment	153,052			147,721			5—7 years
Elevators	1,139,296			1,139,296			20—40 years
Swimming pools	444,629			444,629			10—30 years
Equipment	5,556,712			5,491,992			5—7 years
Motor vehicles	130,859			130,563			5 years
Fences	24,670			24,670			5—15 years
Furniture and fixtures	6,072,922			5,910,046			5—7 years
Smoke alarms	220,437			220,437			5—7 years
Total fixed assets	225,894,113			225,021,946
Less: Accumulated depreciation	(78,320,385		)	(75,905,862		)
	$	147,573,728		$	149,116,084

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 $451,000  and $427,000 for the three months ended March 31, 2015 and 2014, 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 three months ended March 31, 2015 and 2014, approximately $238,000 and $178,000, was charged to NERA for legal, accounting, construction, maintenance, rental and architectural services and supervision of capital improvements. Of the 2015 expenses referred to above, approximately $124,000 consisted of repairs and maintenance, $84,000 of administrative expense . Approximately $30,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental

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properties. Additionally in 2015, the Hamilton Company received approximately $225,000 from the Investment Properties of which approximately $167,000 was the management fee, approximately $47,000 was for maintenance services, approximately $5,000 was for construction and capital improvement projects and approximately $6,000 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 $729,000 and $866,000 for the three months ended March 31, 2015 and 2014, 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 2015 and 2014.

Bookkeeping and accounting functions are provided by the Management Company’s accounting staff, which consists of approximately 14 people. During the three months ended March 31, 2015 and 2014, the Management Company charged the Partnership $31,250 ($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 three months ended March 31, 2015 and 2014 this individual received fees of $18,750.

The Partnership has invested in nine limited partnerships, which have invested in mixed use residential apartment complexes. The Partnership has a 40% to 50% ownership interest in each investment property. The other investors are Harold Brown, the President of the Management Company and five other employees of the Management Company. Harold Brown’s ownership interest is between 43.2% and 57%. See Note 14 for a description of the properties and their operations.

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

NOTE 4. OTHER ASSETS

Approximately $2,146,000 and $2,090,000 of security deposits are included in prepaid expenses and other assets at March 31, 2015 and December 31, 2014, respectively. The security deposits and escrow accounts are restricted cash.

Included in prepaid expenses and other assets at March 31, 2015 and December 31, 2014 is approximately $273,000 and $253,000, 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 $41,000 net of accumulated amortization of approximately $1,711,000 and approximately $49,000 net of accumulated amortization of approximately $1,703,000 at March 31, 2015 and December 31, 2014, respectively.

Financing fees of approximately $1,681,000 and $1,736,000 are net of accumulated amortization of approximately $668,000 and $613,000 at March 31, 2015 and December 31, 2014, respectively.

NOTE 5. MORTGAGE NOTES PAYABLE AND LINE OF CREDIT

Mortgage Notes Payable

At March 31, 2015 and December 31, 2014, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At March 31, 2015, 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 March 31, 2015, the weighted average interest rate on the above mortgages was 4.81%. The effective rate of 4.93% 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.

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Approximate annual maturities at March 31, 2015 are as follows:

2016—current maturities	$	285,000
2017	1,439,000
2018	1,801,000
2019	7,880,000
2020	1,963,000
Thereafter	182,671,000
	$	196,039,000

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 March 31, 2015, 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 Partnership paid approximately $13,000 for the three months ended March 31, 2015.

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.

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 March 31, 2015, amounts received for prepaid rents of approximately $1,621,000 are included in cash and cash equivalents, and security deposits of approximately $2,146,000 are included in prepaid expenses and other assets and are restricted cash.

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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 2015, the Partnership announced the approval of a quarterly distribution of its Class A Limited Partners and holders of Depositary Receipts of record as of March 15, 2015 and paid on March 31, 2015, $7.50 per unit and $0.25 per receipt.

In 2014, 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:

	Three Months Ended March 31,
	2015		2014
Net Income per Depositary Receipt	$	0.11	$	(0.01	)
Distributions per Depositary Receipt	$	0.25	$	0.25

NOTE 8. TREASURY UNITS

Treasury Units at March 31, 2015 are as follows:

Class A	42,704
Class B	10,143
General Partnership	534
	53,381

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. On March 10, 2015, the General Partner authorized an increase in the Repurchase Program from 1,500,000 to 2,000,000 Depository Receipts and extended the Program for an additional five years from March 31, 2015  until March 31, 2020.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

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discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through March 31, 2015, the Partnership has repurchased 1,306,331 Depositary Receipts at an average price of $26.01 per receipt (or $780.30 per underlying Class A Unit), 2,605 Class B Units and 137 General Partnership Units, both at an average price of $812.50 per Unit, totaling approximately $36,385,000 including brokerage fees paid by the Partnership.

During the three months ended March 31, 2015, the Partnership purchased a total of 19,415 Depositary Receipts. The average price was $50.00 per receipt or $1,500 per unit. The total cost including commission was $975,731. The Partnership was required to repurchase 154 Class B Units and 8 General Partnership units at a cost of $230,574 and $12,135 respectively.

From April 1, 2015 through May 5, 2015, the Partnership did not purchase any additional Depositary Receipts.

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 three months ended March 31, 2015, 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 March 31, 2015 as follows:

	Commercial Property Leases
2016	$	2,624,000
2017	2,038,000
2018	1,406,000
2019	1,098,000
2020	560,000
Thereafter	675,000
	$	8,401,000

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 $182,000 and $153,000 for the three months ended March 31, 2015 and 2014 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately 26% of the total commercial rental income.

The following information is provided for commercial leases:

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					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 March 31,
2016	$	459,536	21,584	11	16	%
2017	1,016,457		38,594	9	34	%
2018	169,747		5,981	5	6	%
2019	424,000		12,690	8	14	%
2020	622,466		21,517	8	21	%
2021	64,657		1,106	1	2	%
2022	64,800		1,800	1	2	%
2023	0		0	0	0	%
2024	157,443		4,771	1	5	%
2025	0		0	0	0	%
Totals	$	2,979,106	108,043	44	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $391,000 and $366,000 at March 31, 2015 and December 31, 2014. Included in rents receivable at March 31, 2015 is approximately $150,000 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 March 31, 2015 also includes approximately $98,000 representing the deferral of rental concession primarily related to the residential properties.

For the three months ended March 31, 2015, rent at the commercial properties includes approximately $550 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 three months ended March 31, 2015 and 2014, cash paid for interest was approximately $2,360,000, and $1,664,000 respectively.  Cash paid for state income taxes was approximately $13,000 and $19,000 during the three months ended March 31, 2015 and 2014 respectively.

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At March  31, 2015 and December 31, 2014, 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 March 31, 2015 and December 31, 2014 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 March 31, 2015 and December 31, 2014, 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 March 31, 2015 and December 31, 2014, 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.

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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 March 31, 2015	$	196,038,642	$	215,845,385
At December 31, 2014	$	196,071,540	$	210,691,170
Investment Properties
At March 31, 2015	$	137,462,493	$	149,159,839
At December 31, 2014	$	137,910,870	$	147,843,221

Disclosure about fair value of financial instruments is based on pertinent information available to management as of March 31, 2015 and December 31, 2014. 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 March 31, 2015 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 loss of approximately $2,100,000 was approximately $3,100,000 less than statement income for the year ended December 31, 2014. The primary reason for the decrease is due to accelerated depreciation, tax free exchange and other differences in the treatment of certain expenditures. The cumulative tax basis of the Partnership’s real estate at December 31, 2014 is approximately $5,000,000 less than the statement basis. The primary reasons for the lower tax basis are tax free exchanges, and accelerated depreciation. The Partnership’s tax basis in its joint venture investments is approximately $1,300,000 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 expired in 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 March 31, 2015, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2009 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

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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 $85,897,000 at March 31, 2015. 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 March 31, 2015, the balance of the mortgage is approximately $4,556,000. 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.  As of May  5, 2015, 7 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 balance on Hamilton Essex 81, LLC is approximately $8,076,000, at March 31, 2015, amortizing over 30 years at 5.79% due in August 2016. The mortgage on Essex Development, LLC, or the parking lot is approximately $1,975,000 with a variable interest rate of 2.25% over the daily Libor rate (0.171%) at March 31, 2015.  In September 2013, this 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 $4,787,000 at March  31, 2015. This investment is referred to as Hamilton 1025, LLC.

In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. In October 2004, the 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 March 31, 2015, the balance of this mortgage is approximately $5,272,000. This investment is referred to as Hamilton Minuteman,  LLC.

In August 2004, the Partnership invested $8,000,000 for a 50% ownership interest in a 280-unit apartment complex located in Watertown, Massachusetts. The total purchase price was $56,000,000.  The Partnership sold 137 units as

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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. The costs associated with the refinancing were approximately $161,000.

In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts. In June 2013, the property was refinanced with a 15 year mortgage in the amount of $10,000,000 at 3.87%, interest only for 3 years and is amortized on a 30-year schedule for the balance of the term. 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. At March 31, 2015, the balance of this mortgage is approximately $10,000,000. This investment is referred to as 345 Franklin, LLC.

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Summary financial information as of March 31, 2015

				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	$	8,636,396		$	2,620,789		$	7,040,787		$	5,097,980		$	802,055		$	6,344,523		$	6,483,432		$	19,225,373		$	96,374,735		$	152,626,070
Cash & Cash Equivalents	53,122			49,826			107,441			36,196			15,110			30,261			51,370			191,526			985,394			1,520,246
Rent Receivable	30,694			—			5,470			3,077			—			8,531			287			8,901			71,152			128,112
Real Estate Tax Escrow	114,280			—			41,532			73,919			—			51,749			39,769			78,483			260,698			660,430
Prepaid Expenses & Other Assets	76,589			224			26,198			47,558			20,197			49,482			42,326			92,912			1,800,526			2,156,012
Financing & Leasing Fees	25,978			3,524			88,225			8,337			—			11,929			7,020			151,150			266,643			562,806
Total Assets	$	8,937,059		$	2,674,363		$	7,309,653		$	5,267,067		$	837,362		$	6,496,475		$	6,624,204		$	19,748,345		$	99,759,148		$	157,653,676
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,075,681		$	1,974,501		$	10,000,000		$	4,787,315		$	—		$	4,556,075		$	5,271,998		$	16,900,000		$	85,896,923		$	137,462,493
Accounts Payable & Accrued Expense	44,904			4,941			81,557			21,772			20,019			13,657			52,119			142,669			626,221			1,007,859
Advance Rental Pmts& Security Deposits	174,416			—			203,975			95,932			11,114			93,589			96,246			316,025			2,480,438			3,471,735
Total Liabilities	8,295,001			1,979,442			10,285,532			4,905,019			31,133			4,663,321			5,420,363			17,358,694			89,003,582			141,942,087
Partners’ Capital	642,058			694,921			(2,975,879		)	362,048			806,229			1,833,154			1,203,841			2,389,651			10,755,566			15,711,589
Total Liabilities and Capital	$	8,937,059		$	2,674,363		$	7,309,653		$	5,267,067		$	837,362		$	6,496,475		$	6,624,204		$	19,748,345		$	99,759,148		$	157,653,676
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	321,028		$	347,460		$	—		$	181,023		$	403,114		$	916,577		$	601,920		$	1,194,825		$	4,302,225		8,268,172
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,487,939	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,487,939		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,780,233
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 May 1, 2015	—			—			—			127			113			—			—			—			—			240
Unsold units	—			—			—			—			7			—			—			—			—			7
Unsold units with deposits for future sale as of May 1, 2015	—			—			—			—			—			—			—			—			—			—

19

Financial information for the three months ended March 31, 2015

				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	$	358,551		$	72,523		$	335,475		$	240,400		$	29,295		$	250,573		$	233,897		$	761,273		$	3,488,805		$	5,770,792
Laundry and Sundry Income	3,842			—			323			—			—			—			—			10,641			19,245			34,051
	362,393			72,523			335,798			240,400			29,295			250,573			233,897			771,914			3,508,050			5,804,843
Expenses
Administrative	3,936			583			7,761			1,992			2,779			1,814			1,624			9,276			52,330			82,095
Depreciation and Amortization	111,469			2,822			93,793			60,029			8,987			79,328			81,518			240,762			814,969			1,493,677
Management Fees	15,345			2,901			14,108			9,439			1,274			9,495			9,825			30,080			74,951			167,418
Operating	37,532			—			40,071			125			24			665			32,547			138,255			455,656			704,875
Renting	500			—			6,345			—			(459		)	2,350			3,742			1,766			16,293			30,537
Repairs and Maintenance	25,683			—			5,988			76,497			11,944			84,858			15,124			84,161			216,618			520,873
Taxes and Insurance	53,418			13,421			29,937			43,051			5,881			37,830			30,958			83,506			361,255			659,257
	247,883			19,727			198,003			191,133			30,430			216,340			175,338			587,806			1,992,072			3,658,732
Income Before Other Income	114,510			52,796			137,795			49,267			(1,135		)	34,233			58,559			184,108			1,515,978			2,146,111
Other Income (Loss)
Interest Expense	(118,233		)	(13,552		)	(97,936		)	(68,488		)	(110		)	(64,464		)	(75,491		)	(185,810		)	(1,210,300		)	(1,834,384		)
Interest Income	—			—			—			6			—			—			—			—			—			6
Gain on Sale of Real Estate	—			—			—			—			—			—			—			—			—			—
Other Income (Expenses)	—			—			—			—			(125		)	—			—			—			—			(125		)
	(118,233		)	(13,552		)	(97,936		)	(68,482		)	(235		)	(64,464		)	(75,491		)	(185,810		)	(1,210,300		)	(1,834,503		)
Net Income (Loss)	$	(3,723	)	$	39,244		$	39,859		$	(19,215	)	$	(1,370	)	$	(30,231	)	$	(16,932	)	$	(1,702	)	$	305,678		$	311,608
Net Income (Loss) - NERA 50%	$	(1,862	)	$	19,622		$	19,929		$	(9,608	)	$	(685	)	$	(15,116	)	$	(8,466	)	$	(851	)				2,963
Net Income (Loss) - NERA 40%																									$	122,271		122,271
																												$	125,234

20

Future annual mortgage maturities at March 31, 2015 are as follows:

															Hamilton
			Hamilton												Park Towers
	Hamilton		Essex 81		345		Hamilton		Hamilton		Hamilton		Hamilton on		(Dexter
Period End	Essex 81		Development		Franklin		1025		Bay Apts		Minuteman		Main Apts		Park)		Total
3/31/2016	145,622		1,974,501		—		73,013		75,910		79,962		—		1,439,081		3,788,089
3/31/2017	7,930,059		—		131,657		4,714,302		78,894		5,192,036		—		1,521,316		19,568,264
3/31/2018	—		—		185,410		—		4,401,271		—		—		1,608,251		6,194,932
3/31/2019	—		—		192,714		—		—		—		—		1,700,153		1,892,867
3/31/2020	—		—		200,305		—		—		—		—		79,628,122		79,828,427
Thereafter	—		—		9,289,914		—		—		—		16,900,000		—		26,189,914
	$	8,075,681	$	1,974,501	$	10,000,000	$	4,787,315	$	4,556,075	$	5,271,998	$	16,900,000	$	85,896,923	$	137,462,493

At March  31, 2015 the weighted average interest rate on the above mortgages was 5.27%. The effective rate was 5.36% including the amortization expense of deferred financing costs.

21

Summary financial information as of March 31, 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	$	8,665,490		$	2,623,618		$	7,409,606		$	5,331,142		$	1,626,115		$	6,604,500		$	6,702,438		$	20,026,347		$	100,826,473		$	159,815,729
Cash & Cash Equivalents	31,408			61,603			26,136			23,018			124,765			25,766			80,847			118			1,027,202			1,400,862
Rent Receivable	28,674			—			2,565			995			1,793			4,641			737			8,623			74,141			122,170
Real Estate Tax Escrow	101,256			—			40,681			68,445			—			37,283			35,466			43,577			339,330			666,038
Prepaid Expenses & Other Assets	71,795			222			32,078			37,561			206,859			35,603			42,400			712,377			1,607,358			2,746,253
Financing & Leasing Fees	42,259			11,982			94,884			13,363			—			18,291			10,989			6,001			325,532			523,300
Total Assets	$	8,940,881		$	2,697,426		$	7,605,950		$	5,474,523		$	1,959,533		$	6,726,084		$	6,872,876		$	20,797,043		$	104,200,037		$	165,274,352
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,202,370		$	2,027,817		$	10,000,000		$	4,856,961		$	—		$	4,622,842		$	5,348,277		$	15,263,225		$	87,179,208		$	137,500,700
Accounts Payable & Accrued Expense	52,518			6,373			81,538			27,653			19,186			10,896			64,247			172,902			708,297			1,143,611
Advance Rental Pmts& Security Deposits	163,668			—			190,001			91,568			20,483			95,060			80,327			291,564			2,294,713			3,227,383
Total Liabilities	8,418,556			2,034,190			10,271,539			4,976,181			39,668			4,728,798			5,492,851			15,727,691			90,182,218			141,871,694
Partners’ Capital	522,325			663,236			(2,665,589		)	498,342			1,919,864			1,997,286			1,380,025			5,069,351			14,017,818			23,402,658
Total Liabilities and Capital	$	8,940,881		$	2,697,426		$	7,605,950		$	5,474,523		$	1,959,533		$	6,726,084		$	6,872,876		$	20,797,043		$	104,200,037		$	165,274,352
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	261,162		$	331,618		$	—		$	249,171		$	959,932		$	998,643		$	690,012		$	2,534,676		$	5,607,127		11,632,342
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,332,795	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,332,795		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	10,299,547
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 May 1, 2014	—			—			—			127			106			—			—			—			—			233
Unsold units	—			—			—			—			14			—			—			—			—			14
Unsold units with deposits for future sale as of May 1, 2014	—			—			—			—			—			—			—			—			—			—

22

Financial information for the three months ended March 31, 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	$	328,770		$	73,236		$	327,740		$	231,187		$	62,798		$	238,891		$	223,942		$	717,680		$	3,357,055		$	5,561,299
Laundry and Sundry Income	3,920			—			(423		)	—			—			—			169			9,456			25,380			38,501
	332,690			73,236			327,317			231,187			62,798			238,891			224,111			727,136			3,382,434			5,599,800
Expenses
Administrative	3,178			317			6,823			1,968			705			4,845			3,003			9,485			54,543			84,868
Depreciation and Amortization	107,903			2,822			99,725			60,152			19,175			79,314			79,402			236,015			1,345,463			2,029,971
Management Fees	13,275			2,929			13,666			9,231			2,384			9,460			9,310			28,263			71,898			160,417
Operating	44,972			—			24,823			160			251			459			32,854			142,160			488,785			734,463
Renting	117			—			3,443			5,753			753			3,492			2,466			6,829			18,590			41,441
Repairs and Maintenance	32,278			—			12,337			80,443			23,824			73,437			16,887			90,518			196,494			526,219
Taxes and Insurance	58,284			13,569			29,644			40,604			11,899			40,759			29,572			95,639			381,185			701,154
	260,008			19,638			190,461			198,311			58,990			211,766			173,493			608,908			2,556,958			4,278,532
Income Before Other Income	72,682			53,598			136,856			32,876			3,808			27,125			50,619			118,227			825,476			1,321,267
Other Income (Loss)
Interest Expense	(119,368		)	(13,919		)	(97,753		)	(69,560		)	(195		)	(65,465		)	(76,500		)	(200,379		)	(1,227,695		)	(1,870,833		)
Interest Income	—			—			—			4			—			—			—			—			—			4
Interest Income from Note	—			—			—			—			334			—			—			—			—			334
Gain on Sale of Real Estate	—			—			—			—			52,283			—			—			—			—			52,283
Other Income (Expenses)	—			—			—			—			—			—			—			—			—			—
	(119,368		)	(13,919		)	(97,753		)	(69,555		)	52,422			(65,465		)	(76,500		)	(200,379		)	(1,227,695		)	(1,818,212		)
Net Income (Loss)	$	(46,687	)	$	39,679		$	39,104		$	(36,679	)	$	56,230		$	(38,340	)	$	(25,881	)	$	(82,152	)	$	(402,219	)	$	(496,945	)
Net Income (Loss) - NERA 50%	$	(23,343	)	$	19,840		$	19,552		$	(18,340	)	$	28,115		$	(19,170	)	$	(12,941	)	$	(41,076	)				(47,363		)
Net Income (Loss) - NERA 40%																									$	(160,888	)	(160,888		)
																												$	(208,250	)

23

NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue From Contracts With Customers (“ASU 2014-09”), which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment. ASU 2014-09 is effective for us beginning January 1, 2017, although on April 1, 2015, the FASB proposed a one-year deferral of the effective date for ASU 2014-09. We are continuing to evaluate this guidance; however, we do not expect its adoption to have a significant impact on our consolidated financial statements, as a substantial portion of our revenue consists of rental income from leasing arrangements, which are specifically excluded from ASU 2014-09.

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.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”), which makes certain changes to both the variable interest model and the voting model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination. ASU 2015-02 is effective for us beginning January 1, 2016. We are continuing to evaluate this guidance; however, we do not expect its adoption to have a significant impact on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. Upon adoption, we will apply the new guidance on a retrospective basis and adjust the balance sheet of each individual period presented to reflect the period-specific effects of applying the new guidance. This guidance is effective for us beginning January 1, 2016. We are continuing to evaluate this guidance; however, we do not expect its adoption to have a significant impact on our consolidated financial statements.

NOTE 16—SUBSEQUENT EVENTS

There have been no material events subsequent to the balance sheet date through the date of this report that require disclosure.

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 2015 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

24

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.

The strong rental season and high occupancy levels of the third and fourth quarters of 2014 have, as expected, carried over into the first quarter of 2015 demonstrated by continued high occupancy and revenue growth. It is also of no surprise that the cold and stormy winter of 2015 took its toll on operating expenses, specifically snow removal costs.  For the first quarter of 2015, revenue increases were 4.3% and expense increases were 4.7%, resulting in a 3.1% increase in Income Before Other Income and Expenses as compared to the first quarter of 2014.  Excluding the approximate $490,000 increase in snow related expenses, there was a decrease of 1.4% in the remaining operating expenses for the first quarter of 2015 compared with the first quarter of 2014.  Removing this unusual expense would yield growth in Income Before Other Income and Expenses of approximately 22.1% for the first quarter.  The Partnership experienced an average vacancy rate of less than 2% during the quarter and executed new leases on residential units, realized average rental increases of approximately 5%.  Based on current occupancy and contractual rents in place for the next 9-12 months, Management expects continued annual revenue growth for 2015 and also anticipates both the urban and suburban portfolio’s occupancy level will keep pace with last year’s occupancy levels.  Management continues to forecast improving rental gains in our market area and slower operating expense growth, leading to an improving bottom line for 2015.

The Stock Repurchase Program that was initiated in 2007 has purchased 1,306,331 Depositary Receipts through March 31, 2015 or approximately 31% of the outstanding Class A Depositary Receipts.  During the first quarter, the Partnership repurchased 19,415 Class A Depositary Receipts, 154 Class B Units, and 8 General Partnership Units at a cost of approximately $976,000, $231,000 and $12,000 respectively for a total cost of approximately $1,219,000.  This purchase of receipts is in line with the Partnership’s trading plan. Management anticipates a steady purchase of receipts, per its trading plan, for the balance of the year.

At May 5, 2015, Harold Brown, his brother Ronald Brown and the President of Hamilton, Carl Valeri, collectively own approximately 41% 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 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 three months ended March 31, 2015, tenant renewals were approximately 71% with an average rental increase of approximately 4.1%, new leases accounted for approximately 29% with rental rate increases of approximately 5.0%.  During the three months ended March 31, 2015, leasing commissions were approximately $15,000 compared to approximately $1,500 for the three months ended March 31, 2014, an increase of approximately $13,500, (900%) from 2014. Tenant concessions were approximately $19,000 in for the three months ended March 31, 2015, compared to approximately $5,000 for the three months ended March 31, 2014, an increase of approximately $14,000 ( 280%).  Tenant improvements were approximately $519,000 for the three months ended March 31, 2015, compared to approximately $319,000 for the three months ended March 31, 2014, an increase of approximately $200,000 (63%).

Hamilton accounted for approximately 9.2% of the repair and maintenance expense of the Partnership during the three months ended March 31, 2015 and 5.8% during the three months ended March 31, 2014. 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.

25

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 $53,000 (74.1%) and approximately $51,000 (85.7%) of the legal expense of the Partnership during the three months ended March 31, 2015 and 2014, 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 three months ended March 31, 2015, Hamilton provided the Partnership approximately $30,000 in construction and architectural services, compared to approximately $14,000 for the three months ended March 31, 2014.

Hamilton’s accounting staff performs bookkeeping and accounting functions for the Partnership. During the three months ended March 31, 2015, Hamilton charged the Partnership $31,250 for bookkeeping and accounting services. For more information on related party transactions, see Note 3 to the Consolidated Financial Statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

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

Discontinued Operations and Rental Property Held for Sale:  In April 2014, the FASB issued guidance related to the reporting of discontinued operation and disclosures of disposals of components of an entity. This guidance defines a discontinued operation as a component or group of components disposed or classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and final result; the guidance states that a strategic shift could include a disposal of a major geographical area of operations, a major line of business, a major equity method investment or other major parts of an entity.  The guidance also provides for additional disclosure requirements in connection with both discontinued operations and other dispositions not qualifying as discontinued operations.  The guidance will be effective for all companies for annual and interim periods beginning on or after December 15, 2014.  The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date.  All entities may early adopt the guidance for new disposals (or new classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance.  The Partnership has elected to early adopt this standard effective with the interim period beginning January 1, 2014.  Prior to January 1, 2014, properties identified as held for sale and/or disposed of were presented in discontinued operations for all periods presented.

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

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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 three months of 2015.

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. 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

27

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 March 31, 2015 and March 31, 2014

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures and other income and expenses of approximately $2,645,000 during the three months ended March 31, 2015, compared to approximately $2,565,000 for the three months ended March 31, 2014, an increase of approximately $80,000 (3.1%).

The rental activity is summarized as follows:

	Occupancy Date
	May 1, 2015		May1, 2014
Residential
Units	2,431		2,431
Vacancies	71		84
Vacancy rate	2.9	%	3.5	%
Commercial
Total square feet	108,043		108,043
Vacancy	0		0
Vacancy rate	0.0	%	0.0	%

	Rental Income (in thousands) Three Months Ended March 31,
	2015						2014
	Total Operations			Continuing Operations			Total Operations			Continuing Operations
Total rents	$	10,973		$	10,973		$	10,515		$	10,515
Residential percentage	92		%	92		%	92		%	92		%
Commercial percentage	8		%	8		%	8		%	8		%
Contingent rentals	$	182		$	182		$	153		$	153

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Three Months Ended March 31, 2015 Compared to Three Months Ended March 31, 2014:

	Three Months Ended March 31,						Dollar			Percent
	2015			2014			Change			Change
Revenues
Rental income	$	10,972,792		$	10,514,719		$	458,073		4.4	%
Laundry and sundry income	102,728			103,209			(481		)	(0.5	)%
	11,075,520			10,617,928			457,592			4.3	%
Expenses
Administrative	533,077			530,567			2,510			0.5	%
Depreciation and amortization	2,484,294			2,724,180			(239,886		)	(8.8	)%
Management fee	450,704			427,392			23,312			5.5	%
Operating	2,086,185			1,681,934			404,251			24.0	%
Renting	65,926			36,856			29,070			78.9	%
Repairs and maintenance	1,347,214			1,211,254			135,960			11.2	%
Taxes and insurance	1,462,976			1,441,123			21,853			1.5	%
	8,430,376			8,053,306			377,070			4.7	%
Income Before Other Income and (Expenses)	2,645,144			2,564,622			80,522			3.1	%
Other Income (Expenses)
Interest income	195			183			12			6.6	%
Interest expense	(2,360,915		)	(2,386,167		)	25,252			(1.1	)%
Income (Loss) from investments in unconsolidated joint ventures	125,234			(208,252		)	333,486			(160.1	)%
	(2,235,486		)	(2,594,236		)	358,750			(13.8	)%
Net Income (Loss)	$	409,658		$	(29,614	)	$	439,272		(1483.3	)%

Rental income from continuing operations for the three months ended March 31, 2015 was approximately $10,973,000, compared to approximately $10,515,000 for the three months ended March 31, 2014, an increase of approximately $458,000 (4.4%).  The Partnership Properties with the most significant increases in rental income include: Westgate Woburn, 1144 Commonwealth Avenue,  62 Boylston Street ,Westside Colonial, 9 School Street, 659 Worcester Road, and Executive Apartments with increases of approximately $61,000, $60,000, $53,000, $28,000, $26,000, $26,000 and $23,000, 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 March 31, 2015 were approximately $8,430,000 compared to approximately $8,053,000 for the three months ended March 31, 2014, an increase of approximately $377,000 (4.7%).  The factors contributing to this net increase are: an increase in operating expenses of approximately $404,000 ( 24.0%), primarily due to an increase in snow removal expense of approximately $490,000 due to the severe winter snowstorms experienced during the three months ended March 31, 2015, partially offset by a decrease in utility costs of approximately $86,000 (7.2%); an increase in repairs and maintenance expenses of approximately $136,000 ( 11.2%), due to an increase in demand for repairs to the properties; an increase in renting expenses of approximately $29,000 (78.9%), due to an increase in rental commissions and concessions to tenants ; partially offset by a decrease in depreciation and amortization of approximately $240,000 (8.8%), primarily due from fully amortizing the value of in-place leases at Hamilton Green in 2014.

Interest expense for the three months ended March 31, 2015 was approximately $2,361,000 compared to approximately $2,386,000 for the three months ended March 31, 2014, a decrease of approximately $25,000 (1.1%). This was primarily due to the Partnership paying off two mortgages during 2014, (Linhart and Linewt), and refinancing Dean Street Associates, resulting in lower interest expense for the quarter ended March 31, 2015.

At March 31, 2015, 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 income from the Investment Properties was approximately $125,000 for the three months ended March 31, 2015, compared to a net loss of approximately $208,000 for the three months ended March 31, 2014, an increase in the income of approximately $333,000 (160.1%). This increase is primarily due to an increase in rental revenue of approximately $209,000, and a decrease in depreciation and amortization expense of approximately $536,000. Included in the income for the three months ended March 31, 2015 is depreciation and amortization expense of approximately $1,494,000. The allocable income for the three months ended March 31, 2015  from the investment in Dexter Park is approximately $122,000, of which approximately $326,000 is depreciation and amortization.

As a result of the changes discussed above, net income for the three months ended March 31, 2015 was approximately $409,000 compared to a net loss of approximately $30,000 for the three months ended March 31, 2014, an increase in income of approximately $439,000.

LIQUIDITY AND CAPITAL RESOURCES

The Partnership’s principal source of cash during the first three months of 2015 was the collection of rents.  The Partnership’s principal source of cash in 2014 was the collection of rents and proceeds from the refinancing of real estate. The majority of cash and cash equivalents of $14,036,371 at March 31, 2015 and $14,015,898 at December 31, 2014 were held in interest bearing accounts at creditworthy financial institutions.

The increase in cash of $20,473 at March 31, 2015 is summarized as follows:

	Three Months Ended March 31,
	2015			2014
Cash provided by operating activities	$	2,367,806		$	2,053,444
Cash (used in) investing activities	(144,665		)	(283,564		)
Cash (used in) financing activities	(32,898		)	(3,447,120		)
Repurchase of Depositary Receipts, Class B and General Partner Units	(1,218,440		)	(379,409		)
Distributions paid	(951,330		)	(969,207		)
Net increase (decrease) in cash and cash equivalents	$	20,473		$	(3,025,856	)

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 primarily due to an increase in proceeds from Investment Properties, partially offset by the improvements to rental properties in 2015. The change in cash used in financing activities is due to the payment of mortgage notes payable.

During the three months ended March 31, 2015, the Partnership purchased 19,415 Depositary Receipts for an average price of $50.00 for a total cost, including commissions, of $975,731, 154 Class B Units for a cost of $230,574 and 8 General Partnership Units for a cost of $12,135 for a total cost of $1,218,440.

During 2015, the Partnership and its Subsidiary Partnerships completed improvements to certain of the Properties at a total cost of approximately $872,000. These improvements were funded from cash reserves. These sources have been adequate to fully fund improvements. The most significant improvements were made at Westgate Woburn, 62 Boylston street, Redwood Hills, Westside Colonial, School Street 9 Associates,  Hamilton Oaks,  1144 Commonwealth,  and North Beacon Street, at a cost of approximately $241,000, $132,000, $111,000, $59,000, $48,000, $44,000, $44,000,  and $43,000, respectively.

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.

During the three months ended March 31, 2015 and 2014 the Partnership received distributions of approximately $736,000 and $373,000 from the investment properties respectively.  Included in these distributions is the amount from Dexter Park of $460,000 and $230,000 for the three months ended March 31, 2015 and 2014 respectively. 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.

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Off-Balance Sheet Arrangements—Joint Venture Indebtedness

As of March 31, 2015, the Partnership had a 40%-50% ownership interest in nine Joint Ventures, eight 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 March 31, 2015, our proportionate share of the non-recourse debt related to these investments was approximately $60,142,000. See Note 14 to the Consolidated Financial Statements.

Contractual Obligations

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

Factors That May Affect Future Results

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

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

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

·The Partnership is also impacted by changing economic conditions making alternative housing arrangements more or less attractive to the Partnership’s tenants, such as the interest rates on single family home mortgages 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

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unavailable or prohibitively expensive.

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

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

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

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

·Competition for acquisitions may result in increased prices for properties.

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

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

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

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 March 31, 2015, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have approximately $333,501,000 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)

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during the first quarter of 2015 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, 2014.

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

(a)None

(b)None

(c)Issuer Purchase of Equity Securities during the first quarter of 2015:

				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)
January 1-31, 2015	$	50.18	13,623	700,716
February 1-28, 2015	$	50.44	5,792	694,924
March 1-31, 2015	$	0.00	0	694,924
Total			19,415

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. On March 10, 2015, the General Partner authorized an increase in the Repurchase Program from 1,500,000 to 2,000,000 Depository Receipts and extended the Program for an additional five years from March 31, 2015  until March 31, 2020. 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 March 31, 2015,  the Partnership has repurchased 1,306,331  Depositary Receipts at an average price of $26.01 per receipt (or $780.30 per underlying Class A Unit), 2,605 Class B Units and 137  General Partnership Units, both at an average price of $812.50  per Unit, totaling approximately $36,385,000 including brokerage fees paid by the Partnership.

Item 3.  Defaults Upon Senior Securities

None.

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Item 4.  Mine Safety Disclosure

Not applicable.

Item 5.  Other Information

None.

Item 6.  Exhibits

See the exhibit index below.

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: May 8, 2015

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)	May 8, 2015
Ronald Brown
/s/ HAROLD BROWN	Treasurer and Director of the General Partner (Principal Financial Officer and Principal Accounting Officer)	May 8, 2015
Harold Brown
/s/ GUILLIAEM AERTSEN	Director of the General Partner	May 8, 2015
Guilliaem Aertsen
/s/ DAVID ALOISE	Director of the General Partner	May 8, 2015
David Aloise
/s/ EUNICE HARPS	Director of the General Partner	May 8, 2015
Eunice Harps

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EXHIBIT INDEX

Exhibit No.	Description of Exhibit
(31.1)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Ronald Brown, Principal Executive Officer of the Partnership (President and a Director of NewReal, Inc., sole General Partner of the Partnership)
(31.2)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Harold Brown, Principal Financial Officer of the Partnership (Treasurer and a Director of NewReal, Inc., sole General Partner of the Partnership)
(32.1)	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Ronald Brown, Principal Executive Officer of the Partnership (President and a Director of NewReal, Inc., sole General Partner of the Partnership) and Harold Brown, Principal Financial Officer of the Partnership (Treasurer and a Director of NewReal, Inc., sole General Partner of the Partnership).
(101.1)	The following financial statements from New England Realty Associates Limited Partnership Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, out 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 an 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: May 8, 2015

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 an 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: May 8, 2015

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 three  months ended  March 31, 2015, 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, as Treasurer and 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: May 8, 2015
	/s/ Harold Brown
	Harold Brown Principal Financial Officer (Treasurer and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: May 8, 2015

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

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

XML

TREASURY UNITS (Details) - 10Q (USD $)	0 Months Ended			3 Months Ended		91 Months Ended
	Mar. 10, 2015	Aug. 08, 2008	Aug. 20, 2007	Mar. 31, 2015	Mar. 31, 2014	Mar. 31, 2015	Mar. 06, 2008	Jan. 30, 2008	Jan. 15, 2008	Jan. 03, 2012
Treasury units				53,381		53,381
Period for repurchase of depository receipts	5 years	12 months	12 months
Depository receipts authorized to be repurchased	2,000,000		300,000				1,500,000	900,000	600,000
Repurchase of depository receipts				19,415		1,306,331
Repurchase price of depository receipts				$ 50.00		$ 26.01
Repurchase price of units				$ 1,500.00
Repurchase of units				809	271
Total cost of repurchase				$ 1,218,440	$ 379,409	$ 36,385,000
Repurchase of depository receipts				975,731
Class A
Treasury units				42,704		42,704
Number of units in each depository receipt			0.1							0.03333
Fixed distribution percentage of unit holders				80.00%
Repurchase price of units						$ 780.30
Total cost of repurchase				975,731	305,230
Class B
Treasury units				10,143		10,143
Fixed distribution percentage of unit holders				19.00%
Repurchase of depository receipts						2,605
Repurchase price of units						$ 812.50
Repurchase of units				154
Total cost of repurchase				230,574	70,470
General Partnership
Treasury units				534		534
Fixed distribution percentage of unit holders				1.00%
Repurchase of depository receipts						137
Repurchase of units				8
Total cost of repurchase				$ 12,135	$ 3,709

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 4) - 10Q (USD $)	Mar. 31, 2015
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
03/31/2016	$ 285,000
03/31/2017	1,439,000
03/31/2018	1,801,000
03/31/2019	7,880,000
03/31/2020	1,963,000
Thereafter	182,671,000
Total	196,039,000
Weighted average interest rate (as a percent)	5.27%
Effective interest rate (as a percent)	5.36%
Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
03/31/2016	145,622
03/31/2017	7,930,059
Total	8,075,681
Hamilton Essex 81 Development
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
03/31/2016	1,974,501
Total	1,974,501
345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
03/31/2017	131,657
03/31/2018	185,410
03/31/2019	192,714
03/31/2020	200,305
Thereafter	9,289,914
Total	10,000,000
Hamilton 1025
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
03/31/2016	73,013
03/31/2017	4,714,302
Total	4,787,315
Hamilton Bay Apartments
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
03/31/2016	75,910
03/31/2017	78,894
03/31/2018	4,401,271
Total	4,556,075
Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
03/31/2016	79,962
03/31/2017	5,192,036
Total	5,271,998
Hamilton on Main Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Thereafter	16,900,000
Total	16,900,000
Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
03/31/2016	1,439,081
03/31/2017	1,521,316
03/31/2018	1,608,251
03/31/2019	1,700,153
03/31/2020	79,628,122
Total	85,896,923
Total
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
03/31/2016	3,788,089
03/31/2017	19,568,264
03/31/2018	6,194,932
03/31/2019	1,892,867
03/31/2020	79,828,427
Thereafter	26,189,914
Total	$ 137,462,493

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 2) - 10Q (USD $)	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014 item	Mar. 07, 2005 item	Nov. 30, 2001 item	Mar. 02, 2005 item	Oct. 03, 2005 item	Sep. 30, 2004 item	May 31, 2008 item	Aug. 31, 2004 item	Oct. 28, 2009 item
LIABILITIES AND PARTNERS' CAPITAL
Equity Method Investments	$ 8,268,172	$ 8,807,868
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	(1,487,939)	(1,425,369)
Hamilton Essex 81
ASSETS
Rental Properties	8,636,396		8,665,490
Cash & Cash Equivalents	53,122		31,408
Rent Receivable	30,694		28,674
Real Estate Tax Escrow	114,280		101,256
Prepaid Expenses & Other Assets	76,589		71,795
Financing & Leasing Fees	25,978		42,259
Total Assets	8,937,059		8,940,881
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	8,075,681		8,202,370
Accounts Payable and Accrued Expenses	44,904		52,518
Advance Rental Payments and Security Deposits	174,416		163,668
Total Liabilities	8,295,001		8,418,556
Partners' Capital	642,058		522,325
Total Liabilities and Partners' Capital	8,937,059		8,940,881
Percentage of ownership interest	50.00%		50.00%
Equity Method Investments	321,028		261,162
Total units/ condominiums
Units to be retained	49		49
Total	49		49	48
Hamilton Essex 81 | Residential buildings
Total units/ condominiums
Total	48		48
Hamilton Essex 81 | Commercial
Total units/ condominiums
Total	1		1
Hamilton Essex Development
ASSETS
Rental Properties	2,620,789		2,623,618
Cash & Cash Equivalents	49,826		61,603
Prepaid Expenses & Other Assets	224		222
Financing & Leasing Fees	3,524		11,982
Total Assets	2,674,363		2,697,426
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	1,974,501		2,027,817
Accounts Payable and Accrued Expenses	4,941		6,373
Total Liabilities	1,979,442		2,034,190
Partners' Capital	694,921		663,236
Total Liabilities and Partners' Capital	2,674,363		2,697,426
Percentage of ownership interest	50.00%		50.00%
Equity Method Investments	347,460		331,618
Total units/ condominiums
Units to be retained	1		1
Total	1		1
Hamilton Essex Development | Commercial
Total units/ condominiums
Total	1		1
345 Franklin
ASSETS
Rental Properties	7,040,787		7,409,606
Cash & Cash Equivalents	107,441		26,136
Rent Receivable	5,470		2,565
Real Estate Tax Escrow	41,532		40,681
Prepaid Expenses & Other Assets	26,198		32,078
Financing & Leasing Fees	88,225		94,884
Total Assets	7,309,653		7,605,950
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	10,000,000		10,000,000
Accounts Payable and Accrued Expenses	81,557		81,538
Advance Rental Payments and Security Deposits	203,975		190,001
Total Liabilities	10,285,532		10,271,539
Partners' Capital	(2,975,879)		(2,665,589)
Total Liabilities and Partners' Capital	7,309,653		7,605,950
Percentage of ownership interest	50.00%		50.00%		50.00%
Equity Method Investments					1,533,000
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	(1,487,939)		(1,332,795)
Total units/ condominiums
Units to be retained	40		40
Total	40		40		40
345 Franklin | Residential buildings
Total units/ condominiums
Total	40		40
Hamilton 1025
ASSETS
Rental Properties	5,097,980		5,331,142
Cash & Cash Equivalents	36,196		23,018
Rent Receivable	3,077		995
Real Estate Tax Escrow	73,919		68,445
Prepaid Expenses & Other Assets	47,558		37,561
Financing & Leasing Fees	8,337		13,363
Total Assets	5,267,067		5,474,523
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	4,787,315		4,856,961
Accounts Payable and Accrued Expenses	21,772		27,653
Advance Rental Payments and Security Deposits	95,932		91,568
Total Liabilities	4,905,019		4,976,181
Partners' Capital	362,048		498,342
Total Liabilities and Partners' Capital	5,267,067		5,474,523
Percentage of ownership interest	50.00%		50.00%			50.00%
Equity Method Investments	181,023		249,171			2,352,000
Total units/ condominiums
Units to be retained	49		49			49
Number of Units in Real Estate Property to be Sold	127		127
Units sold	127		127			127
Total	176		176			176
Hamilton 1025 | Residential buildings
Total units/ condominiums
Total	175		175
Hamilton 1025 | Commercial
Total units/ condominiums
Total	1		1
Hamilton Bay Sales
ASSETS
Rental Properties	802,055		1,626,115
Cash & Cash Equivalents	15,110		124,765
Rent Receivable			1,793
Prepaid Expenses & Other Assets	20,197		206,859
Total Assets	837,362		1,959,533
LIABILITIES AND PARTNERS' CAPITAL
Accounts Payable and Accrued Expenses	20,019		19,186
Advance Rental Payments and Security Deposits	11,114		20,483
Total Liabilities	31,133		39,668
Partners' Capital	806,229		1,919,864
Total Liabilities and Partners' Capital	837,362		1,959,533
Percentage of ownership interest	50.00%		50.00%
Equity Method Investments	403,114		959,932
Total units/ condominiums
Number of Units in Real Estate Property to be Sold	120		120
Units sold	113		106
Unsold units	7		14
Total	120		120
Hamilton Bay Sales | Residential buildings
Total units/ condominiums
Total	120		120
Hamilton Bay Apartments
ASSETS
Rental Properties	6,344,523		6,604,500
Cash & Cash Equivalents	30,261		25,766
Rent Receivable	8,531		4,641
Real Estate Tax Escrow	51,749		37,283
Prepaid Expenses & Other Assets	49,482		35,603
Financing & Leasing Fees	11,929		18,291
Total Assets	6,496,475		6,726,084
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	4,556,075		4,622,842
Accounts Payable and Accrued Expenses	13,657		10,896
Advance Rental Payments and Security Deposits	93,589		95,060
Total Liabilities	4,663,321		4,728,798
Partners' Capital	1,833,154		1,997,286
Total Liabilities and Partners' Capital	6,496,475		6,726,084
Percentage of ownership interest	50.00%		50.00%				50.00%
Equity Method Investments	916,577		998,643				2,500,000
Total units/ condominiums
Units to be retained	48		48				48
Units sold							120
Total	48		48				168
Hamilton Bay Apartments | Residential buildings
Total units/ condominiums
Total	48		48
Hamilton Minuteman
ASSETS
Rental Properties	6,483,432		6,702,438
Cash & Cash Equivalents	51,370		80,847
Rent Receivable	287		737
Real Estate Tax Escrow	39,769		35,466
Prepaid Expenses & Other Assets	42,326		42,400
Financing & Leasing Fees	7,020		10,989
Total Assets	6,624,204		6,872,876
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	5,271,998		5,348,277
Accounts Payable and Accrued Expenses	52,119		64,247
Advance Rental Payments and Security Deposits	96,246		80,327
Total Liabilities	5,420,363		5,492,851
Partners' Capital	1,203,841		1,380,025
Total Liabilities and Partners' Capital	6,624,204		6,872,876
Percentage of ownership interest	50.00%		50.00%					50.00%
Equity Method Investments	601,920		690,012					5,075,000
Total units/ condominiums
Units to be retained	42		42
Total	42		42					42
Hamilton Minuteman | Residential buildings
Total units/ condominiums
Total	42		42
Hamilton on Main Apts
ASSETS
Rental Properties	19,225,373		20,026,347
Cash & Cash Equivalents	191,526		118
Rent Receivable	8,901		8,623
Real Estate Tax Escrow	78,483		43,577
Prepaid Expenses & Other Assets	92,912		712,377
Financing & Leasing Fees	151,150		6,001
Total Assets	19,748,345		20,797,043
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	16,900,000		15,263,225
Accounts Payable and Accrued Expenses	142,669		172,902
Advance Rental Payments and Security Deposits	316,025		291,564
Total Liabilities	17,358,694		15,727,691
Partners' Capital	2,389,651		5,069,351
Total Liabilities and Partners' Capital	19,748,345		20,797,043
Percentage of ownership interest	50.00%		50.00%							50.00%
Equity Method Investments	1,194,825		2,534,676							8,000,000
Total units/ condominiums
Units to be retained	148		148
Units sold									137
Total	148		148							280
Hamilton on Main Apts | Residential buildings
Total units/ condominiums
Total	148		148
Dexter Park
ASSETS
Rental Properties	96,374,735		100,826,473
Cash & Cash Equivalents	985,394		1,027,202
Rent Receivable	71,152		74,141
Real Estate Tax Escrow	260,698		339,330
Prepaid Expenses & Other Assets	1,800,526		1,607,358
Financing & Leasing Fees	266,643		325,532
Total Assets	99,759,148		104,200,037
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	85,896,923		87,179,208
Accounts Payable and Accrued Expenses	626,221		708,297
Advance Rental Payments and Security Deposits	2,480,438		2,294,713
Total Liabilities	89,003,582		90,182,218
Partners' Capital	10,755,566		14,017,818
Total Liabilities and Partners' Capital	99,759,148		104,200,037
Percentage of ownership interest	40.00%		40.00%								40.00%
Equity Method Investments	4,302,225		5,607,127								15,925,000
Total units/ condominiums
Units to be retained	409		409
Total	409		409								409
Dexter Park | Residential buildings
Total units/ condominiums
Total	409		409
Total
ASSETS
Rental Properties	152,626,070		159,815,729
Cash & Cash Equivalents	1,520,246		1,400,862
Rent Receivable	128,112		122,170
Real Estate Tax Escrow	660,430		666,038
Prepaid Expenses & Other Assets	2,156,012		2,746,253
Financing & Leasing Fees	562,806		523,300
Total Assets	157,653,676		165,274,352
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	137,462,493		137,500,700
Accounts Payable and Accrued Expenses	1,007,859		1,143,611
Advance Rental Payments and Security Deposits	3,471,735		3,227,383
Total Liabilities	141,942,087		141,871,694
Partners' Capital	15,711,589		23,402,658
Total Liabilities and Partners' Capital	157,653,676		165,274,352
Equity Method Investments	8,268,172		11,632,342
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	(1,487,939)		(1,332,795)
Total Investment in Unconsolidated Joint Ventures (Net)	$ 6,780,233		$ 10,299,547
Total units/ condominiums
Units to be retained	786		786
Number of Units in Real Estate Property to be Sold	247		247
Units sold	240		233
Unsold units	7		14
Total	1,033		1,033
Total | Residential buildings
Total units/ condominiums
Total	1,030		1,030
Total | Commercial
Total units/ condominiums
Total	3		3

XML

RENTAL PROPERTIES (Details) - 10Q (USD $)	3 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Rental properties
Total fixed assets	$ 225,894,113	$ 225,021,946
Less: Accumulated depreciation	(78,320,385)	(75,905,862)
Total fixed assets, net	147,573,728	149,116,084
Land, improvements and parking lots
Rental properties
Total fixed assets, net	44,541,471	44,541,471
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	153,342,470	153,059,430
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	7,080,552	6,865,348
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	6,481,927	6,341,227
Carpets | Minimum
Rental properties
Useful Life	5 years
Carpets | Maximum
Rental properties
Useful Life	10 years
Air conditioning
Rental properties
Total fixed assets, net	705,116	705,116
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	153,052	147,721
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	5,556,712	5,491,992
Equipment | Minimum
Rental properties
Useful Life	5 years
Equipment | Maximum
Rental properties
Useful Life	7 years
Motor vehicles
Rental properties
Total fixed assets, net	130,859	130,563
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	6,072,922	5,910,046
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	$ 220,437	$ 220,437
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	790
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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MORTGAGE NOTES PAYABLE (Tables) - 10Q

3 Months Ended

Mar. 31, 2015

MORTGAGE NOTES PAYABLE AND LINE OF CREDIT

Schedule of approximate annual maturities

Approximate annual maturities at March 31, 2015 are as follows:

2016—current maturities	$	285,000
2017	1,439,000
2018	1,801,000
2019	7,880,000
2020	1,963,000
Thereafter	182,671,000
	$	196,039,000

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CASH FLOW INFORMATION (Details) - 10Q (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
CASH FLOW INFORMATION
Cash paid for interest	$ 2,360,000	$ 1,664,000
Cash paid for state income taxes	$ 13,000	$ 19,000

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ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS (Details) - 10Q (USD $)	3 Months Ended
	Mar. 31, 2015
ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS
Period for advance rental payment	1 month
Amount received for prepaid rent	$ 1,621,000
Security deposits	$ 2,146,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 3) - 10Q (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Nov. 30, 2001	Mar. 02, 2005	Oct. 03, 2005	Sep. 30, 2004	Aug. 31, 2004	Oct. 28, 2009
Hamilton Essex 81
Revenues
Rental income	$ 358,551	$ 328,770
Laundry and sundry income	3,842	3,920
Total Revenues	362,393	332,690
Expenses
Administrative	3,936	3,178
Depreciation and amortization	111,469	107,903
Management fee	15,345	13,275
Operating	37,532	44,972
Renting	500	117
Repairs and maintenance	25,683	32,278
Taxes and insurance	53,418	58,284
Total Expenses	247,883	260,008
Income Before Other Income	114,510	72,682
Other Income (loss)
Interest expense	118,233	119,368
Total Other Income (loss)	(118,233)	(119,368)
Net Income (Loss)	(3,723)	(46,687)
Proportionate share of net income (loss)	(1,862)	(23,343)
Percentage of ownership interest	50.00%	50.00%
Hamilton Essex Development
Revenues
Rental income	72,523	73,236
Total Revenues	72,523	73,236
Expenses
Administrative	583	317
Depreciation and amortization	2,822	2,822
Management fee	2,901	2,929
Taxes and insurance	13,421	13,569
Total Expenses	19,727	19,638
Income Before Other Income	52,796	53,598
Other Income (loss)
Interest expense	13,552	13,919
Total Other Income (loss)	(13,552)	(13,919)
Net Income (Loss)	39,244	39,679
Proportionate share of net income (loss)	19,622	19,840
Percentage of ownership interest	50.00%	50.00%
345 Franklin
Revenues
Rental income	335,475	327,740
Laundry and sundry income	323	(423)
Total Revenues	335,798	327,317
Expenses
Administrative	7,761	6,823
Depreciation and amortization	93,793	99,725
Management fee	14,108	13,666
Operating	40,071	24,823
Renting	6,345	3,443
Repairs and maintenance	5,988	12,337
Taxes and insurance	29,937	29,644
Total Expenses	198,003	190,461
Income Before Other Income	137,795	136,856
Other Income (loss)
Interest expense	97,936	97,753
Total Other Income (loss)	(97,936)	(97,753)
Net Income (Loss)	39,859	39,104
Proportionate share of net income (loss)	19,929	19,552
Percentage of ownership interest	50.00%	50.00%	50.00%
Hamilton 1025
Revenues
Rental income	240,400	231,187
Total Revenues	240,400	231,187
Expenses
Administrative	1,992	1,968
Depreciation and amortization	60,029	60,152
Management fee	9,439	9,231
Operating	125	160
Renting		5,753
Repairs and maintenance	76,497	80,443
Taxes and insurance	43,051	40,604
Total Expenses	191,133	198,311
Income Before Other Income	49,267	32,876
Other Income (loss)
Interest expense	68,488	69,560
Interest Income	6	4
Total Other Income (loss)	(68,482)	(69,555)
Net Income (Loss)	(19,215)	(36,679)
Proportionate share of net income (loss)	(9,608)	(18,340)
Percentage of ownership interest	50.00%	50.00%		50.00%
Hamilton Bay Sales
Revenues
Rental income	29,295	62,798
Total Revenues	29,295	62,798
Expenses
Administrative	2,779	705
Depreciation and amortization	8,987	19,175
Management fee	1,274	2,384
Operating	24	251
Renting	(459)	753
Repairs and maintenance	11,944	23,824
Taxes and insurance	5,881	11,899
Total Expenses	30,430	58,990
Income Before Other Income	(1,135)	3,808
Other Income (loss)
Interest expense	110	195
Interest Income from Note		334
Gain on Sale of Real Estate		52,283
Other Income (Expenses)	(125)
Total Other Income (loss)	(235)	52,422
Net Income (Loss)	(1,370)	56,230
Proportionate share of net income (loss)	(685)	28,115
Percentage of ownership interest	50.00%	50.00%
Hamilton Bay Apartments
Revenues
Rental income	250,573	238,891
Total Revenues	250,573	238,891
Expenses
Administrative	1,814	4,845
Depreciation and amortization	79,328	79,314
Management fee	9,495	9,460
Operating	665	459
Renting	2,350	3,492
Repairs and maintenance	84,858	73,437
Taxes and insurance	37,830	40,759
Total Expenses	216,340	211,766
Income Before Other Income	34,233	27,125
Other Income (loss)
Interest expense	64,464	65,465
Total Other Income (loss)	(64,464)	(65,465)
Net Income (Loss)	(30,231)	(38,340)
Proportionate share of net income (loss)	(15,116)	(19,170)
Percentage of ownership interest	50.00%	50.00%			50.00%
Hamilton Minuteman
Revenues
Rental income	233,897	223,942
Laundry and sundry income		169
Total Revenues	233,897	224,111
Expenses
Administrative	1,624	3,003
Depreciation and amortization	81,518	79,402
Management fee	9,825	9,310
Operating	32,547	32,854
Renting	3,742	2,466
Repairs and maintenance	15,124	16,887
Taxes and insurance	30,958	29,572
Total Expenses	175,338	173,493
Income Before Other Income	58,559	50,619
Other Income (loss)
Interest expense	75,491	76,500
Total Other Income (loss)	(75,491)	(76,500)
Net Income (Loss)	(16,932)	(25,881)
Proportionate share of net income (loss)	(8,466)	(12,941)
Percentage of ownership interest	50.00%	50.00%				50.00%
Hamilton on Main Apts
Revenues
Rental income	761,273	717,680
Laundry and sundry income	10,641	9,456
Total Revenues	771,914	727,136
Expenses
Administrative	9,276	9,485
Depreciation and amortization	240,762	236,015
Management fee	30,080	28,263
Operating	138,255	142,160
Renting	1,766	6,829
Repairs and maintenance	84,161	90,518
Taxes and insurance	83,506	95,639
Total Expenses	587,806	608,908
Income Before Other Income	184,108	118,227
Other Income (loss)
Interest expense	185,810	200,379
Total Other Income (loss)	(185,810)	(200,379)
Net Income (Loss)	(1,702)	(82,152)
Proportionate share of net income (loss)	(851)	(41,076)
Percentage of ownership interest	50.00%	50.00%					50.00%
Dexter Park
Revenues
Rental income	3,488,805	3,357,055
Laundry and sundry income	19,245	25,380
Total Revenues	3,508,050	3,382,434
Expenses
Administrative	52,330	54,543
Depreciation and amortization	814,969	1,345,463
Management fee	74,951	71,898
Operating	455,656	488,785
Renting	16,293	18,590
Repairs and maintenance	216,618	196,494
Taxes and insurance	361,255	381,185
Total Expenses	1,992,072	2,556,958
Income Before Other Income	1,515,978	825,476
Other Income (loss)
Interest expense	1,210,300	1,227,695
Total Other Income (loss)	(1,210,300)	(1,227,695)
Net Income (Loss)	305,678	(402,219)
Proportionate share of net income (loss)	122,271	(160,888)
Percentage of ownership interest	40.00%	40.00%						40.00%
Total
Revenues
Rental income	5,770,792	5,561,299
Laundry and sundry income	34,051	38,501
Total Revenues	5,804,843	5,599,800
Expenses
Administrative	82,095	84,868
Depreciation and amortization	1,493,677	2,029,971
Management fee	167,418	160,417
Operating	704,875	734,463
Renting	30,537	41,441
Repairs and maintenance	520,873	526,219
Taxes and insurance	659,257	701,154
Total Expenses	3,658,732	4,278,532
Income Before Other Income	2,146,111	1,321,267
Other Income (loss)
Interest expense	1,834,384	1,870,833
Interest Income	6	4
Interest Income from Note		334
Gain on Sale of Real Estate		52,283
Other Income (Expenses)	(125)
Total Other Income (loss)	(1,834,503)	(1,818,212)
Net Income (Loss)	311,608	(496,945)
Proportionate share of net income (loss)	125,234	(208,250)
Total | NERA 50%
Other Income (loss)
Proportionate share of net income (loss)	2,963	(47,363)
Total | NERA 40%
Other Income (loss)
Proportionate share of net income (loss)	$ 122,271	$ (160,888)

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RELATED PARTY TRANSACTIONS - 10Q

3 Months Ended

Mar. 31, 2015

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 $451,000  and $427,000 for the three months ended March 31, 2015 and 2014, 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 three months ended March 31, 2015 and 2014, approximately $238,000 and $178,000, was charged to NERA for legal, accounting, construction, maintenance, rental and architectural services and supervision of capital improvements. Of the 2015 expenses referred to above, approximately $124,000 consisted of repairs and maintenance, $84,000 of administrative expense . Approximately $30,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2015, the Hamilton Company received approximately $225,000 from the Investment Properties of which approximately $167,000 was the management fee, approximately $47,000 was for maintenance services, approximately $5,000 was for construction and capital improvement projects and approximately $6,000 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 $729,000 and $866,000 for the three months ended March 31, 2015 and 2014, 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 2015 and 2014.

Bookkeeping and accounting functions are provided by the Management Company’s accounting staff, which consists of approximately 14 people. During the three months ended March 31, 2015 and 2014, the Management Company charged the Partnership $31,250 ($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 three months ended March 31, 2015 and 2014 this individual received fees of $18,750.

The Partnership has invested in nine limited partnerships, which have invested in mixed use residential apartment complexes. The Partnership has a 40% to 50% ownership interest in each investment property. The other investors are Harold Brown, the President of the Management Company and five other employees of the Management Company. Harold Brown’s ownership interest is between 43.2% and 57%. See Note 14 for a description of the properties and their operations.

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

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FAIR VALUE MEASUREMENTS (Details) - 10Q (USD $)	Mar. 31, 2015	Dec. 31, 2014
Mortgage Notes Payable
Carrying Amount	$ 196,038,642	$ 196,071,540
Wholly owned properties
Mortgage Notes Payable
Carrying Amount	196,038,642	196,071,540
Estimated Fair Value	215,845,385	210,691,170
Partially owned properties
Mortgage Notes Payable
Carrying Amount	137,462,493	137,910,870
Estimated Fair Value	$ 149,159,839	$ 147,843,221

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FAIR VALUE MEASUREMENTS (Tables) - 10Q

3 Months Ended

Mar. 31, 2015

FAIR VALUE MEASUREMENTS

Schedule of carrying amounts and estimated fair value of debt

	Carrying Amount		Estimated Fair Value
Mortgage Notes Payable
Partnership Properties
At March 31, 2015	$	196,038,642	$	215,845,385
At December 31, 2014	$	196,071,540	$	210,691,170
Investment Properties
At March 31, 2015	$	137,462,493	$	149,159,839
At December 31, 2014	$	137,910,870	$	147,843,221

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RENTAL INCOME (Tables) - 10Q

3 Months Ended

Mar. 31, 2015

RENTAL INCOME

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

Approximately 8% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at March 31, 2015 as follows:

	Commercial Property Leases
2016	$	2,624,000
2017	2,038,000
2018	1,406,000
2019	1,098,000
2020	560,000
Thereafter	675,000
	$	8,401,000

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 March 31,
2016	$	459,536	21,584	11	16	%
2017	1,016,457		38,594	9	34	%
2018	169,747		5,981	5	6	%
2019	424,000		12,690	8	14	%
2020	622,466		21,517	8	21	%
2021	64,657		1,106	1	2	%
2022	64,800		1,800	1	2	%
2023	0		0	0	0	%
2024	157,443		4,771	1	5	%
2025	0		0	0	0	%
Totals	$	2,979,106	108,043	44	100	%

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TAXABLE INCOME AND TAX BASIS (Details) - 10Q (USD $)	12 Months Ended
	Dec. 31, 2014
TAXABLE INCOME AND TAX BASIS
Excess amount of statement income over taxable income	$ 3,100,000
Excess amount of cumulative statement basis over cumulative taxable basis	5,000,000
Excess amount of statement income from joint venture investments over taxable income	1,300,000
Reconciliation of GAAP net income to taxable income
Taxable loss	$ 2,100,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables) - 10Q

3 Months Ended

Mar. 31, 2015

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

Summary of financial position relating to investment in unconsolidated joint ventures

Summary financial information as of March 31, 2015

				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	$	8,636,396		$	2,620,789		$	7,040,787		$	5,097,980		$	802,055		$	6,344,523		$	6,483,432		$	19,225,373		$	96,374,735		$	152,626,070
Cash & Cash Equivalents	53,122			49,826			107,441			36,196			15,110			30,261			51,370			191,526			985,394			1,520,246
Rent Receivable	30,694			—			5,470			3,077			—			8,531			287			8,901			71,152			128,112
Real Estate Tax Escrow	114,280			—			41,532			73,919			—			51,749			39,769			78,483			260,698			660,430
Prepaid Expenses & Other Assets	76,589			224			26,198			47,558			20,197			49,482			42,326			92,912			1,800,526			2,156,012
Financing & Leasing Fees	25,978			3,524			88,225			8,337			—			11,929			7,020			151,150			266,643			562,806
Total Assets	$	8,937,059		$	2,674,363		$	7,309,653		$	5,267,067		$	837,362		$	6,496,475		$	6,624,204		$	19,748,345		$	99,759,148		$	157,653,676
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,075,681		$	1,974,501		$	10,000,000		$	4,787,315		$	—		$	4,556,075		$	5,271,998		$	16,900,000		$	85,896,923		$	137,462,493
Accounts Payable & Accrued Expense	44,904			4,941			81,557			21,772			20,019			13,657			52,119			142,669			626,221			1,007,859
Advance Rental Pmts& Security Deposits	174,416			—			203,975			95,932			11,114			93,589			96,246			316,025			2,480,438			3,471,735
Total Liabilities	8,295,001			1,979,442			10,285,532			4,905,019			31,133			4,663,321			5,420,363			17,358,694			89,003,582			141,942,087
Partners’ Capital	642,058			694,921			(2,975,879		)	362,048			806,229			1,833,154			1,203,841			2,389,651			10,755,566			15,711,589
Total Liabilities and Capital	$	8,937,059		$	2,674,363		$	7,309,653		$	5,267,067		$	837,362		$	6,496,475		$	6,624,204		$	19,748,345		$	99,759,148		$	157,653,676
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	321,028		$	347,460		$	—		$	181,023		$	403,114		$	916,577		$	601,920		$	1,194,825		$	4,302,225		8,268,172
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,487,939	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,487,939		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,780,233
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 May 1, 2015	—			—			—			127			113			—			—			—			—			240
Unsold units	—			—			—			—			7			—			—			—			—			7
Unsold units with deposits for future sale as of May 1, 2015	—			—			—			—			—			—			—			—			—			—

Summary financial information as of March 31, 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	$	8,665,490		$	2,623,618		$	7,409,606		$	5,331,142		$	1,626,115		$	6,604,500		$	6,702,438		$	20,026,347		$	100,826,473		$	159,815,729
Cash & Cash Equivalents	31,408			61,603			26,136			23,018			124,765			25,766			80,847			118			1,027,202			1,400,862
Rent Receivable	28,674			—			2,565			995			1,793			4,641			737			8,623			74,141			122,170
Real Estate Tax Escrow	101,256			—			40,681			68,445			—			37,283			35,466			43,577			339,330			666,038
Prepaid Expenses & Other Assets	71,795			222			32,078			37,561			206,859			35,603			42,400			712,377			1,607,358			2,746,253
Financing & Leasing Fees	42,259			11,982			94,884			13,363			—			18,291			10,989			6,001			325,532			523,300
Total Assets	$	8,940,881		$	2,697,426		$	7,605,950		$	5,474,523		$	1,959,533		$	6,726,084		$	6,872,876		$	20,797,043		$	104,200,037		$	165,274,352
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,202,370		$	2,027,817		$	10,000,000		$	4,856,961		$	—		$	4,622,842		$	5,348,277		$	15,263,225		$	87,179,208		$	137,500,700
Accounts Payable & Accrued Expense	52,518			6,373			81,538			27,653			19,186			10,896			64,247			172,902			708,297			1,143,611
Advance Rental Pmts& Security Deposits	163,668			—			190,001			91,568			20,483			95,060			80,327			291,564			2,294,713			3,227,383
Total Liabilities	8,418,556			2,034,190			10,271,539			4,976,181			39,668			4,728,798			5,492,851			15,727,691			90,182,218			141,871,694
Partners’ Capital	522,325			663,236			(2,665,589		)	498,342			1,919,864			1,997,286			1,380,025			5,069,351			14,017,818			23,402,658
Total Liabilities and Capital	$	8,940,881		$	2,697,426		$	7,605,950		$	5,474,523		$	1,959,533		$	6,726,084		$	6,872,876		$	20,797,043		$	104,200,037		$	165,274,352
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	261,162		$	331,618		$	—		$	249,171		$	959,932		$	998,643		$	690,012		$	2,534,676		$	5,607,127		11,632,342
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,332,795	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,332,795		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	10,299,547
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 May 1, 2014	—			—			—			127			106			—			—			—			—			233
Unsold units	—			—			—			—			14			—			—			—			—			14
Unsold units with deposits for future sale as of May 1, 2014	—			—			—			—			—			—			—			—			—			—

Summary of income statement relating to investment in unconsolidated joint ventures

Financial information for the three months ended March 31, 2015

				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	$	358,551		$	72,523		$	335,475		$	240,400		$	29,295		$	250,573		$	233,897		$	761,273		$	3,488,805		$	5,770,792
Laundry and Sundry Income	3,842			—			323			—			—			—			—			10,641			19,245			34,051
	362,393			72,523			335,798			240,400			29,295			250,573			233,897			771,914			3,508,050			5,804,843
Expenses
Administrative	3,936			583			7,761			1,992			2,779			1,814			1,624			9,276			52,330			82,095
Depreciation and Amortization	111,469			2,822			93,793			60,029			8,987			79,328			81,518			240,762			814,969			1,493,677
Management Fees	15,345			2,901			14,108			9,439			1,274			9,495			9,825			30,080			74,951			167,418
Operating	37,532			—			40,071			125			24			665			32,547			138,255			455,656			704,875
Renting	500			—			6,345			—			(459		)	2,350			3,742			1,766			16,293			30,537
Repairs and Maintenance	25,683			—			5,988			76,497			11,944			84,858			15,124			84,161			216,618			520,873
Taxes and Insurance	53,418			13,421			29,937			43,051			5,881			37,830			30,958			83,506			361,255			659,257
	247,883			19,727			198,003			191,133			30,430			216,340			175,338			587,806			1,992,072			3,658,732
Income Before Other Income	114,510			52,796			137,795			49,267			(1,135		)	34,233			58,559			184,108			1,515,978			2,146,111
Other Income (Loss)
Interest Expense	(118,233		)	(13,552		)	(97,936		)	(68,488		)	(110		)	(64,464		)	(75,491		)	(185,810		)	(1,210,300		)	(1,834,384		)
Interest Income	—			—			—			6			—			—			—			—			—			6
Gain on Sale of Real Estate	—			—			—			—			—			—			—			—			—			—
Other Income (Expenses)	—			—			—			—			(125		)	—			—			—			—			(125		)
	(118,233		)	(13,552		)	(97,936		)	(68,482		)	(235		)	(64,464		)	(75,491		)	(185,810		)	(1,210,300		)	(1,834,503		)
Net Income (Loss)	$	(3,723	)	$	39,244		$	39,859		$	(19,215	)	$	(1,370	)	$	(30,231	)	$	(16,932	)	$	(1,702	)	$	305,678		$	311,608
Net Income (Loss) - NERA 50%	$	(1,862	)	$	19,622		$	19,929		$	(9,608	)	$	(685	)	$	(15,116	)	$	(8,466	)	$	(851	)				2,963
Net Income (Loss) - NERA 40%																									$	122,271		122,271
																												$	125,234

Financial information for the three months ended March 31, 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	$	328,770		$	73,236		$	327,740		$	231,187		$	62,798		$	238,891		$	223,942		$	717,680		$	3,357,055		$	5,561,299
Laundry and Sundry Income	3,920			—			(423		)	—			—			—			169			9,456			25,380			38,501
	332,690			73,236			327,317			231,187			62,798			238,891			224,111			727,136			3,382,434			5,599,800
Expenses
Administrative	3,178			317			6,823			1,968			705			4,845			3,003			9,485			54,543			84,868
Depreciation and Amortization	107,903			2,822			99,725			60,152			19,175			79,314			79,402			236,015			1,345,463			2,029,971
Management Fees	13,275			2,929			13,666			9,231			2,384			9,460			9,310			28,263			71,898			160,417
Operating	44,972			—			24,823			160			251			459			32,854			142,160			488,785			734,463
Renting	117			—			3,443			5,753			753			3,492			2,466			6,829			18,590			41,441
Repairs and Maintenance	32,278			—			12,337			80,443			23,824			73,437			16,887			90,518			196,494			526,219
Taxes and Insurance	58,284			13,569			29,644			40,604			11,899			40,759			29,572			95,639			381,185			701,154
	260,008			19,638			190,461			198,311			58,990			211,766			173,493			608,908			2,556,958			4,278,532
Income Before Other Income	72,682			53,598			136,856			32,876			3,808			27,125			50,619			118,227			825,476			1,321,267
Other Income (Loss)
Interest Expense	(119,368		)	(13,919		)	(97,753		)	(69,560		)	(195		)	(65,465		)	(76,500		)	(200,379		)	(1,227,695		)	(1,870,833		)
Interest Income	—			—			—			4			—			—			—			—			—			4
Interest Income from Note	—			—			—			—			334			—			—			—			—			334
Gain on Sale of Real Estate	—			—			—			—			52,283			—			—			—			—			52,283
Other Income (Expenses)	—			—			—			—			—			—			—			—			—			—
	(119,368		)	(13,919		)	(97,753		)	(69,555		)	52,422			(65,465		)	(76,500		)	(200,379		)	(1,227,695		)	(1,818,212		)
Net Income (Loss)	$	(46,687	)	$	39,679		$	39,104		$	(36,679	)	$	56,230		$	(38,340	)	$	(25,881	)	$	(82,152	)	$	(402,219	)	$	(496,945	)
Net Income (Loss) - NERA 50%	$	(23,343	)	$	19,840		$	19,552		$	(18,340	)	$	28,115		$	(19,170	)	$	(12,941	)	$	(41,076	)				(47,363		)
Net Income (Loss) - NERA 40%																									$	(160,888	)	(160,888		)
																												$	(208,250	)

Schedule of future annual mortgage maturities

Future annual mortgage maturities at March 31, 2015 are as follows:

															Hamilton
			Hamilton												Park Towers
	Hamilton		Essex 81		345		Hamilton		Hamilton		Hamilton		Hamilton on		(Dexter
Period End	Essex 81		Development		Franklin		1025		Bay Apts		Minuteman		Main Apts		Park)		Total
3/31/2016	145,622		1,974,501		—		73,013		75,910		79,962		—		1,439,081		3,788,089
3/31/2017	7,930,059		—		131,657		4,714,302		78,894		5,192,036		—		1,521,316		19,568,264
3/31/2018	—		—		185,410		—		4,401,271		—		—		1,608,251		6,194,932
3/31/2019	—		—		192,714		—		—		—		—		1,700,153		1,892,867
3/31/2020	—		—		200,305		—		—		—		—		79,628,122		79,828,427
Thereafter	—		—		9,289,914		—		—		—		16,900,000		—		26,189,914
	$	8,075,681	$	1,974,501	$	10,000,000	$	4,787,315	$	4,556,075	$	5,271,998	$	16,900,000	$	85,896,923	$	137,462,493

XML

SIGNIFICANT ACCOUNTING POLICIES (Details) - 10Q	Mar. 31, 2015 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	790
Area of property (in square feet)	12,500
Partially owned properties | Residential and mixed-use properties | Minimum
Line of Business
Percentage of ownership interest	40.00%
Partially owned properties | Residential and mixed-use properties | Maximum
Line of Business
Percentage of ownership interest	50.00%
Partially owned properties | Car parking lot
Line of Business
Capacity of real estate property (in cars per lot)	50

XML

RENTAL PROPERTIES - 10Q

3 Months Ended

Mar. 31, 2015

RENTAL PROPERTIES

RENTAL PROPERTIES

NOTE 2. RENTAL PROPERTIES

As of March 31, 2015, 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 March 31, 2015, 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 March 31, 2015 with a total of 790 units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

Rental properties consist of the following:

	March 31, 2015			December 31, 2014			Useful Life
Land, improvements and parking lots	$	44,541,471		$	44,541,471		15—40 years
Buildings and improvements	153,342,470			153,059,430			15—40 years
Kitchen cabinets	7,080,552			6,865,348			5—10 years
Carpets	6,481,927			6,341,227			5—10 years
Air conditioning	705,116			705,116			5—10 years
Laundry equipment	153,052			147,721			5—7 years
Elevators	1,139,296			1,139,296			20—40 years
Swimming pools	444,629			444,629			10—30 years
Equipment	5,556,712			5,491,992			5—7 years
Motor vehicles	130,859			130,563			5 years
Fences	24,670			24,670			5—15 years
Furniture and fixtures	6,072,922			5,910,046			5—7 years
Smoke alarms	220,437			220,437			5—7 years
Total fixed assets	225,894,113			225,021,946
Less: Accumulated depreciation	(78,320,385		)	(75,905,862		)
	$	147,573,728		$	149,116,084

XML

SIGNIFICANT ACCOUNTING POLICIES (Details 2) - 10Q (USD $)	3 Months Ended		0 Months Ended
	Mar. 31, 2015 item	Mar. 31, 2014	Jan. 03, 2012	Dec. 31, 2014	Aug. 20, 2007
Principles of Consolidation
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 Per Unit
Dilutive units	0
Concentration of Credit Risks and Financial Instruments
Federally uninsured amounts of cash and cash equivalents, and security deposits included in prepaid expenses and other assets	15,144,000			15,118,000
Advertising Expense
Advertising expense	31,574	30,239
Interest Capitalized
Capitalized interest	$ 0	$ 0
Class A
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
Minimum
Principles of Consolidation
Ownership interest in each subsidiary (as a percent)	99.67%
Interest Capitalized
Criteria of capitalization of interest on property based on specified period of construction	1 year
Minimum | Cash and cash equivalents
Concentration of Credit Risks and Financial Instruments
Interest rate on interest bearing accounts (as a percent)	0.01%
Maximum
Principles of Consolidation
Ownership interest in each subsidiary (as a percent)	100.00%
Maximum | Cash and cash equivalents
Concentration of Credit Risks and Financial Instruments
Interest rate on interest bearing accounts (as a percent)	0.35%
Total
Principles of Consolidation
Number of limited liability companies	9
Total | Minimum
Principles of Consolidation
Percentage of ownership in Joint Ventures	40.00%
Total | Maximum
Principles of Consolidation
Percentage of ownership in Joint Ventures	50.00%

XML

RENTAL INCOME (Details) - 10Q (USD $)	3 Months Ended
	Mar. 31, 2015 sqft item	Mar. 31, 2014	Dec. 31, 2014
Minimum future rental income
2016	$ 2,624,000
2017	2,038,000
2018	1,406,000
2019	1,098,000
2020	560,000
Thereafter	675,000
Commercial Property Leases	8,401,000
Annual base rent for expiring leases	2,979,106
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	391,000		366,000
Recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis	150,000
Deferred rental concession	98,000
Amortization of deferred rents	550
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	182,000	153,000
Through March 31, 2016
Minimum future rental income
Annual base rent for expiring leases	459,536
Total square feet for expiring leases	21,584
Total number of leases expiring	11
Percentage of annual base rent for expiring leases	16.00%
Through March 31, 2017
Minimum future rental income
Annual base rent for expiring leases	1,016,457
Total square feet for expiring leases	38,594
Total number of leases expiring	9
Percentage of annual base rent for expiring leases	34.00%
Through March 31, 2018
Minimum future rental income
Annual base rent for expiring leases	169,747
Total square feet for expiring leases	5,981
Total number of leases expiring	5
Percentage of annual base rent for expiring leases	6.00%
Through March 31, 2019
Minimum future rental income
Annual base rent for expiring leases	424,000
Total square feet for expiring leases	12,690
Total number of leases expiring	8
Percentage of annual base rent for expiring leases	14.00%
Through March 31, 2020
Minimum future rental income
Annual base rent for expiring leases	622,466
Total square feet for expiring leases	21,517
Total number of leases expiring	8
Percentage of annual base rent for expiring leases	21.00%
Through March 31, 2021
Minimum future rental income
Annual base rent for expiring leases	64,657
Total square feet for expiring leases	1,106
Total number of leases expiring	1
Percentage of annual base rent for expiring leases	2.00%
Through March 31, 2022
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 March 31, 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

CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2015	Dec. 31, 2014
ASSETS
Rental Properties	$ 147,573,728	$ 149,116,084
Cash and Cash Equivalents	14,036,371	14,015,898
Rents Receivable	500,001	474,225
Real Estate Tax Escrows	343,485	340,341
Prepaid Expenses and Other Assets	3,270,191	3,287,005
Investments in Unconsolidated Joint Ventures	8,268,172	8,807,868
Financing and Leasing Fees	1,680,700	1,735,652
Total Assets	175,672,648	177,777,073
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	196,038,642	196,071,540
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	1,487,939	1,425,369
Accounts Payable and Accrued Expenses	2,684,390	3,099,117
Advance Rental Payments and Security Deposits	4,589,471	4,548,729
Total Liabilities	204,800,442	205,144,755
Commitments and Contingent Liabilities (Notes 3 and 9)
Partners' Capital 126,844 and 127,653 units outstanding in 2015 and 2014 respectively	(29,127,794)	(27,367,682)
Total Liabilities and Partners' Capital	$ 175,672,648	$ 177,777,073

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details) - 10Q (USD $)	3 Months Ended		0 Months Ended		1 Months Ended		0 Months Ended	1 Months Ended	0 Months Ended	1 Months Ended			12 Months Ended	1 Months Ended
	Mar. 31, 2015 item	Mar. 31, 2014	Oct. 18, 2013	Oct. 28, 2009	Feb. 28, 2007	Apr. 30, 2008 item	Mar. 07, 2005	Sep. 30, 2013	Mar. 02, 2005	Oct. 31, 2004	Jan. 31, 2007	Aug. 31, 2014	Dec. 31, 2005 item	Jun. 30, 2013	Dec. 31, 2014	Oct. 03, 2005 item	Dec. 31, 2006	Sep. 30, 2004 item	May 31, 2008 item	Aug. 31, 2004 item	Nov. 30, 2001 item
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
Investments in joint venture	$ 8,268,172														$ 8,807,868
Borrowings	8,076,000
Outstanding amount of mortgage loan	196,038,642														196,071,540
Interest paid	2,360,000	1,664,000
Distribution to the Partnership	951,330	969,207
Carrying value of investment to discontinue applying the equity method	0
Limited Partnerships
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Capital contributions			660,000
Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Percentage of ownership interest	40.00%	40.00%		40.00%
Investments in joint venture	4,302,225	5,607,127		15,925,000
Number of units	409	409		409
Purchase price of investments				129,500,000
Number of units retained for long-term investment	409	409
Dexter Park | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Borrowings				89,914,000
Interest rate (as a percent)				5.57%
Period for which the entity is required to make interest only payments				2 years
Amortization period of debt				30 years
Outstanding amount of mortgage loan	85,897,000
Hamilton Bay Apartments
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Percentage of ownership interest	50.00%	50.00%														50.00%
Investments in joint venture	916,577	998,643														2,500,000
Number of units	48	48														168
Purchase price of investments																30,875,000
Borrowings					4,750,000
Interest rate (as a percent)					5.57%
Period for which the entity is required to make interest only payments					5 years
Amortization period of debt					30 years
Number of units retained for long-term investment	48	48														48
Number of units sold																120
Hamilton Bay Apartments | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Outstanding amount of mortgage loan	4,556,000
Hamilton Bay Sales
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Percentage of ownership interest	50.00%	50.00%
Investments in joint venture	403,114	959,932
Number of units	120	120
Capital contributions			660,000
Number of units sold	113	106
Number of Units in Real Estate Property to be Sold	120	120
Hamilton Bay Sales | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units						20
Borrowings						2,368,000
Interest rate (as a percent)						5.75%
Hamilton Essex Development, LLC and Hamilton Essex 81, LLC
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Percentage of ownership interest							50.00%
Investments in joint venture							2,000,000
Purchase price of investments							14,300,000
Hamilton Essex Development, LLC and Hamilton Essex 81, LLC | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Borrowings							10,750,000
Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Percentage of ownership interest	50.00%	50.00%
Investments in joint venture	321,028	261,162
Number of units	49	49					48
Number of properties							1
Number of units retained for long-term investment	49	49
Hamilton Essex 81 | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Borrowings	8,076,000
Interest rate (as a percent)	5.79%
Amortization period of debt	30 years
Hamilton Essex Development
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Percentage of ownership interest	50.00%	50.00%
Investments in joint venture	347,460	331,618
Number of units	1	1
Number of units retained for long-term investment	1	1
Capacity of real estate property (in cars per lot)							50
Hamilton Essex Development | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Borrowings	1,975,000
Contractual principal payments to be made								4,443
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)	0.171%
Cost associated with loan extension								9,000
Extended term of debt								2 years
Maximum personal guaranty on mortgage								1,000,000
Debt Instrument, Basis Spread on Variable Rate	2.25%
Hamilton 1025
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Percentage of ownership interest	50.00%	50.00%							50.00%
Investments in joint venture	181,023	249,171							2,352,000
Number of units	176	176							176
Purchase price of investments									23,750,000
Number of units retained for long-term investment	49	49							49
Number of units sold	127	127							127
Number of Units in Real Estate Property to be Sold	127	127
Hamilton 1025 | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Borrowings									5,000,000
Interest rate (as a percent)									5.67%
Period for which the entity is required to make interest only payments									5 years
Amortization period of debt									30 years
Outstanding amount of mortgage loan	4,787,000
Term of debt									10 years
Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Percentage of ownership interest	50.00%	50.00%																50.00%
Investments in joint venture	601,920	690,012																5,075,000
Number of units	42	42																42
Purchase price of investments																		10,100,000
Number of units retained for long-term investment	42	42
Amount returned to partnership										3,775,000
Cash contribution by the entity towards loan																	1,250,000
Hamilton Minuteman | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Borrowings										8,025,000	5,500,000
Interest rate (as a percent)											5.67%
Period for which the entity is required to make interest only payments											5 years
Amortization period of debt											30 years
Outstanding amount of mortgage loan	5,272,000
Term of debt											10 years
Hamilton on Main Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Percentage of ownership interest	50.00%	50.00%																		50.00%
Investments in joint venture	1,194,825	2,534,676																		8,000,000
Number of units	148	148																		280
Purchase price of investments																				56,000,000
Number of units retained for long-term investment	148	148
Number of units sold																			137
Hamilton on Main Apartments, LLC | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of properties													3
Borrowings												16,900,000	16,825,000
Interest rate (as a percent)												4.34%	5.18%
Period for which the entity is required to make interest only payments													3 years
Amortization period of debt													30 years
Term of debt												10 years	10 years
Cost associated with loan extension												161,000
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
Debt Instrument, Loan Proceeds Utilized to Pay Off Existing Mortgage												15,205,000
Debt Instrument, Loan Proceeds distributed to the Partnership												850,000
345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Percentage of ownership interest	50.00%	50.00%																			50.00%
Investments in joint venture																					1,533,000
Number of units	40	40																			40
Number of units retained for long-term investment	40	40
Distribution to the Partnership														1,610,000
Carrying value of investment to discontinue applying the equity method														0
345 Franklin | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Borrowings														10,000,000
Interest rate (as a percent)														3.87%
Period for which the entity is required to make interest only payments														3 years
Amortization period of debt														30 years
Outstanding amount of mortgage loan	10,000,000
Term of debt														15 years
Repayment of loan														$ 6,776,000
Residential buildings | Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units	409	409
Residential buildings | Hamilton Bay Apartments
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units	48	48
Residential buildings | Hamilton Bay Sales
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units	120	120
Residential buildings | Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units	48	48
Residential buildings | Hamilton 1025
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units	175	175
Residential buildings | Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units	42	42
Residential buildings | Hamilton on Main Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units	148	148
Residential buildings | 345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units	40	40
Commercial | Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units	1	1
Commercial | Hamilton Essex Development
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units	1	1
Commercial | Hamilton 1025
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units	1	1
Management Company
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of employees having ownership interest in the investment properties	6
Minimum | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)	3.76%
Minimum | Limited Partnerships
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Percentage of ownership interest	40.00%
Minimum | Harold Brown
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Percentage of ownership interest	43.20%
Maximum | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)	5.97%
Maximum | Limited Partnerships
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Percentage of ownership interest	50.00%
Maximum | Harold Brown
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Percentage of ownership interest	57.00%

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash Flows from Operating Activities
Net income (loss)	$ 409,658	$ (29,614)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	2,484,294	2,724,180
(Income) Loss from investments in joint ventures	(125,234)	208,252
Change in operating assets and liabilities
(Increase) in rents receivable	(25,776)	(6,140)
(Decrease) in accounts payable and accrued expense	(414,728)	(506,471)
(Increase) Decrease in real estate tax escrow	(3,144)	85,858
Decrease (Increase) in prepaid expenses and other assets	1,994	(478,430)
Increase in advance rental payments and security deposits	40,742	55,810
Total Adjustments	1,958,148	2,083,059
Net cash provided by operating activities	2,367,806	2,053,445
Cash Flows From Investing Activities
Proceeds from unconsolidated joint ventures	653,843	273,083
Distribution in excess of investment in unconsolidated joint ventures	82,500	100,000
(Investment in) unconsolidated joint ventures	(8,843)	(108,083)
Improvement of rental properties	(872,165)	(548,564)
Net cash (used in) investing activities	(144,665)	(283,564)
Cash Flows from Financing Activities
Principal payments and payoffs of mortgage notes payable	(32,898)	(3,447,120)
Stock buyback	(1,218,440)	(379,409)
Distributions to partners	(951,330)	(969,207)
Net cash (used in) financing activities	(2,202,668)	(4,795,736)
Net Increase (Decrease) in Cash and Cash Equivalents	20,473	(3,025,855)
Cash and Cash Equivalents, at beginning of period	14,015,898	14,013,380
Cash and Cash Equivalents, at end of period	$ 14,036,371	$ 10,987,525

XML

OTHER ASSETS (Details) - 10Q (USD $)	Mar. 31, 2015	Dec. 31, 2014
OTHER ASSETS
Security deposits	$ 2,146,000	$ 2,090,000
Escrow deposits to fund future capital improvements	273,000	253,000
Intangible assets, net of accumulated amortization	41,000	49,000
Accumulated amortization on intangible assets in connection with the acquisition of Windsor Green	1,711,000	1,703,000
Financing fees, net	1,681,000	1,736,000
Accumulated amortization on financing and leasing fees	$ 668,000	$ 613,000

XML

SUBSEQUENT EVENTS - 10Q

3 Months Ended

Mar. 31, 2015

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 16—SUBSEQUENT EVENTS

There have been no material events subsequent to the balance sheet date through the date of this report that require disclosure.

XML

MORTGAGE NOTES PAYABLE (Details) - 10Q (USD $)	3 Months Ended		0 Months Ended		1 Months Ended	0 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Jul. 31, 2014	Jun. 11, 2014	Feb. 28, 2014	Jul. 11, 2014
MORTGAGE NOTES PAYABLE
Effective interest rate (as a percent)	5.36%
Annual maturities of mortgage debt
2015-current maturities	$ 285,000
2016	1,439,000
2017	1,801,000
2018	7,880,000
2019	1,963,000
Thereafter	182,671,000
Total	196,039,000
Long-term Debt, Maturities, Repayments of Principal in Next Rolling Twelve Months	285,000
Additional disclosures related to mortgages
Amount of new loan	8,076,000
Repurchase of depository receipts	975,731
Repurchase of units	809	271
Line of Credit
Additional disclosures related to mortgages
Term of debt			3 years
Maximum borrowings			25,000,000
Funds drawn by the company	0
Number of properties in which borrowing amount collateralized			23
Amount of refinancing costs			125,000
Base Rate [Member] | Line of Credit
Additional disclosures related to mortgages
Reference rate used in calculation of Base Rate			base
Prime Rate [Member] | Line of Credit
Additional disclosures related to mortgages
Reference rate used in calculation of Base Rate			Prime
Federal Funds Rate [Member] | Line of Credit
Additional disclosures related to mortgages
Basis of effective interest rate used in calculation of Base Rate (as a percent)			0.50%
Reference rate used in calculation of Base Rate			Federal Funds
London Interbank Offered Rate (LIBOR) [Member] | Line of Credit
Additional disclosures related to mortgages
Basis of effective interest rate used in calculation of Base Rate (as a percent)			1.00%
Reference rate used in calculation of Base Rate			one month LIBOR
Minimum | Line of Credit
Additional disclosures related to mortgages
Commitment fee for unused amount (as a percent)			0.15%
Pledged interests rate of the Partnership's ownership interest (as a percent)			49.00%
Minimum | Base Rate [Member] | Line of Credit
Additional disclosures related to mortgages
Debt Instrument, Basis Spread on Variable Rate			2.50%
Maximum | Line of Credit
Additional disclosures related to mortgages
Commitment fee for unused amount (as a percent)			0.20%
Pledged interests rate of the Partnership's ownership interest (as a percent)			100.00%
Maximum | Base Rate [Member] | Line of Credit
Additional disclosures related to mortgages
Debt Instrument, Basis Spread on Variable Rate			3.50%
Mortgages payable
MORTGAGE NOTES PAYABLE
Amount of monthly installments including principal	808,000
Weighted average interest rate (as a percent)	4.81%
Effective interest rate (as a percent)	4.93%
Mortgages payable | NERA Dean Street Associates, LLC
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)				4.22%
Additional disclosures related to mortgages
Amount of new loan				5,687,000
Period of interest only payments on loans				10 years
Amount of loan proceeds utilized for pay off the existing mortgage				5,077,000
Refinancing cost				89,000
Mortgages payable | Hamilton Linewt LLC Commercial-1031Exchange Newton, Massachusetts
Additional disclosures related to mortgages
Amount of mortgage paid off					1,466,000
Mortgages payable | Linhart L.P. Residential/Commercial Newton, Massachusetts
Additional disclosures related to mortgages
Amount of mortgage paid off					1,926,000
Mortgages payable | Courtyard At Westgate Residential Units Burlington Massachusetts Member
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)						4.31%
Additional disclosures related to mortgages
Period of interest only payments on loans						10 years
Amount of loan proceeds utilized for pay off the existing mortgage						2,010,000
Amount of new loan						2,500,000
Amount of refinancing costs						$ 75,000
Mortgages payable | Minimum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)	3.76%
Mortgages payable | Maximum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)	5.97%

XML

RENTAL PROPERTIES (Tables) - 10Q

3 Months Ended

Mar. 31, 2015

RENTAL PROPERTIES

Schedule of rental properties

	March 31, 2015			December 31, 2014			Useful Life
Land, improvements and parking lots	$	44,541,471		$	44,541,471		15—40 years
Buildings and improvements	153,342,470			153,059,430			15—40 years
Kitchen cabinets	7,080,552			6,865,348			5—10 years
Carpets	6,481,927			6,341,227			5—10 years
Air conditioning	705,116			705,116			5—10 years
Laundry equipment	153,052			147,721			5—7 years
Elevators	1,139,296			1,139,296			20—40 years
Swimming pools	444,629			444,629			10—30 years
Equipment	5,556,712			5,491,992			5—7 years
Motor vehicles	130,859			130,563			5 years
Fences	24,670			24,670			5—15 years
Furniture and fixtures	6,072,922			5,910,046			5—7 years
Smoke alarms	220,437			220,437			5—7 years
Total fixed assets	225,894,113			225,021,946
Less: Accumulated depreciation	(78,320,385		)	(75,905,862		)
	$	147,573,728		$	149,116,084

XML

SIGNIFICANT ACCOUNTING POLICIES - 10Q

3 Months Ended

Mar. 31, 2015

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 790 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 2015 or 2014 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 2015 or 2014. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At March 31, 2015, 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 March 31, 2015 and December 31, 2014, respectively approximately $15,144,000 and $15,118,000 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 $31,574 and $30,239 for the three months ended March 31, 2015 and 2014, respectively.

Discontinued Operations and Rental Property Held for Sale:  In April 2014, the FASB issued guidance related to the reporting of discontinued operation and disclosures of disposals of components of an entity. This guidance defines a discontinued operation as a component or group of components disposed or classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and final result; the guidance states that a strategic shift could include a disposal of a major geographical area of operations, a major line of business, a major equity method investment or other major parts of an entity.  The guidance also provides for additional disclosure requirements in connection with both discontinued operations and other dispositions not qualifying as discontinued operations.  The guidance will be effective for all companies for annual and interim periods beginning on or after December 15, 2014.  The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date.  All entities may early adopt the guidance for new disposals (or new classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance.  The Partnership has elected to early adopt this standard effective with the interim period beginning January 1, 2014.  Prior to January 1, 2014, properties identified as held for sale and/or disposed of were presented in discontinued operations for all periods presented.

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 three months ended March 31, 2015 and 2014 there was no capitalized interest.

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

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

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical)	Mar. 31, 2015	Dec. 31, 2014	Mar. 31, 2014	Dec. 31, 2013
CONSOLIDATED BALANCE SHEETS
Partners' Capital, units outstanding	126,844	127,653	129,216	129,487

XML

CASH FLOW INFORMATION - 10Q

3 Months Ended

Mar. 31, 2015

CASH FLOW INFORMATION

CASH FLOW INFORMATION

NOTE 11. CASH FLOW INFORMATION

During the three months ended March 31, 2015 and 2014, cash paid for interest was approximately $2,360,000, and $1,664,000 respectively.  Cash paid for state income taxes was approximately $13,000 and $19,000 during the three months ended March 31, 2015 and 2014 respectively.

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2015	May 05, 2015
Entity Registrant Name	NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP
Entity Central Index Key	0000746514
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Class A
Entity Common Stock, Shares Outstanding		101,475
Class B
Entity Common Stock, Shares Outstanding		24,254

XML

FAIR VALUE MEASUREMENTS - 10Q

3 Months Ended

Mar. 31, 2015

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At March  31, 2015 and December 31, 2014, 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 March 31, 2015 and December 31, 2014 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 March 31, 2015 and December 31, 2014, 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 March 31, 2015 and December 31, 2014, 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 March 31, 2015	$	196,038,642	$	215,845,385
At December 31, 2014	$	196,071,540	$	210,691,170
Investment Properties
At March 31, 2015	$	137,462,493	$	149,159,839
At December 31, 2014	$	137,910,870	$	147,843,221

Disclosure about fair value of financial instruments is based on pertinent information available to management as of March 31, 2015 and December 31, 2014. 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 March 31, 2015 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
	Mar. 31, 2015	Mar. 31, 2014
Revenues
Rental income	$ 10,972,792	$ 10,514,719
Laundry and sundry income	102,728	103,209
Total Revenues	11,075,520	10,617,928
Expenses
Administrative	533,077	530,567
Depreciation and amortization	2,484,294	2,724,180
Management fee	450,704	427,392
Operating	2,086,185	1,681,934
Renting	65,926	36,856
Repairs and maintenance	1,347,214	1,211,254
Taxes and insurance	1,462,976	1,441,123
Total Expenses	8,430,376	8,053,306
Income Before Other Income (Expense)	2,645,144	2,564,622
Other Income (Expense)
Interest income	195	183
Interest expense	(2,360,915)	(2,386,167)
Income (Loss) from investments in unconsolidated joint ventures	125,234	(208,252)
Total Other Income (loss)	(2,235,486)	(2,594,236)
Discontinued Operations
Net Income (Loss)	$ 409,658	$ (29,614)
Income (loss) per Unit
Net income (loss) per unit	$ 3.22	$ (0.23)
Weighted Average Number of Units Outstanding (in units)	127,073	129,312

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ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS - 10Q

3 Months Ended

Mar. 31, 2015

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 March 31, 2015, amounts received for prepaid rents of approximately $1,621,000 are included in cash and cash equivalents, and security deposits of approximately $2,146,000 are included in prepaid expenses and other assets and are restricted cash.

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MORTGAGE NOTES PAYABLE AND LINE OF CREDIT - 10Q

3 Months Ended

Mar. 31, 2015

MORTGAGE NOTES PAYABLE AND LINE OF CREDIT

MORTGAGE NOTES PAYABLE AND LINE OF CREDIT

NOTE 5. MORTGAGE NOTES PAYABLE AND LINE OF CREDIT

Mortgage Notes Payable

At March 31, 2015 and December 31, 2014, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At March 31, 2015, 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 March 31, 2015, the weighted average interest rate on the above mortgages was 4.81%. The effective rate of 4.93% 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 March 31, 2015 are as follows:

2016—current maturities	$	285,000
2017	1,439,000
2018	1,801,000
2019	7,880,000
2020	1,963,000
Thereafter	182,671,000
	$	196,039,000

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 March 31, 2015, 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 Partnership paid approximately $13,000 for the three months ended March 31, 2015.

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.

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SIGNIFICANT ACCOUNTING POLICIES (Policies) - 10Q

3 Months Ended

Mar. 31, 2015

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 790 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 2015 or 2014 other than net income as reported.

Income Per Depositary Receipt

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

Income Per Unit

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

Concentration of Credit Risks and Financial Instruments

Concentration of Credit Risks and Financial Instruments:  The Partnership’s properties are located in New England, and the Partnership is subject to the general economic risks related thereto. No single tenant accounted for more than 5% of the Partnership’s revenues in 2015 or 2014. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At March 31, 2015, 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 March 31, 2015 and December 31, 2014, respectively approximately $15,144,000 and $15,118,000 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 $31,574 and $30,239 for the three months ended March 31, 2015 and 2014, respectively.

Discontinued Operations and Rental Property Held for Sale

Discontinued Operations and Rental Property Held for Sale:  In April 2014, the FASB issued guidance related to the reporting of discontinued operation and disclosures of disposals of components of an entity. This guidance defines a discontinued operation as a component or group of components disposed or classified as held for sale and represents a strategic shift that has (or will have) a major effect on an entity’s operations and final result; the guidance states that a strategic shift could include a disposal of a major geographical area of operations, a major line of business, a major equity method investment or other major parts of an entity.  The guidance also provides for additional disclosure requirements in connection with both discontinued operations and other dispositions not qualifying as discontinued operations.  The guidance will be effective for all companies for annual and interim periods beginning on or after December 15, 2014.  The guidance applies prospectively to new disposals and new classifications of disposal groups as held for sale after the effective date.  All entities may early adopt the guidance for new disposals (or new classifications as held for sale) that have not been reported in financial statements previously issued or available for issuance.  The Partnership has elected to early adopt this standard effective with the interim period beginning January 1, 2014.  Prior to January 1, 2014, properties identified as held for sale and/or disposed of were presented in discontinued operations for all periods presented.

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 three months ended March 31, 2015 and 2014 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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TAXABLE INCOME AND TAX BASIS - 10Q

3 Months Ended

Mar. 31, 2015

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 loss of approximately $2,100,000 was approximately $3,100,000 less than statement income for the year ended December 31, 2014. The primary reason for the decrease is due to accelerated depreciation, tax free exchange and other differences in the treatment of certain expenditures. The cumulative tax basis of the Partnership’s real estate at December 31, 2014 is approximately $5,000,000 less than the statement basis. The primary reasons for the lower tax basis are tax free exchanges, and accelerated depreciation. The Partnership’s tax basis in its joint venture investments is approximately $1,300,000 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 expired in 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 March 31, 2015, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2009 forward.

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COMMITMENTS AND CONTINGENCIES - 10Q

3 Months Ended

Mar. 31, 2015

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

3 Months Ended

Mar. 31, 2015

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 2015, the Partnership announced the approval of a quarterly distribution of its Class A Limited Partners and holders of Depositary Receipts of record as of March 15, 2015 and paid on March 31, 2015, $7.50 per unit and $0.25 per receipt.

In 2014, 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:

	Three Months Ended March 31,
	2015		2014
Net Income per Depositary Receipt	$	0.11	$	(0.01	)
Distributions per Depositary Receipt	$	0.25	$	0.25

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TREASURY UNITS - 10Q

3 Months Ended

Mar. 31, 2015

TREASURY UNITS

TREASURY UNITS

NOTE 8. TREASURY UNITS

Treasury Units at March 31, 2015 are as follows:

Class A	42,704
Class B	10,143
General Partnership	534
	53,381

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. On March 10, 2015, the General Partner authorized an increase in the Repurchase Program from 1,500,000 to 2,000,000 Depository Receipts and extended the Program for an additional five years from March 31, 2015  until March 31, 2020.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 March 31, 2015, the Partnership has repurchased 1,306,331 Depositary Receipts at an average price of $26.01 per receipt (or $780.30 per underlying Class A Unit), 2,605 Class B Units and 137 General Partnership Units, both at an average price of $812.50 per Unit, totaling approximately $36,385,000 including brokerage fees paid by the Partnership.

During the three months ended March 31, 2015, the Partnership purchased a total of 19,415 Depositary Receipts. The average price was $50.00 per receipt or $1,500 per unit. The total cost including commission was $975,731. The Partnership was required to repurchase 154 Class B Units and 8 General Partnership units at a cost of $230,574 and $12,135 respectively.

From April 1, 2015 through May 5, 2015, the Partnership did not purchase any additional Depositary Receipts.

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RENTAL INCOME - 10Q

3 Months Ended

Mar. 31, 2015

RENTAL INCOME

RENTAL INCOME

NOTE 10. RENTAL INCOME

During the three months ended March 31, 2015, 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 March 31, 2015 as follows:

	Commercial Property Leases
2016	$	2,624,000
2017	2,038,000
2018	1,406,000
2019	1,098,000
2020	560,000
Thereafter	675,000
	$	8,401,000

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 $182,000 and $153,000 for the three months ended March 31, 2015 and 2014 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately 26% 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 March 31,
2016	$	459,536	21,584	11	16	%
2017	1,016,457		38,594	9	34	%
2018	169,747		5,981	5	6	%
2019	424,000		12,690	8	14	%
2020	622,466		21,517	8	21	%
2021	64,657		1,106	1	2	%
2022	64,800		1,800	1	2	%
2023	0		0	0	0	%
2024	157,443		4,771	1	5	%
2025	0		0	0	0	%
Totals	$	2,979,106	108,043	44	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $391,000 and $366,000 at March 31, 2015 and December 31, 2014. Included in rents receivable at March 31, 2015 is approximately $150,000 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 March 31, 2015 also includes approximately $98,000 representing the deferral of rental concession primarily related to the residential properties.

For the three months ended March 31, 2015, rent at the commercial properties includes approximately $550 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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RELATED PARTY TRANSACTIONS (Details) - 10Q (USD $)	3 Months Ended
	Mar. 31, 2015 item	Mar. 31, 2014
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue	4.00%
Management fee as a percentage of gross receipts rental revenue of Linewt, LLC	3.00%
Management fees of related party	$ 451,000	$ 427,000
Repairs and maintenance	1,347,214	1,211,254
Administrative expense	533,077	530,567
Management fee	450,704	427,392
Number of limited partnerships and limited liability companies in which the entity has invested	9
Limited Partnerships | Minimum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest	40.00%
Limited Partnerships | Maximum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest	50.00%
General Partner or Management Company
RELATED PARTY TRANSACTIONS
Costs related to professional services	238,000	178,000
Repairs and maintenance	124,000
Administrative expense	84,000
Expenses for construction, architectural services and supervision of capital projects	30,000
Management Company
RELATED PARTY TRANSACTIONS
Reimbursement to related party for payroll transfers	729,000	866,000
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	31,250	31,250
Fees for accounting and bookkeeping services per year	125,000
Number of employees having ownership interest in the investment properties	6
Dexter Park
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue	2.00%
President of Management Company
RELATED PARTY TRANSACTIONS
Quarterly fee for asset management consulting services	18,750	18,750
Harold Brown | Minimum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest	43.20%
Harold Brown | Maximum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest	57.00%
Partially owned properties
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue	4.00%
Repairs and maintenance	47,000
Administrative expense	6,000
Expenses for construction, architectural services and supervision of capital projects	5,000
Amount paid to related party	225,000
Management fee	$ 167,000

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IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS - 10Q

3 Months Ended

Mar. 31, 2015

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue From Contracts With Customers (“ASU 2014-09”), which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” While ASU 2014-09 specifically references contracts with customers, it may apply to certain other transactions such as the sale of real estate or equipment. ASU 2014-09 is effective for us beginning January 1, 2017, although on April 1, 2015, the FASB proposed a one-year deferral of the effective date for ASU 2014-09. We are continuing to evaluate this guidance; however, we do not expect its adoption to have a significant impact on our consolidated financial statements, as a substantial portion of our revenue consists of rental income from leasing arrangements, which are specifically excluded from ASU 2014-09.

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.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis (“ASU 2015-02”), which makes certain changes to both the variable interest model and the voting model, including changes to (1) the identification of variable interests (fees paid to a decision maker or service provider), (2) the variable interest entity characteristics for a limited partnership or similar entity and (3) the primary beneficiary determination. ASU 2015-02 is effective for us beginning January 1, 2016. We are continuing to evaluate this guidance; however, we do not expect its adoption to have a significant impact on our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03), which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected. Upon adoption, we will apply the new guidance on a retrospective basis and adjust the balance sheet of each individual period presented to reflect the period-specific effects of applying the new guidance. This guidance is effective for us beginning January 1, 2016. We are continuing to evaluate this guidance; however, we do not expect its adoption to have a significant impact on our consolidated financial statements.

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PARTNERS' CAPITAL (Tables) - 10Q

3 Months Ended

Mar. 31, 2015

PARTNERS' CAPITAL

Schedule of information per depositary receipt

	Three Months Ended March 31,
	2015		2014
Net Income per Depositary Receipt	$	0.11	$	(0.01	)
Distributions per Depositary Receipt	$	0.25	$	0.25

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RENTAL INCOME (Details 2) - 10Q (Commercial rental income, Staples and Trader Joes)	3 Months Ended
	Mar. 31, 2015
Commercial rental income | Staples and Trader Joes
Concentration Risk [Line Items]
Concentration risk percentage	26.00%

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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, 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		(775,366)	(184,149)	(9,692)		(969,207)
Stock Buyback		(305,230)	(70,470)	(3,709)		(379,409)
Stock Buyback (in units)					271	(271)
Net income (loss)		(23,691)	(5,627)	(296)		(29,614)
Balance at Mar. 31, 2014		(18,589,614)	(4,405,322)	(231,857)		(23,226,793)
Balance (in units) at Mar. 31, 2014	180,225	144,180	34,243	1,802	51,009	129,216
Balance at Dec. 31, 2014		(21,910,488)	(5,184,335)	(272,859)		(27,367,682)
Balance (in units) at Dec. 31, 2014	180,225	144,180	34,243	1,802	52,572	127,653
Increase (Decrease) in Partners' Capital
Distribution to Partners		(761,064)	(180,753)	(9,513)		(951,330)
Stock Buyback		(975,731)	(230,574)	(12,135)		(1,218,440)
Stock Buyback (in units)			(154)	(8)	809	(809)
Net income (loss)		327,726	77,835	4,097		409,658
Balance at Mar. 31, 2015		$ (23,319,557)	$ (5,517,827)	$ (290,410)		$ (29,127,794)
Balance (in units) at Mar. 31, 2015	180,225	144,180	34,243	1,802	53,381	126,844

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OTHER ASSETS - 10Q

3 Months Ended

Mar. 31, 2015

OTHER ASSETS

OTHER ASSETS

NOTE 4. OTHER ASSETS

Approximately $2,146,000 and $2,090,000 of security deposits are included in prepaid expenses and other assets at March 31, 2015 and December 31, 2014, respectively. The security deposits and escrow accounts are restricted cash.

Included in prepaid expenses and other assets at March 31, 2015 and December 31, 2014 is approximately $273,000 and $253,000, 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 $41,000 net of accumulated amortization of approximately $1,711,000 and approximately $49,000 net of accumulated amortization of approximately $1,703,000 at March 31, 2015 and December 31, 2014, respectively.

Financing fees of approximately $1,681,000 and $1,736,000 are net of accumulated amortization of approximately $668,000 and $613,000 at March 31, 2015 and December 31, 2014, respectively.

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TREASURY UNITS (Tables) - 10Q

3 Months Ended

Mar. 31, 2015

TREASURY UNITS

Schedule of treasury units

Treasury Units at March 31, 2015 are as follows:

Class A	42,704
Class B	10,143
General Partnership	534
	53,381

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PARTNERS' CAPITAL (Details) - 10Q (USD $)	3 Months Ended		0 Months Ended
	Mar. 31, 2015	Mar. 31, 2014	Jan. 03, 2012	Dec. 31, 2014	Aug. 20, 2007
Quarterly distribution per unit (in dollars per unit)				7.50
Quarterly distributions per depositary receipt (in dollars per share)				$ 0.25
Distribution per unit (in dollars per unit)				$ 30.00
Earnings per depository receipt
Net Income per Depositary Receipt after Discontinued Operations	0.11	(0.01)
Distributions per Depositary Receipt (in dollars per share)	0.25	0.25		1.00
Limited Partner
Number of classes of partners	2
Class A
Fixed distribution percentage of unit holders	80.00%
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
Quarterly distributions per depositary receipt (in dollars per share)	$ 0.25
Class B
Fixed distribution percentage of unit holders	19.00%
General Partnership
Number of classes of partners	1
Fixed distribution percentage of unit holders	1.00%

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES - 10Q

3 Months Ended

Mar. 31, 2015

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 $85,897,000 at March 31, 2015. 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 March 31, 2015, the balance of the mortgage is approximately $4,556,000. 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.  As of May  5, 2015, 7 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 balance on Hamilton Essex 81, LLC is approximately $8,076,000, at March 31, 2015, amortizing over 30 years at 5.79% due in August 2016. The mortgage on Essex Development, LLC, or the parking lot is approximately $1,975,000 with a variable interest rate of 2.25% over the daily Libor rate (0.171%) at March 31, 2015.  In September 2013, this 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 $4,787,000 at March  31, 2015. This investment is referred to as Hamilton 1025, LLC.

In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. In October 2004, the 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 March 31, 2015, the balance of this mortgage is approximately $5,272,000. This investment is referred to as Hamilton Minuteman,  LLC.

In August 2004, the Partnership invested $8,000,000 for a 50% ownership interest in a 280-unit apartment complex located in Watertown, Massachusetts. The total purchase price was $56,000,000.  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. The costs associated with the refinancing were approximately $161,000.

In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts. In June 2013, the property was refinanced with a 15 year mortgage in the amount of $10,000,000 at 3.87%, interest only for 3 years and is amortized on a 30-year schedule for the balance of the term. 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. At March 31, 2015, the balance of this mortgage is approximately $10,000,000. This investment is referred to as 345 Franklin, LLC.

Summary financial information as of March 31, 2015

				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	$	8,636,396		$	2,620,789		$	7,040,787		$	5,097,980		$	802,055		$	6,344,523		$	6,483,432		$	19,225,373		$	96,374,735		$	152,626,070
Cash & Cash Equivalents	53,122			49,826			107,441			36,196			15,110			30,261			51,370			191,526			985,394			1,520,246
Rent Receivable	30,694			—			5,470			3,077			—			8,531			287			8,901			71,152			128,112
Real Estate Tax Escrow	114,280			—			41,532			73,919			—			51,749			39,769			78,483			260,698			660,430
Prepaid Expenses & Other Assets	76,589			224			26,198			47,558			20,197			49,482			42,326			92,912			1,800,526			2,156,012
Financing & Leasing Fees	25,978			3,524			88,225			8,337			—			11,929			7,020			151,150			266,643			562,806
Total Assets	$	8,937,059		$	2,674,363		$	7,309,653		$	5,267,067		$	837,362		$	6,496,475		$	6,624,204		$	19,748,345		$	99,759,148		$	157,653,676
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,075,681		$	1,974,501		$	10,000,000		$	4,787,315		$	—		$	4,556,075		$	5,271,998		$	16,900,000		$	85,896,923		$	137,462,493
Accounts Payable & Accrued Expense	44,904			4,941			81,557			21,772			20,019			13,657			52,119			142,669			626,221			1,007,859
Advance Rental Pmts& Security Deposits	174,416			—			203,975			95,932			11,114			93,589			96,246			316,025			2,480,438			3,471,735
Total Liabilities	8,295,001			1,979,442			10,285,532			4,905,019			31,133			4,663,321			5,420,363			17,358,694			89,003,582			141,942,087
Partners’ Capital	642,058			694,921			(2,975,879		)	362,048			806,229			1,833,154			1,203,841			2,389,651			10,755,566			15,711,589
Total Liabilities and Capital	$	8,937,059		$	2,674,363		$	7,309,653		$	5,267,067		$	837,362		$	6,496,475		$	6,624,204		$	19,748,345		$	99,759,148		$	157,653,676
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	321,028		$	347,460		$	—		$	181,023		$	403,114		$	916,577		$	601,920		$	1,194,825		$	4,302,225		8,268,172
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,487,939	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,487,939		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,780,233
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 May 1, 2015	—			—			—			127			113			—			—			—			—			240
Unsold units	—			—			—			—			7			—			—			—			—			7
Unsold units with deposits for future sale as of May 1, 2015	—			—			—			—			—			—			—			—			—			—

Financial information for the three months ended March 31, 2015

				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	$	358,551		$	72,523		$	335,475		$	240,400		$	29,295		$	250,573		$	233,897		$	761,273		$	3,488,805		$	5,770,792
Laundry and Sundry Income	3,842			—			323			—			—			—			—			10,641			19,245			34,051
	362,393			72,523			335,798			240,400			29,295			250,573			233,897			771,914			3,508,050			5,804,843
Expenses
Administrative	3,936			583			7,761			1,992			2,779			1,814			1,624			9,276			52,330			82,095
Depreciation and Amortization	111,469			2,822			93,793			60,029			8,987			79,328			81,518			240,762			814,969			1,493,677
Management Fees	15,345			2,901			14,108			9,439			1,274			9,495			9,825			30,080			74,951			167,418
Operating	37,532			—			40,071			125			24			665			32,547			138,255			455,656			704,875
Renting	500			—			6,345			—			(459		)	2,350			3,742			1,766			16,293			30,537
Repairs and Maintenance	25,683			—			5,988			76,497			11,944			84,858			15,124			84,161			216,618			520,873
Taxes and Insurance	53,418			13,421			29,937			43,051			5,881			37,830			30,958			83,506			361,255			659,257
	247,883			19,727			198,003			191,133			30,430			216,340			175,338			587,806			1,992,072			3,658,732
Income Before Other Income	114,510			52,796			137,795			49,267			(1,135		)	34,233			58,559			184,108			1,515,978			2,146,111
Other Income (Loss)
Interest Expense	(118,233		)	(13,552		)	(97,936		)	(68,488		)	(110		)	(64,464		)	(75,491		)	(185,810		)	(1,210,300		)	(1,834,384		)
Interest Income	—			—			—			6			—			—			—			—			—			6
Gain on Sale of Real Estate	—			—			—			—			—			—			—			—			—			—
Other Income (Expenses)	—			—			—			—			(125		)	—			—			—			—			(125		)
	(118,233		)	(13,552		)	(97,936		)	(68,482		)	(235		)	(64,464		)	(75,491		)	(185,810		)	(1,210,300		)	(1,834,503		)
Net Income (Loss)	$	(3,723	)	$	39,244		$	39,859		$	(19,215	)	$	(1,370	)	$	(30,231	)	$	(16,932	)	$	(1,702	)	$	305,678		$	311,608
Net Income (Loss) - NERA 50%	$	(1,862	)	$	19,622		$	19,929		$	(9,608	)	$	(685	)	$	(15,116	)	$	(8,466	)	$	(851	)				2,963
Net Income (Loss) - NERA 40%																									$	122,271		122,271
																												$	125,234

Future annual mortgage maturities at March 31, 2015 are as follows:

															Hamilton
			Hamilton												Park Towers
	Hamilton		Essex 81		345		Hamilton		Hamilton		Hamilton		Hamilton on		(Dexter
Period End	Essex 81		Development		Franklin		1025		Bay Apts		Minuteman		Main Apts		Park)		Total
3/31/2016	145,622		1,974,501		—		73,013		75,910		79,962		—		1,439,081		3,788,089
3/31/2017	7,930,059		—		131,657		4,714,302		78,894		5,192,036		—		1,521,316		19,568,264
3/31/2018	—		—		185,410		—		4,401,271		—		—		1,608,251		6,194,932
3/31/2019	—		—		192,714		—		—		—		—		1,700,153		1,892,867
3/31/2020	—		—		200,305		—		—		—		—		79,628,122		79,828,427
Thereafter	—		—		9,289,914		—		—		—		16,900,000		—		26,189,914
	$	8,075,681	$	1,974,501	$	10,000,000	$	4,787,315	$	4,556,075	$	5,271,998	$	16,900,000	$	85,896,923	$	137,462,493

At March  31, 2015 the weighted average interest rate on the above mortgages was 5.27%. The effective rate was 5.36% including the amortization expense of deferred financing costs.

Summary financial information as of March 31, 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	$	8,665,490		$	2,623,618		$	7,409,606		$	5,331,142		$	1,626,115		$	6,604,500		$	6,702,438		$	20,026,347		$	100,826,473		$	159,815,729
Cash & Cash Equivalents	31,408			61,603			26,136			23,018			124,765			25,766			80,847			118			1,027,202			1,400,862
Rent Receivable	28,674			—			2,565			995			1,793			4,641			737			8,623			74,141			122,170
Real Estate Tax Escrow	101,256			—			40,681			68,445			—			37,283			35,466			43,577			339,330			666,038
Prepaid Expenses & Other Assets	71,795			222			32,078			37,561			206,859			35,603			42,400			712,377			1,607,358			2,746,253
Financing & Leasing Fees	42,259			11,982			94,884			13,363			—			18,291			10,989			6,001			325,532			523,300
Total Assets	$	8,940,881		$	2,697,426		$	7,605,950		$	5,474,523		$	1,959,533		$	6,726,084		$	6,872,876		$	20,797,043		$	104,200,037		$	165,274,352
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,202,370		$	2,027,817		$	10,000,000		$	4,856,961		$	—		$	4,622,842		$	5,348,277		$	15,263,225		$	87,179,208		$	137,500,700
Accounts Payable & Accrued Expense	52,518			6,373			81,538			27,653			19,186			10,896			64,247			172,902			708,297			1,143,611
Advance Rental Pmts& Security Deposits	163,668			—			190,001			91,568			20,483			95,060			80,327			291,564			2,294,713			3,227,383
Total Liabilities	8,418,556			2,034,190			10,271,539			4,976,181			39,668			4,728,798			5,492,851			15,727,691			90,182,218			141,871,694
Partners’ Capital	522,325			663,236			(2,665,589		)	498,342			1,919,864			1,997,286			1,380,025			5,069,351			14,017,818			23,402,658
Total Liabilities and Capital	$	8,940,881		$	2,697,426		$	7,605,950		$	5,474,523		$	1,959,533		$	6,726,084		$	6,872,876		$	20,797,043		$	104,200,037		$	165,274,352
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	261,162		$	331,618		$	—		$	249,171		$	959,932		$	998,643		$	690,012		$	2,534,676		$	5,607,127		11,632,342
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,332,795	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,332,795		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	10,299,547
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 May 1, 2014	—			—			—			127			106			—			—			—			—			233
Unsold units	—			—			—			—			14			—			—			—			—			14
Unsold units with deposits for future sale as of May 1, 2014	—			—			—			—			—			—			—			—			—			—

Financial information for the three months ended March 31, 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	$	328,770		$	73,236		$	327,740		$	231,187		$	62,798		$	238,891		$	223,942		$	717,680		$	3,357,055		$	5,561,299
Laundry and Sundry Income	3,920			—			(423		)	—			—			—			169			9,456			25,380			38,501
	332,690			73,236			327,317			231,187			62,798			238,891			224,111			727,136			3,382,434			5,599,800
Expenses
Administrative	3,178			317			6,823			1,968			705			4,845			3,003			9,485			54,543			84,868
Depreciation and Amortization	107,903			2,822			99,725			60,152			19,175			79,314			79,402			236,015			1,345,463			2,029,971
Management Fees	13,275			2,929			13,666			9,231			2,384			9,460			9,310			28,263			71,898			160,417
Operating	44,972			—			24,823			160			251			459			32,854			142,160			488,785			734,463
Renting	117			—			3,443			5,753			753			3,492			2,466			6,829			18,590			41,441
Repairs and Maintenance	32,278			—			12,337			80,443			23,824			73,437			16,887			90,518			196,494			526,219
Taxes and Insurance	58,284			13,569			29,644			40,604			11,899			40,759			29,572			95,639			381,185			701,154
	260,008			19,638			190,461			198,311			58,990			211,766			173,493			608,908			2,556,958			4,278,532
Income Before Other Income	72,682			53,598			136,856			32,876			3,808			27,125			50,619			118,227			825,476			1,321,267
Other Income (Loss)
Interest Expense	(119,368		)	(13,919		)	(97,753		)	(69,560		)	(195		)	(65,465		)	(76,500		)	(200,379		)	(1,227,695		)	(1,870,833		)
Interest Income	—			—			—			4			—			—			—			—			—			4
Interest Income from Note	—			—			—			—			334			—			—			—			—			334
Gain on Sale of Real Estate	—			—			—			—			52,283			—			—			—			—			52,283
Other Income (Expenses)	—			—			—			—			—			—			—			—			—			—
	(119,368		)	(13,919		)	(97,753		)	(69,555		)	52,422			(65,465		)	(76,500		)	(200,379		)	(1,227,695		)	(1,818,212		)
Net Income (Loss)	$	(46,687	)	$	39,679		$	39,104		$	(36,679	)	$	56,230		$	(38,340	)	$	(25,881	)	$	(82,152	)	$	(402,219	)	$	(496,945	)
Net Income (Loss) - NERA 50%	$	(23,343	)	$	19,840		$	19,552		$	(18,340	)	$	28,115		$	(19,170	)	$	(12,941	)	$	(41,076	)				(47,363		)
Net Income (Loss) - NERA 40%																									$	(160,888	)	(160,888		)
																												$	(208,250	)