10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2015

OR

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

For the transition period from              to             

Commission file number 001-31568

New England Realty Associates Limited Partnership

(Exact name of registrant as specified in its charter)

Massachusetts	04-2619298
(State or other jurisdiction of incorporation or organization)	(I.R.S. employer identification no.)

39 Brighton Avenue, Allston, Massachusetts	02134
(Address of principal executive offices)	(Zip Code)

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

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

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

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

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

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

As of August 5, 2015, there were 100,978 of the registrant’s Class A units (3,029,351 Depositary Receipts) of limited partnership issued and outstanding and 24,016 Class B units issued and outstanding.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP

INDEX

PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014
	Consolidated Statements of Income for the Three Months and Six Months Ended June 30, 2015 and 2014
	Consolidated Statements of Changes in Partners’ Capital for the Six Months Ended June 30, 2015 and 2014
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2015 and 2014
	Notes to Consolidated Financial Statements
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
Item 4.	Controls and Procedures
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings
Item 1A.	Risk Factors
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.	Defaults Upon Senior Securities
Item 4.	Mine Safety Disclosure
Item 5.	Other Information
Item 6.	Exhibits
SIGNATURES

1

NEW ENGLAND REALTY ASSOCIATES, L.P.

PART 1 — FINANCIAL INFORMATION

Item 1. Financial Statements

The accompanying unaudited consolidated balance sheets, statements of income, changes in partners’ capital, and cash flows and related notes thereto, have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements.  The financial statements reflect all adjustments consisting only of normal, recurring adjustments, which are, in the opinion of management, necessary for a fair presentation for the interim periods.

The consolidated balance sheet as of December 31, 2014 has been derived from the audited consolidated balance sheet at that date but does not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements.

The aforementioned financial statements should be read in conjunction with the notes to the aforementioned financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in New England Realty Associates L.P.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

The results of operations for the three and six month periods ended June 30, 2015 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2015			2014
ASSETS	Unaudited
Rental Properties	$	146,682,696		$	149,116,084
Cash and Cash Equivalents	15,406,249			14,015,898
Rents Receivable	526,229			474,225
Insurance Recovery Receivable	952,084			—
Real Estate Tax Escrows	338,094			340,341
Prepaid Expenses and Other Assets	3,776,461			3,287,005
Investments in Unconsolidated Joint Ventures	7,866,077			8,807,868
Financing Fees	1,625,748			1,735,652
Total Assets	$	177,173,638		$	177,777,073
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	196,005,736		$	196,071,540
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	1,534,258			1,425,369
Accounts Payable and Accrued Expenses	4,298,542			3,099,117
Advance Rental Payments and Security Deposits	4,975,554			4,548,729
Total Liabilities	206,814,090			205,144,755
Commitments and Contingent Liabilities (Notes 3 and 9)	—			—
Partners’ Capital 126,400 and 127,653 units outstanding in 2015 and 2014 respectively	(29,640,452		)	(27,367,682		)
Total Liabilities and Partners’ Capital	$	177,173,638		$	177,777,073

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
Revenues
Rental income	$	10,948,498		$	10,439,568		$	21,921,289		$	20,954,287
Laundry and sundry income	112,920			120,967			215,649			224,177
	11,061,418			10,560,535			22,136,938			21,178,464
Expenses
Administrative	487,233			568,915			1,020,310			1,099,482
Depreciation and amortization	2,520,264			2,747,467			5,004,557			5,471,646
Management fee	465,716			438,068			916,419			865,461
Operating	908,112			1,020,323			2,994,297			2,702,257
Renting	155,274			108,612			221,201			145,469
Repairs and maintenance	1,822,707			1,601,307			3,169,921			2,812,456
Taxes and insurance	1,450,928			1,351,043			2,913,904			2,792,153
	7,810,234			7,835,735			16,240,609			15,888,924
Income Before Other Income ( Expense)	3,251,184			2,724,800			5,896,329			5,289,540
Other Income (Expense)
Interest income	168			199			362			382
Interest expense	(2,376,481		)	(2,380,896		)	(4,737,395		)	(4,767,062		)
Income (Loss) from investments in unconsolidated
joint ventures	221,586			(62,382		)	346,820			(270,633		)
	(2,154,727		)	(2,443,079		)	(4,390,213		)	(5,037,313		)
Net Income	$	1,096,457		$	281,721		$	1,506,116		$	252,227
Net Income per Unit	$	8.66		$	2.18		$	11.87		$	1.95
Weighted Average Number of Units Outstanding	126,646			128,988			126,859			129,149

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS’ CAPITAL

(Unaudited)

	Units								Partners’s Capital
	Limited		General		Treasury				Limited						General
	Class A	Class B	Partnership	Subtotal	Units	Total			Class A			Class B			Partnership			Total
Balance January 1, 2014	144,180	34,243	1,802	180,225	50,738	129,487			$	(17,485,327	)	$	(4,145,076	)	$	(218,160	)	$	(21,848,563	)
Distribution to Partners	—	—	—	—	—	—			(1,548,307		)	(367,723		)	(19,354		)	(1,935,384		)
Stock Buyback	—	—	—	—	664	(664		)	(757,246		)	(175,019		)	(9,212		)	(941,477		)
Net Income	—	—	—	—	—	—			201,782			47,923			2,522			252,227
Balance June 30, 2014	144,180	34,243	1,802	180,225	51,402	$	128,823		$	(19,589,098	)	$	(4,639,895	)	$	(244,204	)	$	(24,473,197	)
Balance January 1, 2015	144,180	34,243	1,802	180,225	52,572	127,653			$	(21,910,488	)	$	(5,184,335	)	$	(272,859	)	$	(27,367,682	)
Distribution to Partners	—	—	—	—	—	—			(1,519,908		)	(360,978		)	(18,999		)	(1,899,885		)
Stock Buyback	—	—	—	—	1,253	(1,253		)	(1,505,645		)	(354,688		)	(18,668		)	(1,879,001		)
Net Income	—	—	—	—	—	—			1,204,893			286,162			15,061			1,506,116
Balance June 30, 2015	144,180	34,243	1,802	180,225	53,825	126,400			$	(23,731,148	)	$	(5,613,839	)	$	(295,465	)	$	(29,640,452	)

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2015			2014
Cash Flows from Operating Activities
Net income	$	1,506,116		$	252,227
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	5,004,557			5,471,646
(Income) Loss from investments in joint venture	(346,820		)	270,633
Change in operating assets and liabilities
(Increase) in rents receivable	(52,004		)	(60,704		)
Increase (Decrease) in accounts payable and accrued expense	1,199,425			(556,289		)
(Increase) in insurance recovery receivable	(952,084		)	—
Decrease in real estate tax escrow	2,247			81,194
(Increase) in prepaid expenses and other assets	(519,096		)	(434,134		)
Increase in advance rental payments and security deposits	426,825			333,065
Total Adjustments	4,763,050			5,105,411
Net cash provided by operating activities	6,269,166			5,357,638
Cash Flows from Investing Activities
Proceeds from unconsolidated joint ventures	1,254,487			867,741
Distribution in excess of investment in unconsolidated joint ventures	165,000			100,000
(Investment in) unconsolidated joint ventures	(21,987		)	(117,741		)
Improvement of rental properties	(2,431,625		)	(1,642,788		)
Net cash (used in) investing activities	(1,034,125		)	(792,788		)
Cash Flows from Financing Activities
Payment of financing costs	—			(201,917		)
Proceeds of mortgage notes payable	—			609,555
Principal payments and payoffs of mortgage notes payable	(65,804		)	(3,495,661		)
Stock buyback	(1,879,001		)	(941,477		)
Distributions to partners	(1,899,885		)	(1,935,384		)
Net cash (used in) financing activities	(3,844,690		)	(5,964,884		)
Net Increase (Decrease) in Cash and Cash Equivalents	1,390,351			(1,400,034		)
Cash and Cash Equivalents, at beginning of period	14,015,898			14,013,380
Cash and Cash Equivalents, at end of period	$	15,406,249		$	12,613,346

See notes to consolidated financial statements.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2015

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Line of Business:  New England Realty Associates Limited Partnership (“NERA” or the “Partnership”) was organized in Massachusetts in 1977. NERA and its subsidiaries own 24 properties which include 16 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,412 apartment units, 19 condominium units and 108,043 square feet of commercial space. Additionally, the Partnership also owns a 40-50% interest in 9 residential and mixed use properties consisting of 790 apartment units, 12,500 square feet of commercial space and a 50 car parking lot. The properties are located in Eastern Massachusetts and Southern New Hampshire.

Basis of Presentation:  The preparation of the financial statements, in conformity with accounting principles generally accepted in the United State of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Accordingly, actual results could differ from those estimates.

Principles of Consolidation:  The consolidated financial statements include the accounts of NERA and its subsidiaries. NERA has a 99.67% to 100% ownership interest in each subsidiary except for the nine limited liability companies (the “Investment Properties” or “Joint Ventures”) in which the Partnership has a 40 - 50% ownership interest. The consolidated group is referred to as the “Partnership.” Minority interests are not recorded, since they are insignificant. All significant intercompany accounts and transactions are eliminated in consolidation. The Partnership accounts for its investment in the above-mentioned Investment Properties using the equity method of consolidation. (See Note 14: Investments in Unconsolidated Joint Ventures).

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

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

Impairment:  On an annual basis management assesses whether there are any indicators that the value of the Partnership’s rental properties or investments in unconsolidated subsidiaries may be impaired. In addition to identifying any specific circumstances which may affect a property or properties, management considers other criteria for determining which properties may require assessment for potential impairment. The criteria considered by management include reviewing low leased percentages, significant near term lease expirations, recently acquired properties, current and historical operating and/or cash flow losses, near term mortgage debt maturities or other factors that might impact the Partnership’s intent and ability to hold property. A property’s value is impaired only if management’s estimate of the aggregate future cash flows

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

Revenue Recognition:  Rental income from residential and commercial properties is recognized over the term of the related lease. For residential tenants, amounts 60 days in arrears are charged against income. The commercial tenants are evaluated on a case by case basis. Certain leases of the commercial properties provide for increasing stepped minimum rents, which are accounted for on a straight-line basis over the term of the lease. Contingent rent for commercial properties are received from tenants for certain costs as provided in the lease agreement. The costs generally include real estate taxes, utilities, insurance, common area maintenance and recoverable costs. Rental concessions are also accounted for on the straight-line basis.

Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the differences between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed-rate renewal options for below-market leases. The capitalized above-market lease values for acquired properties are amortized as a reduction of base rental revenue over the remaining term of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.

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

Other intangible assets acquired include amounts for in-place lease values and tenant relationship values, which are based on management’s evaluation of the specific characteristics of each tenant’s lease and the Partnership’s overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant relationships include the nature and extent of the Partnership’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles are amortized to expense over the anticipated life of the relationships.

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

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Financing and Leasing Fees:  Financing fees are capitalized and amortized, using the interest method, over the life of the related mortgages. Leasing fees are capitalized and amortized on a straight-line basis over the life of the related lease. Unamortized balances are expensed when the corresponding fee is no longer applicable.

Income Taxes:  The financial statements have been prepared on the basis that NERA and its subsidiaries are entitled to tax treatment as partnerships. Accordingly, no provision for income taxes have been recorded (See Note 13).

Cash Equivalents:  The Partnership considers cash equivalents to be all highly liquid instruments purchased with a maturity of three months or less.

Segment Reporting:  Operating segments are revenue producing components of the Partnership for which separate financial information is produced internally for management. Under the definition, NERA operated, for all periods presented, as one segment.

Comprehensive Income:  Comprehensive income is defined as changes in partners’ equity, exclusive of transactions with owners (such as capital contributions and dividends). NERA did not have any comprehensive income items in 2015 or 2014  other than net income as reported.

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

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

Concentration of Credit Risks and Financial Instruments:  The Partnership’s properties are located in New England, and the Partnership is subject to the general economic risks related thereto. No single tenant accounted for more than 5% of the Partnership’s revenues in 2015 or 2014. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At June 30, 2015, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01% to 0.35%.  At June 30, 2015 and December 31, 2014, respectively approximately $16,572,000 and $15,118,000 of cash and cash equivalents, and security deposits included in prepaid expenses and other assets exceeded federally insured amounts.

Advertising Expense:  Advertising is expensed as incurred. Advertising expense was $73,961 and $56,662 for the six months ended June 30, 2015 and 2014, respectively.

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

Interest Capitalized:  The Partnership follows the policy of capitalizing interest as a component of the cost of rental property when the time of construction exceeds one year. During the six months ended June 30, 2015 and 2014 there was no capitalized interest.

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

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

NOTE 2. RENTAL PROPERTIES

As of June 30, 2015, the Partnership and its Subsidiary Partnerships owned 2,412 residential apartment units in 20 residential and mixed-use complexes (collectively, the “Apartment Complexes”). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the “Condominium Units”). The Apartment Complexes and Condominium Units are located primarily in the metropolitan Boston area of Massachusetts.

Additionally, as of June 30, 2015, the Partnership and Subsidiary Partnerships owned a commercial shopping center in Framingham, commercial buildings in Newton and Brookline and mixed-use properties in Boston, Brockton and Newton, all in Massachusetts. These properties are referred to collectively as the “Commercial Properties.”

The Partnership also owned a 40% to 50% ownership interest in nine residential and mixed use complexes (the “Investment Properties”) at June 30, 2015 with a total of 790 units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

Rental properties consist of the following:

	June 30, 2015			December 31, 2014			Useful Life
Land, improvements and parking lots	$	44,694,293		$	44,541,471		15—40 years
Buildings and improvements	153,905,317			153,059,430			15—40 years
Kitchen cabinets	7,406,845			6,865,348			5—10 years
Carpets	6,722,293			6,341,227			5—10 years
Air conditioning	721,937			705,116			5—10 years
Laundry equipment	236,283			147,721			5—7 years
Elevators	1,139,296			1,139,296			20—40 years
Swimming pools	444,629			444,629			10—30 years
Equipment	5,653,232			5,491,992			5—7 years
Motor vehicles	130,859			130,563			5 years
Fences	24,670			24,670			5—15 years
Furniture and fixtures	6,153,480			5,910,046			5—7 years
Smoke alarms	220,437			220,437			5—7 years
Total fixed assets	227,453,571			225,021,946
Less: Accumulated depreciation	(80,770,875		)	(75,905,862		)
	$	146,682,696		$	149,116,084

NOTE 3. RELATED PARTY TRANSACTIONS

The Partnership’s properties are managed by an entity that is owned by the majority shareholder of the General Partner. The management fee is equal to 4% of gross receipts rental revenue and laundry income on the majority of the Partnership’s properties and 3% on Linewt. Total fees paid were approximately $916,000 and $865,000 for the six months ended June 30, 2015 and 2014, respectively.

The Partnership Agreement permits the General Partner or Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA. During the six months ended June 30, 2015 and 2014, approximately $441,000 and $372,000, was charged to NERA for legal, accounting, construction, maintenance, rental and architectural services and supervision of capital improvements. Of the 2015 expenses referred to above, approximately $207,000 consisted of repairs and maintenance, and $172,000 of administrative expense. Approximately

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$62,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2015, the Hamilton Company received approximately $426,000 from the Investment Properties of which approximately $343,000 was the management fee, approximately $63,000 was for maintenance services and approximately $13,000 was for administrative services. The management fee is equal to 4% of gross receipts rental income on the majority of investment properties and 2% on Dexter Park.

The Partnership reimburses the management company for the payroll and related expenses of the employees who work at the properties. Total reimbursement was approximately $1,383,000 and $1,565,000 for the six months ended June 30, 2015 and 2014, respectively. The Management Company maintains a 401K plan for all eligible employees whereby the employees may contribute the maximum allowed by law. The plan also provides for discretionary contributions by the employer. There were no employer contributions during 2015 and 2014.

Bookkeeping and accounting functions are provided by the Management Company’s accounting staff, which consists of approximately 14 people. During the six months ended June 30, 2015 and 2014, the Management Company charged the Partnership $62,500 ($125,000 per year) for bookkeeping and accounting services included in administrative expenses above.

The President of the Management Company performs asset management consulting services and receives an asset management fee from the Partnership. The Partnership does not have a written agreement with this individual. During the six months ended June 30, 2015 and 2014 this individual received fees of $37,500.

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

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

NOTE 4. OTHER ASSETS

Approximately $2,225,000 and $2,090,000 of security deposits are included in prepaid expenses and other assets at June 30, 2015 and December 31, 2014, respectively. The security deposits and escrow accounts are restricted cash.

Included in prepaid expenses and other assets at June 30, 2015 and December 31, 2014 is approximately $292,000 and $253,000, respectively, held in escrow to fund future capital improvements.

Intangible assets on the acquisition of Hamilton Green are included in prepaid expenses and other assets.  Intangible assets are approximately $33,000 net of accumulated amortization of approximately $1,719,000 and approximately $49,000 net of accumulated amortization of approximately $1,703,000 at June 30, 2015 and December 31, 2014, respectively.

Financing  fees of approximately $1,626,000 and $1,736,000 are net of accumulated amortization of approximately $723,000 and $613,000 at June 30, 2015 and December 31, 2014 respectively.

NOTE 5. MORTGAGE NOTES PAYABLE

At June 30, 2015 and December 31, 2014, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At June 30, 2015, the interest rates on these loans ranged from 3.76% to 5.97%, payable in monthly installments aggregating approximately $808,000 including principal, to various dates through 2029. The majority of the mortgages are subject to prepayment penalties. At June 30, 2015, the weighted average interest rate on the above mortgages was 4.81%. The effective rate of 4.93% includes the amortization expense of deferred financing costs. See Note 12 for fair value information. The Partnership’s mortgage debt and the mortgage debt of its unconsolidated joint ventures generally is non-recourse except for customary exceptions pertaining to misuse of funds and material misrepresentations.

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

Approximate annual maturities at June 30, 2015 are as follows:

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2016—current maturities	$	504,000
2017	1,629,000
2018	1,821,000
2019	7,900,000
2020	4,330,000
Thereafter	179,822,000
	$	196,006,000

In February 2014, the Partnership paid off the mortgages on Linewt in the amount of approximately $1,466,000 and Linhart in the amount of approximately $1,926,000. There were no prepayment penalties. The Partnership’s cash reserves were used to pay off these mortgages.

On June 11, 2014, the Partnership refinanced the property owned by NERA Dean Street Associates, LLC.  The new mortgage is $5,687,000; the interest rate is 4.22%, interest only payable in 10 years. Approximately $5,077,000 of the loan proceeds were used to pay off  the existing mortgage.  The mortgage matures in June 2024. The costs associated with the refinancing were approximately $89,000.

On July 11, 2014, the Partnership refinanced the property owned by Westgate Apartments Burlington, LLC.  The new mortgage is $2,500,000; the interest rate is 4.31%; interest only, payable in 10 years.  Approximately $2,010,000 of loan proceeds were used to pay off the existing mortgage.  The mortgage matures in August, 2024.  The costs associated with the refinancing were approximately $75,000.

Line of Credit

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit.  The term of the line is three years with a floating interest rate equal to a base rate of the greater of (a) the Prime Rate (b) the Federal Funds Rate plus one-half of one percent per annum, or (c) the LIBOR Rate for a period of one month plus 1% per annum, plus an applicable margin of 2.5% to 3.5%. The costs associated with the line of credit were approximately $125,000.  As of June 30, 2015, no funds have been drawn on this credit line.

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

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

The Partnership paid fees to secure the line of credit. Any unused balance of the line of credit is subject to a fee ranging from 15 to 20 basis points per annum. The Partnership paid approximately $25,000 for the six months ended June 30, 2015.

The line of credit agreement contains several covenants including, but not limited to, providing cash flow projections and compliance certificates, as well as other financial information. Additional covenants include certain restrictions on additional encumbrances of Partnership assets, limitations on debt, maintenance of leverage ratios, minimum tangible net worth, limitations on total aggregate indebtedness, minimum ratio of net operating income to total indebtedness debt service, disposition of properties, and other items.

NOTE 6. ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

The Partnership’s residential lease agreements may require tenants to maintain a one-month advance rental payment and/or a security deposit. At June 30, 2015, amounts received for prepaid rents of approximately $1,773,000 are included in cash and cash equivalents, and security deposits of approximately $2,225,000 are included in prepaid expenses and other assets and are restricted cash.

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NOTE 7. PARTNERS’ CAPITAL

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

In 2015, the Partnership paid quarterly distributions of $7.50 per unit ($0.25 per receipt) on March 31 and June 30, 2015.

In 2014, the Partnership paid quarterly distributions of $7.50 per unit ($0.25 per receipt) in March, June, September, and December for a total distribution of $30.00 per unit ($1.00 per receipt) each year.

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

	Six Months Ended June 30,
	2015		2014
Net Income per Depositary Receipt	$	0.40	$	0.07
Distributions per Depositary Receipt	$	0.50	$	0.50

NOTE 8. TREASURY UNITS

Treasury Units at June 30, 2015 are as follows:

Class A	43,060
Class B	10,227
General Partnership	538
	53,825

On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program (“Repurchase Program”) under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one-tenth of a Class A Unit). On January 15, 2008, the General Partner authorized an increase in the Repurchase Program from 300,000 to 600,000 Depositary Receipts. On January 30, 2008 the General Partner authorized an increase the Repurchase Program from 600,000 to 900,000 Depositary Receipts. On March 6, 2008, the General Partner authorized the increase in the total number of Depositary Receipts that could be repurchased pursuant to the Repurchase Program from 900,000 to1,500,000. On August 8, 2008, the General Partner re- authorized and renewed the Repurchase Program for an additional 12-month period ended August 19, 2009. On March 22, 2010, the General Partner re-authorized and renewed the Repurchase Program that expired on August 19, 2009. Under the terms of the renewed Repurchase Program, the Partnership may purchase up to 1,500,000 Depositary Receipts from the start of the program in 2007 through March 31, 2015. On March 10, 2015, the General Partner authorized an increase in the Repurchase Program from 1,500,000 to 2,000,000 Depository Receipts and extended the Program for an additional five years from March 31, 2015 until March 31, 2020. The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership’s Second Amended and Restate Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through June 30, 2015, the Partnership has repurchased 1,316,996 Depositary Receipts at an average price of $26.20 per receipt (or $786.00 per underlying Class A Unit), 2,690 Class B Units and 142 General Partnership Units, both at an average price of $833.09 per Unit, totaling approximately $37,046,000 including brokerage fees paid by the Partnership.

During the six months ended June 30, 2015, the Partnership purchased a total of 30,080 Depositary Receipts. The average price was $49.63 per receipt or $1,488.90 per unit. The total cost including commission was $1,505,645. The Partnership was required to repurchase 238 Class B Units and 13 General Partnership units at a cost of $354,688 and $18,668 respectively.

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From July 1, 2015 through August 5, 2015, the Partnership purchased a total of  4,241 Depositary Receipts. The average price was $49.23 per receipt or $1,476.99 per unit. The total cost was $215,102. The Partnership is required to repurchase 33.6 Class B Units and 1.8 General Partnership Units at a cost of $49,589 and $2,610 respectively.

NOTE 9. COMMITMENTS AND CONTINGENCIES

From time to time, the Partnership is involved in various ordinary routine litigation incidental to their business. The Partnership either has insurance coverage or provides for any uninsured claims when appropriate. The Partnership is not involved in any material pending legal proceedings.

On June 9, 2015, a fire broke out at 12 Westgate Drive apartment complex in Woburn,Ma., resulting in approximately 10 apartments being damaged which will remain unoccupied for an extended period. The Partnership has insurance coverage on both repairs and rental loss for the extended period until the apartments are available for rent. An estimated insurance recovery receivable of approximately $952,000 has been recorded at June 30, 2015.

NOTE 10. RENTAL INCOME

During the six months ended June 30, 2015, approximately 92% of rental income was related to residential apartments and condominium units with leases of one year or less. The majority of these leases expire in June, July and August. Approximately 8% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30, 2015 as follows:

	Commercial Property Leases
2016	$	2,639,000
2017	1,877,000
2018	1,444,000
2019	1,062,000
2020	475,000
Thereafter	603,000
	$	8,100,000

The aggregate minimum future rental income does not include contingent rentals that may be received under various leases in connection with common area charges and real estate taxes. Aggregate contingent rentals from continuing operations were approximately $345,000 and $315,000 for the six months ended June 30, 2015 and 2014 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately 30% of the total commercial rental income.

The following information is provided for commercial leases:

	Annual base rent for expiring leases		Total square feet for expiring leases	Total numberof leases expiring	Percentage of annual base rent for expiring leases
Through June 30,
2016	$	864,371	38,641	11	29	%
2017	525,725		18,157	7	18	%
2018	408,902		13,175	9	14	%
2019	211,965		6,626	5	7	%
2020	753,497		24,873	10	25	%
2021	64,800		1,800	1	2	%
2022	0		0	0	0	%
2023	0		0	0	0	%
2024	157,443		4,771	1	5	%
2025	0		0	0	0	%
Totals	$	2,986,703	108,043	44	100	%

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Rents receivable are net of an allowance for doubtful accounts of approximately $452,000 and $366,000 at June 30, 2015 and December 31, 2014. Included in rents receivable at June 30, 2015 is approximately $168,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis. The majority of this amount is for long-term leases with Staples and Trader Joe’s at Staples Plaza in Framingham, Massachusetts.

Rents receivable at June 30, 2015 also includes approximately $109,000 representing the deferral of rental concession primarily related to the residential properties.

For the six months ended June 30, 2015 rent at the commercial properties includes approximately $1,100 of amortization of deferred rents arising from the fair values assigned to in-place leases upon the purchase of Cypress Street in Brookline, Massachusetts.

NOTE 11. CASH FLOW INFORMATION

During the six months ended June 30, 2015 and 2014, cash paid for interest was approximately $4,753,000, and $4,074,000 respectively.  Cash paid for state income taxes was approximately $18,000 and $49,000 during the six months ended June 30, 2015 and 2014 respectively.

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At June 30, 2015 and December 31, 2014, we do not have any significant financial assets or financial liabilities that are measured at fair value on a recurring basis in our consolidated financial statements.

Financial Assets and Liabilities not Measured at Fair Value

At June 30, 2015 and December 31, 2014 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, and note payable, accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments or, the recent acquisition of these items.

At June 30, 2015 and December 31, 2014, we estimated the fair value of our mortgages payable and other notes based upon quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available. We estimated the fair value of our secured mortgage debt that does not have current quoted market prices available by discounting the future cash flows using rates currently available to us for debt with similar terms and maturities (Level 3). The differences in the fair value of our debt from the carrying value are the result of differences in interest rates and/or borrowing spreads that were available to us at June 30, 2015 and December 31, 2014, as compared with those in effect when the debt was issued or acquired. The secured mortgage debt contain pre-payment penalties or yield maintenance provisions that could make the cost of refinancing the debt at lower rates exceed the benefit that would be derived from doing so.

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

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

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

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

	Carrying Amount		Estimated Fair Value
Mortgage Notes Payable
Partnership Properties
At June 30, 2015	$	196,005,736	$	209,943,632
At December 31, 2014	$	196,071,540	$	210,691,170
Investment Properties
At June 30, 2015	$	137,039,601	$	146,494,182
At December 31, 2014	$	137,910,870	$	147,843,221

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Disclosure about fair value of financial instruments is based on pertinent information available to management as of June 30, 2015 and December 31, 2014. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since June 30, 2015 and current estimates of fair value may differ significantly from the amounts presented herein.

NOTE 13. TAXABLE INCOME AND TAX BASIS

Taxable income reportable by the Partnership and includable in its partners’ tax returns is different than financial statement income because of tax free exchanges, accelerated depreciation, different tax lives, and timing differences related to prepaid rents, allowances and intangible assets at significant acquisitions. Taxable loss of  approximately $2,100,000 was approximately $3,100,000  less than statement income for the year ended December 31, 2014. The primary reason for the decrease is due to accelerated depreciation, tax free exchange and other differences in the treatment of certain expenditures. The cumulative tax basis of the Partnership’s real estate at December 31, 2014 is approximately $5,000,000 less than the statement basis. The primary reasons for the lower tax basis are tax free exchanges, and accelerated depreciation. The Partnership’s tax basis in its joint venture investments is approximately $1,300,000 less than statement basis because of accelerated depreciation.

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

Allowable accelerated depreciation deductions expired in 2014. This may result in higher taxable income in future years. Future tax law changes may significantly affect taxable income.

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

In the normal course of business the Partnership or one of its subsidiaries is subject to examination by federal, state and local jurisdictions in which it operates, where applicable. As of June 30, 2015, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2009 forward.

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

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

On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, referred to as Dexter Park, is a 409 unit residential complex. The purchase price was $129,500,000. The total mortgage was $89,914,000 with an interest rate of 5.57% and it matures in 2019. The mortgage calls for interest only payments for the first two years of the loan and amortized over 30 years thereafter. The balance of this mortgage is approximately $85,575,000 at June 30, 2015. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

On October 3, 2005, the Partnership invested $2,500,000 for a 50% ownership interest in a 168-unit apartment complex in Quincy, Massachusetts. The purchase price was $30,875,000. The Partnership sold 120 units as condominiums and retained 48 units for long-term investment.. In February 2007, the Partnership refinanced the 48 units with a new mortgage in the amount of $4,750,000 with an interest rate of 5.57%, interest only for five years. The loan will be amortized over 30 years thereafter and matures in March 2017. As of June 30, 2015, the balance of the mortgage is approximately $4,539,000. This investment is referred to as Hamilton Bay Apartments, LLC. In April 2008, the Partnership refinanced an additional 20 units and obtained a new mortgage in the amount of $2,368,000 with interest at 5.75%, interest only, which matured in 2013. On October 18, 2013, the Partnership and its joint venture partner each made capital contributions to the

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entity of $660,000. The capital was used to pay off the outstanding mortgage. As of August 1, 2015, 7 units are still owned by the Partnership. This investment is referred to as Hamilton Bay, LLC.

On March 7, 2005, the Partnership invested $2,000,000 for a 50% ownership interest in a building comprising 48 apartments, one commercial space and a 50-car surface parking lot located in Boston, Massachusetts. The purchase price was $14,300,000, with a $10,750,000 mortgage. The Partnership plans to operate the building and initiate development of the parking lot. In June 2007, the Partnership separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Partnership restructured the mortgages on both parcels at Essex 81 and transferred the residential apartments to Hamilton Essex 81, LLC. The mortgage balance on Hamilton Essex 81, LLC is approximately $8,042,000, at June 30, 2015, amortizing over 30 years at 5.79% due in August 2016. The mortgage on Essex Development, LLC, or the parking lot is approximately $1,961,000 with a variable interest rate of 2.25% over the daily Libor rate (0.1865%) at June 30, 2015. In September 2013, this loan was extended for an additional two years to August 2015 with the same conditions except for the increased principal payments of $4,443 per month. The costs associated with the extension were approximately $9,000. Harold Brown has issued a personal guaranty up to $1,000,000 of this mortgage. In the event that he is obligated to make payments to the lender as a result of this guaranty, the Partnership and other investors have, in turn, agreed to indemnify him for their proportionate share of any such payments. The investment in the parking lot is referred to as Hamilton Essex Development, LLC; the investment in the apartments is referred to as Hamilton Essex 81, LLC. The Partnership is in the process of refinancing both loans.

On March 2, 2005, the Partnership invested $2,352,000 for a 50% ownership interest in a 176-unit apartment complex with an additional small commercial building located in Quincy, Massachusetts. The purchase price was $23,750,000. The Partnership sold 127 of the units as condominiums and retained 49 units for long-term investment. The Partnership obtained a new 10-year mortgage in the amount of $5,000,000 on the units to be retained by the Partnership. The interest on the new loan is 5.67% fixed for the 10 year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan term. The balance of this mortgage is approximately $4,770,000 at June 30, 2015. This investment is referred to as Hamilton 1025, LLC.

In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. In October 2004, the Partnership obtained a mortgage on the property in the amount of $8,025,000 and returned $3,775,000 to the Partnership. The Partnership obtained a new 10- year mortgage in the amount of $5,500,000 in January 2007. The interest on the new loan is 5.67% fixed for the ten year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan. This loan required a cash contribution by the Partnership of $1,250,000 in December 2006. At June 30, 2015, the balance of this mortgage is approximately $5,253,000. This investment is referred to as Hamilton Minuteman,  LLC.

In August 2004, the Partnership invested $8,000,000 for a 50% ownership interest in a 280-unit apartment complex located in Watertown, Massachusetts. The total purchase price was $56,000,000.  The Partnership sold 137 units as condominiums.  The assets were combined with Hamilton on Main Apartments. Hamilton on Main, LLC is known as Hamilton Place.

In 2005, Hamilton on Main Apartments, LLC obtained a ten year mortgage on the three buildings to be retained. The mortgage was $16,825,000, with interest only of 5.18% for three years and amortizing on a 30 year schedule for the remaining seven years when the balance is due. The net proceeds after funding escrow accounts and closing costs on the mortgage were approximately $16,700,000, which were used to reduce the existing mortgage. In August 2014, the property was refinanced with a 10 year mortgage in the amount of $16,900,000 at 4.34% interest only.  The Joint Venture Partnership paid off the prior mortgage of approximately $15,205,000 with the proceeds of the new mortgage and distributed $850,000 to the Partnership. The costs associated with the refinancing were approximately $161,000.

In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts. In June 2013, the property was refinanced with a 15 year mortgage in the amount of $10,000,000 at 3.87%, interest only for 3 years and is amortized on a 30-year schedule for the balance of the term. The Partnership paid off the prior mortgage of approximately $6,776,000 with the proceeds of the new mortgage. After the refinancing, the property made a distribution of $1,610,000 to the Partnership. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting. Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed. This investment is referred to as 345 Franklin, LLC.

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Summary financial information as of June 30, 2015

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	8,564,474		$	2,620,081		$	6,951,074		$	5,039,485		$	793,069		$	6,288,296		$	6,421,497		$	19,007,097		$	95,631,639		$	151,316,712
Cash & Cash Equivalents	29,625			33,530			116,046			6,348			8,106			829			42,200			208,411			1,274,043			1,719,138
Rent Receivable	25,517			—			4,123			5,178			1,605			2,221			152			15,289			133,921			188,006
Real Estate Tax Escrow	123,085			—			17,330			72,812			—			56,520			39,006			94,677			264,746			668,176
Prepaid Expenses & Other Assets	92,967			—			51,470			54,129			19,977			55,989			43,472			82,262			1,940,068			2,340,334
Financing & Leasing Fees	21,848			1,409			86,561			7,080			—			10,338			6,028			147,136			252,066			532,466
Total Assets	$	8,857,516		$	2,655,020		$	7,226,604		$	5,185,032		$	822,757		$	6,414,193		$	6,552,355		$	19,554,872		$	99,496,483		$	156,764,832
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,042,496		$	1,961,172		$	10,000,000		$	4,769,824		$	—		$	4,538,605		$	5,252,844		$	16,900,000		$	85,574,660		$	137,039,601
Accounts Payable & Accrued Expense	59,786			5,308			64,628			27,358			20,207			14,768			47,865			154,122			724,526			1,118,568
Advance Rental Pmts & Security Deposits	199,886			—			230,492			97,276			5,810			95,435			96,548			337,614			2,800,624			3,863,685
Total Liabilities	8,302,168			1,966,480			10,295,120			4,894,458			26,017			4,648,808			5,397,257			17,391,736			89,099,810			142,021,854
Partners’ Capital	555,348			688,540			(3,068,516		)	290,574			796,740			1,765,385			1,155,098			2,163,136			10,396,673			14,742,978
Total Liabilities and Capital	$	8,857,516		$	2,655,020		$	7,226,604		$	5,185,032		$	822,757		$	6,414,193		$	6,552,355		$	19,554,872		$	99,496,483		$	156,764,832
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	277,674		$	344,270		$	—		$	145,287		$	398,370		$	882,693		$	577,549		$	1,081,568		$	4,158,667		7,866,077
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,534,258	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,534,258		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,331,819
Total units/condominiums
Apartments	48			—			40			175			120			48			42			148			409			1,030
Commercial	1			1			—			1			—			—			—			—			—			3
Total	49			1			40			176			120			48			42			148			409			1,033
Units to be retained	49			1			40			49			—			48			42			148			409			786
Units to be sold	—			—			—			127			120			—			—			—			—			247
Units sold through August 1, 2015	—			—			—			127			113			—			—			—			—			240
Unsold units	—			—			—			—			7			—			—			—			—			7
Unsold units with deposits for future sale as of August 1, 2015	—			—			—			—			—			—			—			—			—			—

17

Financial information for the six months ended June 30, 2015

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
Revenues
Rental Income	$	721,908		$	145,045		$	678,276		$	477,428		$	59,468		$	487,086		$	467,474		$	1,524,128		$	7,061,280		$	11,622,093
Laundry and Sundry Income	2,492			—			323			—			—			—			—			22,446			44,078			69,339
	724,400			145,045			678,599			477,428			59,468			487,086			467,474			1,546,574			7,105,358			11,691,432
Expenses
Administrative	8,306			1,008			14,381			3,162			4,674			3,624			2,693			19,935			104,634			162,417
Depreciation and Amortization	224,448			5,644			187,586			120,062			17,974			159,291			163,494			483,116			1,631,773			2,993,388
Management Fees	31,737			5,802			29,240			18,831			2,323			19,432			19,445			61,054			155,624			343,488
Operating	58,763			—			51,186			348			205			708			46,482			184,893			729,806			1,072,391
Renting	6,721			—			9,105			—			—			2,350			4,746			3,401			33,213			59,536
Repairs and Maintenance	66,434			—			19,062			155,388			23,876			186,217			32,764			182,482			540,177			1,206,400
Taxes and Insurance	106,875			26,844			59,877			85,895			10,936			76,225			61,971			166,301			733,913			1,328,837
	503,284			39,298			370,437			383,686			59,988			447,847			331,595			1,101,182			3,929,140			7,166,457
Income Before Other Income	221,116			105,747			308,162			93,742			(520		)	39,239			135,879			445,392			3,176,218			4,524,975
Other Income (Loss)
Interest Expense	(237,262		)	(27,172		)	(195,938		)	(137,440		)	(214		)	(129,239		)	(151,557		)	(373,703		)	(2,429,434		)	(3,681,959		)
Interest Income	—			—			—			8			—			—			—			—			—			8
Other Income (Expenses)	—			—			—			—			(125		)	—			—			97			—			(28		)
	(237,262		)	(27,172		)	(195,938		)	(137,432		)	(339		)	(129,239		)	(151,557		)	(373,606		)	(2,429,434		)	(3,681,979		)
Net Income (Loss)	$	(16,146	)	$	78,575		$	112,224		$	(43,690	)	$	(859	)	$	(90,000	)	$	(15,678	)	$	71,786		$	746,784		$	842,996
Net Income (Loss) - NERA 50%	$	(8,073	)	$	39,288		$	56,112		$	(21,845	)	$	(430	)	$	(45,000	)	$	(7,839	)	$	35,893					48,106
Net Income (Loss) - NERA 40%																									$	298,714		298,714
																												$	346,820

18

Financial information for the three months ended June 30, 2015

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
Revenues
Rental Income	$	362,007		$	72,523		$	342,800		$	237,028		$	30,173		$	236,513		$	233,578		$	762,855		$	3,572,475		$	5,849,952
Laundry and Sundry Income	—																					11,805			24,833			36,638
	362,007			72,523			342,800			237,028			30,173			236,513			233,578			774,660			3,597,308			5,886,590
Expenses
Administrative	4,369			425			6,620			1,170			1,895			1,809			1,069			10,660			52,304			80,321
Depreciation and Amortization	112,979			2,821			93,793			60,033			8,987			79,963			81,976			242,355			816,804			1,499,711
Management Fees	16,392			2,901			15,131			9,391			1,049			9,937			9,620			30,974			80,673			176,068
Operating	21,230			—			11,114			223			181			44			13,935			46,638			274,150			367,515
Renting	6,221			—			2,760			—			—			—			1,003			1,636			16,920			28,540
Repairs and Maintenance	40,751			—			13,075			78,891			12,390			101,359			17,640			98,321			323,559			685,986
Taxes and Insurance	53,458			13,423			29,941			42,844			5,056			38,394			31,013			82,793			372,658			669,580
	255,400			19,570			172,434			192,552			29,558			231,506			156,256			513,377			1,937,068			3,507,721
Income Before Other Income	106,607			52,953			170,366			44,476			615			5,007			77,322			261,283			1,660,240			2,378,869
Other Income (Loss)
Interest Expense	(119,029		)	(13,620		)	(98,002		)	(68,953		)	(105		)	(64,775		)	(76,066		)	(187,893		)	(1,219,133		)	(1,847,576		)
Interest Income										1																		1
Interest Income from Note																												—
Gain on Sale of Real Estate																						96						96
	(119,029		)	(13,620		)	(98,002		)	(68,952		)	(105		)	(64,775		)	(76,066		)	(187,797		)	(1,219,133		)	(1,847,479		)
Net Income (Loss)	$	(12,422	)	$	39,333		$	72,364		$	(24,476	)	$	510		$	(59,768	)	$	1,256		$	73,486		$	441,107		$	531,390
Net Income (Loss) - NERA 50%	$	(6,211	)	$	19,667		$	36,182		$	(12,238	)	$	255		$	(29,884	)	$	628		$	36,743					45,142
Net Income (Loss) - NERA 40%																									$	176,445		176,445
																												$	221,586

19

Future annual mortgage maturities at June 30, 2015 are as follows:

Period End	Hamilon Essex 81		Hamilton Essex 81 Development		345 Franklin		Hamilton 1025		Hamilton Bay Apts		Hamilton Minuteman		Hamilton on Main Apts		Dexter Park		Total
6/30/2016	149,344		1,961,172		—		74,077		77,754		81,127				1,459,214		3,802,688
6/30/2017	7,893,152				177,340		4,695,747		4,460,851		5,171,717				1,542,599		23,941,406
6/30/2018					187,209		—								1,630,749		1,817,958
6/30/2019					194,584		—								1,723,938		1,918,522
6/30/2020					202,250		—								79,218,160		79,420,410
Thereafter					9,238,617		—						16,900,000		—		26,138,617
	$	8,042,496	$	1,961,172	$	10,000,000	$	4,769,824	$	4,538,605	$	5,252,844	$	16,900,000	$	85,574,660	$	137,039,601

At June 30, 2015 the weighted average interest rate on the above mortgages was 5.27%. The effective rate was 5.36% including the amortization expense of deferred financing costs.

20

Summary financial information as of June 30, 2014

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	8,575,457		$	2,622,910		$	7,320,301		$	5,272,805		$	1,148,912		$	6,533,725		$	6,684,183		$	19,873,809		$	99,637,389		$	157,669,491
Cash & Cash Equivalents	76,955			104,102			107,038			6,968			57,296			1,878			66,660			23,626			968,685			1,413,208
Rent Receivable	32,918			—			15,494			2,327			3,666			6,965			5,798			11,991			141,005			220,164
Real Estate Tax Escrow	101,117			—			18,132			68,872			—			28,886			39,093			45,741			369,900			671,741
Prepaid Expenses & Other Assets	83,547			1,230			38,090			43,044			548,734			41,408			42,658			748,027			1,728,976			3,275,714
Financing & Leasing Fees	37,887			9,868			93,219			12,106			—			16,700			9,997			4,287			310,703			494,767
Total Assets	$	8,907,881		$	2,738,110		$	7,592,274		$	5,406,122		$	1,758,608		$	6,629,562		$	6,848,389		$	20,707,481		$	103,156,658		$	163,745,085
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,171,048		$	2,014,488		$	10,000,000		$	4,840,484		$	—		$	4,606,316		$	5,330,234		$	15,188,407		$	86,875,284		$	137,026,261
Accounts Payable & Accrued Expense	59,005			5,297			57,752			30,368			18,811			12,526			47,027			155,825			698,090			1,084,701
Advance Rental Pmts & Security Deposits	223,226			—			229,882			108,125			22,824			97,026			93,313			322,519			2,645,283			3,742,198
Total Liabilities	8,453,279			2,019,785			10,287,634			4,978,977			41,635			4,715,868			5,470,574			15,666,751			90,218,657			141,853,160
Partners’ Capital	454,602			718,325			(2,695,360		)	427,145			1,716,973			1,913,694			1,377,815			5,040,730			12,938,001			21,891,925
Total Liabilities and Capital	$	8,907,881		$	2,738,110		$	7,592,274		$	5,406,122		$	1,758,608		$	6,629,562		$	6,848,389		$	20,707,481		$	103,156,658		$	163,745,085
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	227,301		$	359,163		$	—		$	213,573		$	858,487		$	956,847		$	688,907		$	2,520,365		$	5,175,200		10,999,842
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,347,680	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,347,680		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	9,652,162
Total units/condominiums
Apartments	48			—			40			175			120			48			42			148			409			1,030
Commercial	1			1			—			1			—			—			—			—			—			3
Total	49			1			40			176			120			48			42			148			409			1,033
Units to be retained	49			1			40			49			—			48			42			148			409			786
Units to be sold	—			—			—			127			120			—			—			—			—			247
Units sold through August 1, 2014	—			—			—			127			110			—			—			—			—			237
Unsold units	—			—			—			—			10			—			—			—			—			10
Unsold units with deposits for future sale as of August 1, 2014	—			—			—			—			—			—			—			—			—			—

21

Financial information for the six months ended June 30, 2014

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
Revenues
Rental Income	$	670,157		$	146,472		$	658,488		$	447,481		$	106,721		$	462,103		$	456,812		$	1,440,362		$	6,709,764		$	11,098,360
Laundry and Sundry Income	8,120			—			235			—			—			—			168			19,148			48,593			76,264
	678,277			146,472			658,723			447,481			106,721			462,103			456,980			1,459,510			6,758,357			11,174,624
Expenses
Administrative	17,141			830			19,861			4,161			2,674			10,577			5,443			30,762			116,993			208,442
Depreciation and Amortization	216,170			5,644			200,104			120,320			38,350			158,697			159,254			473,132			2,694,103			4,065,774
Management Fees	29,105			5,859			28,505			18,643			4,275			18,600			18,953			57,820			148,442			330,202
Operating	68,967			—			32,593			353			605			1,039			44,102			206,470			736,853			1,090,982
Renting	10,967			—			3,623			6,376			753			5,042			6,088			18,097			57,536			108,482
Repairs and Maintenance	73,827			3,150			30,932			164,511			47,651			143,741			38,434			190,403			514,184			1,206,833
Taxes and Insurance	116,996			27,640			58,200			81,374			22,665			82,005			59,235			191,586			757,325			1,397,026
	533,173			43,123			373,818			395,738			116,973			419,701			331,509			1,168,270			5,025,436			8,407,741
Income Before Other Income	145,104			103,349			284,905			51,743			(10,252		)	42,402			125,471			291,240			1,732,921			2,766,883
Other Income (Loss)
Interest Expense	(240,198		)	(27,896		)	(195,574		)	(139,629		)	(399		)	(131,333		)	(153,561		)	(402,014		)	(2,464,957		)	(3,755,561		)
Interest Income	—			—			—			10			—			—			—			—			—			10
Interest Income from Note	—			—			—			—			468			—			—			—			—			468
Gain on Sale of Real Estate	—			—			—			—			300,522			—			—			—			—			300,522
	(240,198		)	(27,896		)	(195,574		)	(139,619		)	300,591			(131,333		)	(153,561		)	(402,014		)	(2,464,957		)	(3,454,561		)
Net Income (Loss)	$	(95,094	)	$	75,453		$	89,331		$	(87,876	)	$	290,339		$	(88,931	)	$	(28,090	)	$	(110,774	)	$	(732,036	)	$	(687,678	)
Net Income (Loss) - NERA 50%	$	(47,547	)	$	37,727		$	44,666		$	(43,938	)	$	145,171		$	(44,466	)	$	(14,045	)	$	(55,386	)				22,181
Net Income (Loss) - NERA 40%																									$	(292,814	)	(292,814		)
																												$	(270,633	)

22

Financial information for the three months ended June 30, 2014

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
Revenues
Rental Income	$	341,387		$	73,236		$	330,748		$	216,294		$	43,923		$	223,212		$	232,870		$	722,682		$	3,352,710		$	5,537,062
Laundry and Sundry Income	4,200			—			657			—			—			—			(1		)	9,692			23,213			37,761
	345,587			73,236			331,405			216,294			43,923			223,212			232,869			732,374			3,375,923			5,574,823
Expenses
Administrative	13,963			513			13,038			2,193			1,969			5,732			2,440			21,277			62,450			123,575
Depreciation and Amortization	108,267			2,823			100,379			60,167			19,175			79,383			79,852			237,117			1,348,640			2,035,803
Management Fees	15,829			2,929			14,839			9,412			1,891			9,140			9,643			29,557			76,544			169,784
Operating	23,995			—			7,770			193			355			580			11,248			64,310			248,068			356,519
Renting	10,850			—			180			624			—			1,550			3,622			11,268			38,946			67,040
Repairs and Maintenance	41,549			3,150			18,595			84,068			23,827			70,304			21,547			99,885			317,690			680,615
Taxes and Insurance	58,712			14,070			28,555			40,770			10,767			41,247			29,665			95,947			376,140			695,873
	273,165			23,485			183,356			197,427			57,984			207,936			158,017			559,361			2,468,478			4,129,209
Income Before Other Income	72,422			49,751			148,049			18,867			(14,061		)	15,276			74,852			173,013			907,445			1,445,614
Other Income (Loss)
Interest Expense	(120,829		)	(13,977		)	(97,821		)	(70,070		)	(205		)	(65,868		)	(77,061		)	(201,634		)	(1,237,262		)	(1,884,727		)
Interest Income	—			—			—			5			—			—			—			—			—			5
Interest Income from Note	—			—			—			—			135			—			—			—			—			135
Gain on Sale of Real Estate	—			—			—			—			248,239			—			—			—			—			248,239
	(120,829		)	(13,977		)	(97,821		)	(70,065		)	248,169			(65,868		)	(77,061		)	(201,634		)	(1,237,262		)	(1,636,348		)
Net Income (Loss)	$	(48,407	)	$	35,774		$	50,228		$	(51,198	)	$	234,108		$	(50,592	)	$	(2,209	)	$	(28,621	)	$	(329,817	)	$	(190,734	)
Net Income (Loss) - NERA 50%	$	(24,203	)	$	17,887		$	25,114		$	(25,598	)	$	117,054		$	(25,296	)	$	(1,105	)	$	(14,310	)				69,545
Net Income (Loss) - NERA 40%																									$	(131,927	)	(131,927		)
																												$	(62,382	)

23

NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

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

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

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

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

NOTE 16—SUBSEQUENT EVENTS

From July 1, 2015 through August 5, 2015, the Partnership purchased a total of 4,241 Depositary Receipts. The average price was $49.23 per receipt or $1,476.99 per unit. The total cost was $215,102. The Partnership is required to repurchase 33.6 Class B Units and 1.8 General Partnership Units at a cost of $49,589 and $2,610 respectively.

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

Forward Looking Statements

Certain information contained herein includes forward looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Liquidation Reform Act of 1995 (the “Act”). Forward looking statements in this report, or which management may make orally or in written form from time to time, reflect management’s good faith belief when those statements are made, and are based on information currently available to management. Caution should be exercised in interpreting and relying on such forward looking statements, the realization of which may be impacted by known and unknown risks and uncertainties, events that may occur subsequent to the forward looking statements, and other factors which may be beyond the Partnership’s control and which can materially affect the Partnership’s actual results, performance or achievements for 2015 and beyond. Should one or more of the risks or uncertainties mentioned below materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We expressly disclaim any responsibility to update our forward looking statements, whether as a result of new information, future events or otherwise. Accordingly, investors should use caution in relying on past forward looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

Since the Partnership’s long-term goals include the acquisition of additional properties, a portion of the proceeds from the refinancing and sale of properties is reserved for this purpose.  If available acquisitions do not meet the 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.

Consistent with the 1st quarter, the 2nd quarter demonstrated continued high occupancy and continued improvement in top line growth.  The majority of the top line growth for the 2nd quarter is related to revenue increases achieved during the past rental season of late 2014.  However, renewal increases and new market rents have continued to grow positively and will reveal themselves in the 3rd and 4th quarters.  To date, overall revenue increases have begun to outpace Management’s original expectations set forth earlier in the year.  Despite the extraordinary snow removal expenses of the 1st quarter, year to date operating expenses are well in check.  But for modest tax, insurance and leasing expense increases, most have been offset with declines in utility and bad debt expense with the remaining operating categories experiencing anemic increases.  Management expects the revenue and operating expense trends to continue for the balance of the year.

The Stock Repurchase Program that was initiated in 2007 has purchased 1,316,996 Depositary Receipts through June 30, 2015 or 31% of the outstanding Class A Depositary Receipts.  During the second quarter, the Partnership repurchased 10,665 Class A Depositary Receipts, 84 Class B units, and 4 General Partnership Units at a cost of approximately $530,000, $124,000 and $7,000 respectively for a total cost of $661,000.  This purchase of receipts is in line with the Partnership’s trading plan.  Management anticipates a steady purchase of receipts, per its trading plan, for the balance of the year.

At August 1, 2015, Harold Brown, his brother Ronald Brown and the President of Hamilton, Carl Valeri, collectively own approximately 41% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons’ family members). Harold Brown also controls 75% of the Partnership’s Class B Units, 75% of the capital stock of NewReal, Inc. (“NewReal”), the Partnership’s sole general partner, and all of the outstanding stock of Hamilton. Ronald Brown also owns 25% of the Partnership’s Class B Units and 25% of NewReal’s capital stock. In addition, Ronald Brown is the President and director of NewReal and Harold Brown is NewReal’s Treasurer and a director. The 75% of the issued and outstanding Class B units of the Partnership, controlled by Harold Brown, are owned by HBC Holdings LLC, an entity of which he is the manager.

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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 six months ended June 30, 2015, tenant renewals were approximately 67% with an average rental increase of approximately 3.9%, new leases accounted for approximately 33% with rental rate increases of approximately 4.2%.  During the six months ended June 30, 2015, leasing commissions were approximately $100,000 compared to approximately $73,000 for the six months ended June 30, 2014, an increase of approximately $27,000 (37.0%) from 2014. Tenant concessions were approximately $47,000 in for the six months ended June 30, 2015, compared to approximately $14,000 for the six months ended June 30, 2014, an increase of approximately $33,000 (235.7%).  Tenant improvements were approximately $1,196,000 for the six months ended June 30, 2015, compared to approximately $1,029,000 for the six months ended June 30, 2014, an increase of approximately $167,000 (16.2%).

Hamilton accounted for approximately 6.5% of the repair and maintenance expenses paid for by the Partnership during the six months ended June 30, 2015 and 5.3% during the six months ended June 30, 2014. Of the funds paid to Hamilton for this purpose, the great majority was to cover the cost of services provided by the Hamilton maintenance department, including plumbing, electrical, carpentry services, and snow removal for those properties close to Hamilton’s headquarters. Several of the larger Partnership properties have their own maintenance staff. Those properties that do not have their own maintenance staff and are located more than a reasonable distance from Hamilton’s headquarters in Allston, Massachusetts are generally serviced by local, independent companies.

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 $109,000 (77.6%) and approximately $99,000 (79.0%) of the legal services paid for by the Partnership during the six months ended June 30, 2015 and 2014, respectively.

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

The Partnership requires that three bids be obtained for construction contracts in excess of $15,000. Hamilton may be one of the three bidders on a particular project and may be awarded the contract if its bid and its ability to successfully complete the project are deemed appropriate. For contracts that are not awarded to Hamilton, Hamilton charges the Partnership a construction supervision fee equal to 5% of the contract amount. Hamilton’s architectural department also provides services to the Partnership on an as-needed basis.  During the six months ended June 30, 2015, Hamilton provided the Partnership approximately $62,000 in construction and architectural services, compared to approximately $43,000 for the six months ended June 30, 2014.

Hamilton’s accounting staff perform bookkeeping and accounting functions for the Partnership. During the six months ended June 30, 2015, Hamilton charged the Partnership $62,500 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.

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

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

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

Intangible assets acquired include amounts for in-place lease values above and below market leases and tenant relationship values, which are based on management’s evaluation of the specific characteristics of each tenant’s lease and the Partnership’s overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant relationships include the nature and extent of the Partnership’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles are amortized to expense over the anticipated life of the relationships.

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

Impairment:  On an annual basis management assesses whether there are any indicators that the value of the Partnership’s rental properties may be impaired. A property’s value is impaired only if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the property over the fair value of the property. The Partnership’s estimates of aggregate future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter management’s

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assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved. The Partnership has not recognized an impairment loss during the first six months of 2015.

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

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

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

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

RESULTS OF OPERATIONS

Three Months Ended June 30, 2015 and June 30, 2014

The Partnership and its Subsidiary Partnerships earned income before interest expense, income (loss) from investments in unconsolidated joint ventures and other income and expense of approximately $3,251,000 during the three months ended June 30, 2015, compared to approximately $2,725,000 for the three months ended June 30, 2014, an increase of approximately $526,000 (19.3%).

The rental activity is summarized as follows:

	Occupancy Date
	August  1, 2015		August 1, 2014
Residential
Units	2,431		2,431
Vacancies	84		97
Vacancy rate	3.5	%	4.0	%
Commercial
Total square feet	108,043		108,043
Vacancy	0		0
Vacancy rate	0	%	0	%

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	Rental Income (in thousands) Three Months Ended June 30,
	2015						2014
	Total Operations			Continuing Operations			Total Operations			Continuing Operations
Total rents	$	10,948		$	10,948		$	10,440		$	10,440
Residential percentage	92		%	92		%	92		%	92		%
Commercial percentage	8		%	8		%	8		%	8		%
Contingent rentals	$	163		$	163		$	162		$	162

Three Months Ended June 30, 2015 Compared to Three Months Ended June 30, 2014:

	Three Months Ended June 30,						Dollar			Percent
	2015			2014			Change			Change
Revenues
Rental income	$	10,948,498		$	10,439,568		$	508,930		4.9	%
Laundry and sundry income	112,920			120,967			(8,047		)	(6.7	)%
	11,061,418			10,560,535			500,883			4.7	%
Expenses
Administrative	487,233			568,915			(81,682		)	(14.4	)%
Depreciation and amortization	2,520,264			2,747,467			(227,203		)	(8.3	)%
Management fee	465,716			438,068			27,648			6.3	%
Operating	908,112			1,020,323			(112,211		)	(11.0	)%
Renting	155,274			108,612			46,662			43.0	%
Repairs and maintenance	1,822,707			1,601,307			221,400			13.8	%
Taxes and insurance	1,450,928			1,351,043			99,885			7.4	%
	7,810,234			7,835,735			(25,501		)	(0.3	)%
Income before Other Income (Expenses)	3,251,184			2,724,800			526,384			19.3	%
Other Income (expense)
Interest income	168			199			(31		)	(15.6	)%
Interest expense	(2,376,481		)	(2,380,896		)	4,415			(0.2	)%
Income ( Loss) from investments in unconsolidated joint ventures	221,586			(62,382		)	283,968			(455.2	)%
	(2,154,727		)	(2,443,079		)	288,352			(11.8	)%
Net Income	$	1,096,457		$	281,721		$	814,736		289.2	%

Rental income from continuing operations for the three months ended June 30, 2015 was approximately $10,948,000, compared to approximately $10,440,000 for the three months ended June 30, 2014, an increase of approximately $509,000 (4.9%). Rental income has increased at a number of properties due to increased demand and increases in rental rates. The Partnership Properties with the most significant increases in rental income include, 62 Boylston Street, 1144 Commonwealth Avenue,  Westgate Woburn, Hamilton Green, School Street and 140 North Beacon Street with increases of approximately $88,000, $85,000, $56,000, $39,000, $31,000, and $28,000  respectively. Included in rental income is contingent rentals collected on commercial properties. Contingent rentals include such charges as bill backs of common area maintenance charges, real estate taxes, and utility charges.

Operating expenses from continuing operations for the three months ended June 30, 2015 were approximately $7,810,000 compared to approximately $7,835,000 for the three months ended June 30, 2014, a decrease of approximately $25,000 (0.3%).  The  factors contributing to this net decrease are a decrease in administrative expenses of approximately $82,000 (14.4%) due primarily to a decrease in professional fees and office expense; a decrease in operating expenses of approximately $ 112,000 ( 11.0%) due to a  decrease in snow removal and utility costs; a decrease in depreciation  and amortization of approximately $227,000 (8.3%), primarily due  to the full amortization of in-place leases at Hamilton Green in 2014. These decreases  are partially offset by an  increase in repairs and maintenance expenses of approximately $221,000 (13.8%), due to an increase in  demand for repairs to the properties , and an increase in taxes and insurance of approximately $100,000 (7.4%) due to increases in  insurance costs.

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Interest expense for the three months ended June 30, 2015 was approximately $2,376,000 compared to approximately $2,381,000 for the three months ended June 30, 2014, a decrease of approximately $4,000 (0.2%).  This was primarily due to the Partnership paying off two mortgages during 2014, (Linhart and Linewt), and refinancing Dean Street Associates, resulting in lower interest expense for the quarter ended June 30, 2015.

At June 30, 2015, the Partnership has between a 40% and 50% ownership interests in nine different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 14 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net  income  from the Investment Properties was approximately $222,000 for the three months ended June 30, 2015, compared to a loss of approximately $62,000 for the three months ended June 30, 2014, a decrease in the loss of approximately $284,000 (455.2%). This increase is primarily due to an increase in rental revenue of approximately $314,000, and a decrease in depreciation and amortization expense of approximately $536,000, partially offset by a gain of approximately $248,000 on the sale of four units at Hamilton Bay LLC for the three months ended June 30, 2014. Included in the income for the three months ended June 30, 2015 is depreciation and amortization expense of approximately $1,500,000. The allocable income for the three months ended June 30, 2015 from the investment in Dexter Park is approximately $176,000.

As a result of the changes discussed above, net income for the three months ended June 30, 2015 was approximately $1,096,000 compared to income of approximately $281,000 for the three months ended June 30, 2014, an increase in income of approximately $815,000 (289.2 %).

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Six Months Ended June 30, 2015 Compared to Six Months Ended June 30, 2014

The Partnership and its Subsidiary Partnerships earned income before interest expense, income (loss) from investments in unconsolidated joint ventures and other income and expense of approximately $5,896,000 for the six months ended June  30, 2015, compared to approximately $5,289,000 for the six months ended June  30, 2014, an increase of approximately $607,000 (11.5 %).  The following is a summary of the Partnership’s operations for the six months ended June 30, 2015 and 2014:

	Six Months Ended June 30,						Dollar			Percent
	2015			2014			Change			Change
Revenues
Rental income	$	21,921,289		$	20,954,287		$	967,002		4.6	%
Laundry and sundry income	215,649			224,177			(8,528		)	(3.8	)%
	22,136,938			21,178,464			958,474			4.5	%
Expenses
Administrative	1,020,310			1,099,482			(79,172		)	(7.2	)%
Depreciation and amortization	5,004,557			5,471,646			(467,089		)	(8.5	)%
Management fee	916,419			865,461			50,958			5.9	%
Operating	2,994,297			2,702,257			292,040			10.8	%
Renting	221,201			145,469			75,732			52.1	%
Repairs and maintenance	3,169,921			2,812,456			357,465			12.7	%
Taxes and insurance	2,913,904			2,792,153			121,751			4.4	%
	16,240,609			15,888,924			351,685			2.2	%
Income before Other Income (Expenses)	5,896,329			5,289,540			606,789			11.5	%
Other Income (expense)
Interest income	362			382			(20		)	(5.2	)%
Interest expense	(4,737,395		)	(4,767,062		)	29,667			(0.6	)%
Income ( Loss) from investments in unconsolidated joint ventures	346,820			(270,633		)	617,453			(228.2	)%
	(4,390,213		)	(5,037,313		)	647,100			(12.8	)%
Net Income	$	1,506,116		$	252,227		$	1,253,889		497.1	%

Rental income from continuing operations for the six months ended June 30, 2015 was approximately $21,921,000 compared to approximately $20,954,000 for the six months ended June 30, 2014, an increase of approximately $967,000 (4.6%). Rental income has increased at a number of properties due to increased demand and increases in rental rates. The following properties experienced rental income increases: 1144 Commonwealth Avenue, 62 Boylston Street, Westgate Apartments, 9 School Street, 140 North Beacon Street and Westside Colonial,  with increases of approximately $146,000, $141,000, $117,000, $57,000, $47,000, and $43,000 respectively.

Expenses from continuing operations for the six months ended June 30, 2015 were approximately $16,241,000 compared to approximately $15,889,000 for the six months ended June 30, 2014, an increase of approximately $352,000 (2.2%).The factors contributing to this increase are : an increase in operating expenses of approximately $292,000 ( 10.8%), primarily due to an increase in snow removal expense of approximately $424,000 due to the severe winter snowstorms experienced  in the first quarter of 2015 , partially offset by a decrease in utility costs of approximately $154,000 (17.6%); an increase in repairs and maintenance expenses of approximately $357,000 ( 12.7%), due to an increase in demand for repairs to the properties, and an increase in taxes and insurance of approximately $122,000 (4.4%) primarily due to increases in  insurance costs, partially offset by a decrease in depreciation  and amortization of approximately $468,000 (8.5%), primarily due to the full amortization of  in-place leases at Hamilton Green in 2014.

Interest expense for the six months ended June 30, 2015 was approximately $4,737,000 compared to approximately $4,767,000 for the six months ended June 30, 2014, a decrease of approximately $30,000 (0.6%).  This was primarily due to the Partnership paying off two mortgages during 2014, (Linhart and Linewt), and refinancing Dean Street Associates, resulting in lower interest expense for the quarter ended June 30, 2015.

At June 30, 2015, the Partnership has between a 40 - 50% ownership interest in nine Investment Properties. See a description of these properties included in Note 14 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.

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As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of income  from these Investment Properties was approximately $347,000 for the six months ended June 30, 2015 compared to a loss of approximately $270,000 for the six months ended June 30, 2014, an increase of approximately $617,000 (228.2%).  This increase is primarily due to an increase in rental revenue of approximately $524,000, and a decrease in depreciation and amortization expense of approximately $1,072,000, partially offset by a gain of approximately $301,000 on the sale of five rental units at Hamilton Bay LLC for the six months ended June 30,2014. Included in the income for the six months ended June 30, 2015 is depreciation and amortization expense of approximately $2,993,000. The allocable income for the six months ended June 30, 2015 from the investment in Dexter Park is approximately $299,000.

As a result of the changes discussed above,  the Partnership’s net income for the six months ended June 30, 2015 was approximately $1,506,000 compared to net income of $252,000 an increase of approximately $1,254,000 (497.1%).

LIQUIDITY AND CAPITAL RESOURCES

The Partnership’s principal source of cash during the first six months of 2015 was the collection of rents.  The Partnership’s principal source of cash in 2014 was the collection of rents and proceeds from the  refinancing of real estate. The majority of cash and cash equivalents of $15,406,249 at June 30, 2015 and $14,015,898  at December 31, 2014 were held in interest bearing accounts at creditworthy financial institutions.

The increase in cash of $1,390,351  for the six months ended  June 30, 2015 is summarized as follows:

	Six Months Ended June 30,
	2015			2014
Cash provided by operating activities	$	6,269,166		$	5,357,638
Cash (used in) investing activities	(1,034,125		)	(792,788		)
Cash (used in) financing activities	(65,804		)	(3,088,023		)
Repurchase of Depositary Receipts, Class B and General Partner Units	(1,879,001		)	(941,477		)
Distributions paid	(1,899,885		)	(1,935,384		)
Net increase (decrease) in cash and cash equivalents	$	1,390,351		(1,400,034		)

The increase in cash provided by operating activities is primarily due to an increase in rent collections and a decrease in cash operating expenses. The increase in cash used in investing activities is due to an increase in the improvements to rental properties in 2015 compared to the same period in 2014.  The change in cash used in financing activities is due to  the refinancing of several mortgages in 2014 and the payment of mortgage notes payable in 2015. During the six months ended June 30, 2015, the Partnership purchased 30,080  Depositary Receipts for an average price of $ 49.63 for a total cost of $1,505,645; 238 Class B Units for a cost of $354,688 and 13 General Partnership Units for a cost of $ 18,668, for a total cost of $1,879,001.

During 2015, the Partnership and its Subsidiary Partnerships completed improvements to certain of the Properties at a total cost of approximately $2,432,000. These improvements were funded from cash reserves. Cash reserves have been adequate to fully fund improvements. The most significant improvements were made at Westgate Woburn, 62 Boylston Street, Westside Colonial, Redwood Hills, Hamilton Oaks, and North Beacon Street, at a cost of approximately  $621,000, $380,000, $217,000, $186,000, $185,000, and $142,000  respectively. The Partnership plans to invest approximately $1,503,000 in additional capital improvements in 2015.

On June 11, 2014, the Partnership refinanced the property owned by NERA Dean Street Associates, LLC.  The new mortgage was  $5,687,000; the interest rate  was 4.22%, interest only, payable in 10 years. Approximately $5,077,000 of the loan proceeds were used to pay off the existing mortgage.  The mortgage matures in June 2024. The costs associated with the refinancing were approximately $99,000. Approximately $610,000 in cash was received from this refinancing.

In February 2014, the Partnership paid off the mortgages on Linewt in the amount of approximately $1,466,000 and Linhart in the amount of approximately $1,926,000.

32

During the six months ended June 30, 2015 and 2014 the Partnership received distributions of approximately $1,419,000 and $968,000 from the investment properties respectively.  Included in these distributions is the amount from Dexter Park of $780,000 and $530,000 for the six months ended June 30, 2015 and 2014 respectively.

The Partnership anticipates that cash from operations and interest bearing accounts will be sufficient to fund its current operations, pay distributions, make required debt payments and to finance current improvements to its properties. The Partnership may also sell or refinance properties. The Partnership’s net income and cash flow may fluctuate dramatically from year to year as a result of the sale or refinancing of properties, increases or decreases in rental income or expenses, or the loss of significant tenants.

Off-Balance Sheet Arrangements—Joint Venture Indebtedness

As of June 30, 2015, the Partnership had a 40%-50% ownership interest in nine Joint Ventures, all of which have mortgage indebtedness. We do not have control of these partnerships and therefore we account for them using the equity method of consolidation. At June 30, 2015, our proportionate share of the non-recourse debt related to these investments was approximately $59,962,000. See Note 14 to the Consolidated Financial Statements.

Contractual Obligations

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

Factors That May Affect Future Results

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

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

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

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

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

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

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

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

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

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

33

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

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

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

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

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

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

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

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

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

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

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

As of June 30, 2015, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have approximately $333,045,000 in long-term debt, substantially all of which require payment of interest at fixed rates. Accordingly, the fair value of these debt instruments is affected by changes in market interest rates. This long term debt matures through 2029. For information regarding the fair value and maturity dates of these debt obligations,  See Note 5 to the Consolidated Financial Statements — “Mortgage Notes Payable,” Note 12 to the Consolidated Financial Statements — “Fair Value Measurements” and Note 14 to the Consolidated Financial Statements — “Investment in Unconsolidated Joint Ventures.”

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

34

ITEM 4.  CONTROLS AND PROCEDURES

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

Changes in Internal Control over Financial Reporting.  There were no changes in our internal control over financial reporting during the second quarter of 2015 that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II  ——  OTHER INFORMATION

Item 1.  Legal Proceedings

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

Item 1A.  Risk Factors

There were no material changes to the risk factors disclosed in our annual report on Form 10K for the year ended December 31, 2014.

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

(a)None

(b)None

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

Period	Average Price Paid		Depositary Receipts Purchased as Part of Publicly Announced Plan	Remaining number of Depositary Receipts that may be purchased Under the Plan (as Amended)
April 1-30, 2015	$	0.00	0	693,669
May 1-31, 2015	$	48.92	8,881	684,788
June 1-30, 2015	$	49.07	1,784	683,004
Total			10,665

On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program (“Repurchase Program”) under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one-tenth of a Class A Unit). On January 15, 2008, the General Partner authorized an increase in the Repurchase Program from 300,000 to 600,000 Depositary Receipts. On January 30, 2008 the General Partner authorized an increase the Repurchase Program from 600,000 to 900,000 Depositary Receipts. On March 6, 2008, the General Partner authorized the increase in the total number of Depositary Receipts that could be repurchased pursuant to the Repurchase Program from 900,000 to1, 500,000. On August 8, 2008, the General Partner re- authorized and renewed the Repurchase Program for an additional 12-month period ended August 19, 2009. On March 22, 2010, the General Partner re-authorized and renewed the Repurchase Program that expired on August 19, 2009. Under the terms of the renewed Repurchase Program, the Partnership may purchase up to 1,500,000 Depositary Receipts from the start of the program in 2007 through March 31, 2015. On March 10, 2015, the General Partner authorized an increase in the Repurchase Program from 1,500,000 to 2,000,000 Depository Receipts and extended the Program for an additional five years from March 31, 2015 until March 31, 2020.

35

The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership’s Second Amended and Restate Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through June 30, 2015, the Partnership has repurchased 1,316,996 Depositary Receipts at an average price of $26.20 per receipt (or $786.00 per underlying Class A Unit), 2,690 Class B Units and 142 General Partnership Units, both at an average price of $833.09 per Unit, totaling approximately $37,046,000 including brokerage fees paid by the Partnership.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosure

Not applicable.

Item 5.  Other Information

None.

Item 6.  Exhibits

See the exhibit index below.

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: August 7, 2015

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

Signature	Title	Date
/s/ RONALD BROWN	President and Director of the General Partner (Principal Executive Officer)	August 7, 2015
Ronald Brown
/s/ HAROLD BROWN	Treasurer and Director of the General Partner (Principal Financial Officer and Principal Accounting Officer)	August 7, 2015
Harold Brown
/s/ GUILLIAEM AERTSEN	Director of the General Partner	August 7, 2015
Guilliaem Aertsen
/s/ DAVID ALOISE	Director of the General Partner	August 7, 2015
David Aloise
/s/ EUNICE HARPS	Director of the General Partner	August 7, 2015
Eunice Harps

36

EXHIBIT INDEX

Exhibit No.	Description of Exhibit
(31.1)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Ronald Brown, Principal Executive Officer of the Partnership (President and a Director of NewReal, Inc., sole General Partner of the Partnership)
(31.2)	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of Harold Brown, Principal Financial Officer of the Partnership (Treasurer and a Director of NewReal, Inc., sole General Partner of the Partnership)
(32.1)	Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, of Ronald Brown, Principal Executive Officer of the Partnership (President and a Director of NewReal, Inc., sole General Partner of the Partnership) and Harold Brown, Principal Financial Officer of the Partnership (Treasurer and a Director of NewReal, Inc., sole General Partner of the Partnership).
(101.1)	The following financial statements from New England Realty Associates Limited Partnership Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, formatted in XBRL: (i) Consolidated Balance Sheets, (unaudited) (ii) Consolidated Statements of Income, (unaudited) (iii) Consolidated Statements of Changes in Partners’ Capital, (unaudited) (iv) Consolidated Statements of Cash Flows, (unaudited) and (v) Notes to Consolidated Financial Statements, (unaudited).

37

EX-31.1

Exhibit 31.1

New England Realty Associates Limited Partnership

CERTIFICATION

I, Ronald Brown, certify that:

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

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

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

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

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

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

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

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

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

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

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

	/s/ RONALD BROWN
	Principal Executive Officer (President and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: August 7, 2015

EX-31.2

Exhibit 31.2

New England Realty Associates Limited Partnership

CERTIFICATIONS

I, Harold Brown, certify that:

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

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

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

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

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

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

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

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

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

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

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

	/s/ HAROLD BROWN
	Principal Financial Officer
	(Treasurer and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: August 7, 2015

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of New England Realty Associates Limited Partnership for the six  months ended  June 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Ronald Brown, as President and  Director of the Partnership’s General Partner, NewReal, Inc., and Harold Brown, the President and a Director of the Partnership’s General Partner, NewReal, Inc., each hereby certifies, pursuant to 18.U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

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

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

	/s/ RONALD BROWN
	Ronald Brown
	Principal Executive Officer
	(President and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: August 7, 2015
	/s/ Harold Brown
	Harold Brown
	Principal Financial Officer
	(Treasurer and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: August 7, 2015

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

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

XML

TREASURY UNITS (Details)				1 Months Ended	6 Months Ended		94 Months Ended
	Mar. 10, 2015 shares	Aug. 08, 2008	Aug. 20, 2007 shares	Aug. 05, 2015 USD ($) $ / shares shares	Jun. 30, 2015 USD ($) $ / shares shares	Jun. 30, 2014 USD ($) shares	Jun. 30, 2015 USD ($) $ / shares shares	Jan. 03, 2012	Mar. 06, 2008 shares	Jan. 30, 2008 shares	Jan. 15, 2008 shares
Treasury units					53,825		53,825
Period for repurchase of depository receipts	5 years	12 months	12 months
Depository receipts authorized to be repurchased	2,000,000		300,000						1,500,000	900,000	600,000
Repurchase of depository receipts					30,080		1,316,996
Repurchase price of depository receipts | $ / shares					$ 49.63		$ 26.20
Repurchase price of units | $ / shares					$ 1,488.90
Stock Buyback (in units)					1,253	664
Total cost of repurchase | $					$ 1,879,001	$ 941,477	$ 37,046,000
Repurchase of depository receipts | $					$ 1,505,645
Subsequent event
Repurchase of depository receipts				4,241
Repurchase price of depository receipts | $ / shares				$ 49.23
Repurchase price of units | $ / shares				$ 1,476.99
Repurchase of depository receipts | $				$ 215,102
Class A
Treasury units					43,060		43,060
Number of units in each depository receipt			0.1					0.03333
Fixed distribution percentage of unit holders					80.00%
Repurchase price of units | $ / shares							$ 786.00
Total cost of repurchase | $					$ 1,505,645	757,246
Class B
Treasury units					10,227		10,227
Fixed distribution percentage of unit holders					19.00%
Repurchase of depository receipts							2,690
Repurchase price of units | $ / shares							$ 833.09
Stock Buyback (in units)					238
Total cost of repurchase | $					$ 354,688	175,019
Class B | Subsequent event
Stock Buyback (in units)				33.6
Total cost of repurchase | $				$ 49,589
General Partnership
Treasury units					538		538
Fixed distribution percentage of unit holders					1.00%
Repurchase of depository receipts							142
Stock Buyback (in units)					13
Total cost of repurchase | $					$ 18,668	$ 9,212
General Partnership | Subsequent event
Stock Buyback (in units)				1.8
Total cost of repurchase | $				$ 2,610

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 3) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Oct. 28, 2009	Oct. 03, 2005	Mar. 02, 2005	Sep. 30, 2004	Aug. 31, 2004	Nov. 30, 2001
Hamilton Essex 81
Revenues
Rental income	$ 362,007	$ 341,387	$ 721,908	$ 670,157
Laundry and sundry income		4,200	2,492	8,120
Total Revenues	362,007	345,587	724,400	678,277
Expenses
Administrative	4,369	13,963	8,306	17,141
Depreciation and amortization	112,979	108,267	224,448	216,170
Management fee	16,392	15,829	31,737	29,105
Operating	21,230	23,995	58,763	68,967
Renting	6,221	10,850	6,721	10,967
Repairs and maintenance	40,751	41,549	66,434	73,827
Taxes and insurance	53,458	58,712	106,875	116,996
Total Expenses	255,400	273,165	503,284	533,173
Income Before Other Income	106,607	72,422	221,116	145,104
Other Income (loss)
Interest expense	(119,029)	(120,829)	(237,262)	(240,198)
Total Other Income (loss)	(119,029)	(120,829)	(237,262)	(240,198)
Net Income (Loss)	(12,422)	(48,407)	(16,146)	(95,094)
Proportionate share of net income (loss)	$ (6,211)	$ (24,203)	$ (8,073)	$ (47,547)
Percentage of ownership interest	50.00%	50.00%	50.00%	50.00%
Hamilton Essex Development
Revenues
Rental income	$ 72,523	$ 73,236	$ 145,045	$ 146,472
Total Revenues	72,523	73,236	145,045	146,472
Expenses
Administrative	425	513	1,008	830
Depreciation and amortization	2,821	2,823	5,644	5,644
Management fee	2,901	2,929	5,802	5,859
Repairs and maintenance		3,150		3,150
Taxes and insurance	13,423	14,070	26,844	27,640
Total Expenses	19,570	23,485	39,298	43,123
Income Before Other Income	52,953	49,751	105,747	103,349
Other Income (loss)
Interest expense	(13,620)	(13,977)	(27,172)	(27,896)
Total Other Income (loss)	(13,620)	(13,977)	(27,172)	(27,896)
Net Income (Loss)	39,333	35,774	78,575	75,453
Proportionate share of net income (loss)	$ 19,667	$ 17,887	$ 39,288	$ 37,727
Percentage of ownership interest	50.00%	50.00%	50.00%	50.00%
345 Franklin
Revenues
Rental income	$ 342,800	$ 330,748	$ 678,276	$ 658,488
Laundry and sundry income		657	323	235
Total Revenues	342,800	331,405	678,599	658,723
Expenses
Administrative	6,620	13,038	14,381	19,861
Depreciation and amortization	93,793	100,379	187,586	200,104
Management fee	15,131	14,839	29,240	28,505
Operating	11,114	7,770	51,186	32,593
Renting	2,760	180	9,105	3,623
Repairs and maintenance	13,075	18,595	19,062	30,932
Taxes and insurance	29,941	28,555	59,877	58,200
Total Expenses	172,434	183,356	370,437	373,818
Income Before Other Income	170,366	148,049	308,162	284,905
Other Income (loss)
Interest expense	(98,002)	(97,821)	(195,938)	(195,574)
Total Other Income (loss)	(98,002)	(97,821)	(195,938)	(195,574)
Net Income (Loss)	72,364	50,228	112,224	89,331
Proportionate share of net income (loss)	$ 36,182	$ 25,114	$ 56,112	$ 44,666
Percentage of ownership interest	50.00%	50.00%	50.00%	50.00%						50.00%
Hamilton 1025
Revenues
Rental income	$ 237,028	$ 216,294	$ 477,428	$ 447,481
Total Revenues	237,028	216,294	477,428	447,481
Expenses
Administrative	1,170	2,193	3,162	4,161
Depreciation and amortization	60,033	60,167	120,062	120,320
Management fee	9,391	9,412	18,831	18,643
Operating	223	193	348	353
Renting		624		6,376
Repairs and maintenance	78,891	84,068	155,388	164,511
Taxes and insurance	42,844	40,770	85,895	81,374
Total Expenses	192,552	197,427	383,686	395,738
Income Before Other Income	44,476	18,867	93,742	51,743
Other Income (loss)
Interest expense	(68,953)	(70,070)	(137,440)	(139,629)
Interest Income	1	5	8	10
Total Other Income (loss)	(68,952)	(70,065)	(137,432)	(139,619)
Net Income (Loss)	(24,476)	(51,198)	(43,690)	(87,876)
Proportionate share of net income (loss)	$ (12,238)	$ (25,598)	$ (21,845)	$ (43,938)
Percentage of ownership interest	50.00%	50.00%	50.00%	50.00%			50.00%
Hamilton Bay Sales
Revenues
Rental income	$ 30,173	$ 43,923	$ 59,468	$ 106,721
Total Revenues	30,173	43,923	59,468	106,721
Expenses
Administrative	1,895	1,969	4,674	2,674
Depreciation and amortization	8,987	19,175	17,974	38,350
Management fee	1,049	1,891	2,323	4,275
Operating	181	355	205	605
Renting				753
Repairs and maintenance	12,390	23,827	23,876	47,651
Taxes and insurance	5,056	10,767	10,936	22,665
Total Expenses	29,558	57,984	59,988	116,973
Income Before Other Income	615	(14,061)	(520)	(10,252)
Other Income (loss)
Interest expense	(105)	(205)	(214)	(399)
Interest Income from Note		135		468
Gain on Sale of Real Estate		248,239		300,522
Other Income (Expenses)			(125)
Total Other Income (loss)	(105)	248,169	(339)	300,591
Net Income (Loss)	510	234,108	(859)	290,339
Proportionate share of net income (loss)	$ 255	$ 117,054	$ (430)	$ 145,171
Percentage of ownership interest	50.00%	50.00%	50.00%	50.00%
Hamilton Bay Apartments
Revenues
Rental income	$ 236,513	$ 223,212	$ 487,086	$ 462,103
Total Revenues	236,513	223,212	487,086	462,103
Expenses
Administrative	1,809	5,732	3,624	10,577
Depreciation and amortization	79,963	79,383	159,291	158,697
Management fee	9,937	9,140	19,432	18,600
Operating	44	580	708	1,039
Renting		1,550	2,350	5,042
Repairs and maintenance	101,359	70,304	186,217	143,741
Taxes and insurance	38,394	41,247	76,225	82,005
Total Expenses	231,506	207,936	447,847	419,701
Income Before Other Income	5,007	15,276	39,239	42,402
Other Income (loss)
Interest expense	(64,775)	(65,868)	(129,239)	(131,333)
Total Other Income (loss)	(64,775)	(65,868)	(129,239)	(131,333)
Net Income (Loss)	(59,768)	(50,592)	(90,000)	(88,931)
Proportionate share of net income (loss)	$ (29,884)	$ (25,296)	$ (45,000)	$ (44,466)
Percentage of ownership interest	50.00%	50.00%	50.00%	50.00%		50.00%
Hamilton Minuteman
Revenues
Rental income	$ 233,578	$ 232,870	$ 467,474	$ 456,812
Laundry and sundry income		(1)		168
Total Revenues	233,578	232,869	467,474	456,980
Expenses
Administrative	1,069	2,440	2,693	5,443
Depreciation and amortization	81,976	79,852	163,494	159,254
Management fee	9,620	9,643	19,445	18,953
Operating	13,935	11,248	46,482	44,102
Renting	1,003	3,622	4,746	6,088
Repairs and maintenance	17,640	21,547	32,764	38,434
Taxes and insurance	31,013	29,665	61,971	59,235
Total Expenses	156,256	158,017	331,595	331,509
Income Before Other Income	77,322	74,852	135,879	125,471
Other Income (loss)
Interest expense	(76,066)	(77,061)	(151,557)	(153,561)
Total Other Income (loss)	(76,066)	(77,061)	(151,557)	(153,561)
Net Income (Loss)	1,256	(2,209)	(15,678)	(28,090)
Proportionate share of net income (loss)	$ 628	$ (1,105)	$ (7,839)	$ (14,045)
Percentage of ownership interest	50.00%	50.00%	50.00%	50.00%				50.00%
Hamilton on Main Apts
Revenues
Rental income	$ 762,855	$ 722,682	$ 1,524,128	$ 1,440,362
Laundry and sundry income	11,805	9,692	22,446	19,148
Total Revenues	774,660	732,374	1,546,574	1,459,510
Expenses
Administrative	10,660	21,277	19,935	30,762
Depreciation and amortization	242,355	237,117	483,116	473,132
Management fee	30,974	29,557	61,054	57,820
Operating	46,638	64,310	184,893	206,470
Renting	1,636	11,268	3,401	18,097
Repairs and maintenance	98,321	99,885	182,482	190,403
Taxes and insurance	82,793	95,947	166,301	191,586
Total Expenses	513,377	559,361	1,101,182	1,168,270
Income Before Other Income	261,283	173,013	445,392	291,240
Other Income (loss)
Interest expense	(187,893)	(201,634)	(373,703)	(402,014)
Gain on Sale of Real Estate	96
Other Income (Expenses)			97
Total Other Income (loss)	(187,797)	(201,634)	(373,606)	(402,014)
Net Income (Loss)	73,486	(28,621)	71,786	(110,774)
Proportionate share of net income (loss)	$ 36,743	$ (14,310)	$ 35,893	$ (55,386)
Percentage of ownership interest	50.00%	50.00%	50.00%	50.00%					50.00%
Dexter Park
Revenues
Rental income	$ 3,572,475	$ 3,352,710	$ 7,061,280	$ 6,709,764
Laundry and sundry income	24,833	23,213	44,078	48,593
Total Revenues	3,597,308	3,375,923	7,105,358	6,758,357
Expenses
Administrative	52,304	62,450	104,634	116,993
Depreciation and amortization	816,804	1,348,640	1,631,773	2,694,103
Management fee	80,673	76,544	155,624	148,442
Operating	274,150	248,068	729,806	736,853
Renting	16,920	38,946	33,213	57,536
Repairs and maintenance	323,559	317,690	540,177	514,184
Taxes and insurance	372,658	376,140	733,913	757,325
Total Expenses	1,937,068	2,468,478	3,929,140	5,025,436
Income Before Other Income	1,660,240	907,445	3,176,218	1,732,921
Other Income (loss)
Interest expense	(1,219,133)	(1,237,262)	(2,429,434)	(2,464,957)
Total Other Income (loss)	(1,219,133)	(1,237,262)	(2,429,434)	(2,464,957)
Net Income (Loss)	441,107	(329,817)	746,784	(732,036)
Proportionate share of net income (loss)	$ 176,445	$ (131,927)	$ 298,714	$ (292,814)
Percentage of ownership interest	40.00%	40.00%	40.00%	40.00%	40.00%
Total
Revenues
Rental income	$ 5,849,952	$ 5,537,062	$ 11,622,093	$ 11,098,360
Laundry and sundry income	36,638	37,761	69,339	76,264
Total Revenues	5,886,590	5,574,823	11,691,432	11,174,624
Expenses
Administrative	80,321	123,575	162,417	208,442
Depreciation and amortization	1,499,711	2,035,803	2,993,388	4,065,774
Management fee	176,068	169,784	343,488	330,202
Operating	367,515	356,519	1,072,391	1,090,982
Renting	28,540	67,040	59,536	108,482
Repairs and maintenance	685,986	680,615	1,206,400	1,206,833
Taxes and insurance	669,580	695,873	1,328,837	1,397,026
Total Expenses	3,507,721	4,129,209	7,166,457	8,407,741
Income Before Other Income	2,378,869	1,445,614	4,524,975	2,766,883
Other Income (loss)
Interest expense	(1,847,576)	(1,884,727)	(3,681,959)	(3,755,561)
Interest Income	1	5	8	10
Interest Income from Note		135		468
Gain on Sale of Real Estate	96	248,239		300,522
Other Income (Expenses)			(28)
Total Other Income (loss)	(1,847,479)	(1,636,348)	(3,681,979)	(3,454,561)
Net Income (Loss)	531,390	(190,734)	842,996	(687,678)
Proportionate share of net income (loss)	221,586	(62,382)	346,820	(270,633)
Total | NERA 50%
Other Income (loss)
Proportionate share of net income (loss)	45,142	69,545	48,106	22,181
Total | NERA 40%
Other Income (loss)
Proportionate share of net income (loss)	$ 176,445	$ (131,927)	$ 298,714	$ (292,814)

XML

RENTAL PROPERTIES (Details)	6 Months Ended
	Jun. 30, 2015 USD ($) item	Dec. 31, 2014 USD ($)
Rental properties
Total fixed assets	$ 227,453,571	$ 225,021,946
Less: Accumulated depreciation	(80,770,875)	(75,905,862)
Total fixed assets, net	146,682,696	149,116,084
Land, improvements and parking lots
Rental properties
Total fixed assets, net	$ 44,694,293	44,541,471
Land, improvements and parking lots | Minimum
Rental properties
Useful Life	15 years
Land, improvements and parking lots | Maximum
Rental properties
Useful Life	40 years
Buildings and Improvements
Rental properties
Total fixed assets, net	$ 153,905,317	153,059,430
Buildings and Improvements | Minimum
Rental properties
Useful Life	15 years
Buildings and Improvements | Maximum
Rental properties
Useful Life	40 years
Kitchen cabinets
Rental properties
Total fixed assets, net	$ 7,406,845	6,865,348
Kitchen cabinets | Minimum
Rental properties
Useful Life	5 years
Kitchen cabinets | Maximum
Rental properties
Useful Life	10 years
Carpets
Rental properties
Total fixed assets, net	$ 6,722,293	6,341,227
Carpets | Minimum
Rental properties
Useful Life	5 years
Carpets | Maximum
Rental properties
Useful Life	10 years
Air conditioning
Rental properties
Total fixed assets, net	$ 721,937	705,116
Air conditioning | Minimum
Rental properties
Useful Life	5 years
Air conditioning | Maximum
Rental properties
Useful Life	10 years
Laundry equipment
Rental properties
Total fixed assets, net	$ 236,283	147,721
Laundry equipment | Minimum
Rental properties
Useful Life	5 years
Laundry equipment | Maximum
Rental properties
Useful Life	7 years
Elevators
Rental properties
Total fixed assets, net	$ 1,139,296	1,139,296
Elevators | Minimum
Rental properties
Useful Life	20 years
Elevators | Maximum
Rental properties
Useful Life	40 years
Swimming pools
Rental properties
Total fixed assets, net	$ 444,629	444,629
Swimming pools | Minimum
Rental properties
Useful Life	10 years
Swimming pools | Maximum
Rental properties
Useful Life	30 years
Equipment
Rental properties
Total fixed assets, net	$ 5,653,232	5,491,992
Equipment | Minimum
Rental properties
Useful Life	5 years
Equipment | Maximum
Rental properties
Useful Life	7 years
Motor vehicles
Rental properties
Total fixed assets, net	$ 130,859	130,563
Motor vehicles | Maximum
Rental properties
Useful Life	5 years
Fences
Rental properties
Total fixed assets, net	$ 24,670	24,670
Fences | Minimum
Rental properties
Useful Life	5 years
Fences | Maximum
Rental properties
Useful Life	15 years
Furniture and fixtures
Rental properties
Total fixed assets, net	$ 6,153,480	5,910,046
Furniture and fixtures | Minimum
Rental properties
Useful Life	5 years
Furniture and fixtures | Maximum
Rental properties
Useful Life	7 years
Smoke alarms
Rental properties
Total fixed assets, net	$ 220,437	$ 220,437
Smoke alarms | Minimum
Rental properties
Useful Life	5 years
Smoke alarms | Maximum
Rental properties
Useful Life	7 years
Residential and mixed-use properties
RENTAL PROPERTIES
Total | item	2,412
Number of properties | item	20
Residential and mixed-use properties | Partially owned properties
RENTAL PROPERTIES
Total | item	790
Number of properties | item	9
Residential and mixed-use properties | Partially owned properties | Minimum
RENTAL PROPERTIES
Percentage of ownership interest	40.00%
Residential and mixed-use properties | Partially owned properties | Maximum
RENTAL PROPERTIES
Percentage of ownership interest	50.00%
Condominium
RENTAL PROPERTIES
Total | item	19

XML

MORTGAGE NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2015

MORTGAGE NOTES PAYABLE

Schedule of approximate annual maturities

Approximate annual maturities at June 30, 2015 are as follows:

2016—current maturities	$	504,000
2017	1,629,000
2018	1,821,000
2019	7,900,000
2020	4,330,000
Thereafter	179,822,000
	$	196,006,000

XML

SUBSEQUENT EVENTS (Details) - USD ($)	1 Months Ended	6 Months Ended		94 Months Ended
	Aug. 05, 2015	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015
Subsequent events
Repurchase of depository receipts		30,080		1,316,996
Repurchase price of depository receipts		$ 49.63		$ 26.20
Repurchase price of units		$ 1,488.90
Repurchase of depository receipts		$ 1,505,645
Stock Buyback (in units)		1,253	664
Total cost of repurchase		$ 1,879,001	$ 941,477	$ 37,046,000
Class B
Subsequent events
Repurchase of depository receipts				2,690
Repurchase price of units				$ 833.09
Stock Buyback (in units)		238
Total cost of repurchase		$ 354,688	175,019
General Partnership
Subsequent events
Repurchase of depository receipts				142
Stock Buyback (in units)		13
Total cost of repurchase		$ 18,668	$ 9,212
Subsequent event
Subsequent events
Repurchase of depository receipts	4,241
Repurchase price of depository receipts	$ 49.23
Repurchase price of units	$ 1,476.99
Repurchase of depository receipts	$ 215,102
Subsequent event | Class B
Subsequent events
Stock Buyback (in units)	33.6
Total cost of repurchase	$ 49,589
Subsequent event | General Partnership
Subsequent events
Stock Buyback (in units)	1.8
Total cost of repurchase	$ 2,610

XML

RENTAL INCOME (Details 2)	6 Months Ended
	Jun. 30, 2015
Commercial rental income | Staples and Trader Joes
Concentration Risk [Line Items]
Concentration risk percentage	30.00%

XML

ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS (Details) - Jun. 30, 2015 - USD ($)	Total
ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS
Period for advance rental payment	1 month
Amount received for prepaid rent	$ 1,773,000
Security deposits	$ 2,225,000

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 2)	Aug. 01, 2015 item	Jun. 30, 2015 USD ($) item	Dec. 31, 2014 USD ($)	Jun. 30, 2014 USD ($) item	Oct. 28, 2009 USD ($) item	May. 31, 2008 item	Oct. 03, 2005 USD ($) item	Mar. 07, 2005 item	Mar. 02, 2005 USD ($) item	Sep. 30, 2004 USD ($) item	Aug. 31, 2004 USD ($) item	Nov. 30, 2001 USD ($) item
LIABILITIES AND PARTNERS' CAPITAL
Equity Method Investments		$ 7,866,077	$ 8,807,868
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture		(1,534,258)	$ (1,425,369)
Hamilton Essex 81
ASSETS
Rental Properties		8,564,474		$ 8,575,457
Cash & Cash Equivalents		29,625		76,955
Rent Receivable		25,517		32,918
Real Estate Tax Escrow		123,085		101,117
Prepaid Expenses & Other Assets		92,967		83,547
Financing & Leasing Fees		21,848		37,887
Total Assets		8,857,516		8,907,881
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		8,042,496		8,171,048
Accounts Payable and Accrued Expenses		59,786		59,005
Advance Rental Payments and Security Deposits		199,886		223,226
Total Liabilities		8,302,168		8,453,279
Partners' Capital		555,348		454,602
Total Liabilities and Partners' Capital		$ 8,857,516		$ 8,907,881
Percentage of ownership interest		50.00%		50.00%
Equity Method Investments		$ 277,674		$ 227,301
Total units/ condominiums
Units to be retained | item		49		49
Total | item		49		49				48
Hamilton Essex 81 | Residential buildings
Total units/ condominiums
Total | item		48		48
Hamilton Essex 81 | Commercial
Total units/ condominiums
Total | item		1		1
Hamilton Essex Development
ASSETS
Rental Properties		$ 2,620,081		$ 2,622,910
Cash & Cash Equivalents		33,530		104,102
Prepaid Expenses & Other Assets				1,230
Financing & Leasing Fees		1,409		9,868
Total Assets		2,655,020		2,738,110
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		1,961,172		2,014,488
Accounts Payable and Accrued Expenses		5,308		5,297
Total Liabilities		1,966,480		2,019,785
Partners' Capital		688,540		718,325
Total Liabilities and Partners' Capital		$ 2,655,020		$ 2,738,110
Percentage of ownership interest		50.00%		50.00%
Equity Method Investments		$ 344,270		$ 359,163
Total units/ condominiums
Units to be retained | item		1		1
Total | item		1		1
Hamilton Essex Development | Commercial
Total units/ condominiums
Total | item		1		1
345 Franklin
ASSETS
Rental Properties		$ 6,951,074		$ 7,320,301
Cash & Cash Equivalents		116,046		107,038
Rent Receivable		4,123		15,494
Real Estate Tax Escrow		17,330		18,132
Prepaid Expenses & Other Assets		51,470		38,090
Financing & Leasing Fees		86,561		93,219
Total Assets		7,226,604		7,592,274
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		10,000,000		10,000,000
Accounts Payable and Accrued Expenses		64,628		57,752
Advance Rental Payments and Security Deposits		230,492		229,882
Total Liabilities		10,295,120		10,287,634
Partners' Capital		(3,068,516)		(2,695,360)
Total Liabilities and Partners' Capital		$ 7,226,604		$ 7,592,274
Percentage of ownership interest		50.00%		50.00%								50.00%
Equity Method Investments												$ 1,533,000
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture		$ (1,534,258)		$ (1,347,680)
Total units/ condominiums
Units to be retained | item		40		40
Total | item		40		40								40
345 Franklin | Residential buildings
Total units/ condominiums
Total | item		40		40
Hamilton 1025
ASSETS
Rental Properties		$ 5,039,485		$ 5,272,805
Cash & Cash Equivalents		6,348		6,968
Rent Receivable		5,178		2,327
Real Estate Tax Escrow		72,812		68,872
Prepaid Expenses & Other Assets		54,129		43,044
Financing & Leasing Fees		7,080		12,106
Total Assets		5,185,032		5,406,122
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		4,769,824		4,840,484
Accounts Payable and Accrued Expenses		27,358		30,368
Advance Rental Payments and Security Deposits		97,276		108,125
Total Liabilities		4,894,458		4,978,977
Partners' Capital		290,574		427,145
Total Liabilities and Partners' Capital		$ 5,185,032		$ 5,406,122
Percentage of ownership interest		50.00%		50.00%					50.00%
Equity Method Investments		$ 145,287		$ 213,573					$ 2,352,000
Total units/ condominiums
Units to be retained | item		49		49					49
Number of Units in Real Estate Property to be Sold | item		127		127
Units sold | item		127		127					127
Total | item		176		176					176
Hamilton 1025 | Residential buildings
Total units/ condominiums
Total | item		175		175
Hamilton 1025 | Commercial
Total units/ condominiums
Total | item		1		1
Hamilton Bay Sales
ASSETS
Rental Properties		$ 793,069		$ 1,148,912
Cash & Cash Equivalents		8,106		57,296
Rent Receivable		1,605		3,666
Prepaid Expenses & Other Assets		19,977		548,734
Total Assets		822,757		1,758,608
LIABILITIES AND PARTNERS' CAPITAL
Accounts Payable and Accrued Expenses		20,207		18,811
Advance Rental Payments and Security Deposits		5,810		22,824
Total Liabilities		26,017		41,635
Partners' Capital		796,740		1,716,973
Total Liabilities and Partners' Capital		$ 822,757		$ 1,758,608
Percentage of ownership interest		50.00%		50.00%
Equity Method Investments		$ 398,370		$ 858,487
Total units/ condominiums
Number of Units in Real Estate Property to be Sold | item		120		120
Units sold | item		113		110
Unsold units | item		7		10
Total | item		120		120
Hamilton Bay Sales | Residential buildings
Total units/ condominiums
Total | item		120		120
Hamilton Bay Apartments
ASSETS
Rental Properties		$ 6,288,296		$ 6,533,725
Cash & Cash Equivalents		829		1,878
Rent Receivable		2,221		6,965
Real Estate Tax Escrow		56,520		28,886
Prepaid Expenses & Other Assets		55,989		41,408
Financing & Leasing Fees		10,338		16,700
Total Assets		6,414,193		6,629,562
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		4,538,605		4,606,316
Accounts Payable and Accrued Expenses		14,768		12,526
Advance Rental Payments and Security Deposits		95,435		97,026
Total Liabilities		4,648,808		4,715,868
Partners' Capital		1,765,385		1,913,694
Total Liabilities and Partners' Capital		$ 6,414,193		$ 6,629,562
Percentage of ownership interest		50.00%		50.00%			50.00%
Equity Method Investments		$ 882,693		$ 956,847			$ 2,500,000
Total units/ condominiums
Units to be retained | item		48		48			48
Units sold | item							120
Total | item	7	48		48			168
Hamilton Bay Apartments | Residential buildings
Total units/ condominiums
Total | item		48		48
Hamilton Minuteman
ASSETS
Rental Properties		$ 6,421,497		$ 6,684,183
Cash & Cash Equivalents		42,200		66,660
Rent Receivable		152		5,798
Real Estate Tax Escrow		39,006		39,093
Prepaid Expenses & Other Assets		43,472		42,658
Financing & Leasing Fees		6,028		9,997
Total Assets		6,552,355		6,848,389
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		5,252,844		5,330,234
Accounts Payable and Accrued Expenses		47,865		47,027
Advance Rental Payments and Security Deposits		96,548		93,313
Total Liabilities		5,397,257		5,470,574
Partners' Capital		1,155,098		1,377,815
Total Liabilities and Partners' Capital		$ 6,552,355		$ 6,848,389
Percentage of ownership interest		50.00%		50.00%						50.00%
Equity Method Investments		$ 577,549		$ 688,907						$ 5,075,000
Total units/ condominiums
Units to be retained | item		42		42
Total | item		42		42						42
Hamilton Minuteman | Residential buildings
Total units/ condominiums
Total | item		42		42
Hamilton on Main Apts
ASSETS
Rental Properties		$ 19,007,097		$ 19,873,809
Cash & Cash Equivalents		208,411		23,626
Rent Receivable		15,289		11,991
Real Estate Tax Escrow		94,677		45,741
Prepaid Expenses & Other Assets		82,262		748,027
Financing & Leasing Fees		147,136		4,287
Total Assets		19,554,872		20,707,481
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		16,900,000		15,188,407
Accounts Payable and Accrued Expenses		154,122		155,825
Advance Rental Payments and Security Deposits		337,614		322,519
Total Liabilities		17,391,736		15,666,751
Partners' Capital		2,163,136		5,040,730
Total Liabilities and Partners' Capital		$ 19,554,872		$ 20,707,481
Percentage of ownership interest		50.00%		50.00%							50.00%
Equity Method Investments		$ 1,081,568		$ 2,520,365							$ 8,000,000
Total units/ condominiums
Units to be retained | item		148		148
Units sold | item						137
Total | item		148		148							280
Hamilton on Main Apts | Residential buildings
Total units/ condominiums
Total | item		148		148
Dexter Park
ASSETS
Rental Properties		$ 95,631,639		$ 99,637,389
Cash & Cash Equivalents		1,274,043		968,685
Rent Receivable		133,921		141,005
Real Estate Tax Escrow		264,746		369,900
Prepaid Expenses & Other Assets		1,940,068		1,728,976
Financing & Leasing Fees		252,066		310,703
Total Assets		99,496,483		103,156,658
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		85,574,660		86,875,284
Accounts Payable and Accrued Expenses		724,526		698,090
Advance Rental Payments and Security Deposits		2,800,624		2,645,283
Total Liabilities		89,099,810		90,218,657
Partners' Capital		10,396,673		12,938,001
Total Liabilities and Partners' Capital		$ 99,496,483		$ 103,156,658
Percentage of ownership interest		40.00%		40.00%	40.00%
Equity Method Investments		$ 4,158,667		$ 5,175,200	$ 15,925,000
Total units/ condominiums
Units to be retained | item		409		409
Total | item		409		409	409
Dexter Park | Residential buildings
Total units/ condominiums
Total | item		409		409
Total
ASSETS
Rental Properties		$ 151,316,712		$ 157,669,491
Cash & Cash Equivalents		1,719,138		1,413,208
Rent Receivable		188,006		220,164
Real Estate Tax Escrow		668,176		671,741
Prepaid Expenses & Other Assets		2,340,334		3,275,714
Financing & Leasing Fees		532,466		494,767
Total Assets		156,764,832		163,745,085
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable		137,039,601		137,026,261
Accounts Payable and Accrued Expenses		1,118,568		1,084,701
Advance Rental Payments and Security Deposits		3,863,685		3,742,198
Total Liabilities		142,021,854		141,853,160
Partners' Capital		14,742,978		21,891,925
Total Liabilities and Partners' Capital		156,764,832		163,745,085
Equity Method Investments		7,866,077		10,999,842
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture		(1,534,258)		(1,347,680)
Total Investment in Unconsolidated Joint Ventures (Net)		$ 6,331,819		$ 9,652,162
Total units/ condominiums
Units to be retained | item		786		786
Number of Units in Real Estate Property to be Sold | item		247		247
Units sold | item		240		237
Unsold units | item		7		10
Total | item		1,033		1,033
Total | Residential buildings
Total units/ condominiums
Total | item		1,030		1,030
Total | Commercial
Total units/ condominiums
Total | item		3		3

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2015

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

NOTE 3. RELATED PARTY TRANSACTIONS

The Partnership’s properties are managed by an entity that is owned by the majority shareholder of the General Partner. The management fee is equal to 4% of gross receipts rental revenue and laundry income on the majority of the Partnership’s properties and 3% on Linewt. Total fees paid were approximately $916,000 and $865,000 for the six months ended June 30, 2015 and 2014, respectively.

The Partnership Agreement permits the General Partner or Management Company to charge the costs of professional services (such as counsel, accountants and contractors) to NERA. During the six months ended June 30, 2015 and 2014, approximately $441,000 and $372,000, was charged to NERA for legal, accounting, construction, maintenance, rental and architectural services and supervision of capital improvements. Of the 2015 expenses referred to above, approximately $207,000 consisted of repairs and maintenance, and $172,000 of administrative expense. Approximately $62,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2015, the Hamilton Company received approximately $426,000 from the Investment Properties of which approximately $343,000 was the management fee, approximately $63,000 was for maintenance services and approximately $13,000 was for administrative services. The management fee is equal to 4% of gross receipts rental income on the majority of investment properties and 2% on Dexter Park.

The Partnership reimburses the management company for the payroll and related expenses of the employees who work at the properties. Total reimbursement was approximately $1,383,000 and $1,565,000 for the six months ended June 30, 2015 and 2014, respectively. The Management Company maintains a 401K plan for all eligible employees whereby the employees may contribute the maximum allowed by law. The plan also provides for discretionary contributions by the employer. There were no employer contributions during 2015 and 2014.

Bookkeeping and accounting functions are provided by the Management Company’s accounting staff, which consists of approximately 14 people. During the six months ended June 30, 2015 and 2014, the Management Company charged the Partnership $62,500 ($125,000 per year) for bookkeeping and accounting services included in administrative expenses above.

The President of the Management Company performs asset management consulting services and receives an asset management fee from the Partnership. The Partnership does not have a written agreement with this individual. During the six months ended June 30, 2015 and 2014 this individual received fees of $37,500.

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

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

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CASH FLOW INFORMATION (Details) - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
CASH FLOW INFORMATION
Cash paid for interest	$ 4,753,000	$ 4,074,000
Cash paid for state income taxes	$ 18,000	$ 49,000

XML

FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2015

FAIR VALUE MEASUREMENTS

Schedule of carrying amounts and estimated fair value of debt

	Carrying Amount		Estimated Fair Value
Mortgage Notes Payable
Partnership Properties
At June 30, 2015	$	196,005,736	$	209,943,632
At December 31, 2014	$	196,071,540	$	210,691,170
Investment Properties
At June 30, 2015	$	137,039,601	$	146,494,182
At December 31, 2014	$	137,910,870	$	147,843,221

XML

RENTAL INCOME (Tables)

6 Months Ended

Jun. 30, 2015

RENTAL INCOME

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

Approximately 8% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30, 2015 as follows:

	Commercial Property Leases
2016	$	2,639,000
2017	1,877,000
2018	1,444,000
2019	1,062,000
2020	475,000
Thereafter	603,000
	$	8,100,000

Schedule of information for commercial leases

	Annual base rent for expiring leases		Total square feet for expiring leases	Total number of leases expiring	Percentage of annual base rent for expiring leases
Through June 30,
2016	$	864,371	38,641	11	29	%
2017	525,725		18,157	7	18	%
2018	408,902		13,175	9	14	%
2019	211,965		6,626	5	7	%
2020	753,497		24,873	10	25	%
2021	64,800		1,800	1	2	%
2022	0		0	0	0	%
2023	0		0	0	0	%
2024	157,443		4,771	1	5	%
2025	0		0	0	0	%
Totals	$	2,986,703	108,043	44	100	%

XML

FAIR VALUE MEASUREMENTS (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Mortgage Notes Payable
Carrying Amount	$ 196,005,736	$ 196,071,540
Wholly owned properties
Mortgage Notes Payable
Carrying Amount	196,005,736	196,071,540
Estimated Fair Value	209,943,632	210,691,170
Partially owned properties
Mortgage Notes Payable
Carrying Amount	137,039,601	137,910,870
Estimated Fair Value	$ 146,494,182	$ 147,843,221

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables)

6 Months Ended

Jun. 30, 2015

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

Summary of financial position relating to investment in unconsolidated joint ventures

Summary financial information as of June 30, 2015

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	8,564,474		$	2,620,081		$	6,951,074		$	5,039,485		$	793,069		$	6,288,296		$	6,421,497		$	19,007,097		$	95,631,639		$	151,316,712
Cash & Cash Equivalents	29,625			33,530			116,046			6,348			8,106			829			42,200			208,411			1,274,043			1,719,138
Rent Receivable	25,517			—			4,123			5,178			1,605			2,221			152			15,289			133,921			188,006
Real Estate Tax Escrow	123,085			—			17,330			72,812			—			56,520			39,006			94,677			264,746			668,176
Prepaid Expenses & Other Assets	92,967			—			51,470			54,129			19,977			55,989			43,472			82,262			1,940,068			2,340,334
Financing & Leasing Fees	21,848			1,409			86,561			7,080			—			10,338			6,028			147,136			252,066			532,466
Total Assets	$	8,857,516		$	2,655,020		$	7,226,604		$	5,185,032		$	822,757		$	6,414,193		$	6,552,355		$	19,554,872		$	99,496,483		$	156,764,832
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,042,496		$	1,961,172		$	10,000,000		$	4,769,824		$	—		$	4,538,605		$	5,252,844		$	16,900,000		$	85,574,660		$	137,039,601
Accounts Payable & Accrued Expense	59,786			5,308			64,628			27,358			20,207			14,768			47,865			154,122			724,526			1,118,568
Advance Rental Pmts & Security Deposits	199,886			—			230,492			97,276			5,810			95,435			96,548			337,614			2,800,624			3,863,685
Total Liabilities	8,302,168			1,966,480			10,295,120			4,894,458			26,017			4,648,808			5,397,257			17,391,736			89,099,810			142,021,854
Partners’ Capital	555,348			688,540			(3,068,516		)	290,574			796,740			1,765,385			1,155,098			2,163,136			10,396,673			14,742,978
Total Liabilities and Capital	$	8,857,516		$	2,655,020		$	7,226,604		$	5,185,032		$	822,757		$	6,414,193		$	6,552,355		$	19,554,872		$	99,496,483		$	156,764,832
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	277,674		$	344,270		$	—		$	145,287		$	398,370		$	882,693		$	577,549		$	1,081,568		$	4,158,667		7,866,077
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,534,258	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,534,258		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,331,819
Total units/condominiums
Apartments	48			—			40			175			120			48			42			148			409			1,030
Commercial	1			1			—			1			—			—			—			—			—			3
Total	49			1			40			176			120			48			42			148			409			1,033
Units to be retained	49			1			40			49			—			48			42			148			409			786
Units to be sold	—			—			—			127			120			—			—			—			—			247
Units sold through August 1, 2015	—			—			—			127			113			—			—			—			—			240
Unsold units	—			—			—			—			7			—			—			—			—			7
Unsold units with deposits for future sale as of August 1, 2015	—			—			—			—			—			—			—			—			—			—

Summary financial information as of June 30, 2014

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	8,575,457		$	2,622,910		$	7,320,301		$	5,272,805		$	1,148,912		$	6,533,725		$	6,684,183		$	19,873,809		$	99,637,389		$	157,669,491
Cash & Cash Equivalents	76,955			104,102			107,038			6,968			57,296			1,878			66,660			23,626			968,685			1,413,208
Rent Receivable	32,918			—			15,494			2,327			3,666			6,965			5,798			11,991			141,005			220,164
Real Estate Tax Escrow	101,117			—			18,132			68,872			—			28,886			39,093			45,741			369,900			671,741
Prepaid Expenses & Other Assets	83,547			1,230			38,090			43,044			548,734			41,408			42,658			748,027			1,728,976			3,275,714
Financing & Leasing Fees	37,887			9,868			93,219			12,106			—			16,700			9,997			4,287			310,703			494,767
Total Assets	$	8,907,881		$	2,738,110		$	7,592,274		$	5,406,122		$	1,758,608		$	6,629,562		$	6,848,389		$	20,707,481		$	103,156,658		$	163,745,085
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,171,048		$	2,014,488		$	10,000,000		$	4,840,484		$	—		$	4,606,316		$	5,330,234		$	15,188,407		$	86,875,284		$	137,026,261
Accounts Payable & Accrued Expense	59,005			5,297			57,752			30,368			18,811			12,526			47,027			155,825			698,090			1,084,701
Advance Rental Pmts & Security Deposits	223,226			—			229,882			108,125			22,824			97,026			93,313			322,519			2,645,283			3,742,198
Total Liabilities	8,453,279			2,019,785			10,287,634			4,978,977			41,635			4,715,868			5,470,574			15,666,751			90,218,657			141,853,160
Partners’ Capital	454,602			718,325			(2,695,360		)	427,145			1,716,973			1,913,694			1,377,815			5,040,730			12,938,001			21,891,925
Total Liabilities and Capital	$	8,907,881		$	2,738,110		$	7,592,274		$	5,406,122		$	1,758,608		$	6,629,562		$	6,848,389		$	20,707,481		$	103,156,658		$	163,745,085
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	227,301		$	359,163		$	—		$	213,573		$	858,487		$	956,847		$	688,907		$	2,520,365		$	5,175,200		10,999,842
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,347,680	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,347,680		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	9,652,162
Total units/condominiums
Apartments	48			—			40			175			120			48			42			148			409			1,030
Commercial	1			1			—			1			—			—			—			—			—			3
Total	49			1			40			176			120			48			42			148			409			1,033
Units to be retained	49			1			40			49			—			48			42			148			409			786
Units to be sold	—			—			—			127			120			—			—			—			—			247
Units sold through August 1, 2014	—			—			—			127			110			—			—			—			—			237
Unsold units	—			—			—			—			10			—			—			—			—			10
Unsold units with deposits for future sale as of August 1, 2014	—			—			—			—			—			—			—			—			—			—

Summary of income statement relating to investment in unconsolidated joint ventures

Financial information for the six months ended June 30, 2015

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
Revenues
Rental Income	$	721,908		$	145,045		$	678,276		$	477,428		$	59,468		$	487,086		$	467,474		$	1,524,128		$	7,061,280		$	11,622,093
Laundry and Sundry Income	2,492			—			323			—			—			—			—			22,446			44,078			69,339
	724,400			145,045			678,599			477,428			59,468			487,086			467,474			1,546,574			7,105,358			11,691,432
Expenses
Administrative	8,306			1,008			14,381			3,162			4,674			3,624			2,693			19,935			104,634			162,417
Depreciation and Amortization	224,448			5,644			187,586			120,062			17,974			159,291			163,494			483,116			1,631,773			2,993,388
Management Fees	31,737			5,802			29,240			18,831			2,323			19,432			19,445			61,054			155,624			343,488
Operating	58,763			—			51,186			348			205			708			46,482			184,893			729,806			1,072,391
Renting	6,721			—			9,105			—			—			2,350			4,746			3,401			33,213			59,536
Repairs and Maintenance	66,434			—			19,062			155,388			23,876			186,217			32,764			182,482			540,177			1,206,400
Taxes and Insurance	106,875			26,844			59,877			85,895			10,936			76,225			61,971			166,301			733,913			1,328,837
	503,284			39,298			370,437			383,686			59,988			447,847			331,595			1,101,182			3,929,140			7,166,457
Income Before Other Income	221,116			105,747			308,162			93,742			(520		)	39,239			135,879			445,392			3,176,218			4,524,975
Other Income (Loss)
Interest Expense	(237,262		)	(27,172		)	(195,938		)	(137,440		)	(214		)	(129,239		)	(151,557		)	(373,703		)	(2,429,434		)	(3,681,959		)
Interest Income	—			—			—			8			—			—			—			—			—			8
Other Income (Expenses)	—			—			—			—			(125		)	—			—			97			—			(28		)
	(237,262		)	(27,172		)	(195,938		)	(137,432		)	(339		)	(129,239		)	(151,557		)	(373,606		)	(2,429,434		)	(3,681,979		)
Net Income (Loss)	$	(16,146	)	$	78,575		$	112,224		$	(43,690	)	$	(859	)	$	(90,000	)	$	(15,678	)	$	71,786		$	746,784		$	842,996
Net Income (Loss) - NERA 50%	$	(8,073	)	$	39,288		$	56,112		$	(21,845	)	$	(430	)	$	(45,000	)	$	(7,839	)	$	35,893					48,106
Net Income (Loss) - NERA 40%																									$	298,714		298,714
																												$	346,820

Financial information for the three months ended June 30, 2015

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
Revenues
Rental Income	$	362,007		$	72,523		$	342,800		$	237,028		$	30,173		$	236,513		$	233,578		$	762,855		$	3,572,475		$	5,849,952
Laundry and Sundry Income	—																					11,805			24,833			36,638
	362,007			72,523			342,800			237,028			30,173			236,513			233,578			774,660			3,597,308			5,886,590
Expenses
Administrative	4,369			425			6,620			1,170			1,895			1,809			1,069			10,660			52,304			80,321
Depreciation and Amortization	112,979			2,821			93,793			60,033			8,987			79,963			81,976			242,355			816,804			1,499,711
Management Fees	16,392			2,901			15,131			9,391			1,049			9,937			9,620			30,974			80,673			176,068
Operating	21,230			—			11,114			223			181			44			13,935			46,638			274,150			367,515
Renting	6,221			—			2,760			—			—			—			1,003			1,636			16,920			28,540
Repairs and Maintenance	40,751			—			13,075			78,891			12,390			101,359			17,640			98,321			323,559			685,986
Taxes and Insurance	53,458			13,423			29,941			42,844			5,056			38,394			31,013			82,793			372,658			669,580
	255,400			19,570			172,434			192,552			29,558			231,506			156,256			513,377			1,937,068			3,507,721
Income Before Other Income	106,607			52,953			170,366			44,476			615			5,007			77,322			261,283			1,660,240			2,378,869
Other Income (Loss)
Interest Expense	(119,029		)	(13,620		)	(98,002		)	(68,953		)	(105		)	(64,775		)	(76,066		)	(187,893		)	(1,219,133		)	(1,847,576		)
Interest Income										1																		1
Interest Income from Note																												—
Gain on Sale of Real Estate																						96						96
	(119,029		)	(13,620		)	(98,002		)	(68,952		)	(105		)	(64,775		)	(76,066		)	(187,797		)	(1,219,133		)	(1,847,479		)
Net Income (Loss)	$	(12,422	)	$	39,333		$	72,364		$	(24,476	)	$	510		$	(59,768	)	$	1,256		$	73,486		$	441,107		$	531,390
Net Income (Loss) - NERA 50%	$	(6,211	)	$	19,667		$	36,182		$	(12,238	)	$	255		$	(29,884	)	$	628		$	36,743					45,142
Net Income (Loss) - NERA 40%																									$	176,445		176,445
																												$	221,586

Financial information for the six months ended June 30, 2014

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
Revenues
Rental Income	$	670,157		$	146,472		$	658,488		$	447,481		$	106,721		$	462,103		$	456,812		$	1,440,362		$	6,709,764		$	11,098,360
Laundry and Sundry Income	8,120			—			235			—			—			—			168			19,148			48,593			76,264
	678,277			146,472			658,723			447,481			106,721			462,103			456,980			1,459,510			6,758,357			11,174,624
Expenses
Administrative	17,141			830			19,861			4,161			2,674			10,577			5,443			30,762			116,993			208,442
Depreciation and Amortization	216,170			5,644			200,104			120,320			38,350			158,697			159,254			473,132			2,694,103			4,065,774
Management Fees	29,105			5,859			28,505			18,643			4,275			18,600			18,953			57,820			148,442			330,202
Operating	68,967			—			32,593			353			605			1,039			44,102			206,470			736,853			1,090,982
Renting	10,967			—			3,623			6,376			753			5,042			6,088			18,097			57,536			108,482
Repairs and Maintenance	73,827			3,150			30,932			164,511			47,651			143,741			38,434			190,403			514,184			1,206,833
Taxes and Insurance	116,996			27,640			58,200			81,374			22,665			82,005			59,235			191,586			757,325			1,397,026
	533,173			43,123			373,818			395,738			116,973			419,701			331,509			1,168,270			5,025,436			8,407,741
Income Before Other Income	145,104			103,349			284,905			51,743			(10,252		)	42,402			125,471			291,240			1,732,921			2,766,883
Other Income (Loss)
Interest Expense	(240,198		)	(27,896		)	(195,574		)	(139,629		)	(399		)	(131,333		)	(153,561		)	(402,014		)	(2,464,957		)	(3,755,561		)
Interest Income	—			—			—			10			—			—			—			—			—			10
Interest Income from Note	—			—			—			—			468			—			—			—			—			468
Gain on Sale of Real Estate	—			—			—			—			300,522			—			—			—			—			300,522
	(240,198		)	(27,896		)	(195,574		)	(139,619		)	300,591			(131,333		)	(153,561		)	(402,014		)	(2,464,957		)	(3,454,561		)
Net Income (Loss)	$	(95,094	)	$	75,453		$	89,331		$	(87,876	)	$	290,339		$	(88,931	)	$	(28,090	)	$	(110,774	)	$	(732,036	)	$	(687,678	)
Net Income (Loss) - NERA 50%	$	(47,547	)	$	37,727		$	44,666		$	(43,938	)	$	145,171		$	(44,466	)	$	(14,045	)	$	(55,386	)				22,181
Net Income (Loss) - NERA 40%																									$	(292,814	)	(292,814		)
																												$	(270,633	)

Financial information for the three months ended June 30, 2014

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
Revenues
Rental Income	$	341,387		$	73,236		$	330,748		$	216,294		$	43,923		$	223,212		$	232,870		$	722,682		$	3,352,710		$	5,537,062
Laundry and Sundry Income	4,200			—			657			—			—			—			(1		)	9,692			23,213			37,761
	345,587			73,236			331,405			216,294			43,923			223,212			232,869			732,374			3,375,923			5,574,823
Expenses
Administrative	13,963			513			13,038			2,193			1,969			5,732			2,440			21,277			62,450			123,575
Depreciation and Amortization	108,267			2,823			100,379			60,167			19,175			79,383			79,852			237,117			1,348,640			2,035,803
Management Fees	15,829			2,929			14,839			9,412			1,891			9,140			9,643			29,557			76,544			169,784
Operating	23,995			—			7,770			193			355			580			11,248			64,310			248,068			356,519
Renting	10,850			—			180			624			—			1,550			3,622			11,268			38,946			67,040
Repairs and Maintenance	41,549			3,150			18,595			84,068			23,827			70,304			21,547			99,885			317,690			680,615
Taxes and Insurance	58,712			14,070			28,555			40,770			10,767			41,247			29,665			95,947			376,140			695,873
	273,165			23,485			183,356			197,427			57,984			207,936			158,017			559,361			2,468,478			4,129,209
Income Before Other Income	72,422			49,751			148,049			18,867			(14,061		)	15,276			74,852			173,013			907,445			1,445,614
Other Income (Loss)
Interest Expense	(120,829		)	(13,977		)	(97,821		)	(70,070		)	(205		)	(65,868		)	(77,061		)	(201,634		)	(1,237,262		)	(1,884,727		)
Interest Income	—			—			—			5			—			—			—			—			—			5
Interest Income from Note	—			—			—			—			135			—			—			—			—			135
Gain on Sale of Real Estate	—			—			—			—			248,239			—			—			—			—			248,239
	(120,829		)	(13,977		)	(97,821		)	(70,065		)	248,169			(65,868		)	(77,061		)	(201,634		)	(1,237,262		)	(1,636,348		)
Net Income (Loss)	$	(48,407	)	$	35,774		$	50,228		$	(51,198	)	$	234,108		$	(50,592	)	$	(2,209	)	$	(28,621	)	$	(329,817	)	$	(190,734	)
Net Income (Loss) - NERA 50%	$	(24,203	)	$	17,887		$	25,114		$	(25,598	)	$	117,054		$	(25,296	)	$	(1,105	)	$	(14,310	)				69,545
Net Income (Loss) - NERA 40%																									$	(131,927	)	(131,927		)
																												$	(62,382	)

Schedule of future annual mortgage maturities

Future annual mortgage maturities at June 30, 2015 are as follows:

Period End	Hamilon Essex 81		Hamilton Essex 81 Development		345 Franklin		Hamilton 1025		Hamilton Bay Apts		Hamilton Minuteman		Hamilton on Main Apts		Dexter Park		Total
6/30/2016	149,344		1,961,172		—		74,077		77,754		81,127				1,459,214		3,802,688
6/30/2017	7,893,152				177,340		4,695,747		4,460,851		5,171,717				1,542,599		23,941,406
6/30/2018					187,209		—								1,630,749		1,817,958
6/30/2019					194,584		—								1,723,938		1,918,522
6/30/2020					202,250		—								79,218,160		79,420,410
Thereafter					9,238,617		—						16,900,000		—		26,138,617
	$	8,042,496	$	1,961,172	$	10,000,000	$	4,769,824	$	4,538,605	$	5,252,844	$	16,900,000	$	85,574,660	$	137,039,601

XML

SIGNIFICANT ACCOUNTING POLICIES (Details) - Jun. 30, 2015	ft² item
Residential and mixed-use properties
Line of Business
Number of properties	20
Total	2,412
Condominium
Line of Business
Total	19
Wholly owned properties
Line of Business
Number of properties	24
Wholly owned properties | Residential buildings
Line of Business
Number of properties	16
Total	2,412
Wholly owned properties | Mixed use residential, retail and office buildings
Line of Business
Number of properties	4
Wholly owned properties | Commercial
Line of Business
Number of properties	3
Area of property (in square feet) | ft²	108,043
Wholly owned properties | Condominium
Line of Business
Number of properties	1
Total	19
Partially owned properties | Residential and mixed-use properties
Line of Business
Number of properties	9
Total	790
Area of property (in square feet) | ft²	12,500
Partially owned properties | Residential and mixed-use properties | Minimum
Line of Business
Percentage of ownership interest	40.00%
Partially owned properties | Residential and mixed-use properties | Maximum
Line of Business
Percentage of ownership interest	50.00%
Partially owned properties | Car parking lot
Line of Business
Capacity of real estate property (in cars per lot)	50

XML

RENTAL PROPERTIES

6 Months Ended

Jun. 30, 2015

RENTAL PROPERTIES

RENTAL PROPERTIES

NOTE 2. RENTAL PROPERTIES

As of June 30, 2015, the Partnership and its Subsidiary Partnerships owned 2,412 residential apartment units in 20 residential and mixed-use complexes (collectively, the “Apartment Complexes”). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the “Condominium Units”). The Apartment Complexes and Condominium Units are located primarily in the metropolitan Boston area of Massachusetts.

Additionally, as of June 30, 2015, the Partnership and Subsidiary Partnerships owned a commercial shopping center in Framingham, commercial buildings in Newton and Brookline and mixed-use properties in Boston, Brockton and Newton, all in Massachusetts. These properties are referred to collectively as the “Commercial Properties.”

The Partnership also owned a 40% to 50% ownership interest in nine residential and mixed use complexes (the “Investment Properties”) at June 30, 2015 with a total of 790 units, accounted for using the equity method of consolidation. See Note 14 for summary information on these investments.

Rental properties consist of the following:

	June 30, 2015			December 31, 2014			Useful Life
Land, improvements and parking lots	$	44,694,293		$	44,541,471		15—40 years
Buildings and improvements	153,905,317			153,059,430			15—40 years
Kitchen cabinets	7,406,845			6,865,348			5—10 years
Carpets	6,722,293			6,341,227			5—10 years
Air conditioning	721,937			705,116			5—10 years
Laundry equipment	236,283			147,721			5—7 years
Elevators	1,139,296			1,139,296			20—40 years
Swimming pools	444,629			444,629			10—30 years
Equipment	5,653,232			5,491,992			5—7 years
Motor vehicles	130,859			130,563			5 years
Fences	24,670			24,670			5—15 years
Furniture and fixtures	6,153,480			5,910,046			5—7 years
Smoke alarms	220,437			220,437			5—7 years
Total fixed assets	227,453,571			225,021,946
Less: Accumulated depreciation	(80,770,875		)	(75,905,862		)
	$	146,682,696		$	149,116,084

XML

SIGNIFICANT ACCOUNTING POLICIES (Details 2)		6 Months Ended
	Jan. 03, 2012	Jun. 30, 2015 USD ($) item shares	Jun. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)	Aug. 20, 2007
Principles of Consolidation
Value of equity method investment to discontinued partnership		$ 0
Revenue Recognition
Period for which arrears are charged against income		60 days
Income Taxes
Provision for income taxes		$ 0
Segment Reporting
Number of segments | item		1
Income Per Unit
Dilutive units | shares		0
Concentration of Credit Risks and Financial Instruments
Federally uninsured amounts of cash and cash equivalents, and security deposits included in prepaid expenses and other assets		$ 16,572,000		$ 15,118,000
Advertising Expense
Advertising expense		73,961	$ 56,662
Interest Capitalized
Capitalized interest		$ 0	$ 0
Class A
Income (Loss) Per Depositary Receipt
Forward split of depositary receipts	3
Exchange ratio of depositary receipts for partnership units before adjustment	10
Exchange ratio of depositary receipts for partnership units after adjustment	30
Number of units in each depository receipt	0.03333				0.1
Minimum
Principles of Consolidation
Ownership interest in each subsidiary (as a percent)		99.67%
Interest Capitalized
Criteria of capitalization of interest on property based on specified period of construction		1 year
Minimum | Cash and cash equivalents
Concentration of Credit Risks and Financial Instruments
Interest rate on interest bearing accounts (as a percent)		0.01%
Maximum
Principles of Consolidation
Ownership interest in each subsidiary (as a percent)		100.00%
Maximum | Cash and cash equivalents
Concentration of Credit Risks and Financial Instruments
Interest rate on interest bearing accounts (as a percent)		0.35%
Total
Principles of Consolidation
Number of limited liability companies | item		9
Total | Minimum
Principles of Consolidation
Percentage of ownership in Joint Ventures		40.00%
Total | Maximum
Principles of Consolidation
Percentage of ownership in Joint Ventures		50.00%

XML

Commitments and Contingencies (Details)	Jun. 30, 2015 USD ($)	Jun. 09, 2015 property
Loss Contingencies [Line Items]
Insurance recovery receivable | $	$ 952,084
Westgate Apartments LLC
Loss Contingencies [Line Items]
Number of properties		12
Number of apartments damaged		10
Insurance recovery receivable | $	$ 952,000

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2015	Dec. 31, 2014
ASSETS
Rental Properties	$ 146,682,696	$ 149,116,084
Cash and Cash Equivalents	15,406,249	14,015,898
Rents Receivable	526,229	474,225
Insurance Recovery Receivable	952,084
Real Estate Tax Escrows	338,094	340,341
Prepaid Expenses and Other Assets	3,776,461	3,287,005
Investments in Unconsolidated Joint Ventures	7,866,077	8,807,868
Financing Fees	1,625,748	1,735,652
Total Assets	177,173,638	177,777,073
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	196,005,736	196,071,540
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	1,534,258	1,425,369
Accounts Payable and Accrued Expenses	4,298,542	3,099,117
Advance Rental Payments and Security Deposits	4,975,554	4,548,729
Total Liabilities	$ 206,814,090	$ 205,144,755
Commitments and Contingent Liabilities (Notes 3 and 9)
Partners' Capital 126,400 and 127,653 units outstanding in 2015 and 2014 respectively	$ (29,640,452)	$ (27,367,682)
Total Liabilities and Partners' Capital	$ 177,173,638	$ 177,777,073

XML

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

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash Flows from Operating Activities
Net income	$ 1,506,116	$ 252,227
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	5,004,557	5,471,646
(Income) Loss from investments in joint venture	(346,820)	270,633
Change in operating assets and liabilities
(Increase) in rents receivable	(52,004)	(60,704)
Increase (Decrease) in accounts payable and accrued expense	1,199,425	(556,289)
(Increase) in insurance recovery receivable	(952,084)
Decrease in real estate tax escrow	2,247	81,194
(Increase) in prepaid expenses and other assets	(519,096)	(434,134)
Increase in advance rental payments and security deposits	426,825	333,065
Total Adjustments	4,763,050	5,105,411
Net cash provided by operating activities	6,269,166	5,357,638
Cash Flows From Investing Activities
Proceeds from unconsolidated joint ventures	1,254,487	867,741
Distribution in excess of investment in unconsolidated joint ventures	165,000	100,000
(Investment in) unconsolidated joint ventures	(21,987)	(117,741)
Improvement of rental properties	(2,431,625)	(1,642,788)
Net cash (used in) investing activities	(1,034,125)	(792,788)
Cash Flows from Financing Activities
Payment of financing costs		(201,917)
Proceeds of mortgage notes payable		609,555
Principal payments and payoffs of mortgage notes payable	(65,804)	(3,495,661)
Stock buyback	(1,879,001)	(941,477)
Distributions to partners	(1,899,885)	(1,935,384)
Net cash (used in) financing activities	(3,844,690)	(5,964,884)
Net Increase (Decrease) in Cash and Cash Equivalents	1,390,351	(1,400,034)
Cash and Cash Equivalents, at beginning of period	14,015,898	14,013,380
Cash and Cash Equivalents, at end of period	$ 15,406,249	$ 12,613,346

XML

OTHER ASSETS (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
OTHER ASSETS
Security deposits	$ 2,225,000	$ 2,090,000
Escrow deposits to fund future capital improvements	292,000	253,000
Intangible assets, net of accumulated amortization	33,000	49,000
Accumulated amortization on intangible assets in connection with the acquisition of Windsor Green	1,719,000	1,703,000
Financing fees, net	1,626,000	1,736,000
Accumulated amortization on financing and leasing fees	$ 723,000	$ 613,000

XML

SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2015

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 16—SUBSEQUENT EVENTS

From July 1, 2015 through August 5, 2015, the Partnership purchased a total of 4,241 Depositary Receipts. The average price was $49.23 per receipt or $1,476.99 per unit. The total cost was $215,102. The Partnership is required to repurchase 33.6 Class B Units and 1.8 General Partnership Units at a cost of $49,589 and $2,610 respectively.

XML

MORTGAGE NOTES PAYABLE AND LINE OF CREDIT (Details)				1 Months Ended	6 Months Ended
	Jul. 31, 2014 USD ($) item	Jul. 11, 2014 USD ($)	Jun. 11, 2014 USD ($)	Feb. 28, 2014 USD ($)	Jun. 30, 2015 USD ($) shares	Jun. 30, 2014 shares
MORTGAGE NOTES PAYABLE
Effective interest rate (as a percent)					5.36%
Annual maturities of mortgage debt
2016-current maturities					$ 504,000
2017					1,629,000
2018					1,821,000
2019					7,900,000
2020					4,330,000
Thereafter					179,822,000
Total					196,006,000
Long-term Debt, Maturities, Repayments of Principal in Next Rolling Twelve Months					504,000
Additional disclosures related to mortgages
Amount of new loan					8,042,000
Repurchase of depository receipts					$ 1,505,645
Repurchase of units | shares					1,253	664
Commitment fee for unused line of credit					$ 25,000
Line of Credit
Additional disclosures related to mortgages
Term of debt	3 years
Maximum borrowings	$ 25,000,000
Funds drawn by the company					0
Number of properties in which borrowing amount collateralized | item	23
Amount of refinancing costs	$ 125,000
Base Rate [Member] | Line of Credit
Additional disclosures related to mortgages
Reference rate used in calculation of Base Rate	base
Prime Rate [Member] | Line of Credit
Additional disclosures related to mortgages
Reference rate used in calculation of Base Rate	Prime
Federal Funds Rate [Member] | Line of Credit
Additional disclosures related to mortgages
Basis of effective interest rate used in calculation of Base Rate (as a percent)	0.50%
Reference rate used in calculation of Base Rate	Federal Funds
London Interbank Offered Rate (LIBOR) [Member] | Line of Credit
Additional disclosures related to mortgages
Basis of effective interest rate used in calculation of Base Rate (as a percent)	1.00%
Reference rate used in calculation of Base Rate	one month LIBOR
Minimum | Line of Credit
Additional disclosures related to mortgages
Commitment fee for unused amount (as a percent)	0.15%
Pledged interests rate of the Partnership's ownership interest (as a percent)	49.00%
Minimum | Base Rate [Member] | Line of Credit
Additional disclosures related to mortgages
Debt Instrument, Basis Spread on Variable Rate	2.50%
Maximum | Line of Credit
Additional disclosures related to mortgages
Commitment fee for unused amount (as a percent)	0.20%
Pledged interests rate of the Partnership's ownership interest (as a percent)	100.00%
Maximum | Base Rate [Member] | Line of Credit
Additional disclosures related to mortgages
Debt Instrument, Basis Spread on Variable Rate	3.50%
Mortgages payable
MORTGAGE NOTES PAYABLE
Amount of monthly installments including principal					$ 808,000
Weighted average interest rate (as a percent)					4.81%
Effective interest rate (as a percent)					4.93%
Additional disclosures related to mortgages
Mortgage prepayment penalties				$ 0
Mortgages payable | NERA Dean Street Associates, LLC
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)			4.22%
Additional disclosures related to mortgages
Amount of new loan			$ 5,687,000
Period of interest only payments on loans			10 years
Amount of loan proceeds utilized for pay off the existing mortgage			$ 5,077,000
Refinancing cost			$ 89,000
Mortgages payable | Hamilton Linewt LLC Commercial-1031Exchange Newton, Massachusetts
Additional disclosures related to mortgages
Amount of mortgage paid off				1,466,000
Mortgages payable | Linhart L.P. Residential/Commercial Newton, Massachusetts
Additional disclosures related to mortgages
Amount of mortgage paid off				$ 1,926,000
Mortgages payable | Courtyard At Westgate Residential Units Burlington Massachusetts Member
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)		4.31%
Additional disclosures related to mortgages
Period of interest only payments on loans		10 years
Amount of loan proceeds utilized for pay off the existing mortgage		$ 2,010,000
Amount of new loan		2,500,000
Amount of refinancing costs		$ 75,000
Mortgages payable | Minimum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)					3.76%
Mortgages payable | Maximum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)					5.97%

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RENTAL PROPERTIES (Tables)

6 Months Ended

Jun. 30, 2015

RENTAL PROPERTIES

Schedule of rental properties

	June 30, 2015			December 31, 2014			Useful Life
Land, improvements and parking lots	$	44,694,293		$	44,541,471		15—40 years
Buildings and improvements	153,905,317			153,059,430			15—40 years
Kitchen cabinets	7,406,845			6,865,348			5—10 years
Carpets	6,722,293			6,341,227			5—10 years
Air conditioning	721,937			705,116			5—10 years
Laundry equipment	236,283			147,721			5—7 years
Elevators	1,139,296			1,139,296			20—40 years
Swimming pools	444,629			444,629			10—30 years
Equipment	5,653,232			5,491,992			5—7 years
Motor vehicles	130,859			130,563			5 years
Fences	24,670			24,670			5—15 years
Furniture and fixtures	6,153,480			5,910,046			5—7 years
Smoke alarms	220,437			220,437			5—7 years
Total fixed assets	227,453,571			225,021,946
Less: Accumulated depreciation	(80,770,875		)	(75,905,862		)
	$	146,682,696		$	149,116,084

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SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2015

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Line of Business:  New England Realty Associates Limited Partnership (“NERA” or the “Partnership”) was organized in Massachusetts in 1977. NERA and its subsidiaries own 24 properties which include 16 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,412 apartment units, 19 condominium units and 108,043 square feet of commercial space. Additionally, the Partnership also owns a 40-50% interest in 9 residential and mixed use properties consisting of 790 apartment units, 12,500 square feet of commercial space and a 50 car parking lot. The properties are located in Eastern Massachusetts and Southern New Hampshire.

Basis of Presentation:  The preparation of the financial statements, in conformity with accounting principles generally accepted in the United State of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Accordingly, actual results could differ from those estimates.

Principles of Consolidation:  The consolidated financial statements include the accounts of NERA and its subsidiaries. NERA has a 99.67% to 100% ownership interest in each subsidiary except for the nine limited liability companies (the “Investment Properties” or “Joint Ventures”) in which the Partnership has a 40 - 50% ownership interest. The consolidated group is referred to as the “Partnership.” Minority interests are not recorded, since they are insignificant. All significant intercompany accounts and transactions are eliminated in consolidation. The Partnership accounts for its investment in the above-mentioned Investment Properties using the equity method of consolidation. (See Note 14: Investments in Unconsolidated Joint Ventures).

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

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

Impairment:  On an annual basis management assesses whether there are any indicators that the value of the Partnership’s rental properties or investments in unconsolidated subsidiaries may be impaired. In addition to identifying any specific circumstances which may affect a property or properties, management considers other criteria for determining which properties may require assessment for potential impairment. The criteria considered by management include reviewing low leased percentages, significant near term lease expirations, recently acquired properties, current and historical operating and/or cash flow losses, near term mortgage debt maturities or other factors that might impact the Partnership’s intent and ability to hold property. A property’s value is impaired only if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the property over the fair value of the property. The Partnership’s estimates of aggregate future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved.

Revenue Recognition:  Rental income from residential and commercial properties is recognized over the term of the related lease. For residential tenants, amounts 60 days in arrears are charged against income. The commercial tenants are evaluated on a case by case basis. Certain leases of the commercial properties provide for increasing stepped minimum rents, which are accounted for on a straight-line basis over the term of the lease. Contingent rent for commercial properties are received from tenants for certain costs as provided in the lease agreement. The costs generally include real estate taxes, utilities, insurance, common area maintenance and recoverable costs. Rental concessions are also accounted for on the straight-line basis.

Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the differences between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed-rate renewal options for below-market leases. The capitalized above-market lease values for acquired properties are amortized as a reduction of base rental revenue over the remaining term of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.

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

Other intangible assets acquired include amounts for in-place lease values and tenant relationship values, which are based on management’s evaluation of the specific characteristics of each tenant’s lease and the Partnership’s overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant relationships include the nature and extent of the Partnership’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles are amortized to expense over the anticipated life of the relationships.

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

Financing and Leasing Fees:  Financing fees are capitalized and amortized, using the interest method, over the life of the related mortgages. Leasing fees are capitalized and amortized on a straight-line basis over the life of the related lease. Unamortized balances are expensed when the corresponding fee is no longer applicable.

Income Taxes:  The financial statements have been prepared on the basis that NERA and its subsidiaries are entitled to tax treatment as partnerships. Accordingly, no provision for income taxes have been recorded (See Note 13).

Cash Equivalents:  The Partnership considers cash equivalents to be all highly liquid instruments purchased with a maturity of three months or less.

Segment Reporting:  Operating segments are revenue producing components of the Partnership for which separate financial information is produced internally for management. Under the definition, NERA operated, for all periods presented, as one segment.

Comprehensive Income:  Comprehensive income is defined as changes in partners’ equity, exclusive of transactions with owners (such as capital contributions and dividends). NERA did not have any comprehensive income items in 2015 or 2014  other than net income as reported.

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

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

Concentration of Credit Risks and Financial Instruments:  The Partnership’s properties are located in New England, and the Partnership is subject to the general economic risks related thereto. No single tenant accounted for more than 5% of the Partnership’s revenues in 2015 or 2014. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At June 30, 2015, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01% to 0.35%.  At June 30, 2015 and December 31, 2014, respectively approximately $16,572,000 and $15,118,000 of cash and cash equivalents, and security deposits included in prepaid expenses and other assets exceeded federally insured amounts.

Advertising Expense:  Advertising is expensed as incurred. Advertising expense was $73,961 and $56,662 for the six months ended June 30, 2015 and 2014, respectively.

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

Interest Capitalized:  The Partnership follows the policy of capitalizing interest as a component of the cost of rental property when the time of construction exceeds one year. During the six months ended June 30, 2015 and 2014 there was no capitalized interest.

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

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

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares	Jun. 30, 2015	Dec. 31, 2014	Jun. 30, 2014	Dec. 31, 2013
CONSOLIDATED BALANCE SHEETS
Partners' Capital, units outstanding	126,400	127,653	128,823	129,487

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CASH FLOW INFORMATION

6 Months Ended

Jun. 30, 2015

CASH FLOW INFORMATION

CASH FLOW INFORMATION

NOTE 11. CASH FLOW INFORMATION

During the six months ended June 30, 2015 and 2014, cash paid for interest was approximately $4,753,000, and $4,074,000 respectively.  Cash paid for state income taxes was approximately $18,000 and $49,000 during the six months ended June 30, 2015 and 2014 respectively.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 05, 2015
Entity Registrant Name	NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP
Entity Central Index Key	0000746514
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Class A
Entity Common Stock, Shares Outstanding		100,978
Class B
Entity Common Stock, Shares Outstanding		24,016

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2015

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At June 30, 2015 and December 31, 2014, we do not have any significant financial assets or financial liabilities that are measured at fair value on a recurring basis in our consolidated financial statements.

Financial Assets and Liabilities not Measured at Fair Value

At June 30, 2015 and December 31, 2014 the carrying amounts of certain of our financial instruments, including cash and cash equivalents, accounts receivable, and note payable, accounts payable and accrued expenses were representative of their fair values due to the short-term nature of these instruments or, the recent acquisition of these items.

At June 30, 2015 and December 31, 2014, we estimated the fair value of our mortgages payable and other notes based upon quoted market prices for the same (Level 1) or similar (Level 2) issues when current quoted market prices are available. We estimated the fair value of our secured mortgage debt that does not have current quoted market prices available by discounting the future cash flows using rates currently available to us for debt with similar terms and maturities (Level 3). The differences in the fair value of our debt from the carrying value are the result of differences in interest rates and/or borrowing spreads that were available to us at June 30, 2015 and December 31, 2014, as compared with those in effect when the debt was issued or acquired. The secured mortgage debt contain pre-payment penalties or yield maintenance provisions that could make the cost of refinancing the debt at lower rates exceed the benefit that would be derived from doing so.

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

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

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

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

	Carrying Amount		Estimated Fair Value
Mortgage Notes Payable
Partnership Properties
At June 30, 2015	$	196,005,736	$	209,943,632
At December 31, 2014	$	196,071,540	$	210,691,170
Investment Properties
At June 30, 2015	$	137,039,601	$	146,494,182
At December 31, 2014	$	137,910,870	$	147,843,221

Disclosure about fair value of financial instruments is based on pertinent information available to management as of June 30, 2015 and December 31, 2014. Although management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since June 30, 2015 and current estimates of fair value may differ significantly from the amounts presented herein.

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CONSOLIDATED STATEMENTS OF INCOME - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenues
Rental income	$ 10,948,498	$ 10,439,568	$ 21,921,289	$ 20,954,287
Laundry and sundry income	112,920	120,967	215,649	224,177
Total Revenues	11,061,418	10,560,535	22,136,938	21,178,464
Expenses
Administrative	487,233	568,915	1,020,310	1,099,482
Depreciation and amortization	2,520,264	2,747,467	5,004,557	5,471,646
Management fee	465,716	438,068	916,419	865,461
Operating	908,112	1,020,323	2,994,297	2,702,257
Renting	155,274	108,612	221,201	145,469
Repairs and maintenance	1,822,707	1,601,307	3,169,921	2,812,456
Taxes and insurance	1,450,928	1,351,043	2,913,904	2,792,153
Total Expenses	7,810,234	7,835,735	16,240,609	15,888,924
Income Before Other Income (Expense)	3,251,184	2,724,800	5,896,329	5,289,540
Other Income (Expense)
Interest income	168	199	362	382
Interest expense	(2,376,481)	(2,380,896)	(4,737,395)	(4,767,062)
Income (Loss) from investments in unconsolidated joint ventures	221,586	(62,382)	346,820	(270,633)
Total Other Income (loss)	(2,154,727)	(2,443,079)	(4,390,213)	(5,037,313)
Net Income	$ 1,096,457	$ 281,721	$ 1,506,116	$ 252,227
Income (loss) per Unit
Net income per unit	$ 8.66	$ 2.18	$ 11.87	$ 1.95
Weighted Average Number of Units Outstanding (in units)	126,646	128,988	126,859	129,149

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ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

6 Months Ended

Jun. 30, 2015

ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

NOTE 6. ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

The Partnership’s residential lease agreements may require tenants to maintain a one-month advance rental payment and/or a security deposit. At June 30, 2015, amounts received for prepaid rents of approximately $1,773,000 are included in cash and cash equivalents, and security deposits of approximately $2,225,000 are included in prepaid expenses and other assets and are restricted cash.

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MORTGAGE NOTES PAYABLE

6 Months Ended

Jun. 30, 2015

MORTGAGE NOTES PAYABLE

MORTGAGE NOTES PAYABLE

NOTE 5. MORTGAGE NOTES PAYABLE

At June 30, 2015 and December 31, 2014, the mortgages payable consisted of various loans, all of which were secured by first mortgages on properties referred to in Note 2. At June 30, 2015, the interest rates on these loans ranged from 3.76% to 5.97%, payable in monthly installments aggregating approximately $808,000 including principal, to various dates through 2029. The majority of the mortgages are subject to prepayment penalties. At June 30, 2015, the weighted average interest rate on the above mortgages was 4.81%. The effective rate of 4.93% includes the amortization expense of deferred financing costs. See Note 12 for fair value information. The Partnership’s mortgage debt and the mortgage debt of its unconsolidated joint ventures generally is non-recourse except for customary exceptions pertaining to misuse of funds and material misrepresentations.

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

Approximate annual maturities at June 30, 2015 are as follows:

2016—current maturities	$	504,000
2017	1,629,000
2018	1,821,000
2019	7,900,000
2020	4,330,000
Thereafter	179,822,000
	$	196,006,000

In February 2014, the Partnership paid off the mortgages on Linewt in the amount of approximately $1,466,000 and Linhart in the amount of approximately $1,926,000. There were no prepayment penalties. The Partnership’s cash reserves were used to pay off these mortgages.

On June 11, 2014, the Partnership refinanced the property owned by NERA Dean Street Associates, LLC.  The new mortgage is $5,687,000; the interest rate is 4.22%, interest only payable in 10 years. Approximately $5,077,000 of the loan proceeds were used to pay off  the existing mortgage.  The mortgage matures in June 2024. The costs associated with the refinancing were approximately $89,000.

On July 11, 2014, the Partnership refinanced the property owned by Westgate Apartments Burlington, LLC.  The new mortgage is $2,500,000; the interest rate is 4.31%; interest only, payable in 10 years.  Approximately $2,010,000 of loan proceeds were used to pay off the existing mortgage.  The mortgage matures in August, 2024.  The costs associated with the refinancing were approximately $75,000.

Line of Credit

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit.  The term of the line is three years with a floating interest rate equal to a base rate of the greater of (a) the Prime Rate (b) the Federal Funds Rate plus one-half of one percent per annum, or (c) the LIBOR Rate for a period of one month plus 1% per annum, plus an applicable margin of 2.5% to 3.5%. The costs associated with the line of credit were approximately $125,000.  As of June 30, 2015, no funds have been drawn on this credit line.

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

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

The Partnership paid fees to secure the line of credit. Any unused balance of the line of credit is subject to a fee ranging from 15 to 20 basis points per annum. The Partnership paid approximately $25,000 for the six months ended June 30, 2015.

The line of credit agreement contains several covenants including, but not limited to, providing cash flow projections and compliance certificates, as well as other financial information. Additional covenants include certain restrictions on additional encumbrances of Partnership assets, limitations on debt, maintenance of leverage ratios, minimum tangible net worth, limitations on total aggregate indebtedness, minimum ratio of net operating income to total indebtedness debt service, disposition of properties, and other items.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2015

SIGNIFICANT ACCOUNTING POLICIES

Line of Business

Line of Business:  New England Realty Associates Limited Partnership (“NERA” or the “Partnership”) was organized in Massachusetts in 1977. NERA and its subsidiaries own 24 properties which include 16 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,412 apartment units, 19 condominium units and 108,043 square feet of commercial space. Additionally, the Partnership also owns a 40-50% interest in 9 residential and mixed use properties consisting of 790 apartment units, 12,500 square feet of commercial space and a 50 car parking lot. The properties are located in Eastern Massachusetts and Southern New Hampshire.

Basis of Presentation

Basis of Presentation:  The preparation of the financial statements, in conformity with accounting principles generally accepted in the United State of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Accordingly, actual results could differ from those estimates.

Principles of Consolidation

Principles of Consolidation:  The consolidated financial statements include the accounts of NERA and its subsidiaries. NERA has a 99.67% to 100% ownership interest in each subsidiary except for the nine limited liability companies (the “Investment Properties” or “Joint Ventures”) in which the Partnership has a 40 - 50% ownership interest. The consolidated group is referred to as the “Partnership.” Minority interests are not recorded, since they are insignificant. All significant intercompany accounts and transactions are eliminated in consolidation. The Partnership accounts for its investment in the above-mentioned Investment Properties using the equity method of consolidation. (See Note 14: Investments in Unconsolidated Joint Ventures).

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

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

Impairment

Impairment:  On an annual basis management assesses whether there are any indicators that the value of the Partnership’s rental properties or investments in unconsolidated subsidiaries may be impaired. In addition to identifying any specific circumstances which may affect a property or properties, management considers other criteria for determining which properties may require assessment for potential impairment. The criteria considered by management include reviewing low leased percentages, significant near term lease expirations, recently acquired properties, current and historical operating and/or cash flow losses, near term mortgage debt maturities or other factors that might impact the Partnership’s intent and ability to hold property. A property’s value is impaired only if management’s estimate of the aggregate future cash flows (undiscounted and without interest charges) to be generated by the property is less than the carrying value of the property. To the extent impairment has occurred, the loss shall be measured as the excess of the carrying amount of the property over the fair value of the property. The Partnership’s estimates of aggregate future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved.

Revenue Recognition

Revenue Recognition:  Rental income from residential and commercial properties is recognized over the term of the related lease. For residential tenants, amounts 60 days in arrears are charged against income. The commercial tenants are evaluated on a case by case basis. Certain leases of the commercial properties provide for increasing stepped minimum rents, which are accounted for on a straight-line basis over the term of the lease. Contingent rent for commercial properties are received from tenants for certain costs as provided in the lease agreement. The costs generally include real estate taxes, utilities, insurance, common area maintenance and recoverable costs. Rental concessions are also accounted for on the straight-line basis.

Above-market and below-market lease values for acquired properties are initially recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the differences between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed-rate renewal options for below-market leases. The capitalized above-market lease values for acquired properties are amortized as a reduction of base rental revenue over the remaining term of the respective leases, and the capitalized below-market lease values are amortized as an increase to base rental revenue over the remaining initial terms plus the terms of any below-market fixed-rate renewal options of the respective leases.

Rental Properties

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

Other intangible assets acquired include amounts for in-place lease values and tenant relationship values, which are based on management’s evaluation of the specific characteristics of each tenant’s lease and the Partnership’s overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant relationships include the nature and extent of the Partnership’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles are amortized to expense over the anticipated life of the relationships.

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

Financing and Leasing Fees

Financing and Leasing Fees:  Financing fees are capitalized and amortized, using the interest method, over the life of the related mortgages. Leasing fees are capitalized and amortized on a straight-line basis over the life of the related lease. Unamortized balances are expensed when the corresponding fee is no longer applicable.

Income Taxes

Income Taxes:  The financial statements have been prepared on the basis that NERA and its subsidiaries are entitled to tax treatment as partnerships. Accordingly, no provision for income taxes have been recorded (See Note 13).

Cash Equivalents

Cash Equivalents:  The Partnership considers cash equivalents to be all highly liquid instruments purchased with a maturity of three months or less.

Segment Reporting

Segment Reporting:  Operating segments are revenue producing components of the Partnership for which separate financial information is produced internally for management. Under the definition, NERA operated, for all periods presented, as one segment.

Comprehensive Income

Comprehensive Income:  Comprehensive income is defined as changes in partners’ equity, exclusive of transactions with owners (such as capital contributions and dividends). NERA did not have any comprehensive income items in 2015 or 2014  other than net income as reported.

Income Per Depositary Receipt

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

Income Per Unit

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

Concentration of Credit Risks and Financial Instruments

Concentration of Credit Risks and Financial Instruments:  The Partnership’s properties are located in New England, and the Partnership is subject to the general economic risks related thereto. No single tenant accounted for more than 5% of the Partnership’s revenues in 2015 or 2014. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At June 30, 2015, substantially all of the Partnership’s cash and cash equivalents were held in interest-bearing accounts at financial institutions, earning interest at rates from 0.01% to 0.35%.  At June 30, 2015 and December 31, 2014, respectively approximately $16,572,000 and $15,118,000 of cash and cash equivalents, and security deposits included in prepaid expenses and other assets exceeded federally insured amounts.

Advertising Expense

Advertising Expense:  Advertising is expensed as incurred. Advertising expense was $73,961 and $56,662 for the six months ended June 30, 2015 and 2014, respectively.

Discontinued Operations and Rental Property Held for Sale

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

Interest Capitalized

Interest Capitalized:  The Partnership follows the policy of capitalizing interest as a component of the cost of rental property when the time of construction exceeds one year. During the six months ended June 30, 2015 and 2014 there was no capitalized interest.

Extinguishment of Debt

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

Reclassifications

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

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TAXABLE INCOME AND TAX BASIS

6 Months Ended

Jun. 30, 2015

TAXABLE INCOME AND TAX BASIS

TAXABLE INCOME AND TAX BASIS

NOTE 13. TAXABLE INCOME AND TAX BASIS

Taxable income reportable by the Partnership and includable in its partners’ tax returns is different than financial statement income because of tax free exchanges, accelerated depreciation, different tax lives, and timing differences related to prepaid rents, allowances and intangible assets at significant acquisitions. Taxable loss of  approximately $2,100,000 was approximately $3,100,000  less than statement income for the year ended December 31, 2014. The primary reason for the decrease is due to accelerated depreciation, tax free exchange and other differences in the treatment of certain expenditures. The cumulative tax basis of the Partnership’s real estate at December 31, 2014 is approximately $5,000,000 less than the statement basis. The primary reasons for the lower tax basis are tax free exchanges, and accelerated depreciation. The Partnership’s tax basis in its joint venture investments is approximately $1,300,000 less than statement basis because of accelerated depreciation.

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

Allowable accelerated depreciation deductions expired in 2014. This may result in higher taxable income in future years. Future tax law changes may significantly affect taxable income.

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

In the normal course of business the Partnership or one of its subsidiaries is subject to examination by federal, state and local jurisdictions in which it operates, where applicable. As of June 30, 2015, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2009 forward.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2015

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 9. COMMITMENTS AND CONTINGENCIES

From time to time, the Partnership is involved in various ordinary routine litigation incidental to their business. The Partnership either has insurance coverage or provides for any uninsured claims when appropriate. The Partnership is not involved in any material pending legal proceedings.

On June 9, 2015, a fire broke out at 12 Westgate Drive apartment complex in Woburn,Ma., resulting in approximately 10 apartments being damaged which will remain unoccupied for an extended period. The Partnership has insurance coverage on both repairs and rental loss for the extended period until the apartments are available for rent. An estimated insurance recovery receivable of approximately $952,000 has been recorded at June 30, 2015.

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PARTNERS' CAPITAL

6 Months Ended

Jun. 30, 2015

PARTNERS' CAPITAL

PARTNERS' CAPITAL

NOTE 7. PARTNERS’ CAPITAL

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

In 2015, the Partnership paid quarterly distributions of $7.50 per unit ($0.25 per receipt) on March 31 and June 30, 2015.

In 2014, the Partnership paid quarterly distributions of $7.50 per unit ($0.25 per receipt) in March, June, September, and December for a total distribution of $30.00 per unit ($1.00 per receipt) each year.

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

	Six Months Ended June 30,
	2015		2014
Net Income per Depositary Receipt	$	0.40	$	0.07
Distributions per Depositary Receipt	$	0.50	$	0.50

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TREASURY UNITS

6 Months Ended

Jun. 30, 2015

TREASURY UNITS

TREASURY UNITS

NOTE 8. TREASURY UNITS

Treasury Units at June 30, 2015 are as follows:

Class A	43,060
Class B	10,227
General Partnership	538
	53,825

On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program (“Repurchase Program”) under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one-tenth of a Class A Unit). On January 15, 2008, the General Partner authorized an increase in the Repurchase Program from 300,000 to 600,000 Depositary Receipts. On January 30, 2008 the General Partner authorized an increase the Repurchase Program from 600,000 to 900,000 Depositary Receipts. On March 6, 2008, the General Partner authorized the increase in the total number of Depositary Receipts that could be repurchased pursuant to the Repurchase Program from 900,000 to1,500,000. On August 8, 2008, the General Partner re- authorized and renewed the Repurchase Program for an additional 12-month period ended August 19, 2009. On March 22, 2010, the General Partner re-authorized and renewed the Repurchase Program that expired on August 19, 2009. Under the terms of the renewed Repurchase Program, the Partnership may purchase up to 1,500,000 Depositary Receipts from the start of the program in 2007 through March 31, 2015. On March 10, 2015, the General Partner authorized an increase in the Repurchase Program from 1,500,000 to 2,000,000 Depository Receipts and extended the Program for an additional five years from March 31, 2015 until March 31, 2020. The Repurchase Program requires the Partnership to repurchase a proportionate number of Class B Units and General Partner Units in connection with any repurchases of any Depositary Receipts by the Partnership based upon the 80%, 19% and 1% fixed distribution percentages of the holders of the Class A, Class B and General Partner Units under the Partnership’s Second Amended and Restate Contract of Limited Partnership. Repurchases of Depositary Receipts or Partnership Units pursuant to the Repurchase Program may be made by the Partnership from time to time in its sole discretion in open market transactions or in privately negotiated transactions. From August 20, 2007 through June 30, 2015, the Partnership has repurchased 1,316,996 Depositary Receipts at an average price of $26.20 per receipt (or $786.00 per underlying Class A Unit), 2,690 Class B Units and 142 General Partnership Units, both at an average price of $833.09 per Unit, totaling approximately $37,046,000 including brokerage fees paid by the Partnership.

During the six months ended June 30, 2015, the Partnership purchased a total of 30,080 Depositary Receipts. The average price was $49.63 per receipt or $1,488.90 per unit. The total cost including commission was $1,505,645. The Partnership was required to repurchase 238 Class B Units and 13 General Partnership units at a cost of $354,688 and $18,668 respectively.

From July 1, 2015 through August 5, 2015, the Partnership purchased a total of  4,241 Depositary Receipts. The average price was $49.23 per receipt or $1,476.99 per unit. The total cost was $215,102. The Partnership is required to repurchase 33.6 Class B Units and 1.8 General Partnership Units at a cost of $49,589 and $2,610 respectively.

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RENTAL INCOME

6 Months Ended

Jun. 30, 2015

RENTAL INCOME

RENTAL INCOME

NOTE 10. RENTAL INCOME

During the six months ended June 30, 2015, approximately 92% of rental income was related to residential apartments and condominium units with leases of one year or less. The majority of these leases expire in June, July and August. Approximately 8% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30, 2015 as follows:

	Commercial Property Leases
2016	$	2,639,000
2017	1,877,000
2018	1,444,000
2019	1,062,000
2020	475,000
Thereafter	603,000
	$	8,100,000

The aggregate minimum future rental income does not include contingent rentals that may be received under various leases in connection with common area charges and real estate taxes. Aggregate contingent rentals from continuing operations were approximately $345,000 and $315,000 for the six months ended June 30, 2015 and 2014 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately 30% of the total commercial rental income.

The following information is provided for commercial leases:

	Annual base rent for expiring leases		Total square feet for expiring leases	Total number of leases expiring	Percentage of annual base rent for expiring leases
Through June 30,
2016	$	864,371	38,641	11	29	%
2017	525,725		18,157	7	18	%
2018	408,902		13,175	9	14	%
2019	211,965		6,626	5	7	%
2020	753,497		24,873	10	25	%
2021	64,800		1,800	1	2	%
2022	0		0	0	0	%
2023	0		0	0	0	%
2024	157,443		4,771	1	5	%
2025	0		0	0	0	%
Totals	$	2,986,703	108,043	44	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $452,000 and $366,000 at June 30, 2015 and December 31, 2014. Included in rents receivable at June 30, 2015 is approximately $168,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis. The majority of this amount is for long-term leases with Staples and Trader Joe’s at Staples Plaza in Framingham, Massachusetts.

Rents receivable at June 30, 2015 also includes approximately $109,000 representing the deferral of rental concession primarily related to the residential properties.

For the six months ended June 30, 2015 rent at the commercial properties includes approximately $1,100 of amortization of deferred rents arising from the fair values assigned to in-place leases upon the purchase of Cypress Street in Brookline, Massachusetts.

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RELATED PARTY TRANSACTIONS (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($) item	Jun. 30, 2014 USD ($)
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue			4.00%
Management fee as a percentage of gross receipts rental revenue of Linewt, LLC			3.00%
Management fees of related party			$ 916,000	$ 865,000
Repairs and maintenance	$ 1,822,707	$ 1,601,307	3,169,921	2,812,456
Administrative expense	487,233	568,915	1,020,310	1,099,482
Management fee	$ 465,716	$ 438,068	$ 916,419	865,461
Number of limited partnerships and limited liability companies in which the entity has invested | item			9
Limited Partnerships | Minimum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest	40.00%		40.00%
Limited Partnerships | Maximum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest	50.00%		50.00%
General Partner or Management Company
RELATED PARTY TRANSACTIONS
Costs related to professional services			$ 441,000	372,000
Repairs and maintenance			207,000
Administrative expense			172,000
Expenses for construction, architectural services and supervision of capital projects			62,000
Management Company
RELATED PARTY TRANSACTIONS
Reimbursement to related party for payroll transfers			1,383,000	1,565,000
Employer contributions in 401K plan			$ 0	0
Number of accounting staff of related party providing bookkeeping and accounting functions | item			14
Fees for accounting and bookkeeping services			$ 62,500	62,500
Fees for accounting and bookkeeping services per year			$ 125,000
Number of employees having ownership interest in the investment properties | item			6
Dexter Park
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue			2.00%
President of Management Company
RELATED PARTY TRANSACTIONS
Quarterly fee for asset management consulting services			$ 37,500	$ 37,500
Harold Brown | Minimum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest	43.20%		43.20%
Harold Brown | Maximum
RELATED PARTY TRANSACTIONS
Percentage of ownership interest	57.00%		57.00%
Partially owned properties
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue			4.00%
Repairs and maintenance			$ 63,000
Administrative expense			13,000
Amount paid to related party			426,000
Management fee			$ 343,000

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IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

6 Months Ended

Jun. 30, 2015

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

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

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

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

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

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PARTNERS' CAPITAL (Tables)

6 Months Ended

Jun. 30, 2015

PARTNERS' CAPITAL

Schedule of information per depositary receipt

	Six Months Ended June 30,
	2015		2014
Net Income per Depositary Receipt	$	0.40	$	0.07
Distributions per Depositary Receipt	$	0.50	$	0.50

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details 4) - Jun. 30, 2015 - USD ($)	Total
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2016	$ 504,000
06/30/2017	1,629,000
06/30/2018	1,821,000
06/30/2019	7,900,000
06/30/2020	4,330,000
Thereafter	179,822,000
Total	$ 196,006,000
Weighted average interest rate (as a percent)	5.27%
Effective interest rate (as a percent)	5.36%
Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2016	$ 149,344
06/30/2017	7,893,152
Total	8,042,496
Hamilton Essex 81 Development
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2016	1,961,172
Total	1,961,172
345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2017	177,340
06/30/2018	187,209
06/30/2019	194,584
06/30/2020	202,250
Thereafter	9,238,617
Total	10,000,000
Hamilton 1025
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2016	74,077
06/30/2017	4,695,747
Total	4,769,824
Hamilton Bay Apartments
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2016	77,754
06/30/2017	4,460,851
Total	4,538,605
Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2016	81,127
06/30/2017	5,171,717
Total	5,252,844
Hamilton on Main Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Thereafter	16,900,000
Total	16,900,000
Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2016	1,459,214
06/30/2017	1,542,599
06/30/2018	1,630,749
06/30/2019	1,723,938
06/30/2020	79,218,160
Total	85,574,660
Total
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
06/30/2016	3,802,688
06/30/2017	23,941,406
06/30/2018	1,817,958
06/30/2019	1,918,522
06/30/2020	79,420,410
Thereafter	26,138,617
Total	$ 137,039,601

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RENTAL INCOME (Details)	6 Months Ended
	Jun. 30, 2015 USD ($) ft² item	Jun. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Minimum future rental income
2016	$ 2,639,000
2017	1,877,000
2018	1,444,000
2019	1,062,000
2020	475,000
Thereafter	603,000
Commercial Property Leases	8,100,000
Annual base rent for expiring leases	$ 2,986,703
Total square feet for expiring leases | ft²	108,043
Total number of leases expiring | item	44
Percentage of annual base rent for expiring leases	100.00%
Allowance for doubtful rent receivable	$ 452,000		$ 366,000
Recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis	168,000
Deferred rental concession	109,000
Amortization of deferred rents	$ 1,100
Percentage of rental income related to residential apartments and condominium units with leases of one year or less	92.00%
Maximum period of non-cancelable operating lease	1 year
Percentage of rental income related to commercial properties	8.00%
Aggregate contingent rentals from continuing operations	$ 345,000	$ 315,000
Through March 31, 2016
Minimum future rental income
Annual base rent for expiring leases	$ 864,371
Total square feet for expiring leases | ft²	38,641
Total number of leases expiring | item	11
Percentage of annual base rent for expiring leases	29.00%
Through March 31, 2017
Minimum future rental income
Annual base rent for expiring leases	$ 525,725
Total square feet for expiring leases | ft²	18,157
Total number of leases expiring | item	7
Percentage of annual base rent for expiring leases	18.00%
Through March 31, 2018
Minimum future rental income
Annual base rent for expiring leases	$ 408,902
Total square feet for expiring leases | ft²	13,175
Total number of leases expiring | item	9
Percentage of annual base rent for expiring leases	14.00%
Through March 31, 2019
Minimum future rental income
Annual base rent for expiring leases	$ 211,965
Total square feet for expiring leases | ft²	6,626
Total number of leases expiring | item	5
Percentage of annual base rent for expiring leases	7.00%
Through March 31, 2020
Minimum future rental income
Annual base rent for expiring leases	$ 753,497
Total square feet for expiring leases | ft²	24,873
Total number of leases expiring | item	10
Percentage of annual base rent for expiring leases	25.00%
Through March 31, 2021
Minimum future rental income
Annual base rent for expiring leases	$ 64,800
Total square feet for expiring leases | ft²	1,800
Total number of leases expiring | item	1
Percentage of annual base rent for expiring leases	2.00%
Through March 31, 2024
Minimum future rental income
Annual base rent for expiring leases	$ 157,443
Total square feet for expiring leases | ft²	4,771
Total number of leases expiring | item	1
Percentage of annual base rent for expiring leases	5.00%

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CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL - USD ($)	Subtotal	Class A	Class B	General Partnership	Treasury Units	Total
Balance at Dec. 31, 2013		$ (17,485,327)	$ (4,145,076)	$ (218,160)		$ (21,848,563)
Balance (in units) at Dec. 31, 2013	180,225	144,180	34,243	1,802	50,738	129,487
Increase (Decrease) in Partners' Capital
Distribution to Partners		$ (1,548,307)	$ (367,723)	$ (19,354)		$ (1,935,384)
Stock Buyback		(757,246)	(175,019)	(9,212)		$ (941,477)
Stock Buyback (in units)					664	664
Net income		201,782	47,923	2,522		$ 252,227
Balance at Jun. 30, 2014		$ (19,589,098)	$ (4,639,895)	$ (244,204)		$ (24,473,197)
Balance (in units) at Jun. 30, 2014	180,225	144,180	34,243	1,802	51,402	128,823
Balance at Dec. 31, 2014		$ (21,910,488)	$ (5,184,335)	$ (272,859)		$ (27,367,682)
Balance (in units) at Dec. 31, 2014	180,225	144,180	34,243	1,802	52,572	127,653
Increase (Decrease) in Partners' Capital
Distribution to Partners		$ (1,519,908)	$ (360,978)	$ (18,999)		$ (1,899,885)
Stock Buyback		(1,505,645)	$ (354,688)	$ (18,668)		$ (1,879,001)
Stock Buyback (in units)			238	13	1,253	1,253
Net income		1,204,893	$ 286,162	$ 15,061		$ 1,506,116
Balance at Jun. 30, 2015		$ (23,731,148)	$ (5,613,839)	$ (295,465)		$ (29,640,452)
Balance (in units) at Jun. 30, 2015	180,225	144,180	34,243	1,802	53,825	126,400

XML

OTHER ASSETS

6 Months Ended

Jun. 30, 2015

OTHER ASSETS

OTHER ASSETS

NOTE 4. OTHER ASSETS

Approximately $2,225,000 and $2,090,000 of security deposits are included in prepaid expenses and other assets at June 30, 2015 and December 31, 2014, respectively. The security deposits and escrow accounts are restricted cash.

Included in prepaid expenses and other assets at June 30, 2015 and December 31, 2014 is approximately $292,000 and $253,000, respectively, held in escrow to fund future capital improvements.

Intangible assets on the acquisition of Hamilton Green are included in prepaid expenses and other assets.  Intangible assets are approximately $33,000 net of accumulated amortization of approximately $1,719,000 and approximately $49,000 net of accumulated amortization of approximately $1,703,000 at June 30, 2015 and December 31, 2014, respectively.

Financing  fees of approximately $1,626,000 and $1,736,000 are net of accumulated amortization of approximately $723,000 and $613,000 at June 30, 2015 and December 31, 2014 respectively.

XML

TREASURY UNITS (Tables)

6 Months Ended

Jun. 30, 2015

TREASURY UNITS

Schedule of treasury units

Treasury Units at June 30, 2015 are as follows:

Class A	43,060
Class B	10,227
General Partnership	538
	53,825

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PARTNERS' CAPITAL (Details)		6 Months Ended
	Jan. 03, 2012	Jun. 30, 2015 item $ / shares $ / item	Jun. 30, 2014 $ / shares $ / item	Mar. 31, 2015 $ / shares $ / item	Dec. 31, 2014 $ / shares $ / item	Sep. 30, 2014 $ / shares $ / item	Mar. 31, 2014 $ / shares $ / item	Aug. 20, 2007
Quarterly distribution per unit (in dollars per unit)		7.50	7.50	7.50	7.50	7.50	7.50
Quarterly distributions per depositary receipt (in dollars per share) | $ / shares		$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25
Distribution per unit (in dollars per unit) | $ / shares					$ 30.00
Earnings per depository receipt
Net Income per Depositary Receipt after Discontinued Operations		0.40	0.07
Distributions per Depositary Receipt (in dollars per share)		0.50	0.50		1.00
Limited Partner
Number of classes of partners | item		2
Class A
Fixed distribution percentage of unit holders		80.00%
Forward split of depositary receipts	3
Exchange ratio of depositary receipts for partnership units before adjustment	10
Exchange ratio of depositary receipts for partnership units after adjustment	30
Number of units in each depository receipt	0.03333							0.1
Class B
Fixed distribution percentage of unit holders		19.00%
General Partnership
Number of classes of partners | item		1
Fixed distribution percentage of unit holders		1.00%

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

6 Months Ended

Jun. 30, 2015

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

NOTE 14. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

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

On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, referred to as Dexter Park, is a 409 unit residential complex. The purchase price was $129,500,000. The total mortgage was $89,914,000 with an interest rate of 5.57% and it matures in 2019. The mortgage calls for interest only payments for the first two years of the loan and amortized over 30 years thereafter. The balance of this mortgage is approximately $85,575,000 at June 30, 2015. This investment, Hamilton Park Towers, LLC is referred to as Dexter Park.

On October 3, 2005, the Partnership invested $2,500,000 for a 50% ownership interest in a 168-unit apartment complex in Quincy, Massachusetts. The purchase price was $30,875,000. The Partnership sold 120 units as condominiums and retained 48 units for long-term investment.. In February 2007, the Partnership refinanced the 48 units with a new mortgage in the amount of $4,750,000 with an interest rate of 5.57%, interest only for five years. The loan will be amortized over 30 years thereafter and matures in March 2017. As of June 30, 2015, the balance of the mortgage is approximately $4,539,000. This investment is referred to as Hamilton Bay Apartments, LLC. In April 2008, the Partnership refinanced an additional 20 units and obtained a new mortgage in the amount of $2,368,000 with interest at 5.75%, interest only, which matured in 2013. On October 18, 2013, the Partnership and its joint venture partner each made capital contributions to the entity of $660,000. The capital was used to pay off the outstanding mortgage. As of August 1, 2015, 7 units are still owned by the Partnership. This investment is referred to as Hamilton Bay, LLC.

On March 7, 2005, the Partnership invested $2,000,000 for a 50% ownership interest in a building comprising 48 apartments, one commercial space and a 50-car surface parking lot located in Boston, Massachusetts. The purchase price was $14,300,000, with a $10,750,000 mortgage. The Partnership plans to operate the building and initiate development of the parking lot. In June 2007, the Partnership separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Partnership restructured the mortgages on both parcels at Essex 81 and transferred the residential apartments to Hamilton Essex 81, LLC. The mortgage balance on Hamilton Essex 81, LLC is approximately $8,042,000, at June 30, 2015, amortizing over 30 years at 5.79% due in August 2016. The mortgage on Essex Development, LLC, or the parking lot is approximately $1,961,000 with a variable interest rate of 2.25% over the daily Libor rate (0.1865%) at June 30, 2015. In September 2013, this loan was extended for an additional two years to August 2015 with the same conditions except for the increased principal payments of $4,443 per month. The costs associated with the extension were approximately $9,000. Harold Brown has issued a personal guaranty up to $1,000,000 of this mortgage. In the event that he is obligated to make payments to the lender as a result of this guaranty, the Partnership and other investors have, in turn, agreed to indemnify him for their proportionate share of any such payments. The investment in the parking lot is referred to as Hamilton Essex Development, LLC; the investment in the apartments is referred to as Hamilton Essex 81, LLC. The Partnership is in the process of refinancing both loans.

On March 2, 2005, the Partnership invested $2,352,000 for a 50% ownership interest in a 176-unit apartment complex with an additional small commercial building located in Quincy, Massachusetts. The purchase price was $23,750,000. The Partnership sold 127 of the units as condominiums and retained 49 units for long-term investment. The Partnership obtained a new 10-year mortgage in the amount of $5,000,000 on the units to be retained by the Partnership. The interest on the new loan is 5.67% fixed for the 10 year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan term. The balance of this mortgage is approximately $4,770,000 at June 30, 2015. This investment is referred to as Hamilton 1025, LLC.

In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42-unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. In October 2004, the Partnership obtained a mortgage on the property in the amount of $8,025,000 and returned $3,775,000 to the Partnership. The Partnership obtained a new 10- year mortgage in the amount of $5,500,000 in January 2007. The interest on the new loan is 5.67% fixed for the ten year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan. This loan required a cash contribution by the Partnership of $1,250,000 in December 2006. At June 30, 2015, the balance of this mortgage is approximately $5,253,000. This investment is referred to as Hamilton Minuteman,  LLC.

In August 2004, the Partnership invested $8,000,000 for a 50% ownership interest in a 280-unit apartment complex located in Watertown, Massachusetts. The total purchase price was $56,000,000.  The Partnership sold 137 units as condominiums.  The assets were combined with Hamilton on Main Apartments. Hamilton on Main, LLC is known as Hamilton Place.

In 2005, Hamilton on Main Apartments, LLC obtained a ten year mortgage on the three buildings to be retained. The mortgage was $16,825,000, with interest only of 5.18% for three years and amortizing on a 30 year schedule for the remaining seven years when the balance is due. The net proceeds after funding escrow accounts and closing costs on the mortgage were approximately $16,700,000, which were used to reduce the existing mortgage. In August 2014, the property was refinanced with a 10 year mortgage in the amount of $16,900,000 at 4.34% interest only.  The Joint Venture Partnership paid off the prior mortgage of approximately $15,205,000 with the proceeds of the new mortgage and distributed $850,000 to the Partnership. The costs associated with the refinancing were approximately $161,000.

In November 2001, the Partnership invested approximately $1,533,000 for a 50% ownership interest in a 40-unit apartment building in Cambridge, Massachusetts. In June 2013, the property was refinanced with a 15 year mortgage in the amount of $10,000,000 at 3.87%, interest only for 3 years and is amortized on a 30-year schedule for the balance of the term. The Partnership paid off the prior mortgage of approximately $6,776,000 with the proceeds of the new mortgage. After the refinancing, the property made a distribution of $1,610,000 to the Partnership. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting. Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed. This investment is referred to as 345 Franklin, LLC.

Summary financial information as of June 30, 2015

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	8,564,474		$	2,620,081		$	6,951,074		$	5,039,485		$	793,069		$	6,288,296		$	6,421,497		$	19,007,097		$	95,631,639		$	151,316,712
Cash & Cash Equivalents	29,625			33,530			116,046			6,348			8,106			829			42,200			208,411			1,274,043			1,719,138
Rent Receivable	25,517			—			4,123			5,178			1,605			2,221			152			15,289			133,921			188,006
Real Estate Tax Escrow	123,085			—			17,330			72,812			—			56,520			39,006			94,677			264,746			668,176
Prepaid Expenses & Other Assets	92,967			—			51,470			54,129			19,977			55,989			43,472			82,262			1,940,068			2,340,334
Financing & Leasing Fees	21,848			1,409			86,561			7,080			—			10,338			6,028			147,136			252,066			532,466
Total Assets	$	8,857,516		$	2,655,020		$	7,226,604		$	5,185,032		$	822,757		$	6,414,193		$	6,552,355		$	19,554,872		$	99,496,483		$	156,764,832
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,042,496		$	1,961,172		$	10,000,000		$	4,769,824		$	—		$	4,538,605		$	5,252,844		$	16,900,000		$	85,574,660		$	137,039,601
Accounts Payable & Accrued Expense	59,786			5,308			64,628			27,358			20,207			14,768			47,865			154,122			724,526			1,118,568
Advance Rental Pmts & Security Deposits	199,886			—			230,492			97,276			5,810			95,435			96,548			337,614			2,800,624			3,863,685
Total Liabilities	8,302,168			1,966,480			10,295,120			4,894,458			26,017			4,648,808			5,397,257			17,391,736			89,099,810			142,021,854
Partners’ Capital	555,348			688,540			(3,068,516		)	290,574			796,740			1,765,385			1,155,098			2,163,136			10,396,673			14,742,978
Total Liabilities and Capital	$	8,857,516		$	2,655,020		$	7,226,604		$	5,185,032		$	822,757		$	6,414,193		$	6,552,355		$	19,554,872		$	99,496,483		$	156,764,832
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	277,674		$	344,270		$	—		$	145,287		$	398,370		$	882,693		$	577,549		$	1,081,568		$	4,158,667		7,866,077
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,534,258	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,534,258		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,331,819
Total units/condominiums
Apartments	48			—			40			175			120			48			42			148			409			1,030
Commercial	1			1			—			1			—			—			—			—			—			3
Total	49			1			40			176			120			48			42			148			409			1,033
Units to be retained	49			1			40			49			—			48			42			148			409			786
Units to be sold	—			—			—			127			120			—			—			—			—			247
Units sold through August 1, 2015	—			—			—			127			113			—			—			—			—			240
Unsold units	—			—			—			—			7			—			—			—			—			7
Unsold units with deposits for future sale as of August 1, 2015	—			—			—			—			—			—			—			—			—			—

Financial information for the six months ended June 30, 2015

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
Revenues
Rental Income	$	721,908		$	145,045		$	678,276		$	477,428		$	59,468		$	487,086		$	467,474		$	1,524,128		$	7,061,280		$	11,622,093
Laundry and Sundry Income	2,492			—			323			—			—			—			—			22,446			44,078			69,339
	724,400			145,045			678,599			477,428			59,468			487,086			467,474			1,546,574			7,105,358			11,691,432
Expenses
Administrative	8,306			1,008			14,381			3,162			4,674			3,624			2,693			19,935			104,634			162,417
Depreciation and Amortization	224,448			5,644			187,586			120,062			17,974			159,291			163,494			483,116			1,631,773			2,993,388
Management Fees	31,737			5,802			29,240			18,831			2,323			19,432			19,445			61,054			155,624			343,488
Operating	58,763			—			51,186			348			205			708			46,482			184,893			729,806			1,072,391
Renting	6,721			—			9,105			—			—			2,350			4,746			3,401			33,213			59,536
Repairs and Maintenance	66,434			—			19,062			155,388			23,876			186,217			32,764			182,482			540,177			1,206,400
Taxes and Insurance	106,875			26,844			59,877			85,895			10,936			76,225			61,971			166,301			733,913			1,328,837
	503,284			39,298			370,437			383,686			59,988			447,847			331,595			1,101,182			3,929,140			7,166,457
Income Before Other Income	221,116			105,747			308,162			93,742			(520		)	39,239			135,879			445,392			3,176,218			4,524,975
Other Income (Loss)
Interest Expense	(237,262		)	(27,172		)	(195,938		)	(137,440		)	(214		)	(129,239		)	(151,557		)	(373,703		)	(2,429,434		)	(3,681,959		)
Interest Income	—			—			—			8			—			—			—			—			—			8
Other Income (Expenses)	—			—			—			—			(125		)	—			—			97			—			(28		)
	(237,262		)	(27,172		)	(195,938		)	(137,432		)	(339		)	(129,239		)	(151,557		)	(373,606		)	(2,429,434		)	(3,681,979		)
Net Income (Loss)	$	(16,146	)	$	78,575		$	112,224		$	(43,690	)	$	(859	)	$	(90,000	)	$	(15,678	)	$	71,786		$	746,784		$	842,996
Net Income (Loss) - NERA 50%	$	(8,073	)	$	39,288		$	56,112		$	(21,845	)	$	(430	)	$	(45,000	)	$	(7,839	)	$	35,893					48,106
Net Income (Loss) - NERA 40%																									$	298,714		298,714
																												$	346,820

Financial information for the three months ended June 30, 2015

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
Revenues
Rental Income	$	362,007		$	72,523		$	342,800		$	237,028		$	30,173		$	236,513		$	233,578		$	762,855		$	3,572,475		$	5,849,952
Laundry and Sundry Income	—																					11,805			24,833			36,638
	362,007			72,523			342,800			237,028			30,173			236,513			233,578			774,660			3,597,308			5,886,590
Expenses
Administrative	4,369			425			6,620			1,170			1,895			1,809			1,069			10,660			52,304			80,321
Depreciation and Amortization	112,979			2,821			93,793			60,033			8,987			79,963			81,976			242,355			816,804			1,499,711
Management Fees	16,392			2,901			15,131			9,391			1,049			9,937			9,620			30,974			80,673			176,068
Operating	21,230			—			11,114			223			181			44			13,935			46,638			274,150			367,515
Renting	6,221			—			2,760			—			—			—			1,003			1,636			16,920			28,540
Repairs and Maintenance	40,751			—			13,075			78,891			12,390			101,359			17,640			98,321			323,559			685,986
Taxes and Insurance	53,458			13,423			29,941			42,844			5,056			38,394			31,013			82,793			372,658			669,580
	255,400			19,570			172,434			192,552			29,558			231,506			156,256			513,377			1,937,068			3,507,721
Income Before Other Income	106,607			52,953			170,366			44,476			615			5,007			77,322			261,283			1,660,240			2,378,869
Other Income (Loss)
Interest Expense	(119,029		)	(13,620		)	(98,002		)	(68,953		)	(105		)	(64,775		)	(76,066		)	(187,893		)	(1,219,133		)	(1,847,576		)
Interest Income										1																		1
Interest Income from Note																												—
Gain on Sale of Real Estate																						96						96
	(119,029		)	(13,620		)	(98,002		)	(68,952		)	(105		)	(64,775		)	(76,066		)	(187,797		)	(1,219,133		)	(1,847,479		)
Net Income (Loss)	$	(12,422	)	$	39,333		$	72,364		$	(24,476	)	$	510		$	(59,768	)	$	1,256		$	73,486		$	441,107		$	531,390
Net Income (Loss) - NERA 50%	$	(6,211	)	$	19,667		$	36,182		$	(12,238	)	$	255		$	(29,884	)	$	628		$	36,743					45,142
Net Income (Loss) - NERA 40%																									$	176,445		176,445
																												$	221,586

Future annual mortgage maturities at June 30, 2015 are as follows:

Period End	Hamilon Essex 81		Hamilton Essex 81 Development		345 Franklin		Hamilton 1025		Hamilton Bay Apts		Hamilton Minuteman		Hamilton on Main Apts		Dexter Park		Total
6/30/2016	149,344		1,961,172		—		74,077		77,754		81,127				1,459,214		3,802,688
6/30/2017	7,893,152				177,340		4,695,747		4,460,851		5,171,717				1,542,599		23,941,406
6/30/2018					187,209		—								1,630,749		1,817,958
6/30/2019					194,584		—								1,723,938		1,918,522
6/30/2020					202,250		—								79,218,160		79,420,410
Thereafter					9,238,617		—						16,900,000		—		26,138,617
	$	8,042,496	$	1,961,172	$	10,000,000	$	4,769,824	$	4,538,605	$	5,252,844	$	16,900,000	$	85,574,660	$	137,039,601

At June 30, 2015 the weighted average interest rate on the above mortgages was 5.27%. The effective rate was 5.36% including the amortization expense of deferred financing costs.

Summary financial information as of June 30, 2014

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	8,575,457		$	2,622,910		$	7,320,301		$	5,272,805		$	1,148,912		$	6,533,725		$	6,684,183		$	19,873,809		$	99,637,389		$	157,669,491
Cash & Cash Equivalents	76,955			104,102			107,038			6,968			57,296			1,878			66,660			23,626			968,685			1,413,208
Rent Receivable	32,918			—			15,494			2,327			3,666			6,965			5,798			11,991			141,005			220,164
Real Estate Tax Escrow	101,117			—			18,132			68,872			—			28,886			39,093			45,741			369,900			671,741
Prepaid Expenses & Other Assets	83,547			1,230			38,090			43,044			548,734			41,408			42,658			748,027			1,728,976			3,275,714
Financing & Leasing Fees	37,887			9,868			93,219			12,106			—			16,700			9,997			4,287			310,703			494,767
Total Assets	$	8,907,881		$	2,738,110		$	7,592,274		$	5,406,122		$	1,758,608		$	6,629,562		$	6,848,389		$	20,707,481		$	103,156,658		$	163,745,085
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	8,171,048		$	2,014,488		$	10,000,000		$	4,840,484		$	—		$	4,606,316		$	5,330,234		$	15,188,407		$	86,875,284		$	137,026,261
Accounts Payable & Accrued Expense	59,005			5,297			57,752			30,368			18,811			12,526			47,027			155,825			698,090			1,084,701
Advance Rental Pmts & Security Deposits	223,226			—			229,882			108,125			22,824			97,026			93,313			322,519			2,645,283			3,742,198
Total Liabilities	8,453,279			2,019,785			10,287,634			4,978,977			41,635			4,715,868			5,470,574			15,666,751			90,218,657			141,853,160
Partners’ Capital	454,602			718,325			(2,695,360		)	427,145			1,716,973			1,913,694			1,377,815			5,040,730			12,938,001			21,891,925
Total Liabilities and Capital	$	8,907,881		$	2,738,110		$	7,592,274		$	5,406,122		$	1,758,608		$	6,629,562		$	6,848,389		$	20,707,481		$	103,156,658		$	163,745,085
Partners’ Capital % - NERA	50		%	50		%	50		%	50		%	50		%	50		%	50		%	50		%	40		%
Investment in Unconsolidated Joint Ventures	$	227,301		$	359,163		$	—		$	213,573		$	858,487		$	956,847		$	688,907		$	2,520,365		$	5,175,200		10,999,842
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	—		$	—		$	(1,347,680	)	$	—		$	—		$	—		$	—		$	—		$	—		(1,347,680		)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	9,652,162
Total units/condominiums
Apartments	48			—			40			175			120			48			42			148			409			1,030
Commercial	1			1			—			1			—			—			—			—			—			3
Total	49			1			40			176			120			48			42			148			409			1,033
Units to be retained	49			1			40			49			—			48			42			148			409			786
Units to be sold	—			—			—			127			120			—			—			—			—			247
Units sold through August 1, 2014	—			—			—			127			110			—			—			—			—			237
Unsold units	—			—			—			—			10			—			—			—			—			10
Unsold units with deposits for future sale as of August 1, 2014	—			—			—			—			—			—			—			—			—			—

Financial information for the six months ended June 30, 2014

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
Revenues
Rental Income	$	670,157		$	146,472		$	658,488		$	447,481		$	106,721		$	462,103		$	456,812		$	1,440,362		$	6,709,764		$	11,098,360
Laundry and Sundry Income	8,120			—			235			—			—			—			168			19,148			48,593			76,264
	678,277			146,472			658,723			447,481			106,721			462,103			456,980			1,459,510			6,758,357			11,174,624
Expenses
Administrative	17,141			830			19,861			4,161			2,674			10,577			5,443			30,762			116,993			208,442
Depreciation and Amortization	216,170			5,644			200,104			120,320			38,350			158,697			159,254			473,132			2,694,103			4,065,774
Management Fees	29,105			5,859			28,505			18,643			4,275			18,600			18,953			57,820			148,442			330,202
Operating	68,967			—			32,593			353			605			1,039			44,102			206,470			736,853			1,090,982
Renting	10,967			—			3,623			6,376			753			5,042			6,088			18,097			57,536			108,482
Repairs and Maintenance	73,827			3,150			30,932			164,511			47,651			143,741			38,434			190,403			514,184			1,206,833
Taxes and Insurance	116,996			27,640			58,200			81,374			22,665			82,005			59,235			191,586			757,325			1,397,026
	533,173			43,123			373,818			395,738			116,973			419,701			331,509			1,168,270			5,025,436			8,407,741
Income Before Other Income	145,104			103,349			284,905			51,743			(10,252		)	42,402			125,471			291,240			1,732,921			2,766,883
Other Income (Loss)
Interest Expense	(240,198		)	(27,896		)	(195,574		)	(139,629		)	(399		)	(131,333		)	(153,561		)	(402,014		)	(2,464,957		)	(3,755,561		)
Interest Income	—			—			—			10			—			—			—			—			—			10
Interest Income from Note	—			—			—			—			468			—			—			—			—			468
Gain on Sale of Real Estate	—			—			—			—			300,522			—			—			—			—			300,522
	(240,198		)	(27,896		)	(195,574		)	(139,619		)	300,591			(131,333		)	(153,561		)	(402,014		)	(2,464,957		)	(3,454,561		)
Net Income (Loss)	$	(95,094	)	$	75,453		$	89,331		$	(87,876	)	$	290,339		$	(88,931	)	$	(28,090	)	$	(110,774	)	$	(732,036	)	$	(687,678	)
Net Income (Loss) - NERA 50%	$	(47,547	)	$	37,727		$	44,666		$	(43,938	)	$	145,171		$	(44,466	)	$	(14,045	)	$	(55,386	)				22,181
Net Income (Loss) - NERA 40%																									$	(292,814	)	(292,814		)
																												$	(270,633	)

Financial information for the three months ended June 30, 2014

				Hamilton															Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Hamilton			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Bay Sales			Bay Apts			Apts			Apts			Park			Total
Revenues
Rental Income	$	341,387		$	73,236		$	330,748		$	216,294		$	43,923		$	223,212		$	232,870		$	722,682		$	3,352,710		$	5,537,062
Laundry and Sundry Income	4,200			—			657			—			—			—			(1		)	9,692			23,213			37,761
	345,587			73,236			331,405			216,294			43,923			223,212			232,869			732,374			3,375,923			5,574,823
Expenses
Administrative	13,963			513			13,038			2,193			1,969			5,732			2,440			21,277			62,450			123,575
Depreciation and Amortization	108,267			2,823			100,379			60,167			19,175			79,383			79,852			237,117			1,348,640			2,035,803
Management Fees	15,829			2,929			14,839			9,412			1,891			9,140			9,643			29,557			76,544			169,784
Operating	23,995			—			7,770			193			355			580			11,248			64,310			248,068			356,519
Renting	10,850			—			180			624			—			1,550			3,622			11,268			38,946			67,040
Repairs and Maintenance	41,549			3,150			18,595			84,068			23,827			70,304			21,547			99,885			317,690			680,615
Taxes and Insurance	58,712			14,070			28,555			40,770			10,767			41,247			29,665			95,947			376,140			695,873
	273,165			23,485			183,356			197,427			57,984			207,936			158,017			559,361			2,468,478			4,129,209
Income Before Other Income	72,422			49,751			148,049			18,867			(14,061		)	15,276			74,852			173,013			907,445			1,445,614
Other Income (Loss)
Interest Expense	(120,829		)	(13,977		)	(97,821		)	(70,070		)	(205		)	(65,868		)	(77,061		)	(201,634		)	(1,237,262		)	(1,884,727		)
Interest Income	—			—			—			5			—			—			—			—			—			5
Interest Income from Note	—			—			—			—			135			—			—			—			—			135
Gain on Sale of Real Estate	—			—			—			—			248,239			—			—			—			—			248,239
	(120,829		)	(13,977		)	(97,821		)	(70,065		)	248,169			(65,868		)	(77,061		)	(201,634		)	(1,237,262		)	(1,636,348		)
Net Income (Loss)	$	(48,407	)	$	35,774		$	50,228		$	(51,198	)	$	234,108		$	(50,592	)	$	(2,209	)	$	(28,621	)	$	(329,817	)	$	(190,734	)
Net Income (Loss) - NERA 50%	$	(24,203	)	$	17,887		$	25,114		$	(25,598	)	$	117,054		$	(25,296	)	$	(1,105	)	$	(14,310	)				69,545
Net Income (Loss) - NERA 40%																									$	(131,927	)	(131,927		)
																												$	(62,382	)