10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2016

OR

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

For the transition period from              to             

Commission file number 001-31568

New England Realty Associates Limited Partnership

(Exact name of registrant as specified in its charter)

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

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

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

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 ☒  No ☐

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 ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☐
(Do not check if a smaller reporting company)

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

As of November 4, 2016, there were 99,928 of the registrant’s Class A units (2,997,831 Depositary Receipts) of limited partnership issued and outstanding and 23,735 Class B units issued and outstanding.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP

INDEX

PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015	4
	Consolidated Statements of Income for the Three Months and Nine Months Ended September 30, 2016 and 2015	5
	Consolidated Statements of Changes in Partners’ Capital for the Nine Months ended September 30, 2016 and 2015	6
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2016 and 2015	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	39
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40
Item 3.	Defaults Upon Senior Securities	40
Item 4.	Mine Safety Disclosure	40
Item 5.	Other Information	40
Item 6.	Exhibits	40
SIGNATURES		41

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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, 2015 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, 2015.

The results of operations for the three and nine month periods ended September 30, 2016 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	September 30,		December 31,
	2016		2015
ASSETS		(Unaudited)
Rental Properties	$	170,852,153	$	176,697,314
Cash and Cash Equivalents		7,873,583		10,298,186
Rents Receivable		635,768		433,744
Insurance Recovery Receivable		154,864		345,645
Real Estate Tax Escrows		418,346		370,981
Prepaid Expenses and Other Assets		3,837,685		4,762,535
Investments in Unconsolidated Joint Ventures		8,970,289		7,819,162
Total Assets	$	192,742,688	$	200,727,567
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable		213,089,003		194,500,820
Notes Payable		—		25,000,000
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture		2,481,546		2,288,090
Accounts Payable and Accrued Expenses		2,880,180		4,640,767
Advance Rental Payments and Security Deposits		5,185,970		5,108,843
Total Liabilities		223,636,699		231,538,520
Commitments and Contingent Liabilities (Notes 3 and 9)		—		—
Partners’ Capital 124,923 and 125,374 units outstanding in 2016 and 2015 respectively		(30,894,011)		(30,810,953)
Total Liabilities and Partners’ Capital	$	192,742,688	$	200,727,567

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				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Revenues
Rental income	$	12,273,589	$	11,116,471	$	36,482,801	$	33,037,761
Laundry and sundry income		98,292		93,503		326,633		309,151
		12,371,881		11,209,974		36,809,434		33,346,912
Expenses
Administrative		524,293		502,177		1,477,708		1,528,710
Depreciation and amortization		3,079,368		2,608,748		9,167,516		7,527,772
Management fee		511,730		453,178		1,513,226		1,369,597
Operating		995,787		803,753		3,489,724		3,798,050
Renting		301,696		199,980		544,923		421,181
Repairs and maintenance		2,364,364		2,006,298		6,185,250		5,176,219
Taxes and insurance		1,496,807		1,258,025		4,684,062		4,171,930
		9,274,045		7,832,159		27,062,409		23,993,459
Income Before Other Income (Expense)		3,097,836		3,377,815		9,747,025		9,353,453
Other Income (Expense)
Interest income		305		1,055		710		1,393
Interest expense		(2,553,771)		(2,476,767)		(7,650,096)		(7,299,695)
Income  from investments in unconsolidated joint ventures		562,584		177,890		1,220,666		524,710
Gain on sale of real estate		103,793		—		103,793		—
Other Income (Expense)		—		(6,247)		—		—
		(1,887,089)		(2,304,069)		(6,324,927)		(6,773,592)
Net Income	$	1,210,747	$	1,073,746	$	3,422,098	$	2,579,861
Net Income per Unit	$	9.69	$	8.51	$	27.38	$	20.37
Weighted Average Number of Units Outstanding		124,923		126,199		124,995		126,636

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

(Unaudited)

	Units						Partner’s Capital
	Limited		General		Treasury		Limited				General
	Class A	Class B	Partnership	Subtotal	Units	Total	Class A		Class B		Partnership		Total
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	—	—	—	—	—	—		(2,276,458)		(540,659)		(28,456)		(2,845,573)
Stock Buyback	—	—	—	—	1,677	(1,677)		(2,018,329)		(472,845)		(24,887)		(2,516,061)
Net Income	—	—	—	—	—	—		2,063,889		490,174		25,798		2,579,861
Balance September 30, 2015	144,180	34,243	1,802	180,225	54,249	125,976	$	(24,141,386)	$	(5,707,665)	$	(300,404)	$	(30,149,455)
Balance January 1, 2016	144,180	34,243	1,802	180,225	54,851	125,374	$	(24,673,535)	$	(5,830,548)	$	(306,870)	$	(30,810,953)
Distribution to Partners	—	—	—	—	—	—		(2,248,621)		(534,047)		(28,108)		(2,810,776)
Stock Buyback	—	—	—	—	451	(451)		(558,723)		(128,874)		(6,783)		(694,380)
Net Income	—	—	—	—	—	—		2,737,678		650,199		34,221		3,422,098
Balance September 30, 2016	144,180	34,243	1,802	180,225	55,302	124,923	$	(24,743,201)	$	(5,843,270)	$	(307,540)	$	(30,894,011)

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2016		2015
Cash Flows from Operating Activities
Net income	$	3,422,098	$	2,579,861
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		9,167,516		7,527,772
Amortization of deferred financing costs		141,122		128,300
(Income)  from investments in joint ventures		(1,220,666)		(524,710)
Gain on sale of real estate		(103,793)		—
Change in operating assets and liabilities
(Increase)  in rents receivable		(202,024)		(35,801)
(Decrease) Increase in accounts payable and accrued expense		(1,760,588)		1,527,755
Decrease (Increase)  in insurance recovery receivable		190,781		(412,502)
(Increase)   in real estate tax escrow		(47,365)		(13,307)
Decrease (Increase)  in prepaid expenses and other assets		498,350		(1,368,299)
Increase in advance rental payments and security deposits		77,127		186,825
Total Adjustments		6,740,460		7,016,033
Net cash provided by operating activities		10,162,558		9,595,894
Cash Flows From Investing Activities
Proceeds from unconsolidated joint ventures		2,346,829		2,074,993
Distribution in excess of investment in unconsolidated joint ventures		360,000		873,545
(Investment)  in unconsolidated joint ventures		(2,443,829)		(1,128,538)
Improvement of rental properties		(3,564,402)		(4,669,977)
Purchase of Rental Property		—		(6,144,710)
Net proceeds from the sale of real estate		772,336		—
Net cash (used in) investing activities		(2,529,066)		(8,994,687)
Cash Flows from Financing Activities
Payment of financing costs		(174,718)		—
Proceeds of mortgage notes payable		20,071,000		—
Payment of note payable		(25,000,000)		—
Principal payments of mortgage notes payable		(1,449,221)		(98,718)
Stock buyback		(694,380)		(2,516,061)
Distributions to partners		(2,810,776)		(2,845,573)
Net cash (used in) financing activities		(10,058,095)		(5,460,352)
Net (Decrease) Increase in Cash and Cash Equivalents		(2,424,603)		(4,859,145)
Cash and Cash Equivalents, at beginning of period		10,298,186		14,015,898
Cash and Cash Equivalents, at end of period	$	7,873,583	$	9,156,753

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

(Unaudited)

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 25 properties which include 17 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,506 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 778 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 financial statements have been prepared in conformity with GAAP. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. These estimates and assumptions are based on management’s historical experience that are believed to be reasonable at the time. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgement. The Partnership’s critical accounting policies are those which require assumptions to be made about matters that are highly uncertain. Different estimates could have a material effect on the Partnership’s financial results. Judgements and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions and circumstances.

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: Investment 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 and beyond, the carrying values of investments 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

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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

9

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.

Leasing Fees:  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.

Deferred Financing Costs:  Costs incurred in obtaining financing are capitalized and amortized over the term of the related indebtedness. Deferred financing costs are presented in the balance sheet as a direct deduction from the carrying value of the debt liability to which they relate, except deferred financing costs related to the revolving credit facility, which are presented in prepaid expenses and other assets. In all cases, amortization of such costs is included in interest expense and was approximately $141,000 and $128,000 for the nine months ended September 30, 2016 and 2015, respectively.

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 2016 or 2015 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: Partner’s Capital).

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 2016 or 2015. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At September 30, 2016, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01% to 0.35%. At September 30, 2016 and December 31, 2015, respectively approximately $9,241,000, and $11,592,000 of cash and cash equivalents, and security deposits included in prepaid expenses and other assets exceeded federally insured amounts.

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Advertising Expense:  Advertising is expensed as incurred. Advertising expense was $154,105 and $106,482 for the nine months ended September 30, 2016 and 2015, respectively.

Discontinued Operations and Rental Property Held for Sale:  In April 2014, the FASB issued guidance related to the reporting of discontinued operations 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 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 nine months ended September 30, 2016 and 2015 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. The reclassifications were related primarily to conform to ASU No. 2015-03, Simplifying thePresentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. This new standard was effective for interim and annual reporting beginning after December 15, 2015 and requires retrospective application. Approximately $1.4 million of deferred financing costs were reclassified to contra term loans on the balance sheet at December 31, 2015. There was no change to the net income for any period presented as a result of these reclassifications.

NOTE 2. RENTAL PROPERTIES

As of September 30, 2016, the Partnership and its Subsidiary Partnerships owned 2,506 residential apartment units in 21 residential and mixed-use complexes (collectively, the “Apartment Complexes”). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the “Condominium Units”). The Apartment Complexes and Condominium Units are located primarily in the metropolitan Boston area of Massachusetts.

Additionally, as of September 30, 2016, the Partnership and Subsidiary Partnerships owned a commercial shopping center in Framingham, commercial buildings in Newton and Brookline and mixed-use properties in Boston, Brockton and Newton, all in Massachusetts. These properties are referred to collectively as the “Commercial Properties.”

The Partnership also owned a 40% to 50% ownership interest in nine residential and mixed use complexes (the “Investment Properties”) at September 30, 2016 with a total of 778 units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

On August 3, 2016, Hamilton Green Apartments, LLC sold a single family house contiguous with its apartment complex in Andover, Massachusetts.  The sale price of the property was $1,000,000 with closing costs of $227,663 and a cost basis of $668,544 resulting in a gain on the sale of $103,793.  Included in the closing costs is a mortgage prepayment penalty of $187,905.  The proceeds from the sale were used to reduce the principal amount on the apartment complex’s mortgage.

On September 18, 2015,  Residences at Captain Parker, LLC, a Massachusetts limited liability company (“Captain Parker”) a newly formed subsidiary of the Partnership, purchased the Residence at Captain Parkers, a 94 unit apartment complex located at 125 Worthen Road and Ryder Lane in Lexington, Massachusetts. The purchase price was

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$31,600,000 and the closing costs were approximately $49,000. From the purchase price, the Partnership allocated approximately $474,000 for in-place leases, and approximately $31,000 to the value of tenant relationships. These amounts are being amortized over 12 and 24 months respectively. To fund the purchase, the Partnership utilized the available line of credit of $25,000,000, and the balance from the Partnership’s cash reserves. 

Rental properties consist of the following:

	September 30, 2016		December 31, 2015		Useful Life
Land, improvements and parking lots	$	52,610,465	$	52,852,877	15	-	40	years
Buildings and improvements		173,161,839		172,277,299	15	-	40	years
Kitchen cabinets		8,919,826		8,493,696	5	-	10	years
Carpets		8,039,112		7,361,966	5	-	10	years
Air conditioning		718,531		718,531	5	-	10	years
Laundry equipment		244,771		244,771	5	-	7	years
Elevators		1,139,296		1,139,296	20	-	40	years
Swimming pools		444,629		444,629	10	-	30	years
Equipment		10,125,881		9,502,977	5	-	7	years
Motor vehicles		169,076		130,563			5	years
Fences		42,565		38,115	5	-	15	years
Furniture and fixtures		8,339,939		7,855,351	5	-	7	years
Smoke alarms		216,827		216,827	5	-	7	years
Total fixed assets		264,172,757		261,276,898
Less: Accumulated depreciation		(93,320,604)		(84,579,584)
	$	170,852,153	$	176,697,314

NOTE 3. RELATED PARTY TRANSACTIONS

The Partnership’s properties are managed by an entity that is owned by the majority shareholder of the General Partner. The management fee is equal to 4% of gross receipts rental revenue and laundry income on the majority of the Partnership’s properties and 3% on Linewt. Total fees paid were approximately $1,513,000 and $1,370,000 for the nine months ended September 30, 2016 and 2015, respectively.

The Partnership Agreement permits the General Partner or Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA. During the nine months ended September 30, 2016 and 2015, approximately $772,000 and $719,000, was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements. Of the 2016 expenses referred to above, approximately $286,000 consisted of repairs and maintenance, $261,000 of administrative expense and $67,000 for commercial brokerage fees. Approximately $158,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2016, the Hamilton Company received approximately $635,000 from the Investment Properties of which approximately $521,000 was the management fee, approximately $41,000 was for maintenance services, approximately $27,000 was for administrative services and $46,000 for architectural services and supervision of capital projects. The management fee is equal to 4% of gross receipts rental income on the majority of investment properties and 2% on Dexter Park.

The Partnership reimburses the management company for the payroll and related expenses of the employees who work at the properties. Total reimbursement was approximately $2,212,000 and $2,145,000 for the nine months ended September 30, 2016 and 2015, 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 2016 and 2015.

Bookkeeping and accounting functions are provided by the Management Company’s accounting staff, which consists of approximately 14 people. During the nine months ended September 30, 2016 and 2015, the Management Company charged the Partnership $93,750 ($125,000 per year) for bookkeeping and accounting services included in administrative expenses above.

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The President of the Management Company performs asset management consulting services and receives an asset management fee from the Partnership. The Partnership does not have a written agreement with this individual. During the nine months ended September 30, 2016 and 2015 this individual received fees of $56,250.

The Partnership has invested in nine limited partnerships, which have invested in mixed use residential apartment complexes. The Partnership has a 40% to 50% ownership interest in each investment property. The other investors are Harold Brown, the President of the Management Company and five other employees of the Management Company. Harold Brown’s ownership interest is between 43.2% and 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 $2,309,000, and $2,257,000 of security deposits are included in prepaid expenses and other assets at September 30, 2016 and December 31, 2015, respectively. The security deposits and escrow accounts are restricted cash.

Included in prepaid expenses and other assets at September 30, 2016 and December 31, 2015 is approximately $395,000 and $801,000, respectively, held in escrow to fund future capital improvements.

Intangible assets on the acquisitions of Hamilton Green and the Residence at Captain Parkers are included in prepaid expenses and other assets.  Intangible assets are approximately $16,000 net of accumulated amortization of approximately $2,241,000 and approximately $382,000 net of accumulated amortization of approximately $1,875,000 at September 30, 2016 and December 31, 2015, respectively.

Financing fees in association with the line of credit of approximately $40,000 and $75,000 are net of accumulated amortization of approximately $101,000 and $66,000 at September 30, 2016 and December 31, 2015 respectively.

NOTE 5. MORTGAGE NOTES PAYABLE

At September 30, 2016 and December 31, 2015, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At September 30, 2016, the interest rates on these loans ranged from 2.51% to 5.97%, payable in monthly installments aggregating approximately $976,000 including principal, to various dates through 2029. The majority of the mortgages are subject to prepayment penalties. At September 30, 2016, the weighted average interest rate on the above mortgages was 4.60%. The effective rate of 4.69% includes the amortization expense of deferred financing costs. See Note 12 for fair value information. The Partnership’s mortgage debt and the mortgage debt of its unconsolidated joint ventures generally is non-recourse except for customary exceptions pertaining to misuse of funds and material misrepresentations.

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

Approximate annual maturities at September 30, 2016 are as follows:

2017—current maturities	$	1,747,000
2018		7,823,000
2019		1,903,000
2020		4,321,000
2021		2,312,000
Thereafter		196,455,000
		214,561,000
Less: unamortized deferred financing costs		(1,472,000)
	$	213,089,000

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On January 7, 2016, Captain Parker entered into a Multifamily Loan and Security Agreement (the “Loan Agreement”) with KeyBank National Association (the “Lender”). The manager of Captain Parker is NewReal, Inc. (“New Real”), the general partner of New England Realty Associates Limited Partnership (the “Partnership”).  The Partnership is the sole member of Captain Parker. The Loan Agreement provides for a term loan (the “Loan”) in the principal amount of $20,071,000.  The Loan is due on February 1, 2026 (the “Due Date”), unless the due date is accelerated in accordance with the Loan’s terms.Borrowings under the Loan will bear interest at rates equal to (i) the one month LIBOR rate for United States Dollar Deposits, determined monthly, plus 201 basis points. The interest rate increases upon an event of default. 

Captain Parker is required to repay the aggregate principal amount of the Loan by the Due Date. Interest payments on the Loans are payable monthly in arrears on specified dates set forth in the Loan Agreement. Principal payments on the Loan are also payable monthly commencing on March 1, 2021.  The note issued by Captain Parker in connection with the Loan Agreement (the “Note”) also contains provisions for optional prepayment with a penalty under certain circumstances.

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 the applicable margin of 2.5%. The costs associated with the line of credit were approximately $125,000. As of September 30, 2016, the credit line had no outstanding balance.

On September 15, 2015, the Partnership, in connection with the purchase of the Residence at Captain Parker Apartments, used the entire line of credit, along with cash reserve, to purchase the property. (See Note 2: Rental Properties, for the details of the transaction.)

On January 7, 2016, Captain Parker entered into a Multifamily Loan and Security Agreement (the “Loan Agreement”) with KeyBank National Association (the “Lender”). As a result of securing the financing, the Partnership used the proceeds of the loan and cash reserves of the Partnership to pay down the Line of Credit to zero. A payment was made on January 7, 2016 for $23,000,000, and another payment for $2,000,000 was made on January 15, 2016.

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 distributions, 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 $37,000 for the nine months ended September 30, 2016.

The line of credit agreement has several covenants, such as providing cash flow projections and compliance certificates, as well as other financial information. The covenants include, but are not limited to the following: maintain a leverage ratio that does not exceed 65%; aggregate increase in indebtedness of the subsidiaries and joint ventures should not exceed $15,000,000; maintain a tangible net worth (as defined in the agreement) of a minimum of $150,000,000; a minimum ratio of net operating income to total indebtedness of at least 9.5%; debt service coverage ratio of at least 1.6 to 1, as well as other items.

The Partnership is in compliance with these covenants as of September 30, 2016.

NOTE 6. ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

The Partnership’s residential lease agreements may require tenants to maintain a one-month advance rental payment and/or a security deposit. At September 30, 2016, amounts received for prepaid rents of approximately

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$1,851,000 are included in cash and cash equivalents, and security deposits of approximately $2,309,000 are included in prepaid expenses and other assets and are restricted cash.

NOTE 7. PARTNERS’ CAPITAL

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

In 2016, the Partnership announced the approval of quarterly distributions of its Class A Limited Partners and holders of Depositary Receipts of record as of March 15, 2016, June 15, 2016, and September 15, 2016, payable on March 31, 2016, June 30, 2016, and September 30, 2016, respectively, of $7.50 per unit and $0.25 per receipt.

In 2015, the Partnership paid quarterly distributions of $7.50 per unit ($0.25 per receipt) in March, June, September, and December for a total distribution of $30.00 per unit ($1.00 per receipt) for the year.

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

	Nine Months Ended
	September 30,
	2016		2015
Net Income per Depositary Receipt	$	0.91	$	0.68
Distributions per Depositary Receipt	$	0.75	$	0.75

NOTE 8. TREASURY UNITS

Treasury Units at September 30, 2016 are as follows:

Class A	44,242
Class B	10,507
General Partnership	553
	55,302

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 to 1,500,000. On August 8, 2008, the General Partner re- authorized and renewed the Repurchase Program for an additional 12-month period ended August 19, 2009. On March 22, 2010, the General Partner re-authorized and renewed the Repurchase Program that expired on August 19, 2009. Under the terms of the renewed Repurchase Program, the Partnership may purchase up to 1,500,000 Depositary Receipts from the start of the program in 2007 through March 31, 2015. 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 Restate Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through September 30, 2016, the Partnership has repurchased 1,352,427 Depositary Receipts at an average price of $26.81 per receipt (or $804.30 per underlying Class A

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Unit), 2,970 Class B Units and 156 General Partnership Units, both at an average price of $895.21 per Unit, totaling approximately $39,291,000 including brokerage fees paid by the Partnership.

During the nine months ended September 30, 2016, the Partnership purchased a total of 10,829 Depositary Receipts. The average price was $50.11 per receipt or $1,503.26 per unit. The total cost including commission was $558,723. The Partnership was required to repurchase 86 Class B Units and 5 General Partnership units at a cost of $128,874 and $6,783 respectively.

NOTE 9. COMMITMENTS AND CONTINGENCIES

From time to time, the Partnership is involved in various ordinary routine litigation incidental to its 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.

On June 9, 2015, a fire broke out at 12 Westgate Drive apartment complex in Woburn, MA, resulting in approximately 10 apartments being damaged which will remain unoccupied for an extended period. The Partnership has insurance coverage on both repairs and rental loss for the extended period until the apartments are available for rent, and has received approximately $714,000 from the insurance company to date, leaving an estimated insurance recovery receivable of approximately $155,000 at September 30, 2016, which is included in the insurance recovery receivable on the balance sheet.

NOTE 10. RENTAL INCOME

During the nine months ended September 30, 2016, approximately 93% 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 7% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at September 30, 2016 as follows:

	Commercial
	Property Leases
2017	$	2,434,000
2018		2,066,000
2019		1,634,000
2020		1,065,000
2021		763,000
Thereafter		356,000
	$	8,318,000

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 $444,000 and $521,000 for the nine months ended September 30, 2016 and 2015 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately 22% of the total commercial rental income.

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The following information is provided for commercial leases:

	Annual base				Percentage of
	rent for		Total square feet	Total number of	annual base rent for
Through September 30,	expiring leases		for expiring leases	leases expiring	expiring leases
2017	$	577,694	25,179	11	20	%
2018		367,293	11,507	7	13	%
2019		707,687	25,029	13	24	%
2020		215,165	6,409	5	8	%
2021		784,588	34,248	6	28	%
2022		30,600	900	1	1	%
2023		—	—	—	0	%
2024		157,443	4,771	1	6	%
2025		—	—	—	0	%
2026		—	—	—	0	%
Totals	$	2,840,470	108,043	44	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $666,000 and $373,000 at September 30, 2016 and December 31, 2015. Included in rents receivable at September 30, 2016 is approximately $115,000 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 at 62 Boylston Street in Boston, Massachusetts.

Rents receivable at September 30, 2016 also includes approximately $111,000 representing the deferral of rental concession primarily related to the residential properties.

For the nine months ended September 30, 2016 rent at the commercial properties includes approximately $2,000 of amortization of deferred rents arising from the fair values assigned to in-place leases upon the purchase of Cypress Street in Brookline, Massachusetts.

NOTE 11. CASH FLOW INFORMATION

During the nine months ended September 30, 2016 and 2015, cash paid for interest was approximately $7,457,000, and $7,214,000 respectively.  Cash paid for state income taxes was approximately $42,000 and $19,000 during the nine months ended September 30, 2016 and 2015 respectively.

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At September 30, 2016 and December 31, 2015, we do not have any significant financial assets or financial liabilities that are measured at fair value on a recurring basis in our consolidated financial statements.

Financial Assets and Liabilities not Measured at Fair Value

At September 30, 2016 and December 31, 2015 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, and note payable, accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments or, the recent acquisition of these items.

At September 30, 2016 and December 31, 2015, we estimated the fair value of our mortgages payable and other notes based upon quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available. We estimated the fair value of our secured mortgage debt that does not have current quoted market prices available by discounting the future cash flows using rates currently available to us for debt with similar terms and maturities (Level 3). The differences in the fair value of our debt from the carrying value are the result of differences in interest rates and/or borrowing spreads that were available to us at September 30, 2016 and December 31, 2015, 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 September 30, 2016	*	$	213,089,003	$	231,415,786
At December 31, 2015	*	$	194,500,820	$	205,240,993
Investment Properties
At September 30, 2016	*	$	130,551,992	$	138,000,688
At December 31, 2015	*	$	135,657,988	$	142,512,272

* Net of unamortized deferred financing costs

Disclosure about fair value of financial instruments is based on pertinent information available to management as of September 30, 2016 and December 31, 2015. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since September 30, 2016 and current estimates of fair value may differ significantly from the amounts presented herein.

NOTE 13. TAXABLE INCOME AND TAX BASIS

Taxable income reportable by the Partnership and includable in its partners’ tax returns is different than financial statement income because of tax free exchanges, accelerated depreciation, different tax lives, and timing differences related to prepaid rents, allowances and intangible assets at significant acquisitions. Taxable income of approximately $2,106,000 was approximately $1,667,000 less than statement income for the year ended December 31, 2015. The primary reason for the difference 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, 2015 is approximately $7,000,000 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 $1,500,000 less than statement basis because of accelerated depreciation. Taxable income for 2016 is expected to exceed financial statement income, primarily due to a change in taxable depreciation expense.

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.

While allowable accelerated tax depreciation deductions were extended, 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.

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In the normal course of business the Partnership or one of its subsidiaries is subject to examination by federal, state and local jurisdictions in which it operates, where applicable. As of September 30, 2016, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2012 forward.

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

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 interest 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 $83,686,000 at September 30, 2016. 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 is amortized over 30 years thereafter and matures in March 2017. As of September 30, 2016, the balance of the mortgage is approximately $4,447,000. 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. One unit was sold in the quarter ended September 30, 2016, with a gain on the sale of approximately $100,000. As of November 1, 2016, one unit is 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 planned to operate the building and initiate development of the parking lot. In June 2007, the Partnership separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Partnership restructured the mortgages on both parcels at Essex 81 and transferred the residential apartments to Hamilton Essex 81, LLC. On September 28, 2015, Hamilton Essex Development, LLC paid off the outstanding mortgage balance of $1,952,286.  The Partnership made a capital contribution of $978,193 to Hamilton Essex Development LLC for its share of the funds required for the transaction.  Additionally, the Partnership made a capital contribution of $100,000 to Hamilton Essex 81, LLC.  On September 30, 2015, Hamilton Essex 81, LLC obtained a new 10 year mortgage in the amount of $10,000,000, interest only at 2.18% plus the one month Libor rate. The proceeds of the note were used to pay off the existing mortgage of $8,040,719 and the Partnership received a distribution of $978,193 for its share of the excess proceeds. 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.As of September 30, 2016,the balance of the mortgage is approximately $9,876,000.The investment in the parking lot is referred to as Hamilton Essex Development, LLC; the investment in the apartments is referred to as Hamilton Essex 81, LLC.

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 was 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. On July 8, 2016, Hamilton 1025 LLC paid off the

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outstanding balance of the mortgage balance. The Partnership made a capital contribution of $2,359,500 to Hamilton 1025, LLC for its share of the funds required for the transaction. This investment is referred to as Hamilton 1025, LLC.

Hamilton 1025 LLC started to sell the 48 remaining residential condominium units in the third quarter of 2016. Six units were sold in the quarter ended September 30, 2016 with a gain on the sales of approximately $802,000. As of November 4, 2016, three units are under purchase and sales agreements and the Partnership still owns 43 units.

In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. In October 2004, the Partnership obtained a mortgage on the property in the amount of $8,025,000 and returned $3,775,000 to the Partnership. The Partnership obtained a new 10 year mortgage in the amount of $5,500,000 in January 2007. The interest on the new loan was a 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. On September 12, 2016, the property was refinanced with a 15 year mortgage in the amount of $6,000,000, at 3.71%, interest only. The Joint Venture Partnership paid off the prior mortgage of approximately $5,158,000 with the proceeds of the new mortgage and made a distribution of $385,000 to the Partnership. The cost associated with the refinancing was approximately $123,000. 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. As of September 30, 2016, the balance of the mortgage is approximately $16,773,000.

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.As of September 30, 2016, the balance of the mortgage is approximately $9,892,000. This investment is referred to as 345 Franklin, LLC.

20

Summary financial information as of September 30, 2016

				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	$	8,129,487		$	2,616,545		$	6,521,385		$	4,074,383		$	124,752		$	5,956,617		$	6,206,120		$	17,972,191		$	92,473,236		$	144,074,716
Cash & Cash Equivalents		142,274			52,323			199,544			155,921			97,332			1,121			89,502			100,273			1,036,851			1,875,141
Rent Receivable		49,547			—			18,009			35,302			3,000			15,687			980			20,473			288,807			431,805
Real Estate Tax Escrow		81,827			—			45,014			659,841			171			44,049			37,762			135,659			216,881			1,221,204
Prepaid Expenses & Other Assets		172,746			982			54,156			—			—			78,234			67,687			94,299			1,978,426			2,446,530
Total Assets	$	8,575,881		$	2,669,850		$	6,838,108		$	4,925,447		$	225,255		$	6,095,708		$	6,402,051		$	18,322,895		$	95,994,201		$	150,049,396
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,875,898		$	—		$	9,892,225		$	—		$	—		$	4,447,269		$	5,877,338		$	16,772,927		$	83,686,335		$	130,551,992
Accounts Payable & Accrued Expense		59,117			1,275			78,095			51,206			3,947			9,809			42,713			140,981			693,424			1,080,567
Advance Rental Pmts & Security Deposits		225,843			—			245,904			79,732			2,380			93,716			112,168			361,929			2,493,486			3,615,158
Total Liabilities		10,160,858			1,275			10,216,224			130,938			6,327			4,550,794			6,032,219			17,275,837			86,873,245			135,247,717
Partners’ Capital		(1,584,977)			2,668,575			(3,378,116)			4,794,509			218,928			1,544,914			369,832			1,047,058			9,120,956			14,801,679
Total Liabilities and Capital	$	8,575,881		$	2,669,850		$	6,838,108		$	4,925,447		$	225,255		$	6,095,708		$	6,402,051		$	18,322,895		$	95,994,201		$	150,049,396
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$	—		$	1,334,288		$	—		$	2,397,254		$	109,464		$	772,457		$	184,916		$	523,529		$	3,648,382			8,970,289
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(792,488)		$	—		$	(1,689,058)		$	—		$	—		$	—		$	—		$	—		$	—			(2,481,546)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,488,743
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			—			—			—			42			148			409			689
Units to be sold		—			—			—			176			120			48			—			—			—			344
Units sold through November 1, 2016		—			—			—			133			119			—			—			—			—			252
Unsold units		—			—			—			43			1			—			—			—			—			44
Unsold units with deposits for future sale as of  November 1, 2016		—			—			—			3			—			—			—			—			—			3

21

Financial information for the nine months ended September 30, 2016

			Hamilton										Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	1,139,145	$	180,000	$	1,089,610	$	650,328	$	36,315	$	724,848	$	742,872	$	2,425,746	$	11,026,501	$	18,015,365
Laundry and Sundry Income		11,032		—		2,823		—		—		—		343		31,445		76,124		121,767
		1,150,177		180,000		1,092,433		650,328		36,315		724,848		743,215		2,457,191		11,102,625		18,137,132
Expenses
Administrative		25,757		1,314		23,269		8,429		5,312		8,257		5,225		31,677		137,958		247,198
Depreciation and Amortization		338,820		2,122		260,819		177,062		18,876		238,807		254,869		718,340		2,435,762		4,445,477
Management Fees		47,267		7,200		45,858		24,220		1,412		28,568		30,392		97,873		238,441		521,231
Operating		74,431		—		53,336		732		257		1,364		66,845		232,598		876,054		1,305,617
Renting		23,804		—		14,910		1,789		—		4,354		5,621		13,106		193,381		256,965
Repairs and Maintenance		120,332		3,150		48,832		232,398		18,756		305,491		65,358		407,989		1,113,528		2,315,834
Taxes and Insurance		171,345		44,664		94,429		121,614		8,371		124,296		90,496		365,969		1,136,580		2,157,764
		801,756		58,450		541,453		566,244		52,984		711,137		518,806		1,867,552		6,131,704		11,250,086
Income Before Other Income		348,421		121,550		550,980		84,084		(16,669)		13,711		224,409		589,639		4,970,921		6,887,046
Other Income (Loss)
Interest Expense		(214,415)		—		(298,442)		(149,327)		(65)		(196,329)		(226,672)		(577,942)		(3,657,249)		(5,320,441)
Interest Income		—		—		—		10		—		—		—		—		—		10
Gain on Sale of Real Estate		—		—		—		802,129		335,321		—		—		—		—		1,137,450
		(214,415)		—		(298,442)		652,812		335,256		(196,329)		(226,672)		(577,942)		(3,657,249)		(4,182,981)
Net Income (Loss)	$	134,006	$	121,550	$	252,538	$	736,896	$	318,587	$	(182,618)	$	(2,263)	$	11,697	$	1,313,672	$	2,704,065
Net Income (Loss)—NERA 50%	$	67,003	$	60,775	$	126,270	$	368,448	$	159,294	$	(91,309)	$	(1,132)	$	5,848				695,197
Net Income —NERA 40%																	$	525,469		525,469
																			$	1,220,666

22

Financial information for the three months ended September 30, 2016

													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	$	371,228	$	60,000	$	364,649	$	177,852	$	8,625	$	230,491	$	251,118	$	820,748	$	3,614,525	$	5,899,236
Laundry and Sundry Income		2,675		—		725		—		—		—		44		10,811		21,478		35,733
		373,903		60,000		365,374		177,852		8,625		230,491		251,162		831,559		3,636,003		5,934,969
Expenses
Administrative		5,660		425		7,071		5,684		2,328		2,386		2,625		11,545		40,757		78,481
Depreciation and Amortization		113,626		707		86,988		58,998		6,292		79,953		85,288		241,279		817,710		1,490,841
Management Fees		17,216		2,400		15,033		6,293		336		8,964		10,469		33,611		73,108		167,430
Operating		24,073		—		16,670		147		58		356		20,614		81,583		267,793		411,294
Renting		16,965		—		4,369		—		—		3,400		819		3,590		137,786		166,929
Repairs and Maintenance		44,248		—		19,499		76,499		5,187		104,886		(45,582)		180,736		520,451		905,924
Taxes and Insurance		56,037		14,062		30,006		35,405		1,300		40,318		30,997		110,147		402,822		721,094
		277,825		17,594		179,636		183,026		15,501		240,263		105,230		662,491		2,260,427		3,941,993
Income Before Other Income		96,078		42,406		185,738		(5,174)		(6,876)		(9,772)		145,932		169,068		1,375,576		1,992,976
Other Income (Loss)
Interest Expense		(72,768)		—		(99,433)		(10,638)		(6)		(65,351)		(74,324)		(194,071)		(1,222,601)		(1,739,192)
Interest Income		—		—		—		1		—		—		—		—		—		1
Gain on sale of real estate		—		—		—		802,129		99,851				—		—		—		901,980
		(72,768)		—		(99,433)		791,492		99,845		(65,351)		(74,324)		(194,071)		(1,222,601)		(837,211)
Net Income (Loss)	$	23,310	$	42,406	$	86,305	$	786,318	$	92,969	$	(75,123)	$	71,608	$	(25,003)	$	152,975	$	1,155,765
Net Income (Loss)—NERA 50%	$	11,655	$	21,203	$	43,153	$	393,158	$	46,485	$	(37,562)	$	35,804	$	(12,502)				501,394
Net Income —NERA 40%																	$	61,190		61,190
																			$	562,584

23

Future annual mortgage maturities at September 30, 2016 are as follows:

	Hamilton		345		Hamilton		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Franklin		Bay Apts		Minuteman		Main Apts		Park		Total
9/30/2017	$	—	$	181,277	$	4,449,655	$	—	$	—	$	1,564,180	$	6,195,112
9/30/2018		—		188,419		—		—		—		1,653,563		1,841,982
9/30/2019		—		195,841		—		—		—		1,748,055		1,943,896
9/30/2020		—		203,556		—		—		—		78,899,705		79,103,261
9/30/2021		—		211,575		—		—		—		—		211,575
Thereafter		10,000,000		8,989,794		—		6,000,000		16,900,000		—		41,889,794
		10,000,000		9,970,462		4,449,655		6,000,000		16,900,000		83,865,503		131,185,620
Less: unamortized deferred financing costs		(124,102)		(78,237)		(2,386)		(122,662)		(127,073)		(179,168)		(633,628)
	$	9,875,898	$	9,892,225	$	4,447,269	$	5,877,338	$	16,772,927	$	83,686,335	$	130,551,992

At September 30, 2016 the weighted average interest rate on the above mortgages was 4.98%. The effective rate was 5.06% including the amortization expense of deferred financing costs.

24

Summary financial information as of September 30, 2015

Financial information has been restated to conform to the current period reporting.

				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	$	8,511,004		$	2,619,374		$	6,859,314		$	4,997,692		$	672,579		$	6,212,058		$	6,371,641		$	18,785,662		$	94,934,158		$	149,963,482
Cash & Cash Equivalents		73,595			81,236			79,265			1,029			8,171			3,998			60,545			216,613			1,023,237			1,547,689
Rent Receivable		40,921			—			8,582			4,272			100			2,820			692			12,320			70,167			139,874
Real Estate Tax Escrow		104,165			—			42,400			75,984			—			55,215			39,403			91,842			242,660			651,669
Prepaid Expenses & Other Assets		121,531			903			45,606			55,877			211,856			60,886			39,742			84,849			1,851,560			2,472,810
Total Assets	$	8,851,216		$	2,701,513		$	7,035,167		$	5,134,854		$	892,706		$	6,334,977		$	6,512,023		$	19,191,286		$	98,121,782		$	154,775,524
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,862,109		$	—		$	9,915,104		$	4,746,249		$	—		$	4,512,848		$	5,228,371		$	16,756,876		$	85,010,224		$	136,031,781
Accounts Payable & Accrued Expense		60,815			1,133			83,754			21,998			23,055			6,934			59,805			207,573			754,434			1,219,501
Advance Rental Pmts& Security Deposits		185,386			—			203,378			95,656			5,695			86,897			107,428			314,676			2,349,097			3,348,213
Total Liabilities		10,108,310			1,133			10,202,236			4,863,903			28,750			4,606,679			5,395,604			17,279,125			88,113,755			140,599,495
Partners’ Capital		(1,257,094)			2,700,380			(3,167,069)			270,951			863,956			1,728,298			1,116,419			1,912,161			10,008,027			14,176,029
Total Liabilities and Capital	$	8,851,216		$	2,701,513		$	7,035,167		$	5,134,854		$	892,706		$	6,334,977		$	6,512,023		$	19,191,286		$	98,121,782		$	154,775,524
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$			$	1,350,188		$	—		$	135,476		$	431,978		$	864,149		$	558,210		$	956,080		$	4,003,209		$	8,299,289
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(628,547)		$	—		$	(1,583,534)		$	—		$	—		$	—		$	—		$	—		$	—			(2,212,081)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,087,208
Total units/condominiums
Apartments		48			—			40			175			120			48			42			148			409			1,030
Commercial		1			1			—			1			—			—			—			—			—			3
Total		49			1			40			176			120			48			42			148			409			1,033
Units to be retained		49			1			40			49			—			48			42			148			409			786
Units to be sold		—			—			—			127			120			—			—			—			—			247
Units sold through November 1, 2015		—			—			—			127			114			—			—			—			—			241
Unsold units		—			—			—			—			6			—			—			—			—			6
Unsold units with deposits for future sale as of November 1, 2015		—			—			—			—			1			—			—			—			—			1

25

Financial information for the nine months ended September 30, 2015

Financial information has been restated to conform to the current period reporting.

			Hamilton						Hamilton				Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Bay		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	1,090,071	$	217,568	$	1,033,115	$	713,771	$	78,548	$	733,978	$	699,019	$	2,305,464	$	10,650,223	$	17,521,757
Laundry and Sundry Income		10,114		—		323		—		—		—		—		33,335		67,439		111,211
		1,100,185		217,568		1,033,438		713,771		78,548		733,978		699,019		2,338,799		10,717,662		17,632,968
Expenses
Administrative		17,087		1,434		25,912		5,500		6,537		5,507		3,724		32,349		181,425		279,475
Depreciation and Amortization		326,816		2,122		276,396		176,861		26,961		235,126		243,699		714,838		2,408,892		4,411,711
Management Fees		46,666		8,714		42,971		28,273		3,143		28,914		28,974		91,870		227,847		507,372
Operating		81,724		—		67,241		531		476		917		64,428		296,685		971,545		1,483,547
Renting		8,906		—		12,649		—		—		2,350		6,623		5,701		72,373		108,602
Repairs and Maintenance		110,815		200		45,950		235,033		34,914		273,982		56,628		297,165		930,398		1,985,085
Taxes and Insurance		161,702		39,503		89,750		126,255		16,415		115,086		92,943		253,816		1,141,731		2,037,201
		753,716		51,973		560,869		572,453		88,446		661,882		497,019		1,692,424		5,934,211		10,812,993
Income Before Other Income		346,469		165,595		472,569		141,318		(9,898)		72,096		202,000		646,375		4,783,451		6,819,975
Other Income (Loss)
Interest Expense		(367,955)		(46,283)		(298,900)		(210,641)		(268)		(199,183)		(231,356)		(575,661)		(3,700,310)		(5,630,557)
Interest Income		—		—				11				—		—		96				107
Other Income ( Expense)		—		—						76,523				—				—		76,523
		(367,955)		(46,283)		(298,900)		(210,630)		76,255		(199,183)		(231,356)		(575,565)		(3,700,310)		(5,553,927)
Net Income (Loss)	$	(21,486)	$	119,312	$	173,669	$	(69,312)	$	66,357	$	(127,087)	$	(29,356)	$	70,810	$	1,083,141	$	1,266,048
Net Income (Loss)—NERA 50%	$	(10,743)	$	59,655	$	86,834	$	(34,656)	$	33,179	$	(63,544)	$	(14,678)	$	35,405				91,454
Net Income —NERA 40%																	$	433,256		433,256
																			$	524,710

26

Financial information for the three months ended September 30, 2015

Financial information has been restated to conform to the current period reporting.

			Hamilton						Hamilton				Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Bay		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	368,163	$	72,523	$	354,840	$	236,343	$	19,080	$	246,892	$	231,545	$	781,336	$	3,588,943	$	5,899,665
Laundry and Sundry Income		7,622		—		—		—		—		—		—		10,888		23,361		41,871
		375,785		72,523		354,840		236,343		19,080		246,892		231,545		792,224		3,612,304		5,941,536
Expenses
Administrative		8,781		425		11,531		2,338		1,863		1,883		1,032		12,414		76,791		117,058
Depreciation and Amortization		110,629		708		92,140		59,312		8,988		79,016		82,190		239,747		806,277		1,479,007
Management Fees		14,929		2,912		13,731		9,442		820		9,482		9,529		30,816		72,222		163,883
Operating		22,961		—		16,055		183		271		208		17,946		111,793		241,740		411,157
Renting		2,185		—		3,544		—		159		—		1,877		2,300		39,160		49,225
Repairs and Maintenance		44,380		200		26,888		79,646		10,879		87,765		23,864		114,683		390,221		778,526
Taxes and Insurance		54,826		12,659		29,873		40,360		5,479		38,861		30,972		87,515		407,819		708,364
		258,691		16,904		193,762		191,281		28,459		217,215		167,410		599,268		2,034,230		3,707,220
Income Before Other Income		117,094		55,619		161,078		45,062		(9,379)		29,677		64,135		192,956		1,578,074		2,234,316
Other Income (Loss)
Interest Expense		(122,433)		(14,882)		(99,632)		(70,688)		(55)		(66,763)		(77,815)		(193,932)		(1,241,719)		(1,887,919)
Interest Income		—		—		—		3		—		—		—		—		—		3
Gain on sale of Real Estate		—		—		—		—		76,648		—		—		—		—		76,648
		(122,433)		(14,882)		(99,632)		(70,685)		76,593		(66,763)		(77,815)		(193,932)		(1,241,719)		(1,811,268)
Net Income (Loss)	$	(5,339)	$	40,737	$	61,446	$	(25,623)	$	67,214	$	(37,086)	$	(13,680)	$	(976)	$	336,355	$	423,048
Net Income (Loss)—NERA 50%	$	(2,670)	$	20,369	$	30,723	$	(12,812)	$	33,607	$	(18,543)	$	(6,840)	$	(488)				43,347
Net Income —NERA 40%																	$	134,543		134,543
																			$	177,890

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NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In February 2016, the FASB issued ASU 2016-02, modifying the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.  This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively.  A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification.  Leases with a term of 12 months or less will be accounted for in the same manner as operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The guidance supersedes previously issued guidance under ASC Topic 840 “Leases”. The guidance is effective on January 1, 2019, with early adoption permitted.  The Partnership is currently in the process of evaluating the impact the adoption of ASU 2016-02 will have on the Partnership’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-07, which eliminates a requirement for the retroactive adjustment on a step by step basis of the investment, results of operations, and retained earnings as if the equity method had been effective during all previous periods that the investment had been held when an investment qualifies for equity method accounting due to an increase in the level of ownership or degree of influence. The cost of acquiring the additional interest in the investee is to be added to the current basis of the investor’s previously held interest and the equity method of accounting should be adopted as of the date the investment becomes qualified for equity method accounting. This guidance is to be applied on a prospective basis and is effective for interim and annual periods beginning after December 15, 2016. Early adoption is permitted for financial statements that have not been previously issued. The adoption of ASU 2016-07 will have no significant impact on the Partnership’s consolidated financial statements. 

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 addresses eight specific cash flow issues and intends to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted. The Partnership is currently in the process of evaluating the impact the adoption of ASU 2016-15 will have on the Partnership’s consolidated statement of cash flows.

NOTE 16. SUBSEQUENT EVENTS

From October 1, 2016 through November 4, 2016, the Partnership purchased a total of 330 Depositary Receipts. The average price was $60.13 per receipt or $1,803.90 per unit. The total cost was $20,605. The Partnership is required to repurchase 2.6 Class B Units and 0.1 General Partnership Units at a cost of $4,713 and $248 respectively.

On October 26, 2016, the Partnership announced that on December 31, 2016 it will make its regular quarterly distribution and a special distribution to its owners of record as of December 15, 2016. The quarterly distribution will be $7.50 per unit. The quarterly distribution per Depository Receipt will be $0.25. The special distribution will be $24 per unit. The special distribution per Depository Receipt will be $0.80.

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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 2016 and beyond. Should one or more of the risks or uncertainties mentioned below materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We expressly disclaim any responsibility to update our forward looking statements, whether as a result of new information, future events or otherwise. Accordingly, investors should use caution in relying on past forward looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

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

The third quarter performance is consistent with Management’s expectations as noted in the second quarter  Form10-Q.  While consolidated year to date revenue growth for the third quarter was 10.4%, same store revenue growth was 5.2%.  Similarly, Net Operating Income ( Income Before Other Income (Expense) plus Depreciation and Amortization) grew by 12.0% and 5.8% respectively.  Revenue gains were across the board, and tenant retention remains high. The portfolio mix of student and working class housing continues to outperform higher end properties in terms of revenue gains and occupancy.  Management expects similar year to date gains to reveal themselves in the upcoming fourth quarter and entire first half of 2017. This is largely due to the recent renewal and new lease rental increases during the third quarter. We believe that consolidated operating expenses reflect normalized operations in contrast to the extreme weather conditions of the 2014-2015 winter which blurred the Partnership’s traditional ongoing operating ratios. We believe that our previous emphasis on curb appeal has contributed to the overall performance of the portfolio and upon further review we may consider decelerating allocations toward capital expenditures for 2017.

The General Partner recently announced a Board of Advisor approved fourth quarter distribution and special distribution payable to all owners of record as of December 15, 2016, and payable December 31,2016. The 4th quarter distribution will be approximately $1,000,000 in total, and the special distribution will be approximately $3,000,000 in total. We expect taxable income to exceed financial statement income for 2016.

Management has also begun to market the remaining condominiums at Hamilton Bay Apartments, LLC and Hamilton 1025, LLC, (Joint Venture). Management expects a complete sellout over the next two years as the residential leases mature. It is expected that the unit sale prices will exceed previous unit sales when the buildings were converted 10 years ago. Hamilton 1025, LLC  sold six units in the third quarter  resulting in  gains on sales of approximately $802,000.

The Partnership purchased a 94 unit apartment complex in Lexington, Residences at Captain Parkers, for $31.6 million in the third quarter of 2015.  Management’s expectations on revenue, operating expenses and returns on capital improvements made in the fourth quarter of 2015 are being met and the property will be contributing to the Partnership’s cash flow as anticipated.

The Stock Repurchase Program that was initiated in 2007 has purchased 1,352,427 Depositary Receipts through September 30, 2016 or approximately 32% of the outstanding Class A Depositary Receipts.  During the third quarter, the Partnership did not purchase any Depositary Receipts.

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At November 1, 2016, Harold Brown, his brother Ronald Brown and the President of Hamilton, Carl Valeri, collectively own approximately 42% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons’ family members). Harold Brown also controls 75% of the Partnership’s Class B Units, 75% of the capital stock of NewReal, Inc. (“NewReal”), the Partnership’s sole general partner, and all of the outstanding stock of Hamilton. Ronald Brown also owns 25% of the Partnership’s Class B Units and 25% of NewReal’s capital stock. In addition, Ronald Brown is the President and director of NewReal and Harold Brown is NewReal’s Treasurer and a director. The 75% of the issued and outstanding Class B units of the Partnership, controlled by Harold Brown, are owned by HBC Holdings LLC, an entity of which he is the manager.

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

Residential tenants sign a one year lease. During the nine months ended September 30, 2016, tenant renewals were approximately 63% with an average rental increase of approximately 4.9%, new leases accounted for approximately 37% with rental rate increases of approximately 5.8%. During the nine months ended September 30, 2016, leasing commissions were approximately $328,000 compared to approximately $226,000 for the nine months ended September 30, 2015, an increase of approximately $102,000 (45.2%) from 2015. Tenant concessions were approximately $43,000 for the nine months ended September 30, 2016, compared to approximately $79,000 for the nine months ended September 30, 2015, a decrease of approximately $36,000 (45.6%).  Tenant improvements were approximately $1,603,000 for the nine months ended September 30, 2016, compared to approximately $2,383,000 for the nine months ended September 30, 2015, a decrease of approximately $780,000 (32.7%).

Hamilton accounted for approximately 4.6% of the repair and maintenance expenses paid for by the Partnership during the nine months ended September 30, 2016 and 6.5% during the nine months ended September 30, 2015. Of the funds paid to Hamilton for this purpose, the great majority was to cover the cost of services provided by the Hamilton maintenance department, including plumbing, electrical, carpentry services, and snow removal for those properties close to Hamilton’s headquarters. Several of the larger Partnership properties have their own maintenance staff. Those properties that do not have their own maintenance staff and are located more than a reasonable distance from Hamilton’s headquarters in Allston, Massachusetts are generally serviced by local, independent companies.

Hamilton’s legal department handles most of the Partnership’s eviction and collection matters. Additionally, it prepares most long-term commercial lease agreements and represents the Partnership in selected purchase and sale transactions. Overall, Hamilton provided approximately $167,000 (86.1%) and approximately $164,000 (75.8%) of the legal services paid for by the Partnership during the nine months ended September 30, 2016 and 2015, respectively.

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

The Partnership requires that three bids be obtained for construction contracts in excess of $15,000. Hamilton may be one of the three bidders on a particular project and may be awarded the contract if its bid and its ability to successfully complete the project are deemed appropriate. For contracts that are not awarded to Hamilton, Hamilton charges the Partnership a construction supervision fee equal to 5% of the contract amount. Hamilton’s architectural department also provides services to the Partnership on an as-needed basis. During the nine months ended September 30, 2016, Hamilton provided the Partnership approximately $158,000 in construction and architectural services, compared to approximately $126,000 for the nine months ended September 30, 2015.

Hamilton’s accounting staff perform bookkeeping and accounting functions for the Partnership. During the nine months ended September 30, 2016 and 2015, Hamilton charged the Partnership $93,750 for bookkeeping and accounting services. For more information on related party transactions, see Note 3 to the Consolidated Financial Statements.

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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 operations 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 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 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

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prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles are amortized to expense over the anticipated life of the relationships.

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

Impairment:  On an annual basis management assesses whether there are any indicators that the value of the Partnership’s rental properties may be impaired. A property’s value is impaired only if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the property over the fair value of the property. The Partnership’s estimates of aggregate future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved. The Partnership has not recognized an impairment loss during the first nine months of 2016.

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

The authoritative guidance on consolidation provides guidance on the identification of entities for which control is achieved through means other than voting rights (“variable interest entities” or “VIEs”) and the determination of which business enterprise, if any, should consolidate the VIE (the “primary beneficiary”). Generally, the consideration of whether an entity is a VIE applies when either (1) the equity investors (if any) lack one or more of the essential characteristics of a controlling financial interest, (2) the equity investment at risk is insufficient to finance that equity’s activities without additional subordinated financial support or (3) the equity investors have voting rights that are not proportionate to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. The primary beneficiary is defined by the entity having both of the following characteristics: (1) the power to direct the activities that, when taken together, most significantly impact the variable interest entity’s performance; and (2) the obligation to absorb losses and rights to receive the returns from VIE that would be significant to the VIE.

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

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

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RESULTS OF OPERATIONS

Three Months Ended September 30, 2016 and September 30, 2015

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, gain on sale of real estate and other income and expense of approximately $3,098,000 during the three months ended September 30, 2016, compared to approximately $3,378,000 for the three months ended September 30, 2015, a decrease of approximately $280,000 (8.3%).

The rental activity is summarized as follows:

	Occupancy Date
	November 1, 2016		November 1, 2015
Residential
Units	2,525		2,525
Vacancies	61		73
Vacancy rate	2.4	%	2.9	%
Commercial
Total square feet	108,043		108,043
Vacancy	1,950		—
Vacancy rate	1.8	%	0.0	%

	Rental Income (in thousands)
	Three Months Ended September 30,
	2016						2015
	Total			Continuing			Total			Continuing
	Operations			Operations			Operations			Operations
Total rents	$	12,274		$	12,274		$	11,116		$	11,116
Residential percentage		93	%		93	%		92	%		92	%
Commercial percentage		7	%		7	%		8	%		8	%
Contingent rentals	$	171		$	171		$	176		$	176

Three Months Ended September 30, 2016 Compared to Three Months Ended September 30, 2015:

	Three Months Ended September 30,				Dollar		Percent
	2016		2015		Change		Change
Revenues
Rental income	$	12,273,589	$	11,116,471	$	1,157,118	10.4%
Laundry and sundry income		98,292		93,503		4,789	5.1%
		12,371,881		11,209,974		1,161,907	10.4%
Expenses
Administrative		524,293		502,177		22,116	4.4%
Depreciation and amortization		3,079,368		2,608,748		470,620	18.0%
Management fee		511,730		453,178		58,552	12.9%
Operating		995,787		803,753		192,034	23.9%
Renting		301,696		199,980		101,716	50.9%
Repairs and maintenance		2,364,364		2,006,298		358,066	17.8%
Taxes and insurance		1,496,807		1,258,025		238,782	19.0%
		9,274,045		7,832,159		1,441,886	18.4%
Income Before Other Income  (Expense)		3,097,836		3,377,815		(279,979)	(8.3%)
Other Income (Expense)
Interest income		305		1,055		(750)	(71.1%)
Interest expense		(2,553,771)		(2,476,767)		(77,004)	3.1%
Income from investments in unconsolidated joint ventures		562,584		177,890		384,694	216.3%
Gain on sale of real estate		103,793		—		103,793	0.0%
Other Income (Expense)		—		(6,247)		6,247	(100.0%)

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		(1,887,089)		(2,304,069)		416,980	(18.1%)
Net Income	$	1,210,747	$	1,073,746	$	137,001	12.8%

Rental income for the three months ended September 30, 2016 was approximately $12,274,000, compared to approximately $11,116,000 for the three months ended September 30, 2015, an increase of approximately $1,157,000 (10.4 %). The factors that can be attributed to this increase are as follows: the acquisition of Captain Parker resulted in an increase in rental income of approximately $524,000. In addition, rental income has increased at a number of properties due to increased demand and increases in rental rates. The Partnership Properties with the most significant increases in rental income include, Westgate Apartments, 1144 Commonwealth Avenue, 62 Boylston Street ,Westside Colonial, School Street,  Executive Apartments, and Hamilton Oaks, with increases of approximately $116,000, $73,000, $65,000, $64,000, $56,000, $51,000 and $46,000 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 for the three months ended September 30, 2016 were approximately $9,274,000 compared to approximately $7,832,000 for the three months ended September 30, 2015, an increase of approximately $1,442,000 (18.4%). The operating expenses associated with the acquisition of Captain Parker were approximately $656,000 for the three months ended September 30, 2016.  Excluding Captain Parker, operating expenses increased approximately $888,000 (11.5%). The factors contributing to this net increase are an increase in repairs and maintenance costs of approximately $ 282,000 (14.1%) due to continued maintenance at the properties, an increase in depreciation and amortization of approximately $103,000 (4.1%), an increase in operating expenses of approximately $172,000 (21.5%), and an increase in taxes and insurance of  approximately $179,000 (14.3%).

Interest expense for the three months ended September 30, 2016 was approximately $2,554,000 compared to approximately $2,477,000 for the three months ended September 30, 2015, an increase of approximately $77,000 (3.1%).  Approximately $133,000 of this increase represents the interest on the mortgage on Captain Parker, partially offset by a decrease in interest expense on the Line of Credit of approximately $43,000.

At September 30, 2016, the Partnership has between a 40% and 50% ownership interests in nine different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 14 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net income  from the Investment Properties was approximately $563,000 for the three months ended September 30, 2016, compared to net income of approximately $178,000 for the three months ended September 30, 2015,  an increase in income of approximately $385,000 (216.3%). This increase is primarily due to  a gain on the sale of real estate of approximately $902,000 on the sale of 6 units at Hamilton 1025 and 1 unit at Hamilton Bay LLC for the three months ended September 30, 2016, compared to a gain of approximately $77,000 for the three months ended September 30, 2015, partially offset by an increase in renting expense of approximately $118,000 and an increase in Repairs and Maintenance expense of approximately $127,000. Included in the income for the three months ended September 30, 2016 is depreciation and amortization expense of approximately $1,491,000. The proportional income for the three months ended September 30, 2016 from the investment in Dexter Park is approximately $61,000.

As a result of the changes discussed above, net income for the three months ended September 30, 2016 was approximately $1,211,000 compared to income of approximately $1,074,000 for the three months ended September 30, 2015, an increase in income of approximately $137,000 (12.8 %).

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Nine Months Ended September 30, 2016 Compared to Nine Months Ended September 30, 2015:

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, gain on sale of real estate  and other income and expense of approximately $9,747,000 during the nine months ended September 30, 2016, compared to approximately $9,353,000 for the nine months ended September 30, 2015, an increase of approximately $394,000 (4.2%).

	Nine Months Ended September 30,				Dollar		Percent
	2016		2015		Change		Change
Revenues
Rental income	$	36,482,801	$	33,037,761	$	3,445,040	10.4%
Laundry and sundry income		326,633		309,151		17,482	5.7%
		36,809,434		33,346,912		3,462,522	10.4%
Expenses
Administrative		1,477,708		1,528,710		(51,002)	(3.3%)
Depreciation and amortization		9,167,516		7,527,772		1,639,744	21.8%
Management fee		1,513,226		1,369,597		143,629	10.5%
Operating		3,489,724		3,798,050		(308,326)	(8.1%)
Renting		544,923		421,181		123,742	29.4%
Repairs and maintenance		6,185,250		5,176,219		1,009,031	19.5%
Taxes and insurance		4,684,062		4,171,930		512,132	12.3%
		27,062,409		23,993,459		3,068,950	12.8%
Income Before Other Income ( Expense)		9,747,025		9,353,453		393,572	4.2%
Other Income (Expense)
Interest income		710		1,393		(683)	(49.0%)
Interest (expense)		(7,650,096)		(7,299,695)		(350,401)	4.8%
Income from investments in unconsolidated joint ventures		1,220,666		524,710		695,956	132.6%
Gain on sale of real estate		103,793		—		103,793	N/A
		(6,324,927)		(6,773,592)		448,665	(6.6%)
Net Income	$	3,422,098	$	2,579,861	$	842,237	32.6%

Rental income for the nine months ended September 30, 2016 was approximately $36,483,000, compared to approximately $33,038,000 for the nine months ended September 30, 2015, an increase of approximately $3,445,000 (10.4 %). The factors that can be attributed to this increase are as follows: the acquisition of Captain Parker resulted in an increase in rental income of approximately $1,734,000. In addition, rental income has increased at a number of properties due to increased demand and increases in rental rates. The Partnership Properties with the most significant increases in rental income include, 1144 Commonwealth Avenue, 62 Boylston Street, Westgate Apartments, School Street, Hamilton Oaks, Westside Colonial and Redwood Hills  with increases of approximately $225,000, $191,000, $178,000, $173,000, $155,000,  $152,000 and $132,000 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 for the nine months ended September 30, 2016 were approximately $27,062,000 compared to approximately $23,993,000 for the nine months ended September 30, 2015, an increase of approximately $ 3,069,000, (12.8%). The operating expenses associated with the acquisition of Captain Parker were approximately $2,053,000 for the nine months ended September 30, 2016.  Excluding Captain Parker, operating expenses increased approximately $1,119,000 (4.7%). The factors contributing to this net increase are an increase in repairs and maintenance costs of approximately $793,000 (15.3%), due to continued maintenance at the properties, an increase in depreciation and amortization of approximately $356,000 (4.8%), and an increase in taxes and insurance of approximately $313,000 (7.5%), partially offset by a decrease in operating expenses of approximately $ 465,000 (12.2%) due to a decrease in snow removal costs.

Interest expense for the nine months ended September 30, 2016 was approximately $7,650,000 compared to approximately $7,300,000 for the nine months ended September 30, 2015, an increase of approximately $350,000

35

(4.8%).  Approximately $382,000 of this increase represents the interest on the mortgage on Captain Parker, partially offset by a decrease in interest expense on the Line of Credit of approximately $25,000.

At September 30, 2016, the Partnership has between a 40% and 50% ownership interests in nine different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 14 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net income  from the Investment Properties was approximately $1,221,000 for the nine months ended September 30, 2016, compared to net income of approximately $525,000 for the nine months ended September  30, 2015, an increase in income of approximately $696,000 (132.6%). This increase is primarily due to an increase in rental revenue of approximately $494,000, and a net gain of approximately $1,137,000 on the sale of 6 units at Hamilton 1025 and 4 units at Hamilton Bay LLC for the nine months ended September 30, 2016, compared  to a gain of approximately $77,000 for the nine  months ended September 30,2015, partially offset by an increase in operating expenses of approximately $437,000. Included in the income for the nine months ended September 30, 2016 is depreciation and amortization expense of approximately $4,445,000. The proportional income for the nine months ended September 30, 2016 from the investment in Dexter Park is approximately $525,000.

As a result of the changes discussed above, net income for the nine months ended September 30, 2016 was approximately $3,422,000 compared to income of approximately $2,580,000 for the nine months ended September 30, 2015, an increase in income of approximately $842,000 (32.6 %).

LIQUIDITY AND CAPITAL RESOURCES

The Partnership’s principal source of cash during the first nine months of 2016 was the collection of rents and the proceeds from the mortgage for Captain Parker. The Partnership’s principal source of cash in 2015 was the collection of rents. The majority of cash and cash equivalents of $7,873,583 at September 30, 2016 and $10,298,186 at December 31, 2015 were held in interest bearing accounts at creditworthy financial institutions.

The decrease in cash of $2,424,603 for the nine months ended September 30, 2016 is summarized as follows:

	Nine Months Ended September 30,
	2016		2015
Cash provided by operating activities	$	10,162,558	$	9,595,894
Cash (used in) investing activities		(2,529,066)		(8,994,687)
Cash  (used in) financing activities		(6,552,939)		(98,718)
Repurchase of Depositary Receipts, Class B and General Partner Units		(694,380)		(2,516,061)
Distributions paid		(2,810,776)		(2,845,573)
Net (decrease)  in cash and cash equivalents	$	(2,424,603)	$	(4,859,145)

The increase in cash provided by operating activities is primarily due to an increase in rent collections and a decrease in cash operating expenses. The decrease in cash used in investing activities is due primarily to no purchases of rental properties in 2016 compared to the same period in 2015. The change in cash used in financing activities is due to the paydown of the $25,000,000 outstanding line of credit, partially offset by the proceeds of the mortgage on Captain Parker, and the payment of mortgage notes payable. During the nine months ended September 30, 2016, the Partnership purchased 10,829 Depositary Receipts for an average price of $50.11 for a total cost of $558,723; 86 Class B Units for a cost of $128,874 and 5 General Partnership Units for a cost of $6,783, for a total cost of $694,380.

During 2016, the Partnership and its Subsidiary Partnerships have completed improvements to certain of the Properties at a total cost of approximately $3,564,000. These improvements were funded from cash reserves. Cash reserves have been adequate to fully fund improvements. The most significant improvements were made at Captain Parker, Hamilton Oaks, 62 Boylston Street, Westside Colonial, 1144 Commonwealth, and North Beacon Street,  at a cost of approximately $637,000, $479,000, $439,000, $345,000, $216,000 and $203,000 respectively. The Partnership plans to invest approximately $500,000 in additional capital improvements in 2016.

On January 7, 2016, Captain Parker entered into a Multifamily Loan and Security Agreement (the “Loan Agreement”) with KeyBank National Association (the “Lender”). The manager of Captain Parker is NewReal, Inc.

36

(“New Real”), the general partner of New England Realty Associates Limited Partnership (the “Partnership”).  The Partnership is the sole member of Captain Parker. The Loan Agreement provides for a term loan (the “Loan”) in the principal amount of $20,071,000.  The Loan is due on February 1, 2026 (the “Due Date”), unless the due date is accelerated in accordance with the Loan’s terms.  The proceeds of the Loan were used to refinance existing indebtedness. The Partnership is a limited guarantor of certain of the Captain Parker obligations under the Loan Agreement.

During the nine months ended September 30, 2016 the Partnership received distributions of approximately $2,707,000 from the investment properties. For the nine months ended September 30, 2015, the Partnership received distributions of approximately $2,949,000 from the investment properties. Included in these distributions is the amount from Dexter Park of approximately $740,000 and $1,070,000 for the nine months ended September 30, 2016 and 2015 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 finance current improvements to its properties. The Partnership may also sell or refinance properties. The Partnership’s net income and cash flow may fluctuate dramatically from year to year as a result of the sale or refinancing of properties, increases or decreases in rental income or expenses, or the loss of significant tenants.

Off-Balance Sheet Arrangements—Joint Venture Indebtedness

As of September 30, 2016, the Partnership had a 40%-50% ownership interest in nine Joint Ventures, all of which have mortgage indebtedness. We do not have control of these partnerships and therefore we account for them using the equity method of consolidation. At September 30, 2016, our proportionate share of the non-recourse debt related to these investments was approximately $56,907,000. 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.

37

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

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As of September 30, 2016, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have approximately $343,641,000 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. The Partnership, its Subsidiary Partnerships and the Investment Properties collectively have variable rate debt of $30,071,000 (without taking out unamortized deferred financing costs) as of September 30, 2016 ranged from LIBOR plus 201 basis points to LIBOR plus 350 basis points. Assuming interest- rate caps are not in effect, if market rates of interest on the Partnership’s variable rate debt increased or decreased by 100 basis points, then the increase or decrease in interest costs on the Partnership’s variable rate debt would be approximately $251,000 annually and the increase or decrease in the fair value of the Partnership’s fixed rate debt as of September 30, 2016 would be approximately $18 million. For information regarding the fair value and maturity dates of these debt obligations,  See Note 5 to the Consolidated Financial Statements — “Mortgage Notes Payable,” Note 12 to the Consolidated Financial Statements — “Fair Value Measurements” and Note 14 to the Consolidated Financial Statements — “Investment in Unconsolidated Joint Ventures.”

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

ITEM 4.  CONTROLS AND PROCEDURES

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

Changes in Internal Control over Financial Reporting.  There were no changes in our internal control over financial reporting during the third quarter of 2016 that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II  —  OTHER INFORMATION

Item 1.  Legal Proceedings

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, 2015.

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

(a)None.

(b)None.

(c)None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosure

Not applicable.

Item 5.  Other Information

None.

Item 6.  Exhibits

See the exhibit index below.

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SIGNATURES

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

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP
By:	/s/ NEWREAL, INC.
	Its General Partner
By:	/s/ RONALD BROWN
	Ronald Brown, President
Dated: November 8, 2016

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

Signature	Title	Date
/s/ RONALD BROWN	President and Director of the General Partner (Principal Executive Officer)	November 8, 2016
Ronald Brown
/s/ HAROLD BROWN	Treasurer and Director of the General Partner (Principal Financial Officer and Principal Accounting Officer)	November 8, 2016
Harold Brown
/s/ GUILLIAEM AERTSEN	Director of the General Partner	November 8, 2016
Guilliaem Aertsen
/s/ DAVID ALOISE	Director of the General Partner	November 8, 2016
David Aloise
/s/ EUNICE HARPS	Director of the General Partner	November 8, 2016
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 September 30, 2016, 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).

42

EX-31.1

Exhibit 31.1

New England Realty Associates Limited Partnership

CERTIFICATION

I, Ronald Brown, certify that:

1.I have reviewed this quarterly report on Form 10-Q of New England Realty Associates Limited Partnership;

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

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

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

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

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

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

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

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

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

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

	/s/ RONALD BROWN
	Principal Executive Officer (President and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: November 8, 2016

EX-31.2

Exhibit 31.2

New England Realty Associates Limited Partnership

CERTIFICATIONS

I, Harold Brown, certify that:

1.I have reviewed this quarterly report on Form 10-Q of New England Realty Associates Limited Partnership;

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

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

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

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

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

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

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

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

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

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

	/s/ HAROLD BROWN
	Principal Financial Officer
	(Treasurer and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: November 8, 2016

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of New England Realty Associates Limited Partnership for the nine    months ended  September 30, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Ronald Brown, as President and  Director of the Partnership’s General Partner, NewReal, Inc., and Harold Brown, the President and a Director of the Partnership’s General Partner, NewReal, Inc., each hereby certifies, pursuant to 18.U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

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

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

	/s/ RONALD BROWN
	Ronald Brown
	Principal Executive Officer
	(President and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: November 8, 2016
	/s/ Harold Brown
	Harold Brown
	Principal Financial Officer
	(Treasurer and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: November 8, 2016

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

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 04, 2016
Entity Registrant Name	NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP
Entity Central Index Key	0000746514
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Class A
Entity Common Stock, Shares Outstanding		99,928
Class B
Entity Common Stock, Shares Outstanding		23,735

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Sep. 30, 2016	Dec. 31, 2015
ASSETS
Rental Properties	$ 170,852,153	$ 176,697,314
Cash and Cash Equivalents	7,873,583	10,298,186
Rents Receivable	635,768	433,744
Insurance Recovery Receivable	154,864	345,645
Real Estate Tax Escrows	418,346	370,981
Prepaid Expenses and Other Assets	3,837,685	4,762,535
Investments in Unconsolidated Joint Ventures	8,970,289	7,819,162
Total Assets	192,742,688	200,727,567
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	213,089,003	194,500,820
Line of credit		25,000,000
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	2,481,546	2,288,090
Accounts Payable and Accrued Expenses	2,880,180	4,640,767
Advance Rental Payments and Security Deposits	5,185,970	5,108,843
Total Liabilities	223,636,699	231,538,520
Partners' Capital 124,923 and 125,374 units outstanding in 2016 and 2015 respectively	(30,894,011)	(30,810,953)
Total Liabilities and Partners' Capital	$ 192,742,688	$ 200,727,567

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015	Dec. 31, 2014
CONSOLIDATED BALANCE SHEETS
Partners' Capital, units outstanding	124,923	125,374	125,976	127,653

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues
Rental income	$ 12,273,589	$ 11,116,471	$ 36,482,801	$ 33,037,761
Laundry and sundry income	98,292	93,503	326,633	309,151
Total Revenues	12,371,881	11,209,974	36,809,434	33,346,912
Expenses
Administrative	524,293	502,177	1,477,708	1,528,710
Depreciation and amortization	3,079,368	2,608,748	9,167,516	7,527,772
Management fee	511,730	453,178	1,513,226	1,369,597
Operating	995,787	803,753	3,489,724	3,798,050
Renting	301,696	199,980	544,923	421,181
Repairs and maintenance	2,364,364	2,006,298	6,185,250	5,176,219
Taxes and insurance	1,496,807	1,258,025	4,684,062	4,171,930
Total Expenses	9,274,045	7,832,159	27,062,409	23,993,459
Income Before Other Income (Expense)	3,097,836	3,377,815	9,747,025	9,353,453
Other Income (Expense)
Interest income	305	1,055	710	1,393
Interest expense	(2,553,771)	(2,476,767)	(7,650,096)	(7,299,695)
Income from investments in unconsolidated joint ventures	562,584	177,890	1,220,666	524,710
Gain on sale of real estate	103,793		103,793
Other Income (Expense)		(6,247)
Total Other Income (Expense)	(1,887,089)	(2,304,069)	(6,324,927)	(6,773,592)
Net Income	$ 1,210,747	$ 1,073,746	$ 3,422,098	$ 2,579,861
Income per Unit
Net Income (Loss), Per Outstanding Limited Partnership Unit, Basic, Net of Tax	$ 9.69	$ 8.51	$ 27.38	$ 20.37
Weighted Average Number of Units Outstanding (in units)	124,923	126,199	124,995	126,636

XML

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL - USD ($)	Subtotal	General Partnership	Treasury Units	Class A	Class B	Total
Balance at Dec. 31, 2014		$ (272,859)		$ (21,910,488)	$ (5,184,335)	$ (27,367,682)
Balance (in units) at Dec. 31, 2014	180,225	1,802	52,572	144,180	34,243	127,653
Increase (Decrease) in Partners' Capital
Distribution to Partners		$ (28,456)		$ (2,276,458)	$ (540,659)	$ (2,845,573)
Stock Buyback		(24,887)		(2,018,329)	(472,845)	(2,516,061)
Stock Buyback (in units)			1,677
Net income		25,798		2,063,889	490,174	2,579,861
Balance at Sep. 30, 2015		$ (300,404)		$ (24,141,386)	$ (5,707,665)	$ (30,149,455)
Balance (in units) at Sep. 30, 2015	180,225	1,802	54,249	144,180	34,243	125,976
Balance at Dec. 31, 2015		$ (306,870)		$ (24,673,535)	$ (5,830,548)	$ (30,810,953)
Balance (in units) at Dec. 31, 2015	180,225	1,802	54,851	144,180	34,243	125,374
Increase (Decrease) in Partners' Capital
Distribution to Partners		$ (28,108)		$ (2,248,621)	$ (534,047)	$ (2,810,776)
Stock Buyback		(6,783)		(558,723)	(128,874)	(694,380)
Stock Buyback (in units)			451
Net income		34,221		2,737,678	650,199	3,422,098
Balance at Sep. 30, 2016		$ (307,540)		$ (24,743,201)	$ (5,843,270)	$ (30,894,011)
Balance (in units) at Sep. 30, 2016	180,225	1,802	55,302	144,180	34,243	124,923
Increase (Decrease) in Partners' Capital
Gain (Loss) on Disposition of Oil and Gas and Timber Property						$ 103,793

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash Flows from Operating Activities
Net income	$ 3,422,098	$ 2,579,861
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	9,167,516	7,527,772
Amortization of deferred financing costs	141,122	128,300
(Income) Loss from investments in joint venture	(1,220,666)	(524,710)
Gain on the sale of real estate	(103,793)
Change in operating assets and liabilities
(Increase) in rents receivable	(202,024)	(35,801)
Increase (Decrease) in accounts payable and accrued expense	(1,760,588)	1,527,755
(Increase) in insurance recovery receivable	190,781	(412,502)
(Increase) Decrease in real estate tax escrow	(47,365)	(13,307)
(Increase) in prepaid expenses and other assets	498,350	(1,368,299)
Increase in advance rental payments and security deposits	77,127	186,825
Total Adjustments	6,740,460	7,016,033
Net cash provided by operating activities	10,162,558	9,595,894
Cash Flows From Investing Activities
Proceeds from unconsolidated joint ventures	2,346,829	2,074,993
Distribution in excess of investment in unconsolidated joint ventures	360,000	873,545
(Investment) in unconsolidated joint ventures	(2,443,829)	(1,128,538)
Improvement of rental properties	(3,564,402)	(4,669,977)
Purchase of rental property		(6,144,710)
Net proceeds from the sale of real estate	772,336
Net cash (used in) investing activities	(2,529,066)	(8,994,687)
Cash Flows from Financing Activities
Payment of financing costs	(174,718)
Proceeds of mortgage notes payable	20,071,000
Payment of note payable	(25,000,000)
Principal payments of mortgage notes payable	(1,449,221)	(98,718)
Stock buyback	(694,380)	(2,516,061)
Distributions to partners	(2,810,776)	(2,845,573)
Net cash provided by (used in) financing activities	(10,058,095)	(5,460,352)
Net (Decrease) in Cash and Cash Equivalents	(2,424,603)	(4,859,145)
Cash and Cash Equivalents, at beginning of period	10,298,186	14,015,898
Cash and Cash Equivalents, at end of period	$ 7,873,583	$ 9,156,753

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SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2016

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 25 properties which include 17 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,506 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 778 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 financial statements have been prepared in conformity with GAAP. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. These estimates and assumptions are based on management’s historical experience that are believed to be reasonable at the time. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgement. The Partnership’s critical accounting policies are those which require assumptions to be made about matters that are highly uncertain. Different estimates could have a material effect on the Partnership’s financial results. Judgements and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions and circumstances.

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: Investment 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 and beyond, the carrying values of investments 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.

Leasing Fees:  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.

Deferred Financing Costs:  Costs incurred in obtaining financing are capitalized and amortized over the term of the related indebtedness. Deferred financing costs are presented in the balance sheet as a direct deduction from the carrying value of the debt liability to which they relate, except deferred financing costs related to the revolving credit facility, which are presented in prepaid expenses and other assets. In all cases, amortization of such costs is included in interest expense and was approximately $141,000 and $128,000 for the nine months ended September 30, 2016 and 2015, respectively.

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 2016 or 2015 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: Partner’s Capital).

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 2016 or 2015. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At September 30, 2016, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01% to 0.35%. At September 30, 2016 and December 31, 2015, respectively approximately $9,241,000, and $11,592,000 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 $154,105 and $106,482 for the nine months ended September 30, 2016 and 2015, respectively.

Discontinued Operations and Rental Property Held for Sale:  In April 2014, the FASB issued guidance related to the reporting of discontinued operations 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 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 nine months ended September 30, 2016 and 2015 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. The reclassifications were related primarily to conform to ASU No. 2015-03, Simplifying thePresentation of Debt Issuance Costs, which requires debt issuance costs to be presented in the balance sheet as a direct deduction from the associated debt liability. This new standard was effective for interim and annual reporting beginning after December 15, 2015 and requires retrospective application. Approximately $1.4 million of deferred financing costs were reclassified to contra term loans on the balance sheet at December 31, 2015. There was no change to the net income for any period presented as a result of these reclassifications.

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RENTAL PROPERTIES

9 Months Ended

Sep. 30, 2016

RENTAL PROPERTIES

RENTAL PROPERTIES

NOTE 2. RENTAL PROPERTIES

As of September 30, 2016, the Partnership and its Subsidiary Partnerships owned 2,506 residential apartment units in 21 residential and mixed-use complexes (collectively, the “Apartment Complexes”). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the “Condominium Units”). The Apartment Complexes and Condominium Units are located primarily in the metropolitan Boston area of Massachusetts.

Additionally, as of September 30, 2016, the Partnership and Subsidiary Partnerships owned a commercial shopping center in Framingham, commercial buildings in Newton and Brookline and mixed-use properties in Boston, Brockton and Newton, all in Massachusetts. These properties are referred to collectively as the “Commercial Properties.”

The Partnership also owned a 40% to 50% ownership interest in nine residential and mixed use complexes (the “Investment Properties”) at September 30, 2016 with a total of 778 units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

On August 3, 2016, Hamilton Green Apartments, LLC sold a single family house contiguous with its apartment complex in Andover, Massachusetts.  The sale price of the property was $1,000,000 with closing costs of $227,663 and a cost basis of $668,544 resulting in a gain on the sale of $103,793.  Included in the closing costs is a mortgage prepayment penalty of $187,905.  The proceeds from the sale were used to reduce the principal amount on the apartment complex’s mortgage.

On September 18, 2015,  Residences at Captain Parker, LLC, a Massachusetts limited liability company (“Captain Parker”) a newly formed subsidiary of the Partnership, purchased the Residence at Captain Parkers, a 94 unit apartment complex located at 125 Worthen Road and Ryder Lane in Lexington, Massachusetts. The purchase price was $31,600,000 and the closing costs were approximately $49,000. From the purchase price, the Partnership allocated approximately $474,000 for in-place leases, and approximately $31,000 to the value of tenant relationships. These amounts are being amortized over 12 and 24 months respectively. To fund the purchase, the Partnership utilized the available line of credit of $25,000,000, and the balance from the Partnership’s cash reserves. 

Rental properties consist of the following:

	September 30, 2016		December 31, 2015		Useful Life
Land, improvements and parking lots	$	52,610,465	$	52,852,877	15	-	40	years
Buildings and improvements		173,161,839		172,277,299	15	-	40	years
Kitchen cabinets		8,919,826		8,493,696	5	-	10	years
Carpets		8,039,112		7,361,966	5	-	10	years
Air conditioning		718,531		718,531	5	-	10	years
Laundry equipment		244,771		244,771	5	-	7	years
Elevators		1,139,296		1,139,296	20	-	40	years
Swimming pools		444,629		444,629	10	-	30	years
Equipment		10,125,881		9,502,977	5	-	7	years
Motor vehicles		169,076		130,563			5	years
Fences		42,565		38,115	5	-	15	years
Furniture and fixtures		8,339,939		7,855,351	5	-	7	years
Smoke alarms		216,827		216,827	5	-	7	years
Total fixed assets		264,172,757		261,276,898
Less: Accumulated depreciation		(93,320,604)		(84,579,584)
	$	170,852,153	$	176,697,314

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2016

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 3. RELATED PARTY TRANSACTIONS

The Partnership’s properties are managed by an entity that is owned by the majority shareholder of the General Partner. The management fee is equal to 4% of gross receipts rental revenue and laundry income on the majority of the Partnership’s properties and 3% on Linewt. Total fees paid were approximately $1,513,000 and $1,370,000 for the nine months ended September 30, 2016 and 2015, respectively.

The Partnership Agreement permits the General Partner or Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA. During the nine months ended September 30, 2016 and 2015, approximately $772,000 and $719,000, was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements. Of the 2016 expenses referred to above, approximately $286,000 consisted of repairs and maintenance, $261,000 of administrative expense and $67,000 for commercial brokerage fees. Approximately $158,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2016, the Hamilton Company received approximately $635,000 from the Investment Properties of which approximately $521,000 was the management fee, approximately $41,000 was for maintenance services, approximately $27,000 was for administrative services and $46,000 for architectural services and supervision of capital projects. The management fee is equal to 4% of gross receipts rental income on the majority of investment properties and 2% on Dexter Park.

The Partnership reimburses the management company for the payroll and related expenses of the employees who work at the properties. Total reimbursement was approximately $2,212,000 and $2,145,000 for the nine months ended September 30, 2016 and 2015, 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 2016 and 2015.

Bookkeeping and accounting functions are provided by the Management Company’s accounting staff, which consists of approximately 14 people. During the nine months ended September 30, 2016 and 2015, the Management Company charged the Partnership $93,750 ($125,000 per year) for bookkeeping and accounting services included in administrative expenses above.

The President of the Management Company performs asset management consulting services and receives an asset management fee from the Partnership. The Partnership does not have a written agreement with this individual. During the nine months ended September 30, 2016 and 2015 this individual received fees of $56,250.

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

9 Months Ended

Sep. 30, 2016

OTHER ASSETS

OTHER ASSETS

NOTE 4. OTHER ASSETS

Approximately $2,309,000, and $2,257,000 of security deposits are included in prepaid expenses and other assets at September 30, 2016 and December 31, 2015, respectively. The security deposits and escrow accounts are restricted cash.

Included in prepaid expenses and other assets at September 30, 2016 and December 31, 2015 is approximately $395,000 and $801,000, respectively, held in escrow to fund future capital improvements.

Intangible assets on the acquisitions of Hamilton Green and the Residence at Captain Parkers are included in prepaid expenses and other assets.  Intangible assets are approximately $16,000 net of accumulated amortization of approximately $2,241,000 and approximately $382,000 net of accumulated amortization of approximately $1,875,000 at September 30, 2016 and December 31, 2015, respectively.

Financing fees in association with the line of credit of approximately $40,000 and $75,000 are net of accumulated amortization of approximately $101,000 and $66,000 at September 30, 2016 and December 31, 2015 respectively.

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MORTGAGE NOTES PAYABLE

9 Months Ended

Sep. 30, 2016

MORTGAGE NOTES PAYABLE

MORTGAGE NOTES PAYABLE

NOTE 5. MORTGAGE NOTES PAYABLE

At September 30, 2016 and December 31, 2015, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At September 30, 2016, the interest rates on these loans ranged from 2.51% to 5.97%, payable in monthly installments aggregating approximately $976,000 including principal, to various dates through 2029. The majority of the mortgages are subject to prepayment penalties. At September 30, 2016, the weighted average interest rate on the above mortgages was 4.60%. The effective rate of 4.69% includes the amortization expense of deferred financing costs. See Note 12 for fair value information. The Partnership’s mortgage debt and the mortgage debt of its unconsolidated joint ventures generally is non-recourse except for customary exceptions pertaining to misuse of funds and material misrepresentations.

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

Approximate annual maturities at September 30, 2016 are as follows:

2017—current maturities	$	1,747,000
2018		7,823,000
2019		1,903,000
2020		4,321,000
2021		2,312,000
Thereafter		196,455,000
		214,561,000
Less: unamortized deferred financing costs		(1,472,000)
	$	213,089,000

On January 7, 2016, Captain Parker entered into a Multifamily Loan and Security Agreement (the “Loan Agreement”) with KeyBank National Association (the “Lender”). The manager of Captain Parker is NewReal, Inc. (“New Real”), the general partner of New England Realty Associates Limited Partnership (the “Partnership”).  The Partnership is the sole member of Captain Parker. The Loan Agreement provides for a term loan (the “Loan”) in the principal amount of $20,071,000.  The Loan is due on February 1, 2026 (the “Due Date”), unless the due date is accelerated in accordance with the Loan’s terms.Borrowings under the Loan will bear interest at rates equal to (i) the one month LIBOR rate for United States Dollar Deposits, determined monthly, plus 201 basis points. The interest rate increases upon an event of default. 

Captain Parker is required to repay the aggregate principal amount of the Loan by the Due Date. Interest payments on the Loans are payable monthly in arrears on specified dates set forth in the Loan Agreement. Principal payments on the Loan are also payable monthly commencing on March 1, 2021.  The note issued by Captain Parker in connection with the Loan Agreement (the “Note”) also contains provisions for optional prepayment with a penalty under certain circumstances.

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 the applicable margin of 2.5%. The costs associated with the line of credit were approximately $125,000. As of September 30, 2016, the credit line had no outstanding balance.

On September 15, 2015, the Partnership, in connection with the purchase of the Residence at Captain Parker Apartments, used the entire line of credit, along with cash reserve, to purchase the property. (See Note 2: Rental Properties, for the details of the transaction.)

On January 7, 2016, Captain Parker entered into a Multifamily Loan and Security Agreement (the “Loan Agreement”) with KeyBank National Association (the “Lender”). As a result of securing the financing, the Partnership used the proceeds of the loan and cash reserves of the Partnership to pay down the Line of Credit to zero. A payment was made on January 7, 2016 for $23,000,000, and another payment for $2,000,000 was made on January 15, 2016.

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 distributions, 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 $37,000 for the nine months ended September 30, 2016.

The line of credit agreement has several covenants, such as providing cash flow projections and compliance certificates, as well as other financial information. The covenants include, but are not limited to the following: maintain a leverage ratio that does not exceed 65%; aggregate increase in indebtedness of the subsidiaries and joint ventures should not exceed $15,000,000; maintain a tangible net worth (as defined in the agreement) of a minimum of $150,000,000; a minimum ratio of net operating income to total indebtedness of at least 9.5%; debt service coverage ratio of at least 1.6 to 1, as well as other items.

The Partnership is in compliance with these covenants as of September 30, 2016.

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ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

9 Months Ended

Sep. 30, 2016

ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

NOTE 6. ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

The Partnership’s residential lease agreements may require tenants to maintain a one-month advance rental payment and/or a security deposit. At September 30, 2016, amounts received for prepaid rents of approximately $1,851,000 are included in cash and cash equivalents, and security deposits of approximately $2,309,000 are included in prepaid expenses and other assets and are restricted cash.

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PARTNERS' CAPITAL

9 Months Ended

Sep. 30, 2016

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.

In 2016, the Partnership announced the approval of quarterly distributions of its Class A Limited Partners and holders of Depositary Receipts of record as of March 15, 2016, June 15, 2016, and September 15, 2016, payable on March 31, 2016, June 30, 2016, and September 30, 2016, respectively, of $7.50 per unit and $0.25 per receipt.

In 2015, the Partnership paid quarterly distributions of $7.50 per unit ($0.25 per receipt) in March, June, September, and December for a total distribution of $30.00 per unit ($1.00 per receipt) for the year.

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

	Nine Months Ended
	September 30,
	2016		2015
Net Income per Depositary Receipt	$	0.91	$	0.68
Distributions per Depositary Receipt	$	0.75	$	0.75

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TREASURY UNITS

9 Months Ended

Sep. 30, 2016

TREASURY UNITS

TREASURY UNITS

NOTE 8. TREASURY UNITS

Treasury Units at September 30, 2016 are as follows:

Class A	44,242
Class B	10,507
General Partnership	553
	55,302

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 to 1,500,000. On August 8, 2008, the General Partner re- authorized and renewed the Repurchase Program for an additional 12-month period ended August 19, 2009. On March 22, 2010, the General Partner re-authorized and renewed the Repurchase Program that expired on August 19, 2009. Under the terms of the renewed Repurchase Program, the Partnership may purchase up to 1,500,000 Depositary Receipts from the start of the program in 2007 through March 31, 2015. 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 Restate Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through September 30, 2016, the Partnership has repurchased 1,352,427 Depositary Receipts at an average price of $26.81 per receipt (or $804.30 per underlying Class A Unit), 2,970 Class B Units and 156 General Partnership Units, both at an average price of $895.21 per Unit, totaling approximately $39,291,000 including brokerage fees paid by the Partnership.

During the nine months ended September 30, 2016, the Partnership purchased a total of 10,829 Depositary Receipts. The average price was $50.11 per receipt or $1,503.26 per unit. The total cost including commission was $558,723. The Partnership was required to repurchase 86 Class B Units and 5 General Partnership units at a cost of $128,874 and $6,783 respectively.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2016

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 its 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.

On June 9, 2015, a fire broke out at 12 Westgate Drive apartment complex in Woburn, MA, resulting in approximately 10 apartments being damaged which will remain unoccupied for an extended period. The Partnership has insurance coverage on both repairs and rental loss for the extended period until the apartments are available for rent, and has received approximately $714,000 from the insurance company to date, leaving an estimated insurance recovery receivable of approximately $155,000 at September 30, 2016, which is included in the insurance recovery receivable on the balance sheet.

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RENTAL INCOME

9 Months Ended

Sep. 30, 2016

RENTAL INCOME

RENTAL INCOME

NOTE 10. RENTAL INCOME

During the nine months ended September 30, 2016, approximately 93% 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 7% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at September 30, 2016 as follows:

	Commercial
	Property Leases
2017	$	2,434,000
2018		2,066,000
2019		1,634,000
2020		1,065,000
2021		763,000
Thereafter		356,000
	$	8,318,000

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 $444,000 and $521,000 for the nine months ended September 30, 2016 and 2015 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately 22% of the total commercial rental income.

The following information is provided for commercial leases:

	Annual base				Percentage of
	rent for		Total square feet	Total number of	annual base rent for
Through September 30,	expiring leases		for expiring leases	leases expiring	expiring leases
2017	$	577,694	25,179	11	20	%
2018		367,293	11,507	7	13	%
2019		707,687	25,029	13	24	%
2020		215,165	6,409	5	8	%
2021		784,588	34,248	6	28	%
2022		30,600	900	1	1	%
2023		—	—	—	0	%
2024		157,443	4,771	1	6	%
2025		—	—	—	0	%
2026		—	—	—	0	%
Totals	$	2,840,470	108,043	44	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $666,000 and $373,000 at September 30, 2016 and December 31, 2015. Included in rents receivable at September 30, 2016 is approximately $115,000 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 at 62 Boylston Street in Boston, Massachusetts.

Rents receivable at September 30, 2016 also includes approximately $111,000 representing the deferral of rental concession primarily related to the residential properties.

For the nine months ended September 30, 2016 rent at the commercial properties includes approximately $2,000 of amortization of deferred rents arising from the fair values assigned to in-place leases upon the purchase of Cypress Street in Brookline, Massachusetts.

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CASH FLOW INFORMATION

9 Months Ended

Sep. 30, 2016

CASH FLOW INFORMATION

CASH FLOW INFORMATION

NOTE 11. CASH FLOW INFORMATION

During the nine months ended September 30, 2016 and 2015, cash paid for interest was approximately $7,457,000, and $7,214,000 respectively.  Cash paid for state income taxes was approximately $42,000 and $19,000 during the nine months ended September 30, 2016 and 2015 respectively.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2016

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At September 30, 2016 and December 31, 2015, we do not have any significant financial assets or financial liabilities that are measured at fair value on a recurring basis in our consolidated financial statements.

Financial Assets and Liabilities not Measured at Fair Value

At September 30, 2016 and December 31, 2015 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, and note payable, accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments or, the recent acquisition of these items.

At September 30, 2016 and December 31, 2015, we estimated the fair value of our mortgages payable and other notes based upon quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available. We estimated the fair value of our secured mortgage debt that does not have current quoted market prices available by discounting the future cash flows using rates currently available to us for debt with similar terms and maturities (Level 3). The differences in the fair value of our debt from the carrying value are the result of differences in interest rates and/or borrowing spreads that were available to us at September 30, 2016 and December 31, 2015, as compared with those in effect when the debt was issued or acquired. The secured mortgage debt contain pre-payment penalties or yield maintenance provisions that could make the cost of refinancing the debt at lower rates exceed the benefit that would be derived from doing so.

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

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

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

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

		Carrying Amount		Estimated Fair Value
Mortgage Notes Payable
Partnership Properties
At September 30, 2016	*	$	213,089,003	$	231,415,786
At December 31, 2015	*	$	194,500,820	$	205,240,993
Investment Properties
At September 30, 2016	*	$	130,551,992	$	138,000,688
At December 31, 2015	*	$	135,657,988	$	142,512,272

* Net of unamortized deferred financing costs

Disclosure about fair value of financial instruments is based on pertinent information available to management as of September 30, 2016 and December 31, 2015. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since September 30, 2016 and current estimates of fair value may differ significantly from the amounts presented herein.

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TAXABLE INCOME AND TAX BASIS

9 Months Ended

Sep. 30, 2016

TAXABLE INCOME AND TAX BASIS

TAXABLE INCOME AND TAX BASIS

NOTE 13. TAXABLE INCOME AND TAX BASIS

Taxable income reportable by the Partnership and includable in its partners’ tax returns is different than financial statement income because of tax free exchanges, accelerated depreciation, different tax lives, and timing differences related to prepaid rents, allowances and intangible assets at significant acquisitions. Taxable income of approximately $2,106,000 was approximately $1,667,000 less than statement income for the year ended December 31, 2015. The primary reason for the difference 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, 2015 is approximately $7,000,000 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 $1,500,000 less than statement basis because of accelerated depreciation. Taxable income for 2016 is expected to exceed financial statement income, primarily due to a change in taxable depreciation expense.

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.

While allowable accelerated tax depreciation deductions were extended, future tax law changes may significantly affect taxable income.

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

In the normal course of business the Partnership or one of its subsidiaries is subject to examination by federal, state and local jurisdictions in which it operates, where applicable. As of September 30, 2016, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2012 forward.

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

9 Months Ended

Sep. 30, 2016

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

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 interest 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 $83,686,000 at September 30, 2016. 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 is amortized over 30 years thereafter and matures in March 2017. As of September 30, 2016, the balance of the mortgage is approximately $4,447,000. 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. One unit was sold in the quarter ended September 30, 2016, with a gain on the sale of approximately $100,000. As of November 1, 2016, one unit is 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 planned to operate the building and initiate development of the parking lot. In June 2007, the Partnership separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Partnership restructured the mortgages on both parcels at Essex 81 and transferred the residential apartments to Hamilton Essex 81, LLC. On September 28, 2015, Hamilton Essex Development, LLC paid off the outstanding mortgage balance of $1,952,286.  The Partnership made a capital contribution of $978,193 to Hamilton Essex Development LLC for its share of the funds required for the transaction.  Additionally, the Partnership made a capital contribution of $100,000 to Hamilton Essex 81, LLC.  On September 30, 2015, Hamilton Essex 81, LLC obtained a new 10 year mortgage in the amount of $10,000,000, interest only at 2.18% plus the one month Libor rate. The proceeds of the note were used to pay off the existing mortgage of $8,040,719 and the Partnership received a distribution of $978,193 for its share of the excess proceeds. 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.As of September 30, 2016,the balance of the mortgage is approximately $9,876,000.The investment in the parking lot is referred to as Hamilton Essex Development, LLC; the investment in the apartments is referred to as Hamilton Essex 81, LLC.

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 was 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. On July 8, 2016, Hamilton 1025 LLC paid off the outstanding balance of the mortgage balance. The Partnership made a capital contribution of $2,359,500 to Hamilton 1025, LLC for its share of the funds required for the transaction. This investment is referred to as Hamilton 1025, LLC.

Hamilton 1025 LLC started to sell the 48 remaining residential condominium units in the third quarter of 2016. Six units were sold in the quarter ended September 30, 2016 with a gain on the sales of approximately $802,000. As of November 4, 2016, three units are under purchase and sales agreements and the Partnership still owns 43 units.

In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. In October 2004, the Partnership obtained a mortgage on the property in the amount of $8,025,000 and returned $3,775,000 to the Partnership. The Partnership obtained a new 10 year mortgage in the amount of $5,500,000 in January 2007. The interest on the new loan was a 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. On September 12, 2016, the property was refinanced with a 15 year mortgage in the amount of $6,000,000, at 3.71%, interest only. The Joint Venture Partnership paid off the prior mortgage of approximately $5,158,000 with the proceeds of the new mortgage and made a distribution of $385,000 to the Partnership. The cost associated with the refinancing was approximately $123,000. 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. As of September 30, 2016, the balance of the mortgage is approximately $16,773,000.

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.As of September 30, 2016, the balance of the mortgage is approximately $9,892,000. This investment is referred to as 345 Franklin, LLC.

Summary financial information as of September 30, 2016

				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	$	8,129,487		$	2,616,545		$	6,521,385		$	4,074,383		$	124,752		$	5,956,617		$	6,206,120		$	17,972,191		$	92,473,236		$	144,074,716
Cash & Cash Equivalents		142,274			52,323			199,544			155,921			97,332			1,121			89,502			100,273			1,036,851			1,875,141
Rent Receivable		49,547			—			18,009			35,302			3,000			15,687			980			20,473			288,807			431,805
Real Estate Tax Escrow		81,827			—			45,014			659,841			171			44,049			37,762			135,659			216,881			1,221,204
Prepaid Expenses & Other Assets		172,746			982			54,156			—			—			78,234			67,687			94,299			1,978,426			2,446,530
Total Assets	$	8,575,881		$	2,669,850		$	6,838,108		$	4,925,447		$	225,255		$	6,095,708		$	6,402,051		$	18,322,895		$	95,994,201		$	150,049,396
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,875,898		$	—		$	9,892,225		$	—		$	—		$	4,447,269		$	5,877,338		$	16,772,927		$	83,686,335		$	130,551,992
Accounts Payable & Accrued Expense		59,117			1,275			78,095			51,206			3,947			9,809			42,713			140,981			693,424			1,080,567
Advance Rental Pmts & Security Deposits		225,843			—			245,904			79,732			2,380			93,716			112,168			361,929			2,493,486			3,615,158
Total Liabilities		10,160,858			1,275			10,216,224			130,938			6,327			4,550,794			6,032,219			17,275,837			86,873,245			135,247,717
Partners’ Capital		(1,584,977)			2,668,575			(3,378,116)			4,794,509			218,928			1,544,914			369,832			1,047,058			9,120,956			14,801,679
Total Liabilities and Capital	$	8,575,881		$	2,669,850		$	6,838,108		$	4,925,447		$	225,255		$	6,095,708		$	6,402,051		$	18,322,895		$	95,994,201		$	150,049,396
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$	—		$	1,334,288		$	—		$	2,397,254		$	109,464		$	772,457		$	184,916		$	523,529		$	3,648,382			8,970,289
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(792,488)		$	—		$	(1,689,058)		$	—		$	—		$	—		$	—		$	—		$	—			(2,481,546)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,488,743
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			—			—			—			42			148			409			689
Units to be sold		—			—			—			176			120			48			—			—			—			344
Units sold through November 1, 2016		—			—			—			133			119			—			—			—			—			252
Unsold units		—			—			—			43			1			—			—			—			—			44
Unsold units with deposits for future sale as of  November 1, 2016		—			—			—			3			—			—			—			—			—			3

Financial information for the nine months ended September 30, 2016

			Hamilton										Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	1,139,145	$	180,000	$	1,089,610	$	650,328	$	36,315	$	724,848	$	742,872	$	2,425,746	$	11,026,501	$	18,015,365
Laundry and Sundry Income		11,032		—		2,823		—		—		—		343		31,445		76,124		121,767
		1,150,177		180,000		1,092,433		650,328		36,315		724,848		743,215		2,457,191		11,102,625		18,137,132
Expenses
Administrative		25,757		1,314		23,269		8,429		5,312		8,257		5,225		31,677		137,958		247,198
Depreciation and Amortization		338,820		2,122		260,819		177,062		18,876		238,807		254,869		718,340		2,435,762		4,445,477
Management Fees		47,267		7,200		45,858		24,220		1,412		28,568		30,392		97,873		238,441		521,231
Operating		74,431		—		53,336		732		257		1,364		66,845		232,598		876,054		1,305,617
Renting		23,804		—		14,910		1,789		—		4,354		5,621		13,106		193,381		256,965
Repairs and Maintenance		120,332		3,150		48,832		232,398		18,756		305,491		65,358		407,989		1,113,528		2,315,834
Taxes and Insurance		171,345		44,664		94,429		121,614		8,371		124,296		90,496		365,969		1,136,580		2,157,764
		801,756		58,450		541,453		566,244		52,984		711,137		518,806		1,867,552		6,131,704		11,250,086
Income Before Other Income		348,421		121,550		550,980		84,084		(16,669)		13,711		224,409		589,639		4,970,921		6,887,046
Other Income (Loss)
Interest Expense		(214,415)		—		(298,442)		(149,327)		(65)		(196,329)		(226,672)		(577,942)		(3,657,249)		(5,320,441)
Interest Income		—		—		—		10		—		—		—		—		—		10
Gain on Sale of Real Estate		—		—		—		802,129		335,321		—		—		—		—		1,137,450
		(214,415)		—		(298,442)		652,812		335,256		(196,329)		(226,672)		(577,942)		(3,657,249)		(4,182,981)
Net Income (Loss)	$	134,006	$	121,550	$	252,538	$	736,896	$	318,587	$	(182,618)	$	(2,263)	$	11,697	$	1,313,672	$	2,704,065
Net Income (Loss)—NERA 50%	$	67,003	$	60,775	$	126,270	$	368,448	$	159,294	$	(91,309)	$	(1,132)	$	5,848				695,197
Net Income —NERA 40%																	$	525,469		525,469
																			$	1,220,666

Financial information for the three months ended September 30, 2016

													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	$	371,228	$	60,000	$	364,649	$	177,852	$	8,625	$	230,491	$	251,118	$	820,748	$	3,614,525	$	5,899,236
Laundry and Sundry Income		2,675		—		725		—		—		—		44		10,811		21,478		35,733
		373,903		60,000		365,374		177,852		8,625		230,491		251,162		831,559		3,636,003		5,934,969
Expenses
Administrative		5,660		425		7,071		5,684		2,328		2,386		2,625		11,545		40,757		78,481
Depreciation and Amortization		113,626		707		86,988		58,998		6,292		79,953		85,288		241,279		817,710		1,490,841
Management Fees		17,216		2,400		15,033		6,293		336		8,964		10,469		33,611		73,108		167,430
Operating		24,073		—		16,670		147		58		356		20,614		81,583		267,793		411,294
Renting		16,965		—		4,369		—		—		3,400		819		3,590		137,786		166,929
Repairs and Maintenance		44,248		—		19,499		76,499		5,187		104,886		(45,582)		180,736		520,451		905,924
Taxes and Insurance		56,037		14,062		30,006		35,405		1,300		40,318		30,997		110,147		402,822		721,094
		277,825		17,594		179,636		183,026		15,501		240,263		105,230		662,491		2,260,427		3,941,993
Income Before Other Income		96,078		42,406		185,738		(5,174)		(6,876)		(9,772)		145,932		169,068		1,375,576		1,992,976
Other Income (Loss)
Interest Expense		(72,768)		—		(99,433)		(10,638)		(6)		(65,351)		(74,324)		(194,071)		(1,222,601)		(1,739,192)
Interest Income		—		—		—		1		—		—		—		—		—		1
Gain on sale of real estate		—		—		—		802,129		99,851				—		—		—		901,980
		(72,768)		—		(99,433)		791,492		99,845		(65,351)		(74,324)		(194,071)		(1,222,601)		(837,211)
Net Income (Loss)	$	23,310	$	42,406	$	86,305	$	786,318	$	92,969	$	(75,123)	$	71,608	$	(25,003)	$	152,975	$	1,155,765
Net Income (Loss)—NERA 50%	$	11,655	$	21,203	$	43,153	$	393,158	$	46,485	$	(37,562)	$	35,804	$	(12,502)				501,394
Net Income —NERA 40%																	$	61,190		61,190
																			$	562,584

Future annual mortgage maturities at September 30, 2016 are as follows:

	Hamilton		345		Hamilton		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Franklin		Bay Apts		Minuteman		Main Apts		Park		Total
9/30/2017	$	—	$	181,277	$	4,449,655	$	—	$	—	$	1,564,180	$	6,195,112
9/30/2018		—		188,419		—		—		—		1,653,563		1,841,982
9/30/2019		—		195,841		—		—		—		1,748,055		1,943,896
9/30/2020		—		203,556		—		—		—		78,899,705		79,103,261
9/30/2021		—		211,575		—		—		—		—		211,575
Thereafter		10,000,000		8,989,794		—		6,000,000		16,900,000		—		41,889,794
		10,000,000		9,970,462		4,449,655		6,000,000		16,900,000		83,865,503		131,185,620
Less: unamortized deferred financing costs		(124,102)		(78,237)		(2,386)		(122,662)		(127,073)		(179,168)		(633,628)
	$	9,875,898	$	9,892,225	$	4,447,269	$	5,877,338	$	16,772,927	$	83,686,335	$	130,551,992

At September 30, 2016 the weighted average interest rate on the above mortgages was 4.98%. The effective rate was 5.06% including the amortization expense of deferred financing costs.

Summary financial information as of September 30, 2015

Financial information has been restated to conform to the current period reporting.

				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	$	8,511,004		$	2,619,374		$	6,859,314		$	4,997,692		$	672,579		$	6,212,058		$	6,371,641		$	18,785,662		$	94,934,158		$	149,963,482
Cash & Cash Equivalents		73,595			81,236			79,265			1,029			8,171			3,998			60,545			216,613			1,023,237			1,547,689
Rent Receivable		40,921			—			8,582			4,272			100			2,820			692			12,320			70,167			139,874
Real Estate Tax Escrow		104,165			—			42,400			75,984			—			55,215			39,403			91,842			242,660			651,669
Prepaid Expenses & Other Assets		121,531			903			45,606			55,877			211,856			60,886			39,742			84,849			1,851,560			2,472,810
Total Assets	$	8,851,216		$	2,701,513		$	7,035,167		$	5,134,854		$	892,706		$	6,334,977		$	6,512,023		$	19,191,286		$	98,121,782		$	154,775,524
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,862,109		$	—		$	9,915,104		$	4,746,249		$	—		$	4,512,848		$	5,228,371		$	16,756,876		$	85,010,224		$	136,031,781
Accounts Payable & Accrued Expense		60,815			1,133			83,754			21,998			23,055			6,934			59,805			207,573			754,434			1,219,501
Advance Rental Pmts& Security Deposits		185,386			—			203,378			95,656			5,695			86,897			107,428			314,676			2,349,097			3,348,213
Total Liabilities		10,108,310			1,133			10,202,236			4,863,903			28,750			4,606,679			5,395,604			17,279,125			88,113,755			140,599,495
Partners’ Capital		(1,257,094)			2,700,380			(3,167,069)			270,951			863,956			1,728,298			1,116,419			1,912,161			10,008,027			14,176,029
Total Liabilities and Capital	$	8,851,216		$	2,701,513		$	7,035,167		$	5,134,854		$	892,706		$	6,334,977		$	6,512,023		$	19,191,286		$	98,121,782		$	154,775,524
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$			$	1,350,188		$	—		$	135,476		$	431,978		$	864,149		$	558,210		$	956,080		$	4,003,209		$	8,299,289
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(628,547)		$	—		$	(1,583,534)		$	—		$	—		$	—		$	—		$	—		$	—			(2,212,081)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,087,208
Total units/condominiums
Apartments		48			—			40			175			120			48			42			148			409			1,030
Commercial		1			1			—			1			—			—			—			—			—			3
Total		49			1			40			176			120			48			42			148			409			1,033
Units to be retained		49			1			40			49			—			48			42			148			409			786
Units to be sold		—			—			—			127			120			—			—			—			—			247
Units sold through November 1, 2015		—			—			—			127			114			—			—			—			—			241
Unsold units		—			—			—			—			6			—			—			—			—			6
Unsold units with deposits for future sale as of November 1, 2015		—			—			—			—			1			—			—			—			—			1

Financial information for the nine months ended September 30, 2015

Financial information has been restated to conform to the current period reporting.

			Hamilton						Hamilton				Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Bay		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	1,090,071	$	217,568	$	1,033,115	$	713,771	$	78,548	$	733,978	$	699,019	$	2,305,464	$	10,650,223	$	17,521,757
Laundry and Sundry Income		10,114		—		323		—		—		—		—		33,335		67,439		111,211
		1,100,185		217,568		1,033,438		713,771		78,548		733,978		699,019		2,338,799		10,717,662		17,632,968
Expenses
Administrative		17,087		1,434		25,912		5,500		6,537		5,507		3,724		32,349		181,425		279,475
Depreciation and Amortization		326,816		2,122		276,396		176,861		26,961		235,126		243,699		714,838		2,408,892		4,411,711
Management Fees		46,666		8,714		42,971		28,273		3,143		28,914		28,974		91,870		227,847		507,372
Operating		81,724		—		67,241		531		476		917		64,428		296,685		971,545		1,483,547
Renting		8,906		—		12,649		—		—		2,350		6,623		5,701		72,373		108,602
Repairs and Maintenance		110,815		200		45,950		235,033		34,914		273,982		56,628		297,165		930,398		1,985,085
Taxes and Insurance		161,702		39,503		89,750		126,255		16,415		115,086		92,943		253,816		1,141,731		2,037,201
		753,716		51,973		560,869		572,453		88,446		661,882		497,019		1,692,424		5,934,211		10,812,993
Income Before Other Income		346,469		165,595		472,569		141,318		(9,898)		72,096		202,000		646,375		4,783,451		6,819,975
Other Income (Loss)
Interest Expense		(367,955)		(46,283)		(298,900)		(210,641)		(268)		(199,183)		(231,356)		(575,661)		(3,700,310)		(5,630,557)
Interest Income		—		—				11				—		—		96				107
Other Income ( Expense)		—		—						76,523				—				—		76,523
		(367,955)		(46,283)		(298,900)		(210,630)		76,255		(199,183)		(231,356)		(575,565)		(3,700,310)		(5,553,927)
Net Income (Loss)	$	(21,486)	$	119,312	$	173,669	$	(69,312)	$	66,357	$	(127,087)	$	(29,356)	$	70,810	$	1,083,141	$	1,266,048
Net Income (Loss)—NERA 50%	$	(10,743)	$	59,655	$	86,834	$	(34,656)	$	33,179	$	(63,544)	$	(14,678)	$	35,405				91,454
Net Income —NERA 40%																	$	433,256		433,256
																			$	524,710

Financial information for the three months ended September 30, 2015

Financial information has been restated to conform to the current period reporting.

			Hamilton						Hamilton				Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Bay		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	368,163	$	72,523	$	354,840	$	236,343	$	19,080	$	246,892	$	231,545	$	781,336	$	3,588,943	$	5,899,665
Laundry and Sundry Income		7,622		—		—		—		—		—		—		10,888		23,361		41,871
		375,785		72,523		354,840		236,343		19,080		246,892		231,545		792,224		3,612,304		5,941,536
Expenses
Administrative		8,781		425		11,531		2,338		1,863		1,883		1,032		12,414		76,791		117,058
Depreciation and Amortization		110,629		708		92,140		59,312		8,988		79,016		82,190		239,747		806,277		1,479,007
Management Fees		14,929		2,912		13,731		9,442		820		9,482		9,529		30,816		72,222		163,883
Operating		22,961		—		16,055		183		271		208		17,946		111,793		241,740		411,157
Renting		2,185		—		3,544		—		159		—		1,877		2,300		39,160		49,225
Repairs and Maintenance		44,380		200		26,888		79,646		10,879		87,765		23,864		114,683		390,221		778,526
Taxes and Insurance		54,826		12,659		29,873		40,360		5,479		38,861		30,972		87,515		407,819		708,364
		258,691		16,904		193,762		191,281		28,459		217,215		167,410		599,268		2,034,230		3,707,220
Income Before Other Income		117,094		55,619		161,078		45,062		(9,379)		29,677		64,135		192,956		1,578,074		2,234,316
Other Income (Loss)
Interest Expense		(122,433)		(14,882)		(99,632)		(70,688)		(55)		(66,763)		(77,815)		(193,932)		(1,241,719)		(1,887,919)
Interest Income		—		—		—		3		—		—		—		—		—		3
Gain on sale of Real Estate		—		—		—		—		76,648		—		—		—		—		76,648
		(122,433)		(14,882)		(99,632)		(70,685)		76,593		(66,763)		(77,815)		(193,932)		(1,241,719)		(1,811,268)
Net Income (Loss)	$	(5,339)	$	40,737	$	61,446	$	(25,623)	$	67,214	$	(37,086)	$	(13,680)	$	(976)	$	336,355	$	423,048
Net Income (Loss)—NERA 50%	$	(2,670)	$	20,369	$	30,723	$	(12,812)	$	33,607	$	(18,543)	$	(6,840)	$	(488)				43,347
Net Income —NERA 40%																	$	134,543		134,543
																			$	177,890

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IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

9 Months Ended

Sep. 30, 2016

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In February 2016, the FASB issued ASU 2016-02, modifying the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee.  This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively.  A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification.  Leases with a term of 12 months or less will be accounted for in the same manner as operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The guidance supersedes previously issued guidance under ASC Topic 840 “Leases”. The guidance is effective on January 1, 2019, with early adoption permitted.  The Partnership is currently in the process of evaluating the impact the adoption of ASU 2016-02 will have on the Partnership’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-07, which eliminates a requirement for the retroactive adjustment on a step by step basis of the investment, results of operations, and retained earnings as if the equity method had been effective during all previous periods that the investment had been held when an investment qualifies for equity method accounting due to an increase in the level of ownership or degree of influence. The cost of acquiring the additional interest in the investee is to be added to the current basis of the investor’s previously held interest and the equity method of accounting should be adopted as of the date the investment becomes qualified for equity method accounting. This guidance is to be applied on a prospective basis and is effective for interim and annual periods beginning after December 15, 2016. Early adoption is permitted for financial statements that have not been previously issued. The adoption of ASU 2016-07 will have no significant impact on the Partnership’s consolidated financial statements. 

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 addresses eight specific cash flow issues and intends to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This guidance is effective for annual periods beginning after December 15, 2017, including interim periods within that reporting period. Early adoption is permitted. The Partnership is currently in the process of evaluating the impact the adoption of ASU 2016-15 will have on the Partnership’s consolidated statement of cash flows.

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2016

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 16. SUBSEQUENT EVENTS

From October 1, 2016 through November 4, 2016, the Partnership purchased a total of 330 Depositary Receipts. The average price was $60.13 per receipt or $1,803.90 per unit. The total cost was $20,605. The Partnership is required to repurchase 2.6 Class B Units and 0.1 General Partnership Units at a cost of $4,713 and $248 respectively.

On October 26, 2016, the Partnership announced that on December 31, 2016 it will make its regular quarterly distribution and a special distribution to its owners of record as of December 15, 2016. The quarterly distribution will be $7.50 per unit. The quarterly distribution per Depository Receipt will be $0.25. The special distribution will be $24 per unit. The special distribution per Depository Receipt will be $0.80.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2016

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 25 properties which include 17 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,506 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 778 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 financial statements have been prepared in conformity with GAAP. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. These estimates and assumptions are based on management’s historical experience that are believed to be reasonable at the time. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgement. The Partnership’s critical accounting policies are those which require assumptions to be made about matters that are highly uncertain. Different estimates could have a material effect on the Partnership’s financial results. Judgements and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions and circumstances.

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: Investment 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 and beyond, the carrying values of investments 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

Leasing Fees:  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

Deferred Financing Costs:  Costs incurred in obtaining financing are capitalized and amortized over the term of the related indebtedness. Deferred financing costs are presented in the balance sheet as a direct deduction from the carrying value of the debt liability to which they relate, except deferred financing costs related to the revolving credit facility, which are presented in prepaid expenses and other assets. In all cases, amortization of such costs is included in interest expense and was approximately $141,000 and $128,000 for the nine months ended September 30, 2016 and 2015, respectively.

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 2016 or 2015 other than net income as reported.

Income (Loss) Per Depositary Receipt

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

Income Per Unit

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

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 2016 or 2015. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At September 30, 2016, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01% to 0.35%. At September 30, 2016 and December 31, 2015, respectively approximately $9,241,000, and $11,592,000 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 $154,105 and $106,482 for the nine months ended September 30, 2016 and 2015, 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 operations 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 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 nine months ended September 30, 2016 and 2015 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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RENTAL PROPERTIES (Tables)

9 Months Ended

Sep. 30, 2016

RENTAL PROPERTIES

Schedule of rental properties

	September 30, 2016		December 31, 2015		Useful Life
Land, improvements and parking lots	$	52,610,465	$	52,852,877	15	-	40	years
Buildings and improvements		173,161,839		172,277,299	15	-	40	years
Kitchen cabinets		8,919,826		8,493,696	5	-	10	years
Carpets		8,039,112		7,361,966	5	-	10	years
Air conditioning		718,531		718,531	5	-	10	years
Laundry equipment		244,771		244,771	5	-	7	years
Elevators		1,139,296		1,139,296	20	-	40	years
Swimming pools		444,629		444,629	10	-	30	years
Equipment		10,125,881		9,502,977	5	-	7	years
Motor vehicles		169,076		130,563			5	years
Fences		42,565		38,115	5	-	15	years
Furniture and fixtures		8,339,939		7,855,351	5	-	7	years
Smoke alarms		216,827		216,827	5	-	7	years
Total fixed assets		264,172,757		261,276,898
Less: Accumulated depreciation		(93,320,604)		(84,579,584)
	$	170,852,153	$	176,697,314

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MORTGAGE NOTES PAYABLE (Tables)

9 Months Ended

Sep. 30, 2016

MORTGAGE NOTES PAYABLE

Schedule of approximate annual maturities

Approximate annual maturities at September 30, 2016 are as follows:

2017—current maturities	$	1,747,000
2018		7,823,000
2019		1,903,000
2020		4,321,000
2021		2,312,000
Thereafter		196,455,000
		214,561,000
Less: unamortized deferred financing costs		(1,472,000)
	$	213,089,000

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PARTNERS' CAPITAL (Tables)

9 Months Ended

Sep. 30, 2016

PARTNERS' CAPITAL

Schedule of information per depositary receipt

	Nine Months Ended
	September 30,
	2016		2015
Net Income per Depositary Receipt	$	0.91	$	0.68
Distributions per Depositary Receipt	$	0.75	$	0.75

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TREASURY UNITS (Tables)

9 Months Ended

Sep. 30, 2016

TREASURY UNITS

Schedule of treasury units

Treasury Units at September 30, 2016 are as follows:

Class A	44,242
Class B	10,507
General Partnership	553
	55,302

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RENTAL INCOME (Tables)

9 Months Ended

Sep. 30, 2016

RENTAL INCOME

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

Approximately 7% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at September 30, 2016 as follows:

	Commercial
	Property Leases
2017	$	2,434,000
2018		2,066,000
2019		1,634,000
2020		1,065,000
2021		763,000
Thereafter		356,000
	$	8,318,000

Schedule of information for commercial leases

	Annual base				Percentage of
	rent for		Total square feet	Total number of	annual base rent for
Through September 30,	expiring leases		for expiring leases	leases expiring	expiring leases
2017	$	577,694	25,179	11	20	%
2018		367,293	11,507	7	13	%
2019		707,687	25,029	13	24	%
2020		215,165	6,409	5	8	%
2021		784,588	34,248	6	28	%
2022		30,600	900	1	1	%
2023		—	—	—	0	%
2024		157,443	4,771	1	6	%
2025		—	—	—	0	%
2026		—	—	—	0	%
Totals	$	2,840,470	108,043	44	100	%

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2016

FAIR VALUE MEASUREMENTS

Schedule of carrying amounts and estimated fair value of debt

		Carrying Amount		Estimated Fair Value
Mortgage Notes Payable
Partnership Properties
At September 30, 2016	*	$	213,089,003	$	231,415,786
At December 31, 2015	*	$	194,500,820	$	205,240,993
Investment Properties
At September 30, 2016	*	$	130,551,992	$	138,000,688
At December 31, 2015	*	$	135,657,988	$	142,512,272

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables)

9 Months Ended

Sep. 30, 2016

Current Year [Member]

Summary of financial position relating to investment in unconsolidated joint ventures

Summary financial information as of September 30, 2016

				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	$	8,129,487		$	2,616,545		$	6,521,385		$	4,074,383		$	124,752		$	5,956,617		$	6,206,120		$	17,972,191		$	92,473,236		$	144,074,716
Cash & Cash Equivalents		142,274			52,323			199,544			155,921			97,332			1,121			89,502			100,273			1,036,851			1,875,141
Rent Receivable		49,547			—			18,009			35,302			3,000			15,687			980			20,473			288,807			431,805
Real Estate Tax Escrow		81,827			—			45,014			659,841			171			44,049			37,762			135,659			216,881			1,221,204
Prepaid Expenses & Other Assets		172,746			982			54,156			—			—			78,234			67,687			94,299			1,978,426			2,446,530
Total Assets	$	8,575,881		$	2,669,850		$	6,838,108		$	4,925,447		$	225,255		$	6,095,708		$	6,402,051		$	18,322,895		$	95,994,201		$	150,049,396
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,875,898		$	—		$	9,892,225		$	—		$	—		$	4,447,269		$	5,877,338		$	16,772,927		$	83,686,335		$	130,551,992
Accounts Payable & Accrued Expense		59,117			1,275			78,095			51,206			3,947			9,809			42,713			140,981			693,424			1,080,567
Advance Rental Pmts & Security Deposits		225,843			—			245,904			79,732			2,380			93,716			112,168			361,929			2,493,486			3,615,158
Total Liabilities		10,160,858			1,275			10,216,224			130,938			6,327			4,550,794			6,032,219			17,275,837			86,873,245			135,247,717
Partners’ Capital		(1,584,977)			2,668,575			(3,378,116)			4,794,509			218,928			1,544,914			369,832			1,047,058			9,120,956			14,801,679
Total Liabilities and Capital	$	8,575,881		$	2,669,850		$	6,838,108		$	4,925,447		$	225,255		$	6,095,708		$	6,402,051		$	18,322,895		$	95,994,201		$	150,049,396
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$	—		$	1,334,288		$	—		$	2,397,254		$	109,464		$	772,457		$	184,916		$	523,529		$	3,648,382			8,970,289
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(792,488)		$	—		$	(1,689,058)		$	—		$	—		$	—		$	—		$	—		$	—			(2,481,546)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,488,743
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			—			—			—			42			148			409			689
Units to be sold		—			—			—			176			120			48			—			—			—			344
Units sold through November 1, 2016		—			—			—			133			119			—			—			—			—			252
Unsold units		—			—			—			43			1			—			—			—			—			44
Unsold units with deposits for future sale as of  November 1, 2016		—			—			—			3			—			—			—			—			—			3

Summary of income statement relating to investment in unconsolidated joint ventures

Financial information for the nine months ended September 30, 2016

			Hamilton										Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Hamilton		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Bay Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	1,139,145	$	180,000	$	1,089,610	$	650,328	$	36,315	$	724,848	$	742,872	$	2,425,746	$	11,026,501	$	18,015,365
Laundry and Sundry Income		11,032		—		2,823		—		—		—		343		31,445		76,124		121,767
		1,150,177		180,000		1,092,433		650,328		36,315		724,848		743,215		2,457,191		11,102,625		18,137,132
Expenses
Administrative		25,757		1,314		23,269		8,429		5,312		8,257		5,225		31,677		137,958		247,198
Depreciation and Amortization		338,820		2,122		260,819		177,062		18,876		238,807		254,869		718,340		2,435,762		4,445,477
Management Fees		47,267		7,200		45,858		24,220		1,412		28,568		30,392		97,873		238,441		521,231
Operating		74,431		—		53,336		732		257		1,364		66,845		232,598		876,054		1,305,617
Renting		23,804		—		14,910		1,789		—		4,354		5,621		13,106		193,381		256,965
Repairs and Maintenance		120,332		3,150		48,832		232,398		18,756		305,491		65,358		407,989		1,113,528		2,315,834
Taxes and Insurance		171,345		44,664		94,429		121,614		8,371		124,296		90,496		365,969		1,136,580		2,157,764
		801,756		58,450		541,453		566,244		52,984		711,137		518,806		1,867,552		6,131,704		11,250,086
Income Before Other Income		348,421		121,550		550,980		84,084		(16,669)		13,711		224,409		589,639		4,970,921		6,887,046
Other Income (Loss)
Interest Expense		(214,415)		—		(298,442)		(149,327)		(65)		(196,329)		(226,672)		(577,942)		(3,657,249)		(5,320,441)
Interest Income		—		—		—		10		—		—		—		—		—		10
Gain on Sale of Real Estate		—		—		—		802,129		335,321		—		—		—		—		1,137,450
		(214,415)		—		(298,442)		652,812		335,256		(196,329)		(226,672)		(577,942)		(3,657,249)		(4,182,981)
Net Income (Loss)	$	134,006	$	121,550	$	252,538	$	736,896	$	318,587	$	(182,618)	$	(2,263)	$	11,697	$	1,313,672	$	2,704,065
Net Income (Loss)—NERA 50%	$	67,003	$	60,775	$	126,270	$	368,448	$	159,294	$	(91,309)	$	(1,132)	$	5,848				695,197
Net Income —NERA 40%																	$	525,469		525,469
																			$	1,220,666

Financial information for the three months ended September 30, 2016

													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	$	371,228	$	60,000	$	364,649	$	177,852	$	8,625	$	230,491	$	251,118	$	820,748	$	3,614,525	$	5,899,236
Laundry and Sundry Income		2,675		—		725		—		—		—		44		10,811		21,478		35,733
		373,903		60,000		365,374		177,852		8,625		230,491		251,162		831,559		3,636,003		5,934,969
Expenses
Administrative		5,660		425		7,071		5,684		2,328		2,386		2,625		11,545		40,757		78,481
Depreciation and Amortization		113,626		707		86,988		58,998		6,292		79,953		85,288		241,279		817,710		1,490,841
Management Fees		17,216		2,400		15,033		6,293		336		8,964		10,469		33,611		73,108		167,430
Operating		24,073		—		16,670		147		58		356		20,614		81,583		267,793		411,294
Renting		16,965		—		4,369		—		—		3,400		819		3,590		137,786		166,929
Repairs and Maintenance		44,248		—		19,499		76,499		5,187		104,886		(45,582)		180,736		520,451		905,924
Taxes and Insurance		56,037		14,062		30,006		35,405		1,300		40,318		30,997		110,147		402,822		721,094
		277,825		17,594		179,636		183,026		15,501		240,263		105,230		662,491		2,260,427		3,941,993
Income Before Other Income		96,078		42,406		185,738		(5,174)		(6,876)		(9,772)		145,932		169,068		1,375,576		1,992,976
Other Income (Loss)
Interest Expense		(72,768)		—		(99,433)		(10,638)		(6)		(65,351)		(74,324)		(194,071)		(1,222,601)		(1,739,192)
Interest Income		—		—		—		1		—		—		—		—		—		1
Gain on sale of real estate		—		—		—		802,129		99,851				—		—		—		901,980
		(72,768)		—		(99,433)		791,492		99,845		(65,351)		(74,324)		(194,071)		(1,222,601)		(837,211)
Net Income (Loss)	$	23,310	$	42,406	$	86,305	$	786,318	$	92,969	$	(75,123)	$	71,608	$	(25,003)	$	152,975	$	1,155,765
Net Income (Loss)—NERA 50%	$	11,655	$	21,203	$	43,153	$	393,158	$	46,485	$	(37,562)	$	35,804	$	(12,502)				501,394
Net Income —NERA 40%																	$	61,190		61,190
																			$	562,584

Schedule of future annual mortgage maturities

Future annual mortgage maturities at September 30, 2016 are as follows:

	Hamilton		345		Hamilton		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Franklin		Bay Apts		Minuteman		Main Apts		Park		Total
9/30/2017	$	—	$	181,277	$	4,449,655	$	—	$	—	$	1,564,180	$	6,195,112
9/30/2018		—		188,419		—		—		—		1,653,563		1,841,982
9/30/2019		—		195,841		—		—		—		1,748,055		1,943,896
9/30/2020		—		203,556		—		—		—		78,899,705		79,103,261
9/30/2021		—		211,575		—		—		—		—		211,575
Thereafter		10,000,000		8,989,794		—		6,000,000		16,900,000		—		41,889,794
		10,000,000		9,970,462		4,449,655		6,000,000		16,900,000		83,865,503		131,185,620
Less: unamortized deferred financing costs		(124,102)		(78,237)		(2,386)		(122,662)		(127,073)		(179,168)		(633,628)
	$	9,875,898	$	9,892,225	$	4,447,269	$	5,877,338	$	16,772,927	$	83,686,335	$	130,551,992

Prior Year [Member]

Summary of financial position relating to investment in unconsolidated joint ventures

Summary financial information as of September 30, 2015

Financial information has been restated to conform to the current period reporting.

				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	$	8,511,004		$	2,619,374		$	6,859,314		$	4,997,692		$	672,579		$	6,212,058		$	6,371,641		$	18,785,662		$	94,934,158		$	149,963,482
Cash & Cash Equivalents		73,595			81,236			79,265			1,029			8,171			3,998			60,545			216,613			1,023,237			1,547,689
Rent Receivable		40,921			—			8,582			4,272			100			2,820			692			12,320			70,167			139,874
Real Estate Tax Escrow		104,165			—			42,400			75,984			—			55,215			39,403			91,842			242,660			651,669
Prepaid Expenses & Other Assets		121,531			903			45,606			55,877			211,856			60,886			39,742			84,849			1,851,560			2,472,810
Total Assets	$	8,851,216		$	2,701,513		$	7,035,167		$	5,134,854		$	892,706		$	6,334,977		$	6,512,023		$	19,191,286		$	98,121,782		$	154,775,524
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,862,109		$	—		$	9,915,104		$	4,746,249		$	—		$	4,512,848		$	5,228,371		$	16,756,876		$	85,010,224		$	136,031,781
Accounts Payable & Accrued Expense		60,815			1,133			83,754			21,998			23,055			6,934			59,805			207,573			754,434			1,219,501
Advance Rental Pmts& Security Deposits		185,386			—			203,378			95,656			5,695			86,897			107,428			314,676			2,349,097			3,348,213
Total Liabilities		10,108,310			1,133			10,202,236			4,863,903			28,750			4,606,679			5,395,604			17,279,125			88,113,755			140,599,495
Partners’ Capital		(1,257,094)			2,700,380			(3,167,069)			270,951			863,956			1,728,298			1,116,419			1,912,161			10,008,027			14,176,029
Total Liabilities and Capital	$	8,851,216		$	2,701,513		$	7,035,167		$	5,134,854		$	892,706		$	6,334,977		$	6,512,023		$	19,191,286		$	98,121,782		$	154,775,524
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$			$	1,350,188		$	—		$	135,476		$	431,978		$	864,149		$	558,210		$	956,080		$	4,003,209		$	8,299,289
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(628,547)		$	—		$	(1,583,534)		$	—		$	—		$	—		$	—		$	—		$	—			(2,212,081)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,087,208
Total units/condominiums
Apartments		48			—			40			175			120			48			42			148			409			1,030
Commercial		1			1			—			1			—			—			—			—			—			3
Total		49			1			40			176			120			48			42			148			409			1,033
Units to be retained		49			1			40			49			—			48			42			148			409			786
Units to be sold		—			—			—			127			120			—			—			—			—			247
Units sold through November 1, 2015		—			—			—			127			114			—			—			—			—			241
Unsold units		—			—			—			—			6			—			—			—			—			6
Unsold units with deposits for future sale as of November 1, 2015		—			—			—			—			1			—			—			—			—			1

Summary of income statement relating to investment in unconsolidated joint ventures

Financial information for the nine months ended September 30, 2015

Financial information has been restated to conform to the current period reporting.

			Hamilton						Hamilton				Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Bay		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	1,090,071	$	217,568	$	1,033,115	$	713,771	$	78,548	$	733,978	$	699,019	$	2,305,464	$	10,650,223	$	17,521,757
Laundry and Sundry Income		10,114		—		323		—		—		—		—		33,335		67,439		111,211
		1,100,185		217,568		1,033,438		713,771		78,548		733,978		699,019		2,338,799		10,717,662		17,632,968
Expenses
Administrative		17,087		1,434		25,912		5,500		6,537		5,507		3,724		32,349		181,425		279,475
Depreciation and Amortization		326,816		2,122		276,396		176,861		26,961		235,126		243,699		714,838		2,408,892		4,411,711
Management Fees		46,666		8,714		42,971		28,273		3,143		28,914		28,974		91,870		227,847		507,372
Operating		81,724		—		67,241		531		476		917		64,428		296,685		971,545		1,483,547
Renting		8,906		—		12,649		—		—		2,350		6,623		5,701		72,373		108,602
Repairs and Maintenance		110,815		200		45,950		235,033		34,914		273,982		56,628		297,165		930,398		1,985,085
Taxes and Insurance		161,702		39,503		89,750		126,255		16,415		115,086		92,943		253,816		1,141,731		2,037,201
		753,716		51,973		560,869		572,453		88,446		661,882		497,019		1,692,424		5,934,211		10,812,993
Income Before Other Income		346,469		165,595		472,569		141,318		(9,898)		72,096		202,000		646,375		4,783,451		6,819,975
Other Income (Loss)
Interest Expense		(367,955)		(46,283)		(298,900)		(210,641)		(268)		(199,183)		(231,356)		(575,661)		(3,700,310)		(5,630,557)
Interest Income		—		—				11				—		—		96				107
Other Income ( Expense)		—		—						76,523				—				—		76,523
		(367,955)		(46,283)		(298,900)		(210,630)		76,255		(199,183)		(231,356)		(575,565)		(3,700,310)		(5,553,927)
Net Income (Loss)	$	(21,486)	$	119,312	$	173,669	$	(69,312)	$	66,357	$	(127,087)	$	(29,356)	$	70,810	$	1,083,141	$	1,266,048
Net Income (Loss)—NERA 50%	$	(10,743)	$	59,655	$	86,834	$	(34,656)	$	33,179	$	(63,544)	$	(14,678)	$	35,405				91,454
Net Income —NERA 40%																	$	433,256		433,256
																			$	524,710

Financial information for the three months ended September 30, 2015

Financial information has been restated to conform to the current period reporting.

			Hamilton						Hamilton				Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Bay		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	368,163	$	72,523	$	354,840	$	236,343	$	19,080	$	246,892	$	231,545	$	781,336	$	3,588,943	$	5,899,665
Laundry and Sundry Income		7,622		—		—		—		—		—		—		10,888		23,361		41,871
		375,785		72,523		354,840		236,343		19,080		246,892		231,545		792,224		3,612,304		5,941,536
Expenses
Administrative		8,781		425		11,531		2,338		1,863		1,883		1,032		12,414		76,791		117,058
Depreciation and Amortization		110,629		708		92,140		59,312		8,988		79,016		82,190		239,747		806,277		1,479,007
Management Fees		14,929		2,912		13,731		9,442		820		9,482		9,529		30,816		72,222		163,883
Operating		22,961		—		16,055		183		271		208		17,946		111,793		241,740		411,157
Renting		2,185		—		3,544		—		159		—		1,877		2,300		39,160		49,225
Repairs and Maintenance		44,380		200		26,888		79,646		10,879		87,765		23,864		114,683		390,221		778,526
Taxes and Insurance		54,826		12,659		29,873		40,360		5,479		38,861		30,972		87,515		407,819		708,364
		258,691		16,904		193,762		191,281		28,459		217,215		167,410		599,268		2,034,230		3,707,220
Income Before Other Income		117,094		55,619		161,078		45,062		(9,379)		29,677		64,135		192,956		1,578,074		2,234,316
Other Income (Loss)
Interest Expense		(122,433)		(14,882)		(99,632)		(70,688)		(55)		(66,763)		(77,815)		(193,932)		(1,241,719)		(1,887,919)
Interest Income		—		—		—		3		—		—		—		—		—		3
Gain on sale of Real Estate		—		—		—		—		76,648		—		—		—		—		76,648
		(122,433)		(14,882)		(99,632)		(70,685)		76,593		(66,763)		(77,815)		(193,932)		(1,241,719)		(1,811,268)
Net Income (Loss)	$	(5,339)	$	40,737	$	61,446	$	(25,623)	$	67,214	$	(37,086)	$	(13,680)	$	(976)	$	336,355	$	423,048
Net Income (Loss)—NERA 50%	$	(2,670)	$	20,369	$	30,723	$	(12,812)	$	33,607	$	(18,543)	$	(6,840)	$	(488)				43,347
Net Income —NERA 40%																	$	134,543		134,543
																			$	177,890

XML

SIGNIFICANT ACCOUNTING POLICIES (Business) (Details)	Sep. 30, 2016 ft² property item	Sep. 30, 2015 property
Residential and mixed-use properties
Line of Business
Number of properties	21
Number of units	2,506
Condominium
Line of Business
Number of units	19
Wholly owned properties
Line of Business
Number of properties	25
Wholly owned properties | Residential buildings
Line of Business
Number of properties	17
Number of units	2,506
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) | ft²	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	778
Area of property (in square feet) | ft²	12,500
Partially owned properties | Residential and mixed-use properties | Minimum
Line of Business
Ownership interest (as a percent)	40.00%
Partially owned properties | Residential and mixed-use properties | Maximum
Line of Business
Ownership interest (as a percent)	50.00%
Partially owned properties | Car parking lot
Line of Business
Capacity of real estate property (in cars per lot)	50
Investment Properties
Line of Business
Number of units | property	1,033	1,033
Investment Properties | Residential buildings
Line of Business
Number of units | property	1,030	1,030
Investment Properties | Commercial
Line of Business
Number of units | property	3	3
Investment Properties | Partially owned properties | Residential and mixed-use properties
Line of Business
Number of units | property	778

XML

SIGNIFICANT ACCOUNTING POLICIES (Details)		9 Months Ended
	Jan. 03, 2012	Sep. 30, 2016 USD ($) item shares	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)	Jun. 30, 2013 USD ($)	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
Deferred financing costs				$ 1,400,000
Amortization of deferred financing costs		$ 141,000	$ 128,000
Segment Reporting
Number of segments | item		1
Income Per Unit
Dilutive units | shares		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		$ 9,241,000		$ 11,592,000
Advertising Expense
Advertising expense		154,105	106,482
Interest Capitalized
Capitalized interest		$ 0	$ 0
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%
Investment Properties
Principles of Consolidation
Number of limited liability companies/partnerships | item		9
Investment Properties | Minimum
Principles of Consolidation
Percentage of ownership interest		40.00%
Investment Properties | Maximum
Principles of Consolidation
Percentage of ownership interest		50.00%
345 Franklin
Principles of Consolidation
Value of equity method investment to discontinued partnership					$ 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

XML

RENTAL PROPERTIES (Details)	9 Months Ended
	Sep. 30, 2016 USD ($) property item	Dec. 31, 2015 USD ($)	Sep. 30, 2015 property	Sep. 18, 2015 item
Rental properties
Total fixed assets	$ 264,172,757	$ 261,276,898
Less: Accumulated depreciation	(93,320,604)	(84,579,584)
Total fixed assets, net	170,852,153	176,697,314
Land, improvements and parking lots
Rental properties
Total fixed assets	$ 52,610,465	52,852,877
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	$ 173,161,839	172,277,299
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	$ 8,919,826	8,493,696
Kitchen cabinets | Minimum
Rental properties
Useful Life	5 years
Kitchen cabinets | Maximum
Rental properties
Useful Life	10 years
Carpets
Rental properties
Total fixed assets	$ 8,039,112	7,361,966
Carpets | Minimum
Rental properties
Useful Life	5 years
Carpets | Maximum
Rental properties
Useful Life	10 years
Air conditioning
Rental properties
Total fixed assets	$ 718,531	718,531
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	$ 244,771	244,771
Laundry equipment | Minimum
Rental properties
Useful Life	5 years
Laundry equipment | Maximum
Rental properties
Useful Life	7 years
Elevators
Rental properties
Total fixed assets	$ 1,139,296	1,139,296
Elevators | Minimum
Rental properties
Useful Life	20 years
Elevators | Maximum
Rental properties
Useful Life	40 years
Swimming pools
Rental properties
Total fixed assets	$ 444,629	444,629
Swimming pools | Minimum
Rental properties
Useful Life	10 years
Swimming pools | Maximum
Rental properties
Useful Life	30 years
Equipment
Rental properties
Total fixed assets	$ 10,125,881	9,502,977
Equipment | Minimum
Rental properties
Useful Life	5 years
Equipment | Maximum
Rental properties
Useful Life	7 years
Motor vehicles
Rental properties
Total fixed assets	$ 169,076	130,563
Motor vehicles | Maximum
Rental properties
Useful Life	5 years
Fences
Rental properties
Total fixed assets	$ 42,565	38,115
Fences | Minimum
Rental properties
Useful Life	5 years
Fences | Maximum
Rental properties
Useful Life	15 years
Furniture and fixtures
Rental properties
Total fixed assets	$ 8,339,939	7,855,351
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	$ 216,827	$ 216,827
Smoke alarms | Minimum
Rental properties
Useful Life	5 years
Smoke alarms | Maximum
Rental properties
Useful Life	7 years
Residences at CaptainParkers LLC Residential Apartments Lexington, Massachusetts
RENTAL PROPERTIES
Number of units | item				94
Wholly owned properties
RENTAL PROPERTIES
Number of properties | item	25
Investment Properties
RENTAL PROPERTIES
Number of units | property	1,033		1,033
Residential and mixed-use properties
RENTAL PROPERTIES
Number of units | item	2,506
Number of properties | item	21
Residential and mixed-use properties | Partially owned properties
RENTAL PROPERTIES
Number of units | item	778
Number of properties | item	9
Residential and mixed-use properties | Partially owned properties | Minimum
RENTAL PROPERTIES
Ownership interest (as a percent)	40.00%
Residential and mixed-use properties | Partially owned properties | Maximum
RENTAL PROPERTIES
Ownership interest (as a percent)	50.00%
Residential and mixed-use properties | Investment Properties | Partially owned properties
RENTAL PROPERTIES
Number of units | property	778
Condominium
RENTAL PROPERTIES
Number of units | item	19
Condominium | Wholly owned properties
RENTAL PROPERTIES
Number of units | item	19
Number of properties | item	1

XML

RENTAL PROPERTIES (Hamilton Green) (Details) - USD ($)		9 Months Ended
	Aug. 03, 2016	Sep. 30, 2016
RENTAL PROPERTIES
Gain on the sale of real estate		$ (103,793)
Hamilton Green
RENTAL PROPERTIES
Sales price of real estate properties	$ 1,000,000
Gain on the sale of real estate	103,793
Closing costs	227,663
Cost basis of the property	668,544
Prepayment penalty	$ 187,905

XML

RENTAL PROPERTIES (Captain Parkers) (Details)	Sep. 18, 2015 USD ($) item	Dec. 31, 2015 USD ($)
RENTAL PROPERTIES
Line of credit		$ 25,000,000
Residences at CaptainParkers LLC Residential Apartments Lexington, Massachusetts
RENTAL PROPERTIES
Number of units | item	94
Purchase price of real estate properties	$ 31,600,000
Closing costs associated with financing	49,000
Purchase price allocated to the value of the in-place leases	474,000
Purchase price allocated to the value of the tenant relationships	$ 31,000
Amortization period of value of the in-place leases	12 months
Amortization period of value of the tenant relationships	24 months
Line of credit	$ 25,000,000

XML

RELATED PARTY TRANSACTIONS (Details)	3 Months Ended		9 Months Ended		21 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) item	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($)
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			$ 1,513,000	$ 1,370,000
Management fee	$ 511,730	$ 453,178	1,513,226	1,369,597
Repairs and maintenance	2,364,364	2,006,298	6,185,250	5,176,219
Administrative expense	$ 524,293	$ 502,177	$ 1,477,708	1,528,710
Number of limited partnerships and limited liability companies in which the entity has invested | item			9
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			$ 56,250	56,250
Harold Brown | Minimum
RELATED PARTY TRANSACTIONS
Ownership interest (as a percent)	43.20%		43.20%		43.20%
Harold Brown | Maximum
RELATED PARTY TRANSACTIONS
Ownership interest (as a percent)	57.00%		57.00%		57.00%
General Partner or Management Company [Member]
RELATED PARTY TRANSACTIONS
Repairs and maintenance			$ 286,000
Administrative expense			261,000
Commercial brokerage fees			67,000
Expenses for construction, architectural services and supervision of capital projects			158,000
Costs related to professional services			772,000	719,000
Management Company [Member]
RELATED PARTY TRANSACTIONS
Reimbursement to related party for payroll transfers			2,212,000	2,145,000
Employer contributions in 401K plan			$ 0	0
Number of accounting staff of related party providing bookkeeping and accounting functions | item			14
Fees for accounting and bookkeeping services			$ 93,750	$ 93,750
Number of employees having ownership interest in the investment properties | item			6
Fees for accounting and bookkeeping services per year					$ 125,000
Partially owned properties
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue			4.00%
Management fee			$ 521,000
Repairs and maintenance			41,000
Administrative expense			27,000
Construction, architectural services and supervision of capital projects			46,000
Amount paid to related party			$ 635,000
Residential and mixed-use properties | Partially owned properties | Minimum
RELATED PARTY TRANSACTIONS
Ownership interest (as a percent)	40.00%		40.00%		40.00%
Residential and mixed-use properties | Partially owned properties | Maximum
RELATED PARTY TRANSACTIONS
Ownership interest (as a percent)	50.00%		50.00%		50.00%

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OTHER ASSETS (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
OTHER ASSETS
Security deposits	$ 2,309,000	$ 2,257,000
Escrow deposits to fund future capital improvements	395,000	801,000
Intangible assets, net of accumulated amortization	16,000	382,000
Accumulated amortization on intangible assets	2,241,000	1,875,000
Financing fees, net	40,000	75,000
Accumulated amortization on financing and leasing fees	$ 101,000	$ 66,000

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MORTGAGE NOTES PAYABLE AND LINE OF CREDIT (Mortgages Payable) (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
MORTGAGE NOTES PAYABLE
Effective interest rate (as a percent)	5.06%
Annual maturities of mortgage debt
2017-current maturities	$ 1,747,000
2018	7,823,000
2019	1,903,000
2020	4,321,000
2021	2,312,000
Thereafter	196,455,000
Total	214,561,000
Less: unamortized deferred financing costs	(1,472,000)
Secured Debt	213,089,003	$ 194,500,820
Mortgages payable
MORTGAGE NOTES PAYABLE
Amount of monthly installments including principal	$ 976,000
Weighted average interest rate (as a percent)	4.60%
Effective interest rate (as a percent)	4.69%
Mortgages payable | Minimum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)	2.51%
Mortgages payable | Maximum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)	5.97%

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MORTGAGE NOTES PAYABLE AND LINE OF CREDIT (Mortgage by property) (Details) - USD ($)			1 Months Ended	12 Months Ended
	Sep. 30, 2015	Jul. 31, 2014	Aug. 31, 2014	Dec. 31, 2005	Sep. 30, 2016	Jan. 15, 2016	Jan. 07, 2016
Line of Credit
MORTGAGE NOTES PAYABLE
Term of debt		3 years
Mortgage amount							$ 0
Residences at CaptainParkers LLC Residential Apartments Lexington, Massachusetts
MORTGAGE NOTES PAYABLE
Amount of loan proceeds utilized for pay off the existing mortgage						$ 2,000,000	23,000,000
Mortgages payable | Hamilton Essex 81
MORTGAGE NOTES PAYABLE
Term of debt	10 years
Mortgage amount					$ 9,876,000
Amount of loan proceeds utilized for pay off the existing mortgage	$ 8,040,719
Mortgages payable | Hamilton on Main Apartments, LLC
MORTGAGE NOTES PAYABLE
Term of debt			10 years	10 years
Mortgage amount					$ 16,773,000
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
Amount of loan proceeds utilized for pay off the existing mortgage			$ 15,205,000
Mortgages payable | Residences at CaptainParkers LLC Residential Apartments Lexington, Massachusetts
MORTGAGE NOTES PAYABLE
Mortgage amount							$ 20,071,000
Mortgages payable | Minimum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)					2.51%
Mortgages payable | Maximum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)					5.97%

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MORTGAGE NOTES PAYABLE AND LINE OF CREDIT (Line of Credit) (Details)				1 Months Ended	9 Months Ended	12 Months Ended
	Jan. 07, 2016	Sep. 30, 2015	Jul. 31, 2014 USD ($) item	Aug. 31, 2014	Sep. 30, 2016 USD ($)	Dec. 31, 2005 item	Dec. 31, 2015 USD ($)	Mar. 07, 2005 item
Line of Credit
Credit line balance							$ 25,000,000
Line Of Credit Facility Unused Capacity Commitment Fee					$ 37,000
Hamilton Essex 81
Line of Credit
Number of properties in which borrowing amount collateralized | item								1
Line of Credit
Line of Credit
Maximum borrowings			$ 25,000,000
Term of debt			3 years
Amount of refinancing costs			$ 125,000
Credit line balance					0
Number of properties in which borrowing amount collateralized | item			23
Base Rate | Line of Credit
Line of Credit
Reference rate used in calculation of Base Rate			base
Prime Rate [Member] | Line of Credit
Line of Credit
Reference rate used in calculation of Base Rate			Prime
Federal Funds Rate | Line of Credit
Line of Credit
Reference rate used in calculation of Base Rate			Federal Funds
Basis of effective interest rate used in calculation of Base Rate (as a percent)			0.50%
LIBOR | Residences at CaptainParkers LLC Residential Apartments Lexington, Massachusetts
Line of Credit
Margin over basis of interest rate (as a percent)	201.00%
LIBOR | Line of Credit
Line of Credit
Reference rate used in calculation of Base Rate			one month LIBOR
Basis of effective interest rate used in calculation of Base Rate (as a percent)			1.00%
Minimum
Line of Credit
Tangible net worth					$ 150,000,000
Ratio of net operating income to total indebtedness					9.50%
Debt service coverage ratio					1.6
Minimum | Line of Credit
Line of Credit
Pledged interests of the Partnership's ownership interest (as a percent)			49.00%
Commitment fee for unused amount (as a percent)			0.15%
Minimum | Base Rate | Line of Credit
Line of Credit
Margin over basis of interest rate (as a percent)			2.50%
Maximum
Line of Credit
Leverage ratio					65.00%
Aggregate increase in indebtedness					$ 15,000,000
Maximum | Line of Credit
Line of Credit
Pledged interests of the Partnership's ownership interest (as a percent)			100.00%
Commitment fee for unused amount (as a percent)			0.20%
Mortgages payable | Hamilton Essex 81
Line of Credit
Term of debt		10 years
Mortgages payable | Hamilton on Main Apartments, LLC
Line of Credit
Term of debt				10 years		10 years
Number of properties in which borrowing amount collateralized | item						3
Mortgages payable | LIBOR | Hamilton Essex 81
Line of Credit
Margin over basis of interest rate (as a percent)		2.18%

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ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS (Details)	9 Months Ended
	Sep. 30, 2016 USD ($)
ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS
Period for advance rental payment	1 month
Amount received for prepaid rent	$ 1,851,000
Security deposits	$ 2,309,000

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PARTNERS' CAPITAL (Details)		9 Months Ended
	Jan. 03, 2012	Sep. 30, 2016 item $ / item	Sep. 30, 2015 $ / item	Sep. 15, 2016 $ / item	Jun. 15, 2016 $ / item	Mar. 15, 2016 $ / item	Dec. 31, 2015 $ / shares $ / item	Jun. 30, 2015 $ / item	Mar. 31, 2015 $ / item	Aug. 20, 2007
Depositary receipts exchange ratio for Class A units | item		30
Quarterly distributions per depositary receipt (in dollars per receipt)			0.25				0.25	0.25	0.25
Quarterly distribution per unit (in dollars per unit)			7.50				7.50	7.50	7.50
Distribution per unit (in dollars per unit) | $ / shares							$ 30.00
Earnings per depository receipt
Net Income per Depositary Receipt (in dollars per receipt)		0.91	0.68
Distributions per Depositary Receipt (in dollars per share)		0.75	0.75				1.00
Limited Partner
Number of classes of partners | item		2
General Partnership
Number of classes of partners | item		1
Fixed distribution percentage of unit holders		1.00%
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 distributions per depositary receipt (in dollars per receipt)				0.25	0.25	0.25
Quarterly distribution per unit (in dollars per unit)				7.50	7.50	7.50
Class B
Fixed distribution percentage of unit holders		19.00%

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TREASURY UNITS (Details)				1 Months Ended	9 Months Ended		109 Months Ended
	Mar. 10, 2015 shares	Aug. 08, 2008	Aug. 20, 2007 shares	Nov. 04, 2016 USD ($) $ / item shares	Sep. 30, 2016 USD ($) $ / item shares	Sep. 30, 2015 USD ($) shares	Sep. 30, 2016 USD ($) $ / item shares	Jan. 03, 2012	Mar. 06, 2008 shares	Jan. 30, 2008 shares	Jan. 15, 2008 shares
Treasury units					55,302		55,302
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
Number of depository receipts repurchased							1,352,427
Repurchase price of depository receipts (in dollars per receipt) | $ / item							26.81
Total cost of repurchase | $					$ 694,380	$ 2,516,061	$ 39,291,000
Subsequent event
Number of depository receipts repurchased				330
Repurchase price of depository receipts (in dollars per receipt) | $ / item				60.13
Repurchase price of units (in dollars per unit) | $ / item				1,803.90
Repurchase of depository receipts | $				$ 20,605
General Partnership
Treasury units					553		553
Fixed distribution percentage of unit holders					1.00%
Number of depository receipts repurchased							156
Total cost of repurchase | $					$ 6,783	$ 24,887
Value of units required to be repurchased | $					$ 6,783
Repurchases required (in units)					5
General Partnership | Subsequent event
Value of units required to be repurchased | $				$ 248
Repurchases required (in units)				0.1
Treasury Units
Units repurchased (in shares)					451	1,677
Class A
Treasury units					44,242		44,242
Number of units in each depository receipt			0.1					0.03333
Fixed distribution percentage of unit holders					80.00%
Repurchase price of depository receipts (in dollars per receipt) | $ / item					50.11
Repurchase price of units (in dollars per unit) | $ / item					1,503.26		804.30
Total cost of repurchase | $					$ 558,723	$ 2,018,329
Repurchase of depository receipts | $					$ 10,829
Class B
Treasury units					10,507		10,507
Fixed distribution percentage of unit holders					19.00%
Number of depository receipts repurchased							2,970
Total cost of repurchase | $					$ 128,874	$ 472,845
Value of units required to be repurchased | $					$ 128,874
Repurchases required (in units)					86
Class B | Subsequent event
Value of units required to be repurchased | $				$ 4,713
Repurchases required (in units)				2.6
Class B | General Partnership
Repurchase price of units (in dollars per unit) | $ / item							895.21

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COMMITMENTS AND CONTINGENCIES (Details)	9 Months Ended
	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)	Jun. 09, 2015 property
Loss Contingencies [Line Items]
Insurance recovery receivable	$ 154,864	$ 345,645
Westgate Apartments LLC
Loss Contingencies [Line Items]
Number of apartments damaged | property			10
Proceeds from Insurance	714,000
Insurance recovery receivable	$ 155,000

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RENTAL INCOME (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
RENTAL INCOME
Percentage of rental income related to residential apartments and condominium units with leases of one year or less	93.00%
Maximum period of non-cancelable operating lease	1 year
Percentage of rental income related to commercial properties	7.00%
Minimum future rental income
2017	$ 2,434,000
2018	2,066,000
2019	1,634,000
2020	1,065,000
2021	763,000
Thereafter	356,000
Commercial Property Leases	8,318,000
Aggregate contingent rentals from continuing operations	$ 444,000	$ 521,000

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RENTAL INCOME (Concentration) (Details)	9 Months Ended
	Sep. 30, 2016
Commercial rental income | Major tenant
Concentration Risk
Concentration risk percentage	22.00%

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RENTAL INCOME (Commercial Leases) (Details)	9 Months Ended
	Sep. 30, 2016 USD ($) ft² item
RENTAL INCOME
Annual base rent for expiring leases | $	$ 2,840,470
Total square feet for expiring leases | ft²	108,043
Total number of leases expiring | item	44
Percentage of annual base rent for expiring leases	100.00%
2017
RENTAL INCOME
Annual base rent for expiring leases | $	$ 577,694
Total square feet for expiring leases | ft²	25,179
Total number of leases expiring | item	11
Percentage of annual base rent for expiring leases	20.00%
2018
RENTAL INCOME
Annual base rent for expiring leases | $	$ 367,293
Total square feet for expiring leases | ft²	11,507
Total number of leases expiring | item	7
Percentage of annual base rent for expiring leases	13.00%
2019
RENTAL INCOME
Annual base rent for expiring leases | $	$ 707,687
Total square feet for expiring leases | ft²	25,029
Total number of leases expiring | item	13
Percentage of annual base rent for expiring leases	24.00%
2020
RENTAL INCOME
Annual base rent for expiring leases | $	$ 215,165
Total square feet for expiring leases | ft²	6,409
Total number of leases expiring | item	5
Percentage of annual base rent for expiring leases	8.00%
2021
RENTAL INCOME
Annual base rent for expiring leases | $	$ 784,588
Total square feet for expiring leases | ft²	34,248
Total number of leases expiring | item	6
Percentage of annual base rent for expiring leases	28.00%
2022
RENTAL INCOME
Annual base rent for expiring leases | $	$ 30,600
Total square feet for expiring leases | ft²	900
Total number of leases expiring | item	1
Percentage of annual base rent for expiring leases	1.00%
2023
RENTAL INCOME
Percentage of annual base rent for expiring leases	0.00%
2024
RENTAL INCOME
Annual base rent for expiring leases | $	$ 157,443
Total square feet for expiring leases | ft²	4,771
Total number of leases expiring | item	1
Percentage of annual base rent for expiring leases	6.00%
2025
RENTAL INCOME
Percentage of annual base rent for expiring leases	0.00%
2026
RENTAL INCOME
Percentage of annual base rent for expiring leases	0.00%

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RENTAL INCOME (Rent Receivable) (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
RENTAL INCOME
Allowance for doubtful rent receivable	$ 666,000	$ 373,000
Recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis	115,000
Deferred rental concession	111,000
Amortization of deferred rents	$ 2,000

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CASH FLOW INFORMATION (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
CASH FLOW INFORMATION
Cash paid for interest	$ 7,457,000	$ 7,214,000
Cash paid for state income taxes	$ 42,000	$ 19,000

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FAIR VALUE MEASUREMENTS (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Mortgage Notes Payable
Carrying Amount	$ 213,089,003	$ 194,500,820
Estimated Fair Value	231,415,786	205,240,993
Partially owned properties
Mortgage Notes Payable
Carrying Amount	130,551,992	135,657,988
Estimated Fair Value	$ 138,000,688	$ 142,512,272

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TAXABLE INCOME AND TAX BASIS (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
TAXABLE INCOME AND TAX BASIS
Excess amount of statement income over taxable income					$ 1,667,000
Excess amount of cumulative statement basis over cumulative taxable basis					7,000,000
Excess amount of statement income from joint venture investments over taxable income					1,500,000
Reconciliation of GAAP net income to taxable income
Financial statement ("book") net income	$ 1,210,747	$ 1,073,746	$ 3,422,098	$ 2,579,861
Reconciliation of Income from Book Basis to Tax Basis Profit (Loss) Tax Basis					$ 2,106,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details)	9 Months Ended
	Sep. 30, 2016 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
Management Company [Member]
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of employees having ownership interest in the investment properties	6
Minimum | Limited Partnerships
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)	40.00%
Minimum | Harold Brown
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)	43.20%
Maximum | Limited Partnerships
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)	50.00%
Maximum | Harold Brown
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)	57.00%

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Dexter) (Details)	Oct. 28, 2009 USD ($) item	Sep. 30, 2016 USD ($)	Dec. 31, 2015 USD ($)
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture		$ 8,970,289	$ 7,819,162
Outstanding amount of mortgage		213,089,003	$ 194,500,820
Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture	$ 15,925,000
Ownership interest (as a percent)	40.00%
Number of units | item	409
Purchase price of investments	$ 129,500,000
Dexter Park | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
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		$ 83,686,000
Borrowings	$ 89,914,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton Bay Apts and Sales) (Details)	1 Months Ended
	Feb. 28, 2007 item	Sep. 30, 2016 USD ($) item	Dec. 31, 2015 USD ($)
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture | $		$ 8,970,289	$ 7,819,162
Outstanding amount of mortgage | $		$ 213,089,003	$ 194,500,820
Hamilton Bay Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units refinanced | item	48
Condominium
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units | item		19
Mortgages payable | Minimum
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)		2.51%
Mortgages payable | Maximum
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)		5.97%

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton Essex) (Details)				9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 28, 2015 USD ($)	Mar. 07, 2005 USD ($) item	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture				$ 8,970,289		$ 7,819,162
Distribution to the Partnership				$ 2,810,776	$ 2,845,573
Hamilton Essex Development, LLC and Hamilton Essex 81, LLC
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture			$ 2,000,000
Ownership interest (as a percent)			50.00%
Purchase price of investments			$ 14,300,000
Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units | item			48
Capital contributions		$ 100,000
Distribution to the Partnership	$ 978,193
Hamilton Essex Development
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Capacity of real estate property (in cars per lot) | item			50
Capital contributions		978,193
Minimum | Limited Partnerships
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)				40.00%
Maximum | Limited Partnerships
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)				50.00%
Mortgages payable | Hamilton Essex Development, LLC and Hamilton Essex 81, LLC
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Borrowings			$ 10,750,000
Mortgages payable | Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Mortgage amount				$ 9,876,000
Term of debt	10 years
Borrowings	$ 10,000,000
Mortgages payable | Hamilton Essex 81 | LIBOR
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Margin over basis of interest rate (as a percent)	2.18%
Mortgages payable | Hamilton Essex Development
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Repayment of loan		$ 1,952,286
Mortgages payable | Minimum
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)				2.51%
Mortgages payable | Maximum
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)				5.97%

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton 1025) (Details)			3 Months Ended
	Jul. 08, 2016 USD ($)	Mar. 02, 2005 USD ($) item	Sep. 30, 2016 USD ($) property	Dec. 31, 2015 USD ($)
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture			$ 8,970,289	$ 7,819,162
Outstanding amount of mortgage			$ 213,089,003	$ 194,500,820
Hamilton 1025
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture		$ 2,352,000
Ownership interest (as a percent)		50.00%
Number of units | item		176
Number of units sold		127	6
Unsold units | property			48
Number of units retained for long-term investment | item		49
Capital contributions	$ 2,359,500
Purchase price of investments		$ 23,750,000
Gain on sale of assets			$ 802,000
Hamilton 1025 | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Term of debt		10 years
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
Borrowings		$ 5,000,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton Minuteman) (Details)		1 Months Ended		9 Months Ended
	Sep. 12, 2016 USD ($)	Jan. 31, 2007 USD ($)	Oct. 31, 2004 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2006 USD ($)	Sep. 30, 2004 USD ($) item
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture				$ 8,970,289		$ 7,819,162
Distribution to the Partnership				2,810,776	$ 2,845,573
Outstanding amount of mortgage				$ 213,089,003		$ 194,500,820
Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture								$ 5,075,000
Ownership interest (as a percent)								50.00%
Number of units | item								42
Cash contribution by the entity towards loan							$ 1,250,000
Purchase price of investments								$ 10,100,000
Amount returned to partnership			$ 3,775,000
Mortgages payable | Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Mortgage amount	$ 6,000,000
Distribution to the Partnership	385,000
Term of debt		10 years
Amount of mortgage paid off	5,158,000
Refinancing costs	$ 123,000
Interest rate (as a percent)	3.71%	5.67%
Period for which the entity is required to make interest only payments	15 years	5 years
Amortization period of debt		30 years
Borrowings		$ 5,500,000	$ 8,025,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton on Main) (Details)	1 Months Ended	9 Months Ended		12 Months Ended
	Aug. 31, 2014 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2005 USD ($)	Dec. 31, 2015 USD ($)	Aug. 31, 2004 USD ($) item
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture		$ 8,970,289			$ 7,819,162
Distribution to the Partnership		2,810,776	$ 2,845,573
Hamilton on Main Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture						$ 8,000,000
Ownership interest (as a percent)						50.00%
Number of units | item						280
Number of units sold | item						137
Purchase price of investments						$ 56,000,000
Mortgages payable | Hamilton on Main Apartments, LLC
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Term of debt	10 years			10 years
Mortgage amount		$ 16,773,000
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
Debt Instrument, Loan Proceeds distributed to the Partnership	$ 850,000
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
Cost associated with loan extension	161,000
Borrowings	$ 16,900,000			$ 16,825,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (345 Franklin) (Details)	1 Months Ended	9 Months Ended
	Jun. 30, 2013 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)	Nov. 30, 2001 USD ($) item
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture		$ 8,970,289		$ 7,819,162
Distribution to the Partnership		2,810,776	$ 2,845,573
Outstanding amount of mortgage		213,089,003		$ 194,500,820
345 Franklin | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Mortgage amount		$ 9,892,000
Maximum | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)		5.97%
345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture					$ 1,533,000
Ownership interest (as a percent)					50.00%
Number of units | item					40
Distribution to the Partnership	$ 1,610,000
345 Franklin | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Term of debt	15 years
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
Repayment of loan	$ 6,776,000
Borrowings	$ 10,000,000

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Balance Sheet) (Details)	Sep. 30, 2016 USD ($) property	Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($) property	Oct. 28, 2009 USD ($) item	Oct. 03, 2005 USD ($) item	Mar. 07, 2005 item	Mar. 02, 2005 USD ($) item	Sep. 30, 2004 USD ($) item	Aug. 31, 2004 USD ($) item	Nov. 30, 2001 USD ($) item
LIABILITIES AND PARTNERS' CAPITAL
Investment in Unconsolidated Joint Ventures	$ 8,970,289	$ 7,819,162
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	(2,481,546)	$ (2,288,090)
Investment Properties
ASSETS
Rental Properties	144,074,716		$ 149,963,482
Cash & Cash Equivalents	1,875,141		1,547,689
Rent Receivable	431,805		139,874
Real Estate Tax Escrow	1,221,204		651,669
Prepaid Expenses & Other Assets	2,446,530		2,472,810
Total Assets	150,049,396		154,775,524
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	130,551,992		136,031,781
Accounts Payable and Accrued Expenses	1,080,567		1,219,501
Advance Rental Payments and Security Deposits	3,615,158		3,348,213
Total Liabilities	135,247,717		140,599,495
Partners' Capital	14,801,679		14,176,029
Total Liabilities and Capital	150,049,396		154,775,524
Investment in Unconsolidated Joint Ventures	8,970,289		8,299,289
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	(2,481,546)		(2,212,081)
Total Investment in Unconsolidated Joint Ventures (Net)	$ 6,488,743		$ 6,087,208
Total units/ condominiums
Total | property	1,033		1,033
Units to be retained | property	689		786
Units to be sold | property	344		247
Units sold | property	252		241
Unsold units | property	44		6
Units unsold with deposits for future sale | property	3		1
Investment Properties | Residential buildings
Total units/ condominiums
Total | property	1,030		1,030
Investment Properties | Commercial
Total units/ condominiums
Total | property	3		3
Hamilton Essex 81
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$ 9,875,898
Total units/ condominiums
Total | item						48
Hamilton Essex 81 | NERA 50%
ASSETS
Rental Properties	8,129,487		$ 8,511,004
Cash & Cash Equivalents	142,274		73,595
Rent Receivable	49,547		40,921
Real Estate Tax Escrow	81,827		104,165
Prepaid Expenses & Other Assets	172,746		121,531
Total Assets	8,575,881		8,851,216
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	9,875,898		9,862,109
Accounts Payable and Accrued Expenses	59,117		60,815
Advance Rental Payments and Security Deposits	225,843		185,386
Total Liabilities	10,160,858		10,108,310
Partners' Capital	(1,584,977)		(1,257,094)
Total Liabilities and Capital	$ 8,575,881		$ 8,851,216
Partners' Capital % - NERA	50.00%		50.00%
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	$ (792,488)		$ (628,547)
Total units/ condominiums
Total | property	49		49
Units to be retained | property	49		49
Hamilton Essex 81 | Residential buildings | NERA 50%
Total units/ condominiums
Total | property	48		48
Hamilton Essex 81 | Commercial | NERA 50%
Total units/ condominiums
Total | property	1		1
Hamilton Essex Development | NERA 50%
ASSETS
Rental Properties	$ 2,616,545		$ 2,619,374
Cash & Cash Equivalents	52,323		81,236
Prepaid Expenses & Other Assets	982		903
Total Assets	2,669,850		2,701,513
LIABILITIES AND PARTNERS' CAPITAL
Accounts Payable and Accrued Expenses	1,275		1,133
Total Liabilities	1,275		1,133
Partners' Capital	2,668,575		2,700,380
Total Liabilities and Capital	$ 2,669,850		$ 2,701,513
Partners' Capital % - NERA	50.00%		50.00%
Investment in Unconsolidated Joint Ventures	$ 1,334,288		$ 1,350,188
Total units/ condominiums
Total | property	1		1
Units to be retained | property	1		1
Hamilton Essex Development | Commercial | NERA 50%
Total units/ condominiums
Total | property	1		1
345 Franklin
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$ 9,892,225
Partners' Capital % - NERA										50.00%
Investment in Unconsolidated Joint Ventures										$ 1,533,000
Total units/ condominiums
Total | item										40
345 Franklin | NERA 50%
ASSETS
Rental Properties	6,521,385		$ 6,859,314
Cash & Cash Equivalents	199,544		79,265
Rent Receivable	18,009		8,582
Real Estate Tax Escrow	45,014		42,400
Prepaid Expenses & Other Assets	54,156		45,606
Total Assets	6,838,108		7,035,167
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	9,892,225		9,915,104
Accounts Payable and Accrued Expenses	78,095		83,754
Advance Rental Payments and Security Deposits	245,904		203,378
Total Liabilities	10,216,224		10,202,236
Partners' Capital	(3,378,116)		(3,167,069)
Total Liabilities and Capital	$ 6,838,108		$ 7,035,167
Partners' Capital % - NERA	50.00%		50.00%
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	$ (1,689,058)		$ (1,583,534)
Total units/ condominiums
Total | property	40		40
Units to be retained | property	40		40
345 Franklin | Residential buildings | NERA 50%
Total units/ condominiums
Total | property	40		40
Hamilton 1025
LIABILITIES AND PARTNERS' CAPITAL
Partners' Capital % - NERA							50.00%
Investment in Unconsolidated Joint Ventures							$ 2,352,000
Total units/ condominiums
Total | item							176
Units to be retained | item							(49)
Units sold	6						127
Unsold units | property	48
Hamilton 1025 | NERA 50%
ASSETS
Rental Properties	$ 4,074,383		$ 4,997,692
Cash & Cash Equivalents	155,921		1,029
Rent Receivable	35,302		4,272
Real Estate Tax Escrow	659,841		75,984
Prepaid Expenses & Other Assets			55,877
Total Assets	4,925,447		5,134,854
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable			4,746,249
Accounts Payable and Accrued Expenses	51,206		21,998
Advance Rental Payments and Security Deposits	79,732		95,656
Total Liabilities	130,938		4,863,903
Partners' Capital	4,794,509		270,951
Total Liabilities and Capital	$ 4,925,447		$ 5,134,854
Partners' Capital % - NERA	50.00%		50.00%
Investment in Unconsolidated Joint Ventures	$ 2,397,254		$ 135,476
Total units/ condominiums
Total | property	176		176
Units to be retained | property			49
Units to be sold | property	176		127
Units sold | property	133		127
Unsold units | property	43
Units unsold with deposits for future sale | property	3
Hamilton 1025 | Residential buildings | NERA 50%
Total units/ condominiums
Total | property	175		175
Hamilton 1025 | Commercial | NERA 50%
Total units/ condominiums
Total | property	1		1
Hamilton Bay Sales | NERA 50%
ASSETS
Rental Properties	$ 124,752		$ 672,579
Cash & Cash Equivalents	97,332		8,171
Rent Receivable	3,000		100
Real Estate Tax Escrow	171
Prepaid Expenses & Other Assets			211,856
Total Assets	225,255		892,706
LIABILITIES AND PARTNERS' CAPITAL
Accounts Payable and Accrued Expenses	3,947		23,055
Advance Rental Payments and Security Deposits	2,380		5,695
Total Liabilities	6,327		28,750
Partners' Capital	218,928		863,956
Total Liabilities and Capital	$ 225,255		$ 892,706
Partners' Capital % - NERA	50.00%		50.00%
Investment in Unconsolidated Joint Ventures	$ 109,464		$ 431,978
Total units/ condominiums
Total | property	120		120
Units to be sold | property	120		120
Units sold | property	119		114
Unsold units | property	1		6
Units unsold with deposits for future sale | property			1
Hamilton Bay Sales | Residential buildings | NERA 50%
Total units/ condominiums
Total | property	120		120
Hamilton Bay Apts
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$ 4,447,269
Partners' Capital % - NERA					50.00%
Investment in Unconsolidated Joint Ventures					$ 2,500,000
Total units/ condominiums
Total | item					168
Units to be retained | item					(48)
Units sold | item					120
Hamilton Bay Apts | NERA 50%
ASSETS
Rental Properties	5,956,617		$ 6,212,058
Cash & Cash Equivalents	1,121		3,998
Rent Receivable	15,687		2,820
Real Estate Tax Escrow	44,049		55,215
Prepaid Expenses & Other Assets	78,234		60,886
Total Assets	6,095,708		6,334,977
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	4,447,269		4,512,848
Accounts Payable and Accrued Expenses	9,809		6,934
Advance Rental Payments and Security Deposits	93,716		86,897
Total Liabilities	4,550,794		4,606,679
Partners' Capital	1,544,914		1,728,298
Total Liabilities and Capital	$ 6,095,708		$ 6,334,977
Partners' Capital % - NERA	50.00%		50.00%
Investment in Unconsolidated Joint Ventures	$ 772,457		$ 864,149
Total units/ condominiums
Total | property	48		48
Units to be retained | property			48
Units to be sold | property	48
Hamilton Bay Apts | Residential buildings | NERA 50%
Total units/ condominiums
Total | property	48		48
Hamilton Minuteman
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$ 5,877,338
Partners' Capital % - NERA								50.00%
Investment in Unconsolidated Joint Ventures								$ 5,075,000
Total units/ condominiums
Total | item								42
Hamilton Minuteman | NERA 50%
ASSETS
Rental Properties	6,206,120		$ 6,371,641
Cash & Cash Equivalents	89,502		60,545
Rent Receivable	980		692
Real Estate Tax Escrow	37,762		39,403
Prepaid Expenses & Other Assets	67,687		39,742
Total Assets	6,402,051		6,512,023
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	5,877,338		5,228,371
Accounts Payable and Accrued Expenses	42,713		59,805
Advance Rental Payments and Security Deposits	112,168		107,428
Total Liabilities	6,032,219		5,395,604
Partners' Capital	369,832		1,116,419
Total Liabilities and Capital	$ 6,402,051		$ 6,512,023
Partners' Capital % - NERA	50.00%		50.00%
Investment in Unconsolidated Joint Ventures	$ 184,916		$ 558,210
Total units/ condominiums
Total | property	42		42
Units to be retained | property	42		42
Hamilton Minuteman | Residential buildings | NERA 50%
Total units/ condominiums
Total | property	42		42
Hamilton on Main Apts
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$ 16,772,927
Partners' Capital % - NERA									50.00%
Investment in Unconsolidated Joint Ventures									$ 8,000,000
Total units/ condominiums
Total | item									280
Units sold | item									137
Hamilton on Main Apts | NERA 50%
ASSETS
Rental Properties	17,972,191		$ 18,785,662
Cash & Cash Equivalents	100,273		216,613
Rent Receivable	20,473		12,320
Real Estate Tax Escrow	135,659		91,842
Prepaid Expenses & Other Assets	94,299		84,849
Total Assets	18,322,895		19,191,286
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	16,772,927		16,756,876
Accounts Payable and Accrued Expenses	140,981		207,573
Advance Rental Payments and Security Deposits	361,929		314,676
Total Liabilities	17,275,837		17,279,125
Partners' Capital	1,047,058		1,912,161
Total Liabilities and Capital	$ 18,322,895		$ 19,191,286
Partners' Capital % - NERA	50.00%		50.00%
Investment in Unconsolidated Joint Ventures	$ 523,529		$ 956,080
Total units/ condominiums
Total | property	148		148
Units to be retained | property	148		148
Hamilton on Main Apts | Residential buildings | NERA 50%
Total units/ condominiums
Total | property	148		148
Dexter Park
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$ 83,686,335
Partners' Capital % - NERA				40.00%
Investment in Unconsolidated Joint Ventures				$ 15,925,000
Total units/ condominiums
Total | item				409
Dexter Park | NERA 40%
ASSETS
Rental Properties	92,473,236		$ 94,934,158
Cash & Cash Equivalents	1,036,851		1,023,237
Rent Receivable	288,807		70,167
Real Estate Tax Escrow	216,881		242,660
Prepaid Expenses & Other Assets	1,978,426		1,851,560
Total Assets	95,994,201		98,121,782
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	83,686,335		85,010,224
Accounts Payable and Accrued Expenses	693,424		754,434
Advance Rental Payments and Security Deposits	2,493,486		2,349,097
Total Liabilities	86,873,245		88,113,755
Partners' Capital	9,120,956		10,008,027
Total Liabilities and Capital	$ 95,994,201		$ 98,121,782
Partners' Capital % - NERA	40.00%		40.00%
Investment in Unconsolidated Joint Ventures	$ 3,648,382		$ 4,003,209
Total units/ condominiums
Total | property	409		409
Units to be retained | property	409		409
Dexter Park | Residential buildings | NERA 40%
Total units/ condominiums
Total | property	409		409

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Income) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Oct. 28, 2009	Oct. 03, 2005	Mar. 02, 2005	Sep. 30, 2004	Aug. 31, 2004	Nov. 30, 2001
Investment Properties
Revenues
Rental income	$ 5,899,236	$ 5,899,665	$ 18,015,365	$ 17,521,757
Laundry and Sundry Income	35,733	41,871	121,767	111,211
Total Revenues	5,934,969	5,941,536	18,137,132	17,632,968
Expenses
Administrative	78,481	117,058	247,198	279,475
Depreciation and amortization	1,490,841	1,479,007	4,445,477	4,411,711
Management Fees	167,430	163,883	521,231	507,372
Operating	411,294	411,157	1,305,617	1,483,547
Renting	166,929	49,225	256,965	108,602
Repairs and Maintenance	905,924	778,526	2,315,834	1,985,085
Taxes and Insurance	721,094	708,364	2,157,764	2,037,201
Total Expenses	3,941,993	3,707,220	11,250,086	10,812,993
Income Before Other Income	1,992,976	2,234,316	6,887,046	6,819,975
Other Income (loss)
Interest Expense	(1,739,192)	(1,887,919)	(5,320,441)	(5,630,557)
Interest Income	1	3	10	107
Other Income (Expense)				76,523
Gain on Sale of Real Estate	901,980	76,648	1,137,450
Total Other Income (Loss)	(837,211)	(1,811,268)	(4,182,981)	(5,553,927)
Net Income (Loss)	1,155,765	423,048	2,704,065	1,266,048
Proportionate share of net income (loss)	562,584	177,890	1,220,666	524,710
Investment Properties | NERA 50%
Other Income (loss)
Proportionate share of net income (loss)	501,394	43,347	695,197	91,454
Investment Properties | NERA 40%
Other Income (loss)
Proportionate share of net income (loss)	61,190	134,543	525,469	433,256
Hamilton Essex 81 | NERA 50%
Revenues
Rental income	371,228	368,163	1,139,145	1,090,071
Laundry and Sundry Income	2,675	7,622	11,032	10,114
Total Revenues	373,903	375,785	1,150,177	1,100,185
Expenses
Administrative	5,660	8,781	25,757	17,087
Depreciation and amortization	113,626	110,629	338,820	326,816
Management Fees	17,216	14,929	47,267	46,666
Operating	24,073	22,961	74,431	81,724
Renting	16,965	2,185	23,804	8,906
Repairs and Maintenance	44,248	44,380	120,332	110,815
Taxes and Insurance	56,037	54,826	171,345	161,702
Total Expenses	277,825	258,691	801,756	753,716
Income Before Other Income	96,078	117,094	348,421	346,469
Other Income (loss)
Interest Expense	(72,768)	(122,433)	(214,415)	(367,955)
Total Other Income (Loss)	(72,768)	(122,433)	(214,415)	(367,955)
Net Income (Loss)	23,310	(5,339)	134,006	(21,486)
Proportionate share of net income (loss)	$ 11,655	$ (2,670)	$ 67,003	$ (10,743)
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
Hamilton Essex Development | NERA 50%
Revenues
Rental income	$ 60,000	$ 72,523	$ 180,000	$ 217,568
Total Revenues	60,000	72,523	180,000	217,568
Expenses
Administrative	425	425	1,314	1,434
Depreciation and amortization	707	708	2,122	2,122
Management Fees	2,400	2,912	7,200	8,714
Repairs and Maintenance		200	3,150	200
Taxes and Insurance	14,062	12,659	44,664	39,503
Total Expenses	17,594	16,904	58,450	51,973
Income Before Other Income	42,406	55,619	121,550	165,595
Other Income (loss)
Interest Expense		(14,882)		(46,283)
Total Other Income (Loss)		(14,882)		(46,283)
Net Income (Loss)	42,406	40,737	121,550	119,312
Proportionate share of net income (loss)	$ 21,203	$ 20,369	$ 60,775	$ 59,655
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
345 Franklin
Other Income (loss)
Ownership interest (as a percent)										50.00%
345 Franklin | NERA 50%
Revenues
Rental income	$ 364,649	$ 354,840	$ 1,089,610	$ 1,033,115
Laundry and Sundry Income	725		2,823	323
Total Revenues	365,374	354,840	1,092,433	1,033,438
Expenses
Administrative	7,071	11,531	23,269	25,912
Depreciation and amortization	86,988	92,140	260,819	276,396
Management Fees	15,033	13,731	45,858	42,971
Operating	16,670	16,055	53,336	67,241
Renting	4,369	3,544	14,910	12,649
Repairs and Maintenance	19,499	26,888	48,832	45,950
Taxes and Insurance	30,006	29,873	94,429	89,750
Total Expenses	179,636	193,762	541,453	560,869
Income Before Other Income	185,738	161,078	550,980	472,569
Other Income (loss)
Interest Expense	(99,433)	(99,632)	(298,442)	(298,900)
Total Other Income (Loss)	(99,433)	(99,632)	(298,442)	(298,900)
Net Income (Loss)	86,305	61,446	252,538	173,669
Proportionate share of net income (loss)	$ 43,153	$ 30,723	$ 126,270	$ 86,834
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
Hamilton 1025
Other Income (loss)
Ownership interest (as a percent)							50.00%
Hamilton 1025 | NERA 50%
Revenues
Rental income	$ 177,852	$ 236,343	$ 650,328	$ 713,771
Total Revenues	177,852	236,343	650,328	713,771
Expenses
Administrative	5,684	2,338	8,429	5,500
Depreciation and amortization	58,998	59,312	177,062	176,861
Management Fees	6,293	9,442	24,220	28,273
Operating	147	183	732	531
Renting			1,789
Repairs and Maintenance	76,499	79,646	232,398	235,033
Taxes and Insurance	35,405	40,360	121,614	126,255
Total Expenses	183,026	191,281	566,244	572,453
Income Before Other Income	(5,174)	45,062	84,084	141,318
Other Income (loss)
Interest Expense	(10,638)	(70,688)	(149,327)	(210,641)
Interest Income	1	3	10	11
Gain on Sale of Real Estate	802,129		802,129
Total Other Income (Loss)	791,492	(70,685)	652,812	(210,630)
Net Income (Loss)	786,318	(25,623)	736,896	(69,312)
Proportionate share of net income (loss)	$ 393,158	$ (12,812)	$ 368,448	$ (34,656)
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
Hamilton Bay Sales | NERA 50%
Revenues
Rental income	$ 8,625	$ 19,080	$ 36,315	$ 78,548
Total Revenues	8,625	19,080	36,315	78,548
Expenses
Administrative	2,328	1,863	5,312	6,537
Depreciation and amortization	6,292	8,988	18,876	26,961
Management Fees	336	820	1,412	3,143
Operating	58	271	257	476
Renting		159
Repairs and Maintenance	5,187	10,879	18,756	34,914
Taxes and Insurance	1,300	5,479	8,371	16,415
Total Expenses	15,501	28,459	52,984	88,446
Income Before Other Income	(6,876)	(9,379)	(16,669)	(9,898)
Other Income (loss)
Interest Expense	(6)	(55)	(65)	(268)
Other Income (Expense)				76,523
Gain on Sale of Real Estate	99,851	76,648	335,321
Total Other Income (Loss)	99,845	76,593	335,256	76,255
Net Income (Loss)	92,969	67,214	318,587	66,357
Proportionate share of net income (loss)	$ 46,485	$ 33,607	$ 159,294	$ 33,179
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
Hamilton Bay Apts
Other Income (loss)
Ownership interest (as a percent)						50.00%
Hamilton Bay Apts | NERA 50%
Revenues
Rental income	$ 230,491	$ 246,892	$ 724,848	$ 733,978
Total Revenues	230,491	246,892	724,848	733,978
Expenses
Administrative	2,386	1,883	8,257	5,507
Depreciation and amortization	79,953	79,016	238,807	235,126
Management Fees	8,964	9,482	28,568	28,914
Operating	356	208	1,364	917
Renting	3,400		4,354	2,350
Repairs and Maintenance	104,886	87,765	305,491	273,982
Taxes and Insurance	40,318	38,861	124,296	115,086
Total Expenses	240,263	217,215	711,137	661,882
Income Before Other Income	(9,772)	29,677	13,711	72,096
Other Income (loss)
Interest Expense	(65,351)	(66,763)	(196,329)	(199,183)
Total Other Income (Loss)	(65,351)	(66,763)	(196,329)	(199,183)
Net Income (Loss)	(75,123)	(37,086)	(182,618)	(127,087)
Proportionate share of net income (loss)	$ (37,562)	$ (18,543)	$ (91,309)	$ (63,544)
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
Hamilton Minuteman
Other Income (loss)
Ownership interest (as a percent)								50.00%
Hamilton Minuteman | NERA 50%
Revenues
Rental income	$ 251,118	$ 231,545	$ 742,872	$ 699,019
Laundry and Sundry Income	44		343
Total Revenues	251,162	231,545	743,215	699,019
Expenses
Administrative	2,625	1,032	5,225	3,724
Depreciation and amortization	85,288	82,190	254,869	243,699
Management Fees	10,469	9,529	30,392	28,974
Operating	20,614	17,946	66,845	64,428
Renting	819	1,877	5,621	6,623
Repairs and Maintenance	(45,582)	23,864	65,358	56,628
Taxes and Insurance	30,997	30,972	90,496	92,943
Total Expenses	105,230	167,410	518,806	497,019
Income Before Other Income	145,932	64,135	224,409	202,000
Other Income (loss)
Interest Expense	(74,324)	(77,815)	(226,672)	(231,356)
Total Other Income (Loss)	(74,324)	(77,815)	(226,672)	(231,356)
Net Income (Loss)	71,608	(13,680)	(2,263)	(29,356)
Proportionate share of net income (loss)	$ 35,804	$ (6,840)	$ (1,132)	$ (14,678)
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
Hamilton on Main Apts
Other Income (loss)
Ownership interest (as a percent)									50.00%
Hamilton on Main Apts | NERA 50%
Revenues
Rental income	$ 820,748	$ 781,336	$ 2,425,746	$ 2,305,464
Laundry and Sundry Income	10,811	10,888	31,445	33,335
Total Revenues	831,559	792,224	2,457,191	2,338,799
Expenses
Administrative	11,545	12,414	31,677	32,349
Depreciation and amortization	241,279	239,747	718,340	714,838
Management Fees	33,611	30,816	97,873	91,870
Operating	81,583	111,793	232,598	296,685
Renting	3,590	2,300	13,106	5,701
Repairs and Maintenance	180,736	114,683	407,989	297,165
Taxes and Insurance	110,147	87,515	365,969	253,816
Total Expenses	662,491	599,268	1,867,552	1,692,424
Income Before Other Income	169,068	192,956	589,639	646,375
Other Income (loss)
Interest Expense	(194,071)	(193,932)	(577,942)	(575,661)
Interest Income				96
Total Other Income (Loss)	(194,071)	(193,932)	(577,942)	(575,565)
Net Income (Loss)	(25,003)	(976)	11,697	70,810
Proportionate share of net income (loss)	$ (12,502)	$ (488)	$ 5,848	$ 35,405
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
Dexter Park
Other Income (loss)
Ownership interest (as a percent)					40.00%
Dexter Park | NERA 40%
Revenues
Rental income	$ 3,614,525	$ 3,588,943	$ 11,026,501	$ 10,650,223
Laundry and Sundry Income	21,478	23,361	76,124	67,439
Total Revenues	3,636,003	3,612,304	11,102,625	10,717,662
Expenses
Administrative	40,757	76,791	137,958	181,425
Depreciation and amortization	817,710	806,277	2,435,762	2,408,892
Management Fees	73,108	72,222	238,441	227,847
Operating	267,793	241,740	876,054	971,545
Renting	137,786	39,160	193,381	72,373
Repairs and Maintenance	520,451	390,221	1,113,528	930,398
Taxes and Insurance	402,822	407,819	1,136,580	1,141,731
Total Expenses	2,260,427	2,034,230	6,131,704	5,934,211
Income Before Other Income	1,375,576	1,578,074	4,970,921	4,783,451
Other Income (loss)
Interest Expense	(1,222,601)	(1,241,719)	(3,657,249)	(3,700,310)
Total Other Income (Loss)	(1,222,601)	(1,241,719)	(3,657,249)	(3,700,310)
Net Income (Loss)	152,975	336,355	1,313,672	1,083,141
Proportionate share of net income (loss)	$ 61,190	$ 134,543	$ 525,469	$ 433,256
Ownership interest (as a percent)	40.00%	40.00%	40.00%	40.00%

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Mortgage Maturities) (Details) - USD ($)	Sep. 30, 2016	Sep. 30, 2015
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Weighted average interest rate (as a percent)	4.98%
Effective interest rate (as a percent)	5.06%
Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Thereafter	$ 10,000,000
Total	10,000,000
Less: unamortized deferred financing costs	(124,102)
Debt maturities net of unamortized deferred financing costs	9,875,898
345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
9/30/2017	181,277
9/30/2018	188,419
9/30/2019	195,841
9/30/2020	203,556
9/30/2021	211,575
Thereafter	8,989,794
Total	9,970,462
Less: unamortized deferred financing costs	(78,237)
Debt maturities net of unamortized deferred financing costs	9,892,225
Hamilton Bay Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
9/30/2017	4,449,655
Total	4,449,655
Less: unamortized deferred financing costs	(2,386)
Debt maturities net of unamortized deferred financing costs	4,447,269
Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Thereafter	6,000,000
Total	6,000,000
Less: unamortized deferred financing costs	(122,662)
Debt maturities net of unamortized deferred financing costs	5,877,338
Hamilton on Main Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Thereafter	16,900,000
Total	16,900,000
Less: unamortized deferred financing costs	(127,073)
Debt maturities net of unamortized deferred financing costs	16,772,927
Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
9/30/2017	1,564,180
9/30/2018	1,653,563
9/30/2019	1,748,055
9/30/2020	78,899,705
Total	83,865,503
Less: unamortized deferred financing costs	(179,168)
Debt maturities net of unamortized deferred financing costs	83,686,335
Investment Properties
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
9/30/2017	6,195,112
9/30/2018	1,841,982
9/30/2019	1,943,896
9/30/2020	79,103,261
9/30/2021	211,575
Thereafter	41,889,794
Total	131,185,620
Less: unamortized deferred financing costs	(633,628)
Debt maturities net of unamortized deferred financing costs	$ 130,551,992	$ 136,031,781

XML

SUBSEQUENT EVENTS (Details)		1 Months Ended	9 Months Ended	109 Months Ended
	Oct. 26, 2016 $ / shares $ / item	Nov. 04, 2016 USD ($) $ / item shares	Sep. 30, 2016 USD ($) shares	Sep. 30, 2016 $ / item shares	Dec. 31, 2015 $ / item	Sep. 30, 2015 $ / item	Jun. 30, 2015 $ / item	Mar. 31, 2015 $ / item
Subsequent events
Repurchase price of depository receipts (in dollars per receipt) | $ / item				26.81
Number of depository receipts repurchased				1,352,427
Quarterly distribution per unit (in dollars per unit) | $ / item					7.50	7.50	7.50	7.50
Quarterly distributions per depositary receipt (in dollars per receipt) | $ / item					0.25	0.25	0.25	0.25
General Partnership
Subsequent events
Value of units required to be repurchased | $			$ 6,783
Repurchases required (in units)			5
Number of depository receipts repurchased				156
Class B
Subsequent events
Value of units required to be repurchased | $			$ 128,874
Repurchases required (in units)			86
Number of depository receipts repurchased				2,970
Subsequent event
Subsequent events
Repurchase of depository receipts | $		$ 20,605
Repurchase price of units (in dollars per unit) | $ / item		1,803.90
Repurchase price of depository receipts (in dollars per receipt) | $ / item		60.13
Number of depository receipts repurchased		330
Quarterly distribution per unit (in dollars per unit) | $ / item	7.50
Quarterly distributions per depositary receipt (in dollars per receipt) | $ / item	0.25
Special distribution per unit (in dollars per unit) | $ / shares	$ 24
Special distribution per depositary receipt (in dollars per receipt) | $ / shares	$ 0.80
Subsequent event | General Partnership
Subsequent events
Value of units required to be repurchased | $		$ 248
Repurchases required (in units)		0.1
Subsequent event | Class B
Subsequent events
Value of units required to be repurchased | $		$ 4,713
Repurchases required (in units)		2.6

XML

Label	Element	Value
Hamilton Bay Apartments L L C [Member]
Debt Instrument, Term for which Interest Only Payments Required	nen_DebtInstrumentTermForWhichInterestOnlyPaymentsRequired	5 years
Proceeds from Issuance of Debt	us-gaap_ProceedsFromIssuanceOfDebt	$ 4,750,000
Debt Instrument, Amortization Term	nen_DebtInstrumentAmortizationTerm	30 years
Debt Instrument, Interest Rate, Stated Percentage	us-gaap_DebtInstrumentInterestRateStatedPercentage	5.57%
Equity Method Investment, Aggregate Cost	us-gaap_EquityMethodInvestmentAggregateCost	$ 30,875,000
Hamilton Bay Apartments L L C [Member] | Mortgages [Member]
Secured Debt	us-gaap_SecuredDebt	4,447,000
Hamilton Bay L L C [Member]
Partners' Capital Account, Contributions	us-gaap_PartnersCapitalAccountContributions	$ 660,000
Hamilton Bay L L C [Member] | Residential Apartment [Member]
Number of Units in Real Estate Property Unsold	nen_NumberOfUnitsInRealEstatePropertyUnsold	1
Number of Units in Real Estate Property Sold	nen_NumberOfUnitsInRealEstatePropertySold	1
Discontinued Operation, Gain (Loss) on Disposal of Discontinued Operation, Net of Tax	us-gaap_DiscontinuedOperationGainLossOnDisposalOfDiscontinuedOperationNetOfTax	$ 100,000
Hamilton Bay L L C [Member] | Mortgages [Member]
Proceeds from Issuance of Debt	us-gaap_ProceedsFromIssuanceOfDebt	$ 2,368,000
Number of Units in Real Estate Property	us-gaap_NumberOfUnitsInRealEstateProperty	20
Debt Instrument, Interest Rate, Stated Percentage	us-gaap_DebtInstrumentInterestRateStatedPercentage	5.75%