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 March 31, 2024

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, every Interactive Data File required to be submitted 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 such files). Yes ☒   No ☐

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

Large accelerated filer ☐	Accelerated Filer ☒
Non-accelerated filer ☐	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

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

Title of each class:	Trading Symbol	Name of each exchange on which registered:
Class A	NEN	NYSE MKT Exchange

As of May 8, 2024, there were 93,791 of the registrant’s Class A units (2,813,732 Depositary Receipts) of limited partnership issued and outstanding and 22,275 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 March 31, 2024 and December 31, 2023	4
	Consolidated Statements of Income for the Three Months Ended March 31, 2024 and 2023	5
	Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2024 and 2023	6
	Consolidated Statements of Changes in Partners’ Capital for the Three Months Ended March 31, 2024 and 2023	7
	Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosure	38
Item 5.	Other Information	38
Item 6.	Exhibits	39
SIGNATURES		40

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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, statements of comprehensive 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, 2023, 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, 2023.

The results of operations for the three month period ended March 31, 2024 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

	March 31,		December 31,
	2024		2023
ASSETS
Rental Properties	$	270,256,700	$	269,804,946
Cash and Cash Equivalents		28,801,744		18,230,463
Rents Receivable		865,990		953,761
Real Estate Tax Escrows		2,332,010		2,229,703
Investment in U.S. Treasury bills		69,444,998		84,700,751
Prepaid Expenses and Other Assets		8,073,622		8,369,775
Investments in Unconsolidated Joint Ventures		1,416,930		1,441,291
Total Assets	$	381,191,994	$	385,730,690
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	408,060,293	$	408,660,292
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture		26,819,651		26,707,807
Accounts Payable and Accrued Expenses		5,416,975		5,720,088
Advance Rental Payments and Security Deposits		9,936,175		9,996,887
Total Liabilities		450,233,094		451,085,074
Commitments and Contingent Liabilities (Notes 3 and 9)		—		—
Partners’ Capital 117,312 and 117,431 units outstanding in 2024 and 2023 respectively		(69,041,100)		(65,354,384)
	$	381,191,994	$	385,730,690

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended March 31,
	2024		2023
Revenues
Rental income	$	19,710,432	$	17,568,727
Laundry and sundry income		182,967		122,959
		19,893,399		17,691,686
Expenses
Administrative		762,019		737,101
Depreciation and amortization		4,227,582		3,846,260
Management fee		788,607		697,764
Operating		2,645,493		2,533,796
Renting		387,599		191,585
Repairs and maintenance		2,847,957		2,763,136
Taxes and insurance		2,482,368		2,470,679
		14,141,625		13,240,321
Income Before Other Income (Expense)		5,751,774		4,451,365
Other Income (Expense)
Interest income		1,177,547		974,546
Interest expense		(3,907,016)		(3,899,240)
Income from investments in unconsolidated joint ventures		441,291		227,704
		(2,288,178)		(2,696,990)
Net Income	$	3,463,596	$	1,754,375
Net Income per Unit	$	29.51	$	14.72
Weighted Average Number of Units Outstanding		117,354		119,181

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

	Three Months Ended March 31,
	2024		2023
Net income	$	3,463,596	$	1,754,375
Other comprehensive income (loss):
Net unrealized gain (loss) on derivative instruments for interest rate swaps		142,034		(165,887)
Comprehensive income	$	3,605,630	$	1,588,488

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

(Unaudited)

	Units						Partners' Capital
													Accumulated
	Limited		General		Treasury		Limited				General		Comprehensive
	Class A	Class B	Partnership	Subtotal	Units	Total	Class A		Class B		Partnership		Income		Total
Balance January 1, 2023	144,180	34,243	1,802	180,225	60,970	119,255	$	(48,160,462)	$	(11,403,635)	$	(600,191)	$	294,931	$	(59,869,357)
Distribution to Partners	—	—	—	—	—	—		(4,563,508)		(1,083,833)		(57,044)		—		(5,704,385)
Stock Buyback	—	—	—	—	431	(431)		(755,666)		(179,411)		(9,443)		—		(944,520)
Net Income	—	—	—	—	—	—		1,403,500		333,331		17,544		—		1,754,375
Net unrealized (loss) on derivative instruments for interest rate swaps	—	—	—	—	—	—		—		—		—		(165,887)		(165,887)
Balance March 31 , 2023	144,180	34,243	1,802	180,225	61,401	118,824		(52,076,136)		(12,333,548)		(649,134)		129,044		(64,929,774)
Balance January 1, 2024	144,180	34,243	1,802	180,225	62,794	117,431	$	(52,503,128)		(12,433,251)		(654,383)		236,377		(65,354,385)
Distribution to Partners	—	—	—	—				(5,631,164)		(1,337,401)		(70,390)		—		(7,038,955)
Stock Buyback	—	—	—	—	119	(119)		(202,882)		(47,983)		(2,525)		—		(253,390)
Net Income	—	—	—	—	—	—		2,770,877		658,083		34,636		—		3,463,596
Net unrealized gain on derivative instruments for interest rate swaps	—	—	—	—	—	—		—		—		—		142,034		142,034
Balance March 31, 2024	144,180	34,243	1,802	180,225	62,913	117,312	$	(55,566,297)	$	(13,160,552)	$	(692,662)		378,411	$	(69,041,100)

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
	2024		2023
Cash Flows from Operating Activities
Net Income	$	3,463,596	$	1,754,375
Adjustments to reconcile net income to net cash provided by operating activities
Interest accrued on U.S. Treasury bills		(1,161,305)		(971,106)
Depreciation and amortization		4,227,582		3,846,260
Amortization of deferred finance costs		94,946		94,946
(Income) from investments in joint ventures		(441,291)		(227,704)
Change in operating assets and liabilities
Proceeds from unconsolidated joint ventures		52,500		30,000
Decrease (Increase) in rents receivable		87,771		(146,176)
(Decrease) in accounts payable and accrued expense		(303,116)		(2,176,919)
(Increase) in real estate tax escrow		(102,307)		(88,077)
Decrease (Increase) in prepaid expenses and other assets		266,086		(555,260)
(Decrease) Increase in advance rental payments and security deposits		(60,715)		105,204
Total Adjustments		2,660,151		(88,832)
Net cash provided by operating activities		6,123,747		1,665,543
Cash Flows From Investing Activities
Distribution in excess of investment in unconsolidated joint ventures		525,000		550,000
Investment in U.S. Treasury bills		(38,989,940)		(53,713,756)
Proceeds from U.S. Treasury bills		55,407,000		45,000,000
Developing of rental property and other related costs		(2,111,993)		—
Purchase of rental property		—		(8,974,242)
Improvement of rental properties		(2,395,243)		(2,172,877)
Net cash provided by (used in) investing activities		12,434,824		(19,310,875)
Cash Flows from Financing Activities
Principal payments of mortgage notes payable		(694,945)		(611,861)
Stock buyback		(253,390)		(944,520)
Distributions to partners		(7,038,955)		(5,704,385)
Net cash (used in) provided by financing activities		(7,987,290)		(7,260,766)
Net Increase (Decrease) in Cash and Cash Equivalents		10,571,281		(24,906,098)
Cash and Cash Equivalents, at beginning of period		18,230,463		49,560,723
Cash and Cash Equivalents, at end of period	$	28,801,744	$	24,654,625

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Line of Business: New England Realty Associates Limited Partnership (“NERA”, the “Company” or the “Partnership”) was organized in Massachusetts in 1977. NERA and its subsidiaries own 31 properties which include 22 residential buildings; 5 mixed use residential, retail and office buildings; 4 commercial buildings and individual units at one condominium complex. These properties total 2,943 apartment units, 19 condominium units and approximately 130,000 square feet of commercial space. Additionally, the Partnership also owns a 40 - 50% interest in 7 residential and mixed use properties consisting of 688 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. Judgments 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 seven 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 15: 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 some 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 15: 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

9

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. Revenue from commercial leases also include reimbursements and recoveries 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 amounts are accounted for 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.

The Partnership evaluates the non-lease components (lease arrangements that include common area maintenance services) with related lease components (lease revenues). If both the timing and pattern of transfer are the same for the non-lease component and related lease component, the lease component is the predominant component. The Partnership elected an allowed practical expedient. For (i) operating lease arrangements involving real estate that include common area maintenance services and (ii) all real estate arrangements that include real estate taxes and insurance costs, we present these amounts within lease revenues in our consolidated statements of income. We record amounts reimbursed by the lessee in the period in which the applicable expenses are incurred.

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

10

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. Costs directly related to the acquisition, development and construction of rental properties are capitalized. Capitalized development and construction costs include pre-construction costs, development and construction costs, regulatory fees, interest, property taxes, insurance, construction oversight fees, and other project costs incurred during the period of development. The Partnership considers a construction project as substantially completed and held available for occupancy upon the substantial completion of improvements, but no later than one year from cessation of major construction activity.

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 $95,000 and $95,000 for the three months ended March 31, 2024 and 2023, respectively.

Derivative Instruments: The Partnership measures derivative instruments, including certain derivative instruments embedded in other contracts, at fair value and records them as an asset or liability, depending upon the Partnership’s rights or obligations under the applicable derivative contract. For derivatives designated and qualifying as fair value hedges, the changes in the fair value of both the derivative instrument and the hedged item are recorded in earnings. For derivatives designated as cash flow hedges, the effective portions of the derivative are reported in other comprehensive income (“OCI”) and are subsequently reclassified into earnings when the hedged item affects earnings. Changes in fair value of derivative instruments not designated as hedging and ineffective portions of hedges are recognized in earnings in the affected period.

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 has been recorded (See Note 14).

Cash Equivalents: The Partnership considers cash equivalents to be all highly liquid instruments purchased with a maturity of three months or less at the time of purchase, including its investment in money market funds.

Investments in Treasury Bills: Investments in U.S. Treasury bills are recorded at amortized cost and classified as held to maturity as the Partnership has the intent and the ability to hold them until they mature. The carrying value of the Treasury Bills are adjusted for accretion of discounts over the remaining life of the investment. Income related to the Treasury Bills is recognized in interest income in the Partnership’s consolidated statement of income.

11

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.

Other Comprehensive Income (Loss): Other comprehensive income (loss) includes items that are recorded in equity, such as effective portions of derivatives designated as cash flow hedges or unrealized holding gains or losses on marketable securities available for sale. NERA had comprehensive income of approximately $142,000 and a comprehensive loss of approximately $166,000 for the three months ended March 31, 2024 and 2023, respectively.

Income (Loss) 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 2024 or 2023. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At March 31, 2024, 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 4.07%. At March 31, 2024 and December 31, 2023, respectively approximately $29,025,000, and $18,711,000 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 approximately $152,000 and $109,000 for the three months ended March 31, 2024, and 2023, respectively.

Rental Property Held for Sale: When assets are identified by management as held for sale, the Partnership discontinues depreciating the assets and estimates the sales price, net of selling costs, of such assets. The Partnership generally considers assets to be held for sale when the transaction has received appropriate corporate authority, and there are no significant contingencies relating to the sale. If, in management’s opinion, the estimated net sales price, net of selling costs, of the assets which have been identified as held for sale is less than the carrying value of the assets, a valuation allowance is established.

Interest Capitalized: The Partnership follows the policy of capitalizing interest as a component of the cost of rental property when the time of construction exceeds one year. During the three months ended March 31, 2024, and 2023 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 refinancings qualify as extinguishment of debt.

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

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NOTE 2. RENTAL PROPERTIES

As of March 31, 2024, the Partnership and its Subsidiary Partnerships owned 2,943 residential apartment units in 27 residential and mixed-use complexes (collectively, the “Apartment Complexes”). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the “Condominium Units”). The Apartment Complexes and Condominium Units are located primarily in the metropolitan Boston area of Massachusetts.

Additionally, as of March 31, 2024, the Partnership and Subsidiary Partnerships owned two commercial shopping centers in Framingham, commercial buildings in Newton and Brookline and commercial space in 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 seven residential and mixed use complexes (the “Investment Properties”) at March 31, 2024 with a total of 688 apartment units, accounted for using the equity method of consolidation. See Note 15 for summary information on these investments.

The Partnership purchased a commercial retail property of approximately 20,700 square feet, located at 653 Worcester Road in Framingham, Massachusetts for the sum of approximately $10,151,000 on January 18, 2023. This acquisition was funded from the Partnership’s cash reserves and closing costs were approximately $59,000. From the purchase price, the Partnership allocated approximately $585,000 for in-place leases, and approximately $378,000 to the value of tenant relationships. These amounts are being amortized over 12 and 156 months respectively.

On July 14, 2023, the Partnership purchased a 52 unit mixed use property in the South End neighborhood of Boston, Massachusetts comprised of three buildings at 26-30 Rutland Street, 105-117 West Concord Street and 475 Shawmut Avenue, and approximately 3,400 square feet of commercial space for a purchase price of approximately $27,500,000. This acquisition was funded from the Partnership’s cash reserves and closing costs were approximately $81,000. From the purchase price, the Partnership allocated approximately $525,000 for in-place leases, approximately $61,000 to the value of tenant relationships and $241,000 to the value of below-market leases. These amounts are being amortized over 12 and 36 months respectively.

In December, 2023, the Partnership received approval from MassHousing to construct a 72 unit apartment building in accordance with Chapter 40B to include 17 affordable units on the Mill Street Development site. In order to initiate construction, the Partnership demolished the existing building structures and started construction in January 2024. In order to comply with the permanent financing requirements for a 40B project, Mill Street Development signed a term sheet for a loan of up to $15 million, to be funded upon completion of the development project. In addition, Mill Street Development deposited $75,000 into escrow to comply with the 40B project requirement of a cost certification of total development costs upon completion of the project. Total expected construction costs for the project are expected to be approximately $30,000,000 with construction completion anticipated during the fourth quarter of 2025.

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Rental properties consist of the following:

	March 31, 2024		December 31, 2023		Useful Life
Land, improvements and parking lots	$	99,249,928	$	99,162,143	15	-	40	years
Buildings and improvements		278,027,649		277,986,334	15	-	40	years
Construction in progress		3,361,078		—			N/A
Kitchen cabinets		16,356,947		16,137,828	5	-	10	years
Carpets		13,429,753		13,127,838	5	-	10	years
Air conditioning		500,000		500,000	5	-	10	years
Laundry equipment		568,716		568,716	5	-	7	years
Elevators		1,885,265		1,885,265	20	-	40	years
Swimming pools		1,090,604		1,090,604	10	-	30	years
Equipment		21,599,934		21,348,556	5	-	30	years
Motor vehicles		232,954		232,954			5	years
Fences		91,620		91,620	5	-	15	years
Furniture and fixtures		8,609,685		8,365,039	5	-	7	years
Total fixed assets		445,004,133		440,496,897
Less: Accumulated depreciation		(174,747,433)		(170,691,951)
	$	270,256,700	$	269,804,946

NOTE 3. RELATED PARTY TRANSACTIONS

The Partnership’s properties are managed by The Hamilton Company, Inc. (the “Management Company”), an entity that is owned by the majority shareholder of NewReal, Inc., the general partner of the Partnership (the “General Partner”). The management fee is equal to 4% of gross receipts of rental revenue and laundry income on the majority of the Partnership’s properties and 3% on Linewt. Total fees paid were approximately $789,000 and $698,000 for the three months ended March 31, 2024 and 2023, respectively.

The Partnership Agreement permits the General Partner or the Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA. During the three months ended March 31, 2024 and 2023, approximately $206,000 and $493,000 was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements. Of the 2024 expenses referred to above, approximately $22,000 consisted of repairs and maintenance, and $79,000 of administrative expense. Approximately $105,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2024, the Hamilton Company received approximately $213,000 from the Investment Properties of which approximately $188,000 was the management fee, approximately $18,000 for construction, architectural services, and supervision of capital projects, and approximately $2,000 for repairs and maintenance, and approximately $5,000 for legal expense. The management fee is equal to 4% of gross receipts of rental income on the majority of the investment properties and 2% on Dexter Park.

The Partnership reimburses the Management Company for the payroll and related expenses of the employees who work at the properties. Total reimbursement was approximately $1,100,000 and $1,114,000 for the three months ended March 31, 2024 and 2023, 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. For the three months ended March 31, 2024, the Partnership accrued $16,000 for the employer’s match portion to the plan. For the three months ended March 31, 2023, the Partnership contributed $16,000 for the employer’s match portion to the plan.

Bookkeeping and accounting functions are provided by the Management Company’s accounting staff, which consists of approximately 14 people. During the three months ended March 31, 2024 and 2023, the Management Company charged the Partnership $31,250 ($125,000 per year) for bookkeeping and accounting services included in administrative expenses above.

Sally Michael is a Director of New Real, Inc., and she is a Partner at Saul Ewing Arnstein & Lear LLP. Saul Ewing billed the Partnership for legal fees totaling approximately $46,000 and $37,000 for the three months ended March 31, 2024 and 2023, respectively.

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The Partnership has invested in seven 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 the Brown family related entities, and five current and previous employees of the Management Company. The Brown Family related entities’ ownership interest was between 47.6% and 59%. See Note 15 for a description of the properties and their operations.

NOTE 4. PREPAID EXPENSES and OTHER ASSETS

Approximately $3,582,000, and $3,601,000 of security deposits are included in prepaid expenses and other assets at March 31, 2024 and December 31, 2023, respectively. The security deposits and escrow accounts are restricted cash.

Also, included in prepaid expenses and other assets at March 31, 2024 and December 31, 2023 is approximately $1,903,000 and $1,784,000, respectively, held in escrow to fund future capital improvements.

Intangible assets on the acquisition of rental properties are included in prepaid expenses and other assets. Intangible assets are approximately $530,000 and $677,000 net of accumulated amortization of approximately $1,019,000 and $872,000 at March 31, 2024, and at December 31, 2023, respectively.

Financing fees in association with the line of credit of approximately $36,000 and $52,000 are net of accumulated amortization of approximately $146,000 and $130,000 at March 31, 2024 and December 31, 2023 respectively.

NOTE 5. MORTGAGE NOTES PAYABLE

At March 31, 2024 and December 31, 2023, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At March 31, 2024, the interest rates on these loans ranged from 2.97% to 4.95%, payable in monthly installments aggregating approximately $1,523,000 including principal, to various dates through 2035. The majority of the mortgages are subject to prepayment penalties. At March 31, 2024, the weighted average interest rate on the above mortgages was 3.68%. The effective rate of 3.77% 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.

Financing fees of approximately $2,684,000 and $2,779,000 are net of accumulated amortization of approximately $1,448,000 and $1,353,000 at March 31, 2024 and December 31, 2023, respectively, which offset the total mortgage notes payable.

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

Approximate annual maturities at March 31, 2024 are as follows:

2025—current maturities	$	3,013,000
2026		22,043,000
2027		6,625,000
2028		23,180,000
2029		58,851,000
Thereafter		297,032,000
		410,744,000
Less: unamortized deferred financing costs		2,684,000
	$	408,060,000

Line of Credit

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit. The term of the line was for 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%

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per annum, plus the applicable margin of 2.5%. The agreement originally expired on July 31, 2017, and was extended until October 31, 2020. The costs associated with the line of credit extension were approximately $128,000. Prior to the line’s expiration in 2020, the Partnership exercised its option for a one-year extension until October 31, 2021. The Partnership paid an extension fee of approximately $37,500 in association with the extension.

On October 29, 2021, the Partnership closed on the modification of its existing line of credit. The agreement extends the credit line for three years until October 29, 2024. The commitment amount is for $25 million but is restricted to $17 million during the modification period. The modification period phased out as of December 31, 2022. During this period, the loan covenants were modified from a minimum consolidated debt service ratio of 1.60 to a ratio of 1.35 until September 30, 2022; from a minimum tangible net worth requirement of $200 million to a net worth of $175 million until September 30, 2022; from a maximum consolidated leverage ratio of 65% to a ratio of 70% until September 30, 2022 and from a minimum debt yield of 9.5% to a yield of 8.5% until September 30, 2022 and a yield of 9.0% until December 31, 2022. Once the financial performance of the Partnership meets the original covenant tests for the trailing 12-month period, the commitment amount will return to $25 million. As of March 31, 2024, the portfolio’s debt yield fell below the minimum of 9.5% to 9.0%, thus the Partnership did not comply with the debt yield financial covenant. As such, the Partnership is unable to draw down any amount from the line of credit until the Partnership meets the required financial covenants. The Partnership is currently in discussions with a lender for a replacement line of credit.

The interest rate for the new term was LIBOR plus 300 basis points. The costs associated with the modification and renewal of the line of credit was approximately $179,000.

After June 30, 2023, the remaining tenors of U.S.-dollar LIBOR ceased publication, prompting the need for an alternative benchmark rate. On April 14, 2023, the partnership amended the line of credit to convert its base rate of interest from LIBOR to the Secured Overnight Financing Rate (SOFR) plus 10 basis points.

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

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

NOTE 6. ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

The Partnership’s residential lease agreements may require tenants to maintain a one-month advance rental payment and/or a security deposit. At March 31, 2024, amounts received for prepaid rents of approximately $3,158,000 are included in cash and cash equivalents, and security deposits of approximately $3,582,000 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 distributions made to the total units outstanding. All classes have equal profit sharing and distribution rights, in proportion to their ownership interests.

In March 2024, the Partnership approved a quarterly distribution of $12.00 per Unit ($0.40 per Receipt), payable on March 28, 2024. In addition to the quarterly distribution, there was a special distribution of $48.00 per Class A unit ($1.60 per Receipt) payable on March 28, 2024.

In 2023 the Partnership paid a total distribution of an aggregate $84.00 per Unit ($2.80 per Receipt) for a total payment of $9,954,888.

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

	Three Months Ended
	March 31,
	2024		2023
Net Income per Depositary Receipt	$	0.98	$	0.49
Distributions per Depositary Receipt	$	2.00	$	1.60

NOTE 8. TREASURY UNITS

Treasury Units at March 31, 2024 are as follows:

Class A	50,330
Class B	11,954
General Partnership	629
	62,913

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). Over time, the General Partner has authorized increases in the equity repurchase program. 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. On March 9, 2020, the General Partner extended the program for an additional five years from March 31, 2020 to March 31, 2025. The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership’s Second Amended and Restated Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions.

From August 20, 2007 through March 31, 2024, the Partnership has repurchased 1,535,092 Depositary Receipts at an average price of $31.40 per receipt (or $942.04 per underlying Class A Unit), 4,416 Class B Units and 233 General Partnership Units, both at an average price of $1,263.00 per Unit, totaling approximately $54,674,000 including brokerage fees paid by the Partnership.

During the three months ended March 31, 2024, the Partnership purchased a total of 2,858 Depositary Receipts. The average price was $70.69 per receipt, or $2,120.70 per unit. The cost including commission was approximately $203,000. The Partnership was required to repurchase 22.6 Class B Units and 1.2 General Partnership units at a cost of $47,983 and $2,525 respectively.

NOTE 9. COMMITMENTS AND CONTINGENCIES

The Partnership, the Subsidiary Partnerships, and the Investment Properties and their properties are not presently subject to any material litigation, and, to management’s knowledge, there is not any material litigation presently threatened against them. The properties are occasionally subject to ordinary routine legal and administrative proceedings incident to the ownership of residential and commercial real estate. Some of the legal and other expenses related to these proceedings are covered by insurance and none of these costs and expenses are expected to have a material adverse effect on the Consolidated Financial Statements of the Partnership.

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NOTE 10. RENTAL INCOME

During the three months ended March 31, 2024, approximately 94% 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 6% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at March 31, 2024 as follows:

	Commercial
	Property Leases
2025	$	3,103,182
2026		2,809,317
2027		2,509,650
2028		2,223,676
2029		1,986,170
Thereafter		9,837,638
	$	22,469,633

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 $211,000 and $147,000 for the three months ended March 31, 2024 and 2023 respectively. Trader Joe’s and Walgreen’s, tenants at Staples Plaza and 653 Worcester Road, Framingham, Massachusetts respectively, are approximately 16% 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 March 31,	expiring leases		for expiring leases	leases expiring	expiring leases
2025	$	477,248	31,876	29	13	%
2026		211,470	6,145	9	6	%
2027		395,326	15,162	8	11	%
2028		189,605	5,493	2	5	%
2029		394,176	10,041	4	11	%
2030		291,029	12,026	1	8	%
2031		—	—	—	—	%
2032		—	—	—	—	%
2033		110,600	1,106	1	3	%
2034		533,784	20,897	2	15	%
Thereafter		947,722	27,140	3	28	%
Totals	$	3,550,960	129,886	59	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $1,043,000 and $1,195,000 at March 31, 2024 and December 31, 2023. Included in rents receivable at March 31, 2024 is approximately $538,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis.

NOTE 11. CASH FLOW INFORMATION

During the three months ended March 31, 2024 and 2023, cash paid for interest was approximately $3,814,000, and $3,754,000 respectively. Cash paid for state income taxes was approximately $53,000 and $4,000 during the three months ended March 31, 2024 and 2023, respectively.

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At March 31, 2024 and December 31, 2023, 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.

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Financial Assets and Liabilities not Measured at Fair Value

At March 31, 2024 and December 31, 2023 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.

The Partnership has investments in U.S. Treasury bills, some of which mature over a period greater than 90 days and are classified as short-term investments. The U.S. Treasury bills are carried at amortized cost and classified as held to maturity as the Partnership has the intent and the ability to hold them until they mature. The carrying value of the U.S. Treasury bills are adjusted for accretion of discounts over the remaining life of the investment. Income related to the U.S. Treasury bills is recognized in interest income in the Partnership’s consolidated statement of income. The U.S. Treasury bills classified within Level I of the fair value hierarchy.

At March 31, 2024 and December 31, 2023 we estimated the fair value of our mortgage payable, derivative financial instrument, and other notes based upon quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available. We estimated the fair value of our secured mortgage debt that does not have current quoted market prices available by discounting the future cash flows using rates currently available to us for debt with similar terms and maturities (Level 3). The differences in the fair value of our debt from the carrying value are the result of differences in interest rates and/or borrowing spreads that were available to us at March 31, 2024 and December 31, 2023, 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. At March 31, 2024 and at December 31, 2023, the Partnership’s line of credit had an outstanding balance of zero.

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.

	March 31, 2024		Dec 31, 2023
	Carrying Value	Fair Value	Carrying Value	Fair Value
Assets
Cash equivalents	28,801,744	28,801,744	18,230,463	18,230,463
Treasury bills	69,444,998	69,448,049	84,700,751	84,799,638
Total Assets	98,246,742	98,249,793	102,931,214	103,030,101
Liabilities
Mortgage payable *
- Partnership properties	408,060,293	353,236,985	408,660,292	359,092,343
- Investment properties	165,937,703	154,867,600	165,969,481	156,280,958
Total Liabilities	573,997,996	508,104,585	574,629,773	515,373,301

* Net of unamortized deferred financing costs

Disclosure about fair value of financial instruments is based on pertinent information available to management as of March 31, 2024 and December 31, 2023. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since March 31, 2024 and current estimates of fair value may differ significantly from the amounts presented herein.

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NOTE 13. DERIVATIVE FINANCIAL INSTRUMENTS

Cash Flow Hedges of Interest Rate Risk

The Partnership’s objectives in using rate derivatives are to manage its exposure to interest rate movements. To accomplish this objective, the Partnership uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Partnership making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Partnership’s variable rate debt. During the next 12 months, the Partnership estimates $123,000 will be reclassified as a decrease to interest expense.

As of March 31, 2024, the Partnership had one interest rate swap outstanding with a notional amount of approximately $378,000 designated as cash flow hedges of interest rate risk. As of March 31, 2024, the Partnership did not have any interest rate derivatives in a net liability position.

The table below presents the fair value of the Partnership’s derivative financial instruments as well as their classification on the consolidated balance sheets as of March 31, 2024 and December 31, 2023.

	Fair Value
Asset Derivatives designated	March 31,		December 31,
as hedging instruments	2024		2023		Balance sheet location
Interest rate swaps	$	378,411	$	236,377	Prepaid Expenses and Other Assets

The table below presents the effect the Partnership’s derivative financial instruments on the consolidated statements of income for the quarters ended March 31, 2024 and 2023.

Derivatives in Cash Flow Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative				Location of Gain or (Loss) Reclassified from Accumulated OCI Into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income				Location of Gain or (Loss) Recognized in Income on Derivative	Total Amount of Interest Expense presented in the consolidated statements of operations
Quarter Ended March 31,	2024		2023			2024		2023			2024		2023
Interest rate swaps	$	142,034	$	(165,887)	Interest expense	$	—	$	—	Interest and other investment income (loss)	$	(3,907,016)	$	(3,899,240)

NOTE 14. 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, different depreciation methods, different tax lives, other items with limited tax deductibility carryovers and timing differences related to prepaid rents, allowances and intangible assets at significant acquisitions. Federal taxable income of approximately $9,989,000 was approximately $1,535,000 more than statement income for the year ended December 31, 2023. The Federal cumulative tax basis of the Partnership’s real estate at December 31, 2023 is approximately $8,000,000 less than the statement basis. The primary reasons for the difference in tax basis are tax free exchanges, accelerated depreciation, bonus depreciation, and other timing differences. The Partnership’s Federal tax basis in its joint venture investments is approximately $6,000,000 more than statement basis. State taxable income may be significantly different due to different tax treatments for certain items.

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

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 March 31, 2024, the tax years that generally remain subject to examination by the major tax jurisdictions under the statute of limitations is from the year 2020 forward.

NOTE 15. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

The Partnership has invested in seven limited partnerships and limited liability companies, the majority of which have invested in residential apartment complexes, with three Joint Ventures investing in commercial property. The Partnership has between a 40%-50% ownership interests in each investment. The other investors are the Brown Family related entities and five current and former employees of the Management Company. The Brown Family’s ownership interest was between 47.6% and 59%, 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, Hamilton Park Towers LLC, referred to as Dexter Park, or Hamilton Park, is a 409 unit residential complex. The purchase price was $129,500,000. The original mortgage was $89,914,000 with an interest rate of 5.57% and was to mature in 2019. The mortgage called for interest only payments for the first two years of the loan and amortized over 30 years thereafter.

On May 31, 2018, Hamilton Park Towers, LLC , entered into a Mortgage Note with John Hancock Life Insurance Company (U.S.A.) in the principal amount of $125,000,000. Interest only payments on the Note are payable on a monthly basis at a fixed interest rate of 3.99% per annum, and the principal amount of the Note is due and payable on June 1, 2028. The Note is secured by a mortgage on the Dexter Park apartment complex located at 175 Freeman Street, Brookline, Massachusetts pursuant to a Mortgage, Assignment of Leases and Rents and Security Agreement dated May 31, 2018. The Note is guaranteed by the Partnership and HBC Holdings, LLC pursuant to a Guaranty Agreement dated May 31, 2018.

Hamilton Park used the proceeds of the loan to pay off an outstanding loan of approximately $82,000,000 and distributed approximately $41,200,000 to its owners. The Partnership’s share of the distribution was approximately $16,500,000. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will continue to account for the investment using the equity method of accounting, although the Partnership has no legal obligation to fund its’ share of any future operating deficiencies as needed. At March 31, 2024, the balance on this mortgage before unamortized deferred financing costs is $125,000,000. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

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 Joint Venture planned to operate the building and initiate development of the parking lot. In June 2007, the Joint Venture 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 Joint Venture restructured the mortgages on both parcels at Essex 81. 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. At March 31, 2024, the balance on this mortgage before unamortized deferred financing costs is $10,000,000. 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 Joint Venture sold 127 of the units as condominiums and retained 49 units for long-term investment. The Joint Venture obtained a new 10-year mortgage in the amount of $5,000,000 on the units to be retained by the Joint Venture. The interest on the new loan was 5.67% fixed for the 10 year term with interest only payments for five years

21

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. After paying off the mortgage, the Partnership began to sell off the individual units. In 2019, all residential units were sold. The Partnership still owns the commercial building. This investment is referred to as Hamilton 1025, LLC.

In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. 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. In 2018, 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 to fund its share of any future operating deficiencies, if needed. At March 31 2024, the balance on this mortgage before unamortized deferred financing costs is $6,000,000. 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 Joint Venture sold 137 units as condominiums. The assets were combined with Hamilton on Main Apartments. Hamilton on Main, LLC is known as Hamilton Place. 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 paid off the prior mortgage of approximately $15,205,000 with the proceeds of the new mortgage and distributed $850,000 to the Partnership. The costs associated with the refinancing were approximately $161,000. In 2018, 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 to fund its share of any future operating deficiencies, if needed. At March 31, 2024, the balance of the mortgage before unamortized deferred finance is $16,900,000. The investment is referred to as Hamilton on Main LLC.

On August 23, 2023, Hamilton on Main Apartments, LLC (the “Borrower”), a 50% owned joint venture of the Partnership, received notice from KeyBank, as servicer for the lender of a $16,900,000 loan, indicating that the Borrower failed to comply with certain terms of the loan documents pertaining to the transfer of interests in the Borrower that occurred on the occasion of Harold Brown’s death, and that such transfer constitutes an event of default under the loan documents. While the Borrower has disputed that any events of default actually exist, it worked diligently with KeyBank to obtain KeyBank’s consent to the transfer. On March 8, 2024, the Borrower received notice from KeyBank that it was providing ex-post facto consent to the transfer of interest subject to certain conditions being met by the Borrower. The Partnership’s share of costs associated with the transfer of interests in the Borrower was approximately $107,000. On April 18, 2024 the Borrower and KeyBank executed amended loan documents reflecting the transfer of interest in the Borrower. In conjunction with the execution of the amended loan documents, KeyBank provided a courtesy reduction equal to 50% of the transfer fee.

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 Joint Venture paid off the prior mortgage of approximately $6,776,000 with the proceeds of the new mortgage. After the refinancing, the Joint Venture made a distribution of $1,610,000 to the Partnership. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting. Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed. At March 31, 2024, the balance of this mortgage before unamortized deferred financing costs is approximately $8,424,000. This investment is referred to as 345 Franklin, LLC.

22

Summary financial information at March 31,2024

				Hamilton									Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	5,314,109		$	2,582,568		$	4,395,208		$	74,211		$	4,118,836		$	12,594,324		$	72,539,709		$	101,618,965
Cash & Cash Equivalents		1,226,034			58,242			118,521			19,844			267,322			1,218,033			2,566,642			5,474,638
Rent Receivable		170,515			77,243			537			3,715			254			20,744			121,564			394,572
Real Estate Tax Escrow		81,278			0			69,765			—			29,481			168,242			—			348,766
Prepaid Expenses & Other Assets		315,092			41,185			74,126			233			42,429			222,756			2,449,104			3,144,925
Total Assets	$	7,107,028		$	2,759,238		$	4,658,157		$	98,003		$	4,458,322		$	14,224,099		$	77,677,019		$	110,981,866
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,979,316		$	—		$	8,395,372		$	—		$	5,938,965		$	16,893,312			124,730,738		$	165,937,703
Accounts Payable & Accrued Expense		132,826			1,521			112,431			1,201			67,581			331,127			840,958			1,487,645
Advance Rental Pmts & Security Deposits		348,654			20,660			275,597			—			174,690			474,036			3,309,073			4,602,710
Total Liabilities		10,460,796			22,181			8,783,400			1,201			6,181,236			17,698,475			128,880,769			172,028,058
Partners’ Capital		(3,353,768)			2,737,057			(4,125,243)			96,802			(1,722,914)			(3,474,376)			(51,203,750)			(61,046,192)
Total Liabilities and Capital	$	7,107,028		$	2,759,238		$	4,658,157		$	98,003		$	4,458,322		$	14,224,099		$	77,677,019		$	110,981,866
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$	—		$	1,368,529		$	—		$	48,401		$	—		$	—		$	—			1,416,930
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(1,676,884)		$	—		$	(2,062,622)		$	—		$	(861,457)		$	(1,737,188)		$	(20,481,500)			(26,819,651)
Total Investment in Unconsolidated Joint Ventures (Net)																						$	(25,402,721)
Total units/condominiums
Apartments		48			—			40			—			42			148			409			687
Commercial		1			1			—			1			—			—			—			3
Total		49			1			40			1			42			148			409			690

Financial information for the three months ended March 31, 2024

			Hamilton						Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Apts		Apts		Park		Total
Revenues
Rental Income	$	468,478	$	60,471	$	443,756	$	26,889	$	351,447	$	1,008,232	$	4,348,009	$	6,707,282
Laundry and Sundry Income		2,776		—		6		—		—		12,664		45,430		60,876
		471,254		60,471		443,762		26,889		351,447		1,020,896		4,393,439		6,768,158
Expenses
Administrative		5,218		2,000		8,920		700		6,934		9,324		52,039		85,135
Depreciation and Amortization		115,844		2,927		86,398		816		82,733		261,252		913,751		1,463,721
Management Fees		20,426		2,479		17,417		1,062		14,230		40,191		91,881		187,686
Operating		83,040		—		25,865		(212)		45,574		134,402		438,302		726,971
Renting		1,239		—		4,095		18		5,529		27,586		32,392		70,859
Repairs and Maintenance		38,457		—		23,046		—		29,285		146,331		354,190		591,309
Taxes and Insurance		69,343		17,592		49,285		4,676		39,168		101,542		642,138		923,744
		333,567		24,998		215,026		7,060		223,453		720,628		2,524,693		4,049,425
Income Before Other Income		137,687		35,473		228,736		19,829		127,994		300,268		1,868,746		2,718,733
Other Income (Loss)
Interest Expense		(197,199)		—		(84,867)		—		(59,151)		(193,115)		(1,296,807)		(1,831,139)
Interest Income		10,421		772		2,361		205		2,483		12,850		20,674		49,766
Other Income		—		—		—		—		—		63,745		—		63,745
		(186,778)		772		(82,506)		205		(56,668)		(116,520)		(1,276,133)		(1,717,628)
Net (Loss) Income	$	(49,091)	$	36,245	$	146,230	$	20,034	$	71,326	$	183,748	$	592,613	$	1,001,105
Net (Loss) Income —NERA 50%	$	(24,546)	$	18,123	$	73,115	$	10,017	$	35,663	$	91,874				204,246
Net Income —NERA 40%													$	237,045		237,045
															$	441,291

23

Future annual mortgage maturities at March 31, 2024 are as follows:

	Hamilton		345		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Franklin		Minuteman		Main Apts		Park		Total
3/31/2025	$	—	$	242,212	$	—	$	16,900,000	$	—	$	17,142,212
3/31/2026		10,000,000		251,753		—		—		—		10,251,753
3/31/2027		—		261,671		—		—		—		261,671
3/31/2028		—		271,979		—		—		—		271,979
3/31/2029		—		7,396,056		—		—		125,000,000		132,396,056
Thereafter		—		—		6,000,000		—		—		6,000,000
		10,000,000		8,423,671		6,000,000		16,900,000		125,000,000		166,323,671
Less: unamortized deferred financing costs		(20,684)		(28,298)		(61,035)		(6,688)		(269,263)		(385,968)
	$	9,979,316	$	8,395,373	$	5,938,965	$	16,893,312	$	124,730,737	$	165,937,703

At March 31, 2024, the weighted average interest rate on the above mortgages was 4.23%. The effective rate was 4.29% including the amortization expense of deferred financing costs.

Summary financial information at March 31, 2023

				Hamilton								Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton		Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025		Apts			Apts			Park			Total
ASSETS
Rental Properties	$	5,721,864		$	2,585,058		$	4,727,451		$	77,475	$	4,402,156		$	13,223,620		$	75,278,758		$	106,016,382
Cash & Cash Equivalents		1,032,885			132,374			553,282			28,558		377,286			1,201,715			3,827,354			7,153,454
Rent Receivable		209,427			79,310			—			4,923		—			21,329			71,071			386,060
Real Estate Tax Escrow		70,066			—			62,888			—		39,192			135,371			—			307,517
Prepaid Expenses & Other Assets		301,295			50,371			70,323			229		22,867			213,731			2,283,781			2,942,597
Total Assets	$	7,335,537		$	2,847,113		$	5,413,944		$	111,185	$	4,841,501		$	14,795,766		$	81,460,964		$	116,806,010
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,965,527		$	—		$	8,621,745		$	—	$	5,930,781		$	16,877,261		$	124,666,115		$	166,061,429
Accounts Payable & Accrued Expense		141,973			43,750			337,102			22,181		266,363			785,701			2,161,658			3,758,728
Advance Rental Pmts& Security Deposits		335,457			19,866			283,654			—		178,024			455,924			3,002,957			4,275,882
Total Liabilities		10,442,957			63,616			9,242,501			22,181		6,375,168			18,118,886			129,830,730			174,096,039
Partners’ Capital		(3,107,420)			2,783,497			(3,828,557)			89,004		(1,533,667)			(3,323,120)			(48,369,766)			(57,290,029)
Total Liabilities and Capital	$	7,335,537		$	2,847,113		$	5,413,944		$	111,185		4,841,501		$	14,795,766		$	81,460,964		$	116,806,010
Partners’ Capital %—NERA		50	%		50	%		50	%		50		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$	—		$	1,391,750		$	—		$	44,502	$	—		$	—		$	—		$	1,436,252
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(1,553,710)		$	—		$	(1,914,279)		$	—	$	(766,834)		$	(1,661,560)		$	(19,347,906)			(25,244,289)
Total Investment in Unconsolidated Joint Ventures (Net)																					$	(23,808,037)
Total units/condominiums
Apartments		48			—			40			0		42			148			409			687
Commercial		1			1			—			1		—			—			—			3
Total		49			1			40			1		42			148			409			690

24

Financial information for the three months ended March 31, 2023

			Hamilton						Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Apts		Apts		Park		Total
Revenues
Rental Income	$	438,988	$	60,471	$	411,890	$	24,867	$	313,502	$	924,814	$	3,997,298	$	6,171,830
Laundry and Sundry Income		2,703		—		—		—		—		13,167		36,000		51,870
		441,691		60,471		411,890		24,867		313,502		937,981		4,033,298		6,223,700
Expenses
Administrative		4,740		750		3,469		921		3,875		12,705		48,007		74,467
Depreciation and Amortization		116,987		2,927		86,306		816		83,717		264,509		905,747		1,461,009
Management Fees		19,092		3,179		16,137		994		12,806		37,196		81,609		171,013
Operating		83,347		—		25,379		67		37,516		128,942		376,999		652,250
Renting		3,175		—		8,256		—		1,367		11,946		40,623		65,367
Repairs and Maintenance		54,468		—		24,210		—		20,934		153,454		317,975		571,041
Taxes and Insurance		70,934		15,457		47,175		4,500		35,358		132,372		623,574		929,370
		352,743		22,313		210,932		7,298		195,573		741,124		2,394,534		3,924,517
Income Before Other Income		88,948		38,158		200,958		17,569		117,929		196,857		1,638,764		2,299,183
Other Income (Loss)
Interest Expense		(172,313)		—		(86,958)		—		(58,750)		(187,378)		(1,263,273)		(1,768,672)
		(172,313)		—		(86,958)		—		(58,750)		(187,378)		(1,263,273)		(1,768,672)
Net Income (Loss)	$	(83,365)	$	38,158	$	114,000	$	17,569	$	59,179	$	9,479	$	375,491	$	530,511
																—
Net Income (Loss)—NERA 50%	$	(41,683)	$	19,078	$	56,999	$	8,785	$	29,590	$	4,740				77,508
Net Income —NERA 40%													$	150,196		150,196
															$	227,704

NOTE 16. EMPLOYEE BENEFIT 401(k) PLANS

Employees of the Partnership, who meet certain minimum age and service requirements, are eligible to participate in the Management Company’s 401(k) Plan (the “401(k) Plan”). Eligible employees may elect to defer up to 90 percent of their eligible compensation on a pre-tax basis to the 401(k) Plan, subject to certain limitations imposed by federal law. 

The amounts contributed by employees are immediately vested and non-forfeitable. The Partnership matches 50% up to 6% of compensation deferred by each employee in the 401(k) plan. The Partnership may make discretionary matching or profit-sharing contributions to the 401(k) Plan on behalf of eligible participants in any plan year. Participants are always 100 percent vested in their pre-tax contributions and will begin vesting in any matching or profit-sharing contributions made on their behalf after two years of service with the Partnership at a rate of 20 percent per year, becoming 100 percent vested after a total of six years of service with the Partnership. Total expense recognized by the Partnership for the 401(k) Plan for the three months ended March 31, 2024 was $16,000.

NOTE 17. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

In November 2023, the FASB issued ASU 2023-07, Segment Reporting—Improvements to Reportable Segment Disclosures ("ASU 2023-07"). The guidance requires incremental disclosures related to a public entity’s reportable segments. ASU 2023-07 is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted. The Partnership is currently evaluating the impact of adopting ASU 2023-07 will have on the Partnership's consolidated financial statements.

25

NOTE 18. SUBSEQUENT EVENTS

From April 1, 2024, through May 8, 2024, the Partnership has purchased 1,764 Depository Receipts. The average price was $70.51 per receipt, or $2,115.30 per unit. The total cost was $124,887. The Partnership is required to purchase 14 Class B units and 0.7 General Partnership units at a cost of $29,016 and $1,527, respectively.

On May 8, 2024, the Partnership approved a quarterly distribution of $12.00 per Unit ($0.40 per Receipt), payable on June 28, 2024.

On August 23, 2023, Hamilton on Main Apartments, LLC (the “Borrower”), a 50% owned joint venture of the Partnership, received notice from KeyBank, as servicer for the lender of a $16,900,000 loan, indicating that the Borrower failed to comply with certain terms of the loan documents pertaining to the transfer of interests in the Borrower that occurred on the occasion of Harold Brown’s death, and that such transfer constitutes an event of default under the loan documents. While the Borrower has disputed that any events of default actually exist, it worked diligently with KeyBank to obtain KeyBank’s consent to the transfer. On March 8, 2024, the Borrower received notice from KeyBank that it was providing ex-post facto consent to the transfer of interest subject to certain conditions being met by the Borrower. The Partnership’s share of costs associated with the transfer of interests in the Borrower was approximately $107,000. On April 18, 2024, the Borrower and KeyBank executed amended loan documents reflecting the transfer of interest in the Borrower. In conjunction with the execution of the amended loan documents, KeyBank provided a courtesy reduction equal to 50% of the transfer fee.

26

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

Certain information contained herein includes forward looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Liquidation Reform Act of 1995 (the “Act”). Forward looking statements in this report, or which management may make orally or in written form from time to time, reflect management’s good faith belief when those statements are made, and are based on information currently available to management. Caution should be exercised in interpreting and relying on such forward looking statements, the realization of which may be impacted by known and unknown risks and uncertainties, events that may occur subsequent to the forward looking statements, and other factors which may be beyond the Partnership’s control and which can materially affect the Partnership’s actual results, performance or achievements for 2024 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. For an additional discussion of factors that may affect the Partnership’s business and results of operations, see Item1A-Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended December31,2023.

Over a period of time both in 2021 and 2022, the Partnership took advantage of the low interest rate environment and refinanced fifteen properties, increased their loan balances, and raised approximately $130,000,000. With interest rates rising, and a threat of an economic slowdown, the Partnership increased the debt level and built cash reserves to acquire additional properties when opportunities become available. Currently, $69,445,000 of these reserves are invested in short-term US Treasury bills maturing in 6 months or less with interest rates between 5.08% and 5.45%.

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.

On July 14, 2023, the Partnership purchased a mixed use property in the South End neighborhood of Boston, Massachusetts comprised of three buildings at 26-30 Rutland Street, 105-117 West Concord Street and 475 Shawmut Avenue, and approximately 3,400 square feet of commercial space for a purchase price of $27,500,000 with Partnership cash reserves.

The vacancy rate for the Partnership’s residential properties as of May 2, 2024 was 1.2% as compared with a vacancy rate of 2.1% as of May 2, 2023. The vacancy rate for the Joint Venture properties as of May 2, 2024 was 1.3 %, as compared to 2.5% for the same period last year.

Residential tenants generally have lease terms of 12 months. The majority of these leases will mature during the second and third quarters of the year.

During the first quarter of 2024, rents increased an average of 5.8% for renewals and increased an average of 5.4% for new leases. For the balance of 2024, management expects a strong rental market with continued rent growth.

For the first quarter of 2024, excluding the increase in income and expense from 653 Worcester Road and the Shawmut Apartments, consolidated revenue increased by 8.7%, operating expenses increased by 3.2% and Income before Other Income (Expense) increased by 25.0%, as compared to the first quarter of 2023.

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit. The term of the line was for 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 agreement originally expired on July 31, 2017, and was extended until October 31, 2020. The costs associated with the line of credit extension were approximately $128,000. Prior to the

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line’s expiration in 2020, the Partnership exercised its option for a one-year extension until October 31, 2021. The Partnership paid an extension fee of approximately $37,500 in association with the extension.

On October 29, 2021, the Partnership closed on the modification of its existing line of credit. The agreement extends the credit line for three years until October 29, 2024. The commitment amount is for $25 million but is restricted to $17 million during the modification period. The modification period was phased out by December 31, 2022. During the modification period, the loan covenants were modified from a minimum consolidated debt service ratio of 1.60 to a ratio of 1.35 until September 30, 2022; from a minimum tangible net worth requirement of $200 million to a net worth of $175 million until September 30, 2022; from a maximum consolidated leverage ratio of 65% to a ratio of 70% until September 30, 2022 and from a minimum debt yield of 9.5% to a yield of 8.5% until September 30, 2022 and a yield of 9.0% until December 31, 2022. Once the financial performance of the Partnership meets the original covenant tests for the trailing 12-month period, the commitment amount will return to $25 million. As of March 31, 2024, the portfolio’s debt yield fell below the minimum of 9.5% to 9.0%, thus the Partnership did not comply with the debt yield financial covenant. As such, the Partnership is restricted to draw down any amount from the line of credit until the Partnership meets the required financial covenants. The Partnership is currently in discussions with a lender for a replacement line of credit.

From the start of the Stock Repurchase Program in 2007 through March 31, 2024, the Partnership has purchased 1,535,092 Depositary Receipts. During the three months ended March 31, 2024, the Partnership purchased a total of 2,858 Depositary Receipts.

On August 23, 2023, Hamilton on Main Apartments, LLC (the “Borrower”), a 50% owned joint venture of the Partnership, received notice from KeyBank, as servicer for the lender of a $16,900,000 loan, indicating that the Borrower failed to comply with certain terms of the loan documents pertaining to the transfer of interests in the Borrower that occurred on the occasion of Harold Brown’s death, and that such transfer constitutes an event of default under the loan documents. While the Borrower has disputed that any events of default actually exist, it worked diligently with KeyBank to obtain KeyBank’s consent to the transfer. On March 8, 2024, the Borrower received notice from KeyBank that it was providing ex-post facto consent to the transfer of interest subject to certain conditions being met by the Borrower. The Partnership’s share of costs associated with the transfer of interests in the Borrower was approximately $107,000. On April 18, 2024 the Borrower and KeyBank executed amended loan documents reflecting the transfer of interest in the Borrower. In conjunction with the execution of the amended loan documents, KeyBank provided a courtesy reduction equal to 50% of the transfer fee.

On February 24, 2019, Harold Brown, the owner of 75% of the outstanding voting securities of NewReal, Inc. (“NewReal”), the general partner of New England Realty Associates Limited Partnership, passed away. As a result, the estate of Harold Brown held voting control over the capital stock of NewReal. On January 2, 2024, the estate was settled, with Jameson Brown and Harley Brown each assuming 37.5% ownership in NewReal. As of May 1, 2024, the Brown family related entities and Ronald Brown collectively own approximately 32.4% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons’ family members). Brown family related entities also control 75% of the Partnership’s Class B Units, and 75% of the capital stock of NewReal, the Partnership’s sole general partner. Ronald Brown also owns 25% of the Partnership’s Class B Units and 25% of the capital stock of NewReal. In addition, Ronald Brown is the President and a director of NewReal and Jameson Brown is Treasurer and a director of NewReal. Moreover, 75% of the issued and outstanding Class B units of the Partnership are owned by HBC Holdings LLC, an entity of which Jameson Brown is the manager. The outstanding stock of The Hamilton Company, Inc. is controlled by Jameson Brown and Harley Brown.

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 three months ended March 31, 2024, tenant renewals were approximately 65% with an average rental increase of approximately 5.8%, new leases accounted for approximately 35% with rental rate increases of approximately 5.4%. During the three months ended March 31, 2024, leasing commissions were approximately $118,000 compared to approximately $59,000 for the three months ended March 31, 2023, an

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increase of approximately $59,000 (100.0%). Tenant concessions were approximately $76,000 for the three months ended March 31, 2024, compared to approximately $20,000 for the three months ended March 31, 2023, an increase of approximately $56,000 (280.0%). Tenant improvements were approximately $765,000 for the three months ended March 31, 2024, compared to approximately $650,000 for the three months ended March 31, 2023, an increase of approximately $115,000 (17.7%).

Hamilton accounted for approximately 0.8% of the repair and maintenance expenses paid for by the Partnership during the three months ended March 31, 2024 and 1.7% during the three months ended March 31, 2023. 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 $50,000 (61.6%) and approximately $68,000 (82.6%) of the legal services paid for by the Partnership during the three months ended March 31, 2024 and 2023 respectively.

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

The Partnership requires that three bids be obtained for construction contracts in excess of $15,000. Hamilton may be one of the three bidders on a particular project and may be awarded the contract if its bid and its ability to successfully complete the project are deemed appropriate. For contracts that are not awarded to Hamilton, Hamilton charges the Partnership a construction supervision fee equal to 5% of the contract amount. Hamilton’s architectural department also provides services to the Partnership on an as-needed basis. During the three months ended March 31, 2024, Hamilton provided the Partnership approximately $105,000 in construction and architectural services, compared to approximately $288,000 for the three months ended March 31, 2023.

Hamilton’s accounting staff perform bookkeeping and accounting functions for the Partnership. During the three months ended March 31, 2024 and 2023, Hamilton charged the Partnership $31,250 for bookkeeping and accounting services. For more information on related party transactions, see Note 3 to the Consolidated Financial Statements.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

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

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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 amounts are accounted for 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.

The Partnership evaluates the non-lease components (lease arrangements that include common area maintenance services) with related lease components (lease revenues). If both the timing and pattern of transfer are the same for the non-lease component and related lease component, the lease component is the predominant component. The Partnership elected an allowed practical expedient. For (i) operating lease arrangements involving real estate that include common area maintenance services and (ii) all real estate arrangements that include real estate taxes and insurance costs, we present these amounts within lease revenues in our consolidated statements of income. We record amounts reimbursed by the lessee in the period in which the applicable expenses are incurred.

Rental Property Held for Sale: When assets are identified by management as held for sale, the Partnership discontinues depreciating the assets and estimates the sales price, net of selling costs, of such assets. The Partnership generally considers assets to be held for sale when the transaction has received appropriate corporate authority, and there are no significant contingencies relating to the sale. If, in management’s opinion, the estimated net sales price, net of selling costs, of the assets which have been identified as held for sale is less than the carrying value of the assets, a valuation allowance is established.

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

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

Intangible assets acquired include amounts for in-place lease values above and below market leases and tenant relationship values, which are based on management’s evaluation of the specific characteristics of each tenant’s lease and the Partnership’s overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant

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

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

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

Investments in Treasury Bills: Investments in Treasury Bills are recorded at amortized cost and classified as held to maturity as the Partnership has the intent and the ability to hold them until they mature. The carrying value of the Treasury Bills are adjusted for accretion of discounts over the remaining life of the investment. Income related to the Treasury Bills is recognized in interest income in the Partnership’s consolidated statement of income.

Investments in Joint Ventures: The Partnership accounts for its 40%-50% ownership in the Investment Properties under the equity method of accounting, as it exercises significant influence over, but does not control these entities. These investments are recorded initially at cost, as Investments in Joint Ventures, and subsequently adjusted for the Partnership’s share in earnings, cash contributions and distributions. Under the equity method of accounting, our net equity is reflected on the consolidated balance sheets, and our share of net income or loss from the Partnership is included on the consolidated statements of income. 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. 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.

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.

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

RESULTS OF OPERATIONS

Three Months Ended March 31, 2024 and March 31, 2023

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, other expense of approximately $5,751,000 during the three months ended March 31, 2024, compared to approximately $4,451,000 for the three months ended March 31, 2023, an increase of approximately $1,300,000 (29.2%).

The rental activity is summarized as follows:

	Occupancy Date
	May 1, 2024		May 1, 2023
Residential
Units	2,962		2,911
Vacancies	34		60
Vacancy rate	1.2	%	2.1	%
Commercial
Total square feet	131,159		128,096
Vacancy	1,273		—
Vacancy rate	1.0	%	0.0	%

	Rental Income (in thousands)
	Three Months Ended March 31,
	2024					2023
	Total			Continuing		Total			Continuing
	Operations			Operations		Operations			Operations
Total rents	$	19,710		19,710		$	17,569		$	17,569
Residential percentage		94	%	94	%		94	%		94	%
Commercial percentage		6	%	6	%		6	%		6	%
Contingent rentals	$	211		211		$	147		$	147

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Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023:

	Three Months Ended March 31,				Dollar		Percent
	2024		2023		Change		Change
Revenues
Rental income	$	19,710,432	$	17,568,727	$	2,141,705	12.2%
Laundry and sundry income		182,967		122,959		60,008	48.8%
		19,893,399		17,691,686		2,201,713	12.4%
Expenses
Administrative		762,019		737,101		24,918	3.4%
Depreciation and amortization		4,227,582		3,846,260		381,322	9.9%
Management fee		788,607		697,764		90,843	13.0%
Operating		2,645,493		2,533,796		111,697	4.4%
Renting		387,599		191,585		196,014	102.3%
Repairs and maintenance		2,847,957		2,763,136		84,821	3.1%
Taxes and insurance		2,482,368		2,470,679		11,689	0.5%
		14,141,625		13,240,321		901,304	6.8%
Income Before Other Income (Expense)		5,751,774		4,451,365		1,300,409	29.2%
Other Income (Expense)
Interest income		1,177,547		974,546		203,001	20.8%
Interest expense		(3,907,016)		(3,899,240)		(7,776)	0.2%
Income from investments in unconsolidated joint ventures		441,291		227,704		213,587	93.8%
		(2,288,178)		(2,696,990)		408,812	15.2%
Net Income	$	3,463,596	$	1,754,375	$	1,709,221	97.4%

Rental income for the three months ended March 31, 2024 was approximately $19,710,000, compared to approximately $17,568,000 for the three months ended March 31, 2023, an increase of approximately $2,142,000 (12.2%). Excluding revenue increases from Walgreen’s and Shawmut’s of approximately $624,000, there was an increase of approximately $1,518,000 (8.7%).

The Partnership properties with the largest increases in rental income include 1144 Commonwealth, Hamilton Oaks, Mill Street Gardens, 659 Worcester Road, Hamilton Green, and 62 Boylston Street, with increases of $182,000, $169,000, $130,000, $106,000, $96,000 and $88,000 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 March 31, 2024 were approximately $14,141,000 compared to approximately $13,240,000 for the three months ended March 31, 2023, an increase of approximately $901,000 (6.8%). Excluding 653 Worcester Road and Shawmut Apartments for the comparable period, operating expenses were approximately $13,375,000, an increase of approximately $445,000 (3.4%). The factors contributing to the increase are an increase in renting expense of approximately $196,000 (102.3%), due to tenant concessions for disruptions associated with construction projects, an increase in operating costs of approximately $68,000 (2.7%), and an increase in repairs and maintenance of approximately $61,000 (2.2%).

Interest expense for the three months ended March 31, 2024 was approximately $3,907,000 compared to approximately $3,899,000 for the three months ended March 31, 2023, an increase of approximately $8,000 (0.2%).

Interest income for the three months ended March 31, 2024 was approximately $1,165,000 compared to approximately $974,000 for the three months ended March 31, 2023, an increase of approximately $191,000 (19.6%). Interest income is from investments in Treasury Bills which mature over a period less than 180 days, with interest rates between 5.08% to 5.45%.

At March 31, 2024, the Partnership has between a 40% and 50% ownership interests in seven different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 15 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.

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As described in Note 15 to the Consolidated Financial Statements, the Partnership’s share of the net income from the Investment Properties was approximately $441,000 for the three months ended March 31, 2024, compared to net income of approximately $228,000 for the three months ended March 31, 2023, an increase in income of approximately $213,000 (93.8%). This increase is primarily due to an increase in rental revenue to approximately $2,919,000 from $2,686,000, an increase of approximately $233,000 (8.7%) for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Included in the income for the three months ended March 31, 2023 is depreciation and amortization expense of approximately $646,000.

As a result of the changes discussed above, net income for the three months ended March 31, 2024 was approximately $3,463,000 compared to net income of approximately $1,754,000 for the three months ended March 31, 2023, an increase in income of approximately $1,709,000 (97.4%).

LIQUIDITY AND CAPITAL RESOURCES

The Partnership’s principal source of cash during the first three months of 2024 and 2023 was the collection of rents and a reduction in U.S. Treasury bills. The Partnership’s principal use of cash during the first three months of 2024 was the construction of the Mill Street Development, improvements to rental properties, mortgage principal payments, and distributions to partners. The Partnership’s principal use of cash during the first three months of 2023 was the purchase of U.S.Treasury bills, and the purchase of two properties: a commercial property at 653 Worcester Road for approximately $10,000,000, and the purchase of a mixed use property in the South End neighborhood of Boston, Massachusetts for a purchase price of approximately $27,500,000.

The majority of cash and cash equivalents of $28,801,744 at March 31, 2024 and $18,230,463 at December 31, 2023 were held in interest bearing accounts at creditworthy financial institutions.

The increase in cash of $10,571,281 for the three months ended March 31, 2024 is summarized as follows:

	Three Months Ended March 31,
	2024		2023
Cash provided by operating activities	$	6,123,747	$	1,665,543
Cash provided by (used in) investing activities		12,434,824		(19,310,875)
Principal payments of mortgage notes payable		(694,945)		(611,861)
Repurchase of Depositary Receipts, Class B and General Partner Units		(253,390)		(944,520)
Distributions paid		(7,038,955)		(5,704,385)
Net increase (decrease) in cash and cash equivalents	$	10,571,281	$	(24,906,098)

The net increase in cash provided by operating activities is due to various factors, including a change in depreciation expense, a change in income and distribution from joint ventures, and other factors. The net increase in cash provided by investing activities is primarily due to cash proceeds from the sale of Treasury bills held in a money market account for the improvement of rental properties, including the Mill Street Development project. Financing activities include mortgage principal payments and distributions to partners, and repurchase of depositary receipts.

During 2024, the Partnership and its Subsidiary Partnerships have completed improvements to certain of the Properties at a total cost of approximately $2,395,000. These improvements were funded from cash reserves. Cash reserves have been adequate to fully fund improvements. The most significant improvements were made at 1144 Commonwealth, Executive Apartments, River Drive Apartments, Hamilton Oaks, Westside Colonial, and Dean Street Associates, at a cost of approximately $583,000, $499,000, $288,000, $219,000, $115,000 and $87,000 respectively.

During the three months ended March 31, 2024, the Partnership received distributions of approximately $577,000 from the investment properties. For the three months ended March 31, 2023, the Partnership received $580,000 in distributions from the investment properties. Included in these net distributions is the amount from Dexter Park of approximately $400,000 for the three months ended March 31, 2024 and 2023, respectively.

In March 2024, the Partnership approved a quarterly distribution of $12.00 per Unit ($0.40 per Receipt), which was paid on March 28, 2024. In addition to the quarterly distribution, there was a special distribution of $48.00 per Class A unit ($1.60 per Receipt) payable on March 28, 2024.

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In March 2023, the Partnership approved a quarterly distribution of $9.60 per Unit ($0.32 per Receipt), which was paid on March 31, 2023. In addition to the quarterly distribution, there was a special distribution of $38.40 per Class A unit ($1.28 per Receipt) payable on March 31, 2023.

The Partnership anticipates that cash from operations will be sufficient to fund its current operations, pay distributions, and make required debt payments. The Partnership anticipates that the Mill Street Development project will require approximately $30 million in spending over the next two years, with approximately $10 million to be spent in 2024 and approximately $20 million to be spent in 2025. Construction is expected to be completed during the fourth quarter of 2025.

Off-Balance Sheet Arrangements—Joint Venture Indebtedness

As of March 31, 2024, the Partnership had a 40%-50% ownership interest in seven Joint Ventures, five of which have mortgage indebtedness. We do not have control of these partnerships and therefore we account for them using the equity method of consolidation. At March 31, 2024, our proportionate share of the non-recourse debt related to these investments was approximately $70,662,000. See Note 15 to the Consolidated Financial Statements.

Contractual Obligations

As of March 31, 2024, we are subject to contractual payment obligations as described in the table below.

				Payments due by period
		2025		2026		2027		2028		2029		Thereafter		Total
Contractual Obligations
Long -term debt
Mortgage debt	$	3,013,635		22,042,766		6,624,824		23,179,774		58,851,200		297,032,397	$	410,744,596
Total Contractual Obligations	$	3,013,635	$	22,042,766	$	6,624,824	$	23,179,774	$	58,851,200	$	297,032,397	$	410,744,596

*Excluding unamortized deferred financing costs

We have various standing or renewable service contracts with vendors related to our property management. In addition, we have certain other contracts we enter into in the ordinary course of business that may extend beyond one year. These contracts are not included as part of our contractual obligations because they include terms that provide for cancellation with insignificant or no cancellation penalties.

See Notes 5 and 15 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 of the Partnership’s Form 10-K for the fiscal year ended December 31, 2023 filed with the Securities and Exchange Commission on March 14, 2024 and from time to time in the Partnership’s other 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

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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.

● Our actual costs to develop properties may exceed our budgeted costs.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

As of March 31, 2024, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have approximately $577,068,000 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 2035. The Partnership, its Subsidiary Partnerships and the Investment Properties collectively have variable rate debt of $10,000,000 (without taking out unamortized deferred financing costs) as of March 31, 2024. Interest rates ranged from SOFR plus 170 basis points to SOFR plus 310 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 $50,000 annually and the increase or decrease in the fair value of the Partnership’s fixed rate debt as of March 31, 2024 would be approximately $21,473,000. 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 15 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 other changes in the Management Company’s internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rule 13a-15 that occurred during the quarter ended March 31, 2024 that have materially affected or are reasonably likely to materially affect, the Management Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

There have been no material changes to the Risk Factors in Item 1A, “Risk Factors” in our annual report on Form 10K for the year ended December 31, 2023.

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

(a) None

(b) None

(c) Issuer Purchase of Equity Securities during the first quarter of 2024:

				Remaining number
			Depositary Receipts	of Depositary Receipts
			Purchased as Part	that may be purchased
	Average		of Publicly	Under the Plan
Period	Price Paid		Announced Plan	(as Amended)
January 1-31, 2024	$	70.35	870	466,894
February 1-29,2024	$	70.80	1,883	465,011
March 1-31, 2024	$	71.47	105	464,906
Total			2,858

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). Over time, the General Partner has authorized increases in the equity repurchase program. 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. On March 9, 2020, the General Partner extended the program for an additional five years from March 31, 2020 to March 31, 2025. The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%,19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership’s Second Amended and Restated Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through March 31, 2024, the Partnership has repurchased 1,535,092 Depositary Receipts at an average price of $31.40 per receipt (or $942.04 per underlying Class A Unit), 4,416 Class B Units and 233 General Partnership Units, both at an average price of $1,263.00 per Unit, totaling approximately $54,674,000 including brokerage fees paid by the Partnership.

During the three months ended March 31, 2024, the Partnership purchased a total of 2,858 Depositary Receipts. The average price was $70.69 per receipt or $2,120.70 per unit. The cost including commission was $202,882. The Partnership was required to repurchase 22.6 Class B Units and 1.2 General Partnership units at a cost of $47,983 and $2,525 respectively.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosure

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

See the exhibit index below.

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 Jameson 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 Jameson Brown, Principal Financial Officer of the Partnership (Treasurer and a Director of NewReal, Inc., sole General Partner of the Partnership).
(101.1)	The following financial statements from New England Realty Associates Limited Partnership Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL (eXtensible Business Property Language: (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) (filed herewith).
(104)	Cover Page Interactive Data File – The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

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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: May 9, 2024

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	May 9, 2024
Ronald Brown	(Principal Executive Officer)
/s/ JAMESON BROWN	Treasurer and Director of the General Partner	May 9, 2024
Jameson Brown	(Principal Financial Officer and Principal Accounting Officer)
/s/ MARTINA ALIBRANDI	Director of the General Partner	May 9, 2024
Martina Alibrandi
/s/ DAVID ALOISE	Director of the General Partner	May 9, 2024
David Aloise
/s/ ANDREW BLOCH	Director of the General Partner	May 9, 2024
Andrew Bloch
/s/ SALLY MICHAEL	Director of the General Partner	May 9, 2024
Sally Michael
/s/ DAVID REIER	Director of the General Partner	May 9, 2024
David Reier

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