NOTE 2. RENTAL PROPERTIES

As of December 31, 2014, the Partnership and its Subsidiary Partnerships owned 2,412 residential apartment units in 20 residential and mixed-use complexes (collectively, the "Apartment Complexes"). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the "Condominium Units"). The Apartment Complexes and Condominium Units are located primarily in the metropolitan Boston area of Massachusetts.

Additionally, as of December 31, 2014, the Partnership and Subsidiary Partnerships owned a commercial shopping center in Framingham, commercial buildings in Newton and Brookline and mixed-use properties in Boston, Brockton and Newton, all in Massachusetts. These properties are referred to collectively as the "Commercial Properties."

The Partnership also owned a 40% to 50% ownership interest in nine residential and mixed use complexes (the "Investment Properties") at December 31, 2014 with a total of 790 units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

Rental properties consist of the following:

	December 31, 2014			December 31, 2013			Useful Life
Land, improvements and parking lots	$	44,541,471		$	43,919,728			15–40 years
Buildings and improvements		153,059,430			152,130,635			15–40 years
Kitchen cabinets		6,865,348			5,956,078			5–10 years
Carpets		6,341,227			5,820,516			5–10 years
Air conditioning		705,116			707,928			5–10 years
Laundry equipment		147,721			404,775			5–7 years
Elevators		1,139,296			1,139,296			20–40 years
Swimming pools		444,629			444,629			10–30 years
Equipment		5,491,992			5,038,530			5–7 years
Motor vehicles		130,563			86,657			5 years
Fences		24,670			24,670			5–15 years
Furniture and fixtures		5,910,046			5,564,621			5–7 years
Smoke alarms		220,437			216,223			5–7 years

Total fixed assets		225,021,946			221,454,286
Less: Accumulated depreciation		(75,905,862	)		(68,549,625	)

	$	149,116,084		$	152,904,661

Real estate and accumulated depreciation as of December 31, 2014

			Initial Cost to Partnerships(1)				Cost Capitalized Subsequent to Acquisition(2)			Gross Amount at Which Carried at Close of Period
	Encumbrances (First Mortgages)				Buildings Improvements		Cost Capitalized Subsequent to Acquisition(2)					Buildings Improvements				Accumulated Depreciation(3)		Date Acquired
	Encumbrances (First Mortgages)		Land		Buildings Improvements		Improvements			Land		Buildings Improvements		Totals		Accumulated Depreciation(3)		Date Acquired
Boylston Downtown L.P. Residential Apartments Boston, Massachusetts	$	40,000,000	$	2,112,000	$	8,593,109	$	7,681,413		$	2,112,000	$	16,274,522	$	18,386,522	$	10,220,358		July 1995
Brookside Associates LLC Residential Apartments Woburn, Massachusetts	$	2,642,649	$	684,000	$	3,116,000	$	464,970		$	684,000	$	3,580,970	$	4,264,970	$	1,858,026		Oct. 2000
Clovelly Apartments L.P. Residential Apartments Nashua, New Hampshire	$	4,160,000	$	177,610	$	1,478,359	$	1,661,272		$	177,610	$	3,139,631	$	3,317,241	$	2,081,134		Sept. 1977
Commonwealth 1137 L.P. Residential Apartments Boston, Massachusetts	$	3,750,000	$	342,000	$	1,367,669	$	1,183,513		$	342,000	$	2,551,182	$	2,893,182	$	1,416,545		July 1995
Commonwealth 1144 L.P. Residential Apartments Boston, Massachusetts	$	14,780,000	$	1,410,000	$	5,664,816	$	2,074,864		$	1,410,000	$	7,739,680	$	9,149,680	$	4,851,194		July 1995
Executive Apartments L.P. Residential Apartments Framingham, Massachusetts	$	2,415,000	$	91,400	$	740,360	$	672,285		$	91,400	$	1,412,645	$	1,504,045	$	1,056,717		Sept. 1977
Hamilton Battle Green LLC Residential Apartments Lexington, Massachusetts	$	4,736,891	$	1,341,737	$	8,457,497	$	129,588		$	1,341,737	$	8,587,085	$	9,928,822	$	1,409,607		Jun. 2011
Hamilton Cypress LLC Commercial—1031Exchange Brookline, Massachusetts	$	—	$	2,362,596	$	4,613,985	$	250,850		$	2,362,596	$	4,864,835	$	7,227,431	$	878,739		Oct. 2008
Hamilton Green Apartments, LLC Residential Apartments Andover, Massachusetts	$	38,500,000	$	16,054,336	$	44,794,438	$	553,304		$	16,054,336	$	45,347,742	$	61,402,078	$	4,931,941		Jul. 2013
Hamilton Linewt LLC Commercial—1031Exchange Newton, Massachusetts	$	—	$	884,042	$	2,652,127	$	62,608		$	884,042	$	2,714,735	$	3,598,777	$	492,424		Nov. 2007
Hamilton Oaks Associates LLC Residential Apartments Brockton, Massachusetts	$	11,925,000	$	2,175,000	$	12,325,000	$	2,138,080		$	2,175,000	$	14,463,080	$	16,638,080	$	8,036,862		Dec. 1999
Highland Street Apartments, L.P. Residential Apartments Lowell, Massachusetts	$	1,050,000	$	156,000	$	634,085	$	374,147		$	156,000	$	1,008,232	$	1,164,232	$	629,766		Dec. 1996
Linhart L.P. Residential/Commercial Newton, Massachusetts	$	—	$	385,000	$	1,540,000	$	1,278,713		$	385,000	$	2,818,713	$	3,203,713	$	1,945,771		Jan. 1995
NERA Dean St. Associates LLC Residential Apartments Norwood, Massachusetts	$	5,687,000	$	1,512,000	$	5,701,480	$	791,091		$	1,512,000	$	6,492,571	$	8,004,571	$	2,893,369		Jun. 2002
North Beacon 140 L.P. Residential Apartments Boston, Massachusetts	$	6,937,000	$	936,000	$	3,762,013	$	1,818,227		$	936,000	$	5,580,240	$	6,516,240	$	3,476,883		July 1995
Olde English Apartments L.P. Residential Apartments Lowell, Massachusetts	$	3,080,000	$	46,181	$	878,323	$	1,324,254		$	46,181	$	2,202,577	$	2,248,758	$	1,354,946		Sept. 1977
Redwood Hills L.P. Residential Apartments Worcester, Massachusetts	$	6,743,000	$	1,200,000	$	4,810,604	$	2,896,055		$	1,200,000	$	7,706,659	$	8,906,659	$	4,402,390		July 1995
River Drive L.P. Residential Apartments Danvers, Massachusetts	$	3,465,000	$	72,525	$	587,777	$	678,945		$	72,525	$	1,266,722	$	1,339,247	$	919,183		Sept. 1977
Riverside Apartments Condominium Units Massachusetts	$	—	$	23,346	$	190,807	$	21,706		$	23,346	$	212,513	$	235,859	$	202,257		Sept. 1977
School St Assoc LLC Residential Apartments Framingham, Massachusetts	$	15,000,000	$	4,686,728	$	18,746,911	$	(1,581,928	)	$	4,686,728	$	17,164,983	$	21,851,711	$	7,285,429		Apr. 2003
WRF Associates, LLC Strip Mall Framingham, Massachusetts	$	6,000,000	$	3,280,000	$	4,920,000	$	42,069		$	3,280,000	$	4,962,069	$	8,242,069	$	2,568,515		May 1999
WCB Associates LLC Residential Apartments Brockton, Massachusetts	$	7,000,000	$	1,335,000	$	7,565,501	$	1,174,207		$	1,335,000	$	8,739,708	$	10,074,708	$	4,992,376		Dec. 1999
Westate Apartments Burlington LLC Residential Apartments Burlington, Massachusetts	$	2,500,000	$	44,965	$	4,478,687	$	241,572		$	44,965	$	4,720,259	$	4,765,224	$	1,815,417		Sep. 2004
Westgate Apartments LLC Residential Apartments Woburn, Massachusetts	$	15,700,000	$	461,300	$	2,424,636	$	7,316,384		$	417,107	$	9,741,020	$	10,158,127	$	6,186,013		Sept. 1977

(1)	The initial cost to the Partnerships represents both the balance of mortgages assumed in September 1977, including subsequent adjustments to such amounts, and subsequent acquisitions at cost.
(2)	Net of retirements.
(3)	In 2014, rental properties were depreciated over the following estimated useful lives:

Assets	Life
Buildings and Improvements		10–39 years
Other Categories of Assets		5–15 years

A reconciliation of rental properties and accumulated depreciation is as follows:

	December 31,
	2014		2013		2012
Rental Properties
Balance, Beginning	$	221,454,286	$	158,624,893	$	159,123,799
Additions:
Buildings, improvements and other assets		5,604,791		65,349,698		2,360,399

		227,059,077		223,974,591		161,484,198
Deduct:
Write-offs of retired or disposed assets		2,037,131		2,505,787		1,607,830
Rental properties held for sale and/or sold		0		14,518		1,251,475

Balance, Ending	$	225,021,946	$	221,454,286	$	158,624,893


Accumulated Depreciation
Balance, Beginning	$	68,549,625	$	63,651,293	$	60,199,265
Add:
Depreciation for the year		9,393,368		7,404,120		5,849,083

		77,942,993		71,055,413		66,048,348
Deduct
Accumulated depreciation of retired or disposed assets		2,037,131		2,505,788		1,607,830
Accumulated depreciation of rental properties held for sale and/or sold		0		0		789,225

Balance, Ending	$	75,905,862	$	68,549,625	$	63,651,293

In May 2013 the Partnership sold the Nashoba Apartments located in Acton, Massachusetts. The sale price was $4,300,000; the net proceeds of approximately $2,100,000 were transferred to Investment Property Exchange Services, Inc. a Qualified Intermediary. These funds were held by the intermediary in order to maintain the Partnership's ability to structure a tax free exchange in accordance with the Internal Revenue Service's rules under Sec. 1031. The gain on the sale in accordance with GAAP is approximately $3,679,000. The proceeds were subsequently used in the acquisition of the Hamilton Green Apartments described below.

On July 15, 2013, Hamilton Green Apartments, LLC, ("Hamilton Green") a newly formed subsidiary of the Partnership, purchased Windsor Green at Andover, a 193 unit apartment complex located at 311 and 319 Lowell Street, Andover, Massachusetts. The purchase price was $62,500,000. From the purchase price, the Partnership has allocated approximately $1,656,000 to the value of the in-place leases and approximately $96,000 to the value of the tenant relationships. These amounts will be amortized over 12 and 36 months respectively. To fund this purchase, the Partnership obtained short term financing of approximately $40,000,000, used the funds of approximately $2,100,000 from the sale of the Nashoba Apartments, and the balance from the Partnership's cash reserves. The closing costs associated with this short term financing were approximately $38,000. The original mortgage matured in November 2013. On December 20, 2013, the Partnership refinanced the mortgage on Hamilton Green. The new 15 year mortgage is $38,500,000; the interest rate is 4.67%; interest only for 2 years. After the first two years, principal is amortized on a 30-year amortization schedule through January 2029. This refinancing required additional capital of approximately $1,846,000 from the Partnership. The closing costs associated with this refinancing were approximately $346,000.