10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended June 30, 2017

OR

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

For the transition period from              to             

Commission file number 001-31568

New England Realty Associates Limited Partnership

(Exact name of registrant as specified in its charter)

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

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

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

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

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

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

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

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

As of August 4, 2017, there were 99,509 of the registrant’s Class A units (2,985,282 Depositary Receipts) of limited partnership issued and outstanding and 23,633 Class B units issued and outstanding.

NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP

INDEX

PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Consolidated Balance Sheets as of June 30, 2017 and December 31, 2016	4
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2017 and 2016	5
	Consolidated Statements of Changes in Partners’ Capital for the Six Months ended June 30, 2017 and 2016	6
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2017 and 2016	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	38
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	39
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosure	39
Item 5.	Other Information	40
Item 6.	Exhibits	40
SIGNATURES		41

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NEW ENGLAND REALTY ASSOCIATES, L.P.

PART 1 -- FINANCIAL INFORMATION

Item 1. Financial Statements

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

The consolidated balance sheet as of December 31, 2016 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, 2016.

The results of operations for the three and six month periods ended June 30, 2017 are not necessarily indicative of the results to be expected for the entire fiscal year or any other period.

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NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	June 30,		December 31,
	2017		2016
ASSETS		(Unaudited)
Rental Properties	$	165,745,385	$	169,462,811
Cash and Cash Equivalents		10,953,067		7,463,697
Rents Receivable		472,606		567,627
Insurance Recovery Receivable		68,270		700,931
Real Estate Tax Escrows		469,807		444,625
Prepaid Expenses and Other Assets		4,245,465		3,585,870
Investments in Unconsolidated Joint Ventures		9,029,232		8,336,505
Total Assets	$	190,983,832	$	190,562,066
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable		211,934,121		212,709,080
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture		2,754,771		2,577,606
Accounts Payable and Accrued Expenses		2,728,121		4,052,095
Advance Rental Payments and Security Deposits		5,695,319		5,448,011
Total Liabilities		223,112,332		224,786,792
Commitments and Contingent Liabilities (Notes 3 and 9)		—		—
Partners’ Capital 124,386 and 124,409 units outstanding in 2017 and 2016 respectively		(32,128,500)		(34,224,726)
Total Liabilities and Partners’ Capital	$	190,983,832	$	190,562,066

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,
	2017		2016		2017		2016
Revenues
Rental income	$	12,683,517	$	12,136,355	$	25,314,962	$	24,209,211
Laundry and sundry income		104,274		117,909		216,436		228,341
		12,787,791		12,254,264		25,531,398		24,437,552
Expenses
Administrative		463,008		455,160		988,744		953,416
Depreciation and amortization		3,009,698		3,060,994		5,982,753		6,088,148
Management fee		518,533		501,288		1,055,248		1,001,495
Operating		1,032,064		1,069,692		2,746,025		2,493,937
Renting		94,532		155,962		180,735		243,226
Repairs and maintenance		2,053,272		2,193,186		3,508,894		3,820,886
Taxes and insurance		1,646,053		1,583,385		3,356,457		3,187,255
		8,817,160		9,019,667		17,818,856		17,788,363
Income Before Other Income (Expense)		3,970,631		3,234,597		7,712,542		6,649,189
Other Income (Expense)
Interest income		404		203		716		405
Interest expense		(2,545,553)		(2,542,692)		(5,066,379)		(5,096,325)
Income  from investments in unconsolidated joint ventures		1,058,225		288,478		1,731,062		658,082
		(1,486,924)		(2,254,011)		(3,334,601)		(4,437,838)
Net Income	$	2,483,707	$	980,586	$	4,377,941	$	2,211,351
`	$	19.97	$	7.85	$	35.19	$	17.69
Weighted Average Number of Units Outstanding		124,386		124,923		124,392		125,032

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, 2016	144,180	34,243	1,802	180,225	54,851	125,374	$	(24,673,535)	$	(5,830,548)	$	(306,870)	$	(30,810,953)
Distribution to Partners	—	—	—	—	—	—		(1,499,080)		(356,032)		(18,738)		(1,873,850)
Stock Buyback	—	—	—	—	451	(451)		(558,723)		(128,874)		(6,783)		(694,380)
Net Income	—	—	—	—	—	—		1,769,081		420,157		22,113		2,211,351
Balance June 30, 2016	144,180	34,243	1,802	180,225	55,302	124,923	$	(24,962,257)		(5,895,297)		(310,278)		(31,167,832)
Balance January 1 , 2017	144,180	34,243	1,802	180,225	55,816	124,409	$	(27,407,924)	$	(6,475,961)	$	(340,840)	$	(34,224,726)
Distribution to Partners	—	—	—	—	—	—		(1,791,334)		(425,442)		(22,392)		(2,239,168)
Stock Buyback	—	—	—	—	23	(23)		(34,038)		(8,084)		(426)		(42,548)
Net Income	—	—	—	—		—		3,502,353		831,809		43,779		4,377,941
Balance June 30, 2017	144,180	34,243	1,802	180,225	55,839	124,386	$	(25,730,943)	$	(6,077,678)	$	(319,879)	$	(32,128,500)

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,
	2017		2016
Cash Flows from Operating Activities
Net income	$	4,377,941	$	2,211,351
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization		5,982,753		6,088,148
Amortization of deferred financing costs		94,269		93,986
(Income)  from investments in joint ventures		(1,731,062)		(658,082)
Change in operating assets and liabilities
Decrease (Increase)   in rents receivable		95,021		(65,414)
(Decrease) in accounts payable and accrued expense		(1,323,974)		(1,940,803)
Decrease in insurance recovery receivable		632,661		177,514
(Increase)  in real estate tax escrow		(25,182)		(20,463)
(Increase) Decrease in prepaid expenses and other assets		(90,772)		600,109
Increase in advance rental payments and security deposits		247,308		331,900
Total Adjustments		3,881,022		4,606,895
Net cash provided by operating activities		8,258,963		6,818,246
Cash Flows From Investing Activities
Proceeds from unconsolidated joint ventures		3,322,250		1,331,282
Distribution in excess of investment in unconsolidated joint ventures		334,767		300,000
(Investment)  in unconsolidated joint ventures		(2,441,517)		(53,782)
Deposit and escrow held for the acquisition of real estate		(620,129)		—
Improvement of rental properties		(2,214,020)		(2,771,798)
Net cash (used in) investing activities		(1,618,649)		(1,194,298)
Cash Flows from Financing Activities
Payment of financing costs		—		(174,718)
Proceeds of mortgage notes payable		—		20,071,000
Payment of note payable		—		(25,000,000)
Principal payments of mortgage notes payable		(869,228)		(360,178)
Stock buyback		(42,548)		(694,380)
Distributions to partners		(2,239,168)		(1,873,850)
Net cash (used in) financing activities		(3,150,944)		(8,032,126)
Net Increase  (Decrease) in Cash and Cash Equivalents		3,489,370		(2,408,178)
Cash and Cash Equivalents, at beginning of period		7,463,697		10,298,186
Cash and Cash Equivalents, at end of period	$	10,953,067	$	7,890,008

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, 2017

(Unaudited)

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Line of Business:  New England Realty Associates Limited Partnership (“NERA” or the “Partnership”) was organized in Massachusetts in 1977. NERA and its subsidiaries own 25 properties which include 17 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,506 apartment units, 19 condominium units and 108,043 square feet of commercial space. Additionally, the Partnership also owns a 40- 50% interest in 9 residential and mixed use properties consisting of 754 apartment units, 12,500 square feet of commercial space and a 50 car parking lot. The properties are located in Eastern Massachusetts and Southern New Hampshire.

Basis of Presentation: The financial statements have been prepared in conformity with GAAP. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. These estimates and assumptions are based on management’s historical experience that are believed to be reasonable at the time. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgement. The Partnership’s critical accounting policies are those which require assumptions to be made about matters that are highly uncertain. Different estimates could have a material effect on the Partnership’s financial results. Judgements and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions and circumstances.

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

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

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

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variable interest entity’s performance; and (2) the obligation to absorb losses and rights to receive the returns from VIE that would be significant to the VIE.

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

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

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

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

Other intangible assets acquired include amounts for in-place lease values and tenant relationship values, which are based on management’s evaluation of the specific characteristics of each tenant’s lease and the Partnership’s overall relationship with the respective tenant. Factors to be considered by management in its analysis of in-place lease values include an estimate of carrying costs during hypothetical expected lease-up periods considering current market

9

conditions, and costs to execute similar leases at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, management considers leasing commissions, legal and other related expenses. Characteristics considered by management in valuing tenant relationships include the nature and extent of the Partnership’s existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and expectations of lease renewals. The value of in-place leases are amortized to expense over the remaining initial terms of the respective leases. The value of tenant relationship intangibles are amortized to expense over the anticipated life of the relationships.

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

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

Deferred Financing Costs:  Costs incurred in obtaining financing are capitalized and amortized over the term of the related indebtedness. Deferred financing costs are presented in the balance sheet as a direct deduction from the carrying value of the debt liability to which they relate, except deferred financing costs related to the revolving credit facility, which are presented in prepaid expenses and other assets. In all cases, amortization of such costs is included in interest expense and was approximately $94,000 and $94,000 for the six months ended June 30, 2017 and 2016, respectively.

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

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

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

Comprehensive Income:  Comprehensive income is defined as changes in partners’ equity, exclusive of transactions with owners (such as capital contributions and dividends). NERA did not have any comprehensive income items in 2017 or 2016 other than net income as reported.

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

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

Concentration of Credit Risks and Financial Instruments:  The Partnership’s properties are located in New England, and the Partnership is subject to the general economic risks related thereto. No single tenant accounted for more than 5% of the Partnership’s revenues in 2017 or 2016. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At June 30, 2017, 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, 2017 and December 31, 2016, respectively approximately $12,485,000, and $8,911,000 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 $98,811and $93,394 for the six months ended June 30, 2017 and 2016, respectively.

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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, 2017 and 2016 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. 

NOTE 2. RENTAL PROPERTIES

As of June 30, 2017, the Partnership and its Subsidiary Partnerships owned 2,506 residential apartment units in 21 residential and mixed-use complexes (collectively, the “Apartment Complexes”). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the “Condominium Units”). The Apartment Complexes and Condominium Units are located primarily in the metropolitan Boston area of Massachusetts.

Additionally, as of June 30, 2017, 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, 2017 with a total of 754 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, 2017		December 31, 2016		Useful Life
Land, improvements and parking lots	$	52,918,495	$	52,612,929	15	-	40	years
Buildings and improvements		173,761,734		173,536,288	15	-	40	years
Kitchen cabinets		9,022,944		8,738,323	5	-	10	years
Carpets		7,962,417		7,621,292	5	-	10	years
Air conditioning		690,535		690,535	5	-	10	years
Laundry equipment		274,389		269,784	5	-	7	years
Elevators		1,139,296		1,139,296	20	-	40	years
Swimming pools		444,629		444,629	10	-	30	years
Equipment		10,354,242		10,029,639	5	-	30	years
Motor vehicles		237,954		237,954			5	years
Fences		37,465		37,465	5	-	15	years
Furniture and fixtures		8,371,845		8,127,100	5	-	7	years
Smoke alarms		657,369		174,059	5	-	7	years
Total fixed assets		265,873,314		263,659,293
Less: Accumulated depreciation		(100,127,929)		(94,196,482)
	$	165,745,385	$	169,462,811

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 of rental revenue and laundry income on the majority of the Partnership’s properties and 3% on Linewt. Total fees paid were approximately $1,055,000 and $1,001,000 for the six months ended June 30, 2017 and 2016, 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,  

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2017 and 2016, approximately $363,000 and $557,000, was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements. Of the 2017 expenses referred to above, approximately $95,000 consisted of repairs and maintenance, $184,000 of administrative expense and $1,000 for commercial brokerage fees. Approximately $83,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2017, the Hamilton Company received approximately $798,000 from the Investment Properties of which approximately $352,000 was the management fee, approximately $27,000 was for maintenance services, approximately $14,000 was for administrative services and approximately $405,000 for architectural services and supervision of capital projects. The management fee is equal to 4% of gross receipts of 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 $1,671,000 and $1,509,000 for the six months ended June 30, 2017 and 2016, 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 2017 and 2016.

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, 2017 and 2016, 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, 2017 and 2016 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 56%. 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 $2,466,000, and $2,381,000 of security deposits are included in prepaid expenses and other assets at June 30, 2017 and December 31, 2016, respectively. The security deposits and escrow accounts are restricted cash.

Included in prepaid expenses and other assets at June 30, 2017 and December 31, 2016 is approximately $424,000 and $423,000, respectively, held in escrow to fund future capital improvements.

Intangible assets on the acquisition of the Residence at Captain Parkers are included in prepaid expenses and other assets.  Intangible assets are approximately $4,000 net of accumulated amortization of approximately $500,000 and approximately $12,000 net of accumulated amortization of approximately $492,000 at June 30, 2017 and December 31, 2016, respectively.

Included in deposits and escrows held for acquisition is approximately $620,000 in connection with the purchase of Woodland Park apartments in Newton, Massachusetts. See Note 16-Subsequent Events.

Financing fees in association with the line of credit of approximately $24,000 and $28,000 are net of accumulated amortization of approximately $137,000 and $113,000 at June 30, 2017 and December 31, 2016 respectively.

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NOTE 5. MORTGAGE NOTES PAYABLE

At June 30, 2017 and December 31, 2016, 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, 2017, the interest rates on these loans ranged from 2.80% to 5.97%, payable in monthly installments aggregating approximately $976,000 including principal, to various dates through 2029. The majority of the mortgages are subject to prepayment penalties. At June 30, 2017, the weighted average interest rate on the above mortgages was 4.63%. The effective rate of 4.72% includes the amortization expense of deferred financing costs. See Note 12 for fair value information. The Partnership’s mortgage debt and the mortgage debt of its unconsolidated joint ventures generally is non-recourse except for customary exceptions pertaining to misuse of funds and material misrepresentations.

Financing fees of approximately $1,337,000 and $1,454,000 are net of accumulated amortization of approximately $1,179,000 and $1,061,000 at June 30, 2017 and December 31, 2016, respectively.

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

Approximate annual maturities at June 30, 2017 are as follows:

2018—current maturities	$	1,804,000
2019		7,883,000
2020		4,318,000
2021		2,176,000
2022		2,535,000
Thereafter		194,549,000
		213,265,000
Less: unamortized deferred financing costs		(1,331,000)
	$	211,934,000

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

Captain Parker is required to repay the aggregate principal amount of the Loan by the Due Date. Interest payments on the Loans are payable monthly in arrears on specified dates set forth in the Loan Agreement. Principal payments on the Loan are also payable monthly commencing on March 1, 2022.  The note issued by Captain Parker in connection with the Loan Agreement (the “Note”) also contains provisions for optional prepayment with a penalty under certain circumstances.

Line of Credit

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit.  The term of the line is three years with a floating interest rate equal to a base rate of the greater of (a) the Prime Rate (b) the Federal Funds Rate plus one-half of one percent per annum, or (c) the LIBOR Rate for a period of one month plus 1% per annum, plus the applicable margin of 2.5%. The costs associated with the line of credit were approximately $125,000. As of June 30, 2017, the credit line had no outstanding balance. The agreement expired on July 31,2017. The lender has provided a 90 day extension and is working with the Partnership on a renewal agreement.

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

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

On July 6, 2017, the Partnership, in connection with the purchase of Woodland Park Apartments, used the entire line of credit, along with a loan from HBC Holdings, LLC, a company controlled by Harold Brown for $16,000,000, and cash reserves, to purchase the property. See Note 16-Subsequent Events.

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

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

The Partnership paid fees to secure the line of credit. Any unused balance of the line of credit is subject to a fee ranging from 15 to 20 basis points per annum. The Partnership paid approximately $25,000 for the six months ended June 30, 2017.

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

The Partnership is in compliance with these covenants as of June 30, 2017.

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, 2017, amounts received for prepaid rents of approximately $2,092,000 are included in cash and cash equivalents, and security deposits of approximately $2,466,000 are included in prepaid expenses and other assets and are restricted cash.

NOTE 7. PARTNERS’ CAPITAL

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

In 2017, the Partnership announced the approval of a quarterly distribution of its Class A Limited Partners and holders of Depositary Receipts of record as of March 15, 2017, and June 15, 2017 and payable on March 31, 2017, and June 30, 2017 of $9.00 per unit ($0.30 per receipt).

In 2016, regular quarterly distributions of $7.50 per unit ($0.25 per receipt) were paid in March, June, September and December. In December 2016, the Partnership paid a special distribution of $24.00 per unit ($0.80 per receipt). In 2016, the Partnership paid a total distribution of an aggregate of $54.00 per unit ($1.80 per Receipt).

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

	Six Months Ended
	June 30,
	2017		2016
Net Income per Depositary Receipt	$	1.17	$	0.59
Distributions per Depositary Receipt	$	0.60	$	0.50

NOTE 8. TREASURY UNITS

Treasury Units at June 30, 2017 are as follows:

Class A	44,671
Class B	10,609
General Partnership	559
	55,839

On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program (“Repurchase Program”) under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one-tenth of a Class A Unit).Over time, the General Partner has authorized increases in the equity repurchase program.On March 10, 2015, the General Partner authorized an increase in the Repurchase Program from 1,500,000 to 2,000,000 Depository Receipts and extended the Program for an additional five years from March 31, 2015 until March 31, 2020. 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, 2017, the Partnership has repurchased 1,365,306 Depositary Receipts at an average price of $27.14 per receipt (or $814.20 per underlying Class A Unit), 3,072 Class B Units and 162 General Partnership Units, both at an average price of $926.26 per Unit, totaling approximately $40,274,000 including brokerage fees paid by the Partnership.

During the six months ended June 30, 2017, the Partnership purchased a total of 549 Depositary Receipts. The average price was $62.00 per receipt or $1,860.00 per unit. The total cost including commission was $34,038. The Partnership was required to repurchase 4.3 Class B Units and 0.2 General Partnership units at a cost of $8,084 and $425 respectively.

NOTE 9. COMMITMENTS AND CONTINGENCIES

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

On November 19, 2016, a pipe broke at 62 Boylston Street in Boston, MA. resulting in water damage to 24  apartments. The Partnership has insurance coverage on both the repairs and rental loss. As of June 30, 2017, the Partnership has received payments of approximately $344,000 on this claim.

NOTE 10. RENTAL INCOME

During the six months ended June 30, 2017, approximately 93% of rental income was related to residential apartments and condominium units with leases of one year or less. The majority of these leases expire in June, July and

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August. Approximately 7% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30, 2017 as follows:

	Commercial
	Property Leases
2018	$	3,447,000
2019		2,284,000
2020		1,687,000
2021		1,474,000
2022		594,000
Thereafter		391,000
	$	9,877,000

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 $319,000 and $304,000 for the six months ended June 30, 2017 and 2016 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately 33% of the total commercial rental income.

The following information is provided for commercial leases:

	Annual base				Percentage of
	rent for		Total square feet	Total number of	annual base rent for
Throguh June 30,	expiring leases		for expiring leases	leases expiring	expiring leases
2018	$	418,813	18,181	11	14	%
2019		338,133	10,684	11	12	%
2020		631,713	22,328	9	22	%
2021		621,421	25,004	6	21	%
2022		579,164	23,267	6	20	%
2023		78,000	1,950	1	2	%
2024		251,627	6,629	2	9	%
2025		—	—	—	—	%
2026		—	—	—	—	%
2027		—	—	—	—	%
Totals	$	2,918,871	108,043	46	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $686,000 and $523,000 at June 30, 2017 and December 31, 2016. Included in rents receivable at June 30, 2017 is approximately $120,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis. The majority of this amount is for long-term leases at 62 Boylston Street in Boston, Massachusetts.

Rents receivable at June 30, 2017 also includes approximately $71,000 representing the deferral of rental concession primarily related to the residential properties.

NOTE 11. CASH FLOW INFORMATION

During the six months ended June 30, 2017 and 2016, cash paid for interest was approximately $4,985,000, and $4,947,000 respectively.  Cash paid for state income taxes was approximately $37,000 and $41,000 during the six months ended June 30, 2017 and 2016 respectively.

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At June 30, 2017 and December 31, 2016, 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

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At June 30, 2017 and December 31, 2016 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, 2017 and December 31, 2016, 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, 2017 and December 31, 2016, 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, 2017	*	$	211,934,121	$	219,698,686
At December 31, 2016	*	$	212,709,080	$	219,086,450
Investment Properties
At June 30, 2017	*	$	124,938,378	$	127,583,710
At December 31, 2016	*	$	130,152,297	$	133,991,269

* Net of unamortized deferred financing costs

Disclosure about fair value of financial instruments is based on pertinent information available to management as of June 30, 2017 and December 31, 2016. 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, 2017 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, timing differences related to prepaid rents, allowances and intangible assets related to significant acquisitions. Taxable income of approximately $4,893,000 was approximately $57,000 less than statement income for the year ended December 31, 2016. The primary reason for the difference is due to accelerated depreciation, tax free exchange and other differences in the treatment of certain expenditures. The cumulative tax basis of the Partnership’s real estate at December 31, 2016 is approximately $7,200,000 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 $2,100,000 less than statement basis because of accelerated depreciation.

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

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

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

In the normal course of business the Partnership or one of its subsidiaries is subject to examination by federal, state and local jurisdictions in which it operates, where applicable. As of June 30, 2017, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2013 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 interest in each investment. The other investors are Harold Brown, the President of the Management Company and five other employees of the Management Company. Harold Brown’s ownership interest is between 43.2% and 56%, with the balance owned by the others. A description of each investment is as follows:

On October 28, 2009 the Partnership invested approximately $15,925,000 in a joint venture to acquire a 40% interest in a residential property located in Brookline, Massachusetts. The property, Hamilton Park Towers LLC, referred to as Dexter Park, 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 before unamortized deferred financing costs is approximately $82,757,000 at June 30, 2017.  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 Joint Venture sold 120 units as condominiums and retained 48 units for long-term investment. In February 2007, the Joint Venture 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 was to be amortized over 30 years thereafter and matured in March, 2017. On March 1, 2017, the mortgage balance was paid in full, with the Partnership contributing its share of the mortgage balance of approximately $2,222,000. As of June 30, 2017, 10 units were sold with a gain on the sales of approximately $1,338,000. An additional ten units are under purchase and sale agreements, and the Partnership still owns 38 units. This investment is referred to as Hamilton Bay Apartments, LLC. In April 2008, the Joint Venture 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. During 2017,  1 unit was sold resulting in a gain of approximately $93,000.  As of August 1, 2017, all units have been sold by the Joint Venture. 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 Joint Venture planned to operate the building and initiate development of the parking lot. In June 2007, the Joint Venture separated the parcels, formed an additional limited liability company for the residential apartments and obtained a mortgage on the property. The new limited liability company formed for the residential apartments and commercial space is referred to as Hamilton Essex 81, LLC. In August 2008, the Joint Venture restructured the mortgages on both parcels at Essex 81. On September 28, 2015, Hamilton Essex Development, LLC paid off the outstanding mortgage balance of $1,952,286.  The Partnership made a capital contribution of $978,193 to Hamilton Essex Development LLC for its share of the funds required for the transaction.  Additionally, the Partnership made a capital contribution of $100,000 to Hamilton Essex 81, LLC.  On September 30, 2015, Hamilton Essex 81, LLC obtained a new 10 year mortgage in the amount of $10,000,000, interest

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only at 2.18% plus the one month Libor rate. The proceeds of the note were used to pay off the existing mortgage of $8,040,719 and the Partnership received a distribution of $978,193 for its share of the excess proceeds. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting. Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed. 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.AtJune 30, 2017, the balance on this mortgage before unamortized deferred financing costs is approximately $10,000,000.

On March 2, 2005, the Partnership invested $2,352,000 for a 50% ownership interest in a 176‑unit apartment complex with an additional small commercial building located in Quincy, Massachusetts. The purchase price was $23,750,000. The Joint Venture sold 127 of the units as condominiums and retained 49 units for long‑term investment. The Joint Venture obtained a new 10‑year mortgage in the amount of $5,000,000 on the units to be retained by the Joint Venture. The interest on the new loan was 5.67% fixed for the 10 year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan term. On July 8, 2016, Hamilton 1025 LLC paid off the outstanding balance of the mortgage balance. The Partnership made a capital contribution of $2,359,500 to Hamilton 1025, LLC for its share of the funds required for the transaction. Ten units were sold in the year ended December 31, 2016 with a gain on the sales of approximately $1,324,000. As of June 30, 2017, 8 units were sold in 2017 with a gain on the sales of approximately $939,000. 4 units are under purchase and sales agreements and the Partnership still owns 30 units. This investment is referred to as Hamilton 1025, LLC.

In September 2004, the Partnership invested approximately $5,075,000 for a 50% ownership interest in a 42‑unit apartment complex located in Lexington, Massachusetts. The purchase price was $10,100,000. In October 2004, the Joint Venture obtained a mortgage on the property in the amount of $8,025,000 and returned $3,775,000 to the Partnership. The Joint Venture obtained a new 10- year mortgage in the amount of $5,500,000 in January 2007. The interest on the new loan was 5.67% fixed for the ten year term with interest only payments for five years and amortized over a 30 year period for the balance of the loan. This loan required a cash contribution by the Partnership of $1,250,000 in December 2006. On September 12, 2016, the property was refinanced with a 15 year mortgage in the amount of $6,000,000, at 3.71%, interest only. The Joint Venture Partnership paid off the prior mortgage of approximately $5,158,000 with the proceeds of the new mortgage and made a distribution of $385,000 to the Partnership. The cost associated with the refinancing was approximately $123,000. This investment is referred to as Hamilton Minuteman, LLC. At June 30, 2017, the balance on this mortgage before unamortized deferred financing costs is approximately $6,000,000. This investment is referred to as Hamilton Minuteman, LLC.

In August 2004, the Partnership invested $8,000,000 for a 50% ownership interest in a 280‑unit apartment complex located in Watertown, Massachusetts. The total purchase price was $56,000,000. The Joint Venture sold 137 units as condominiums. The assets were combined with Hamilton on Main Apartments. Hamilton on Main, LLC is known as Hamilton Place. In 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 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. At June 30, 2017, the balance of the mortgage before unamortized deferred financing costs is approximately $16,900,000.

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 Joint Venture paid off the prior mortgage of approximately $6,776,000 with the proceeds of the new mortgage. After the refinancing, the Joint Venture made a distribution of $1,610,000 to the Partnership. As a result of the distribution, the carrying value of the investment fell below zero. The Partnership will continue to account for this investment using the equity method of accounting. Although the Partnership has no legal obligation, the Partnership intends to fund its share of any future operating deficits if needed. At June 30, 2017, the balance of this mortgage before unamortized deferred financing costs is approximately $9,835,000. This investment is referred to as 345 Franklin, LLC.

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Summary financial information as of June 30, 2017

				Hamilton									Hamilton						Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Bay			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Sales			Bay Apts			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	7,798,556		$	2,622,021		$	6,494,266		$	2,812,552		$	0		$	4,484,449		$	6,012,338		$	17,871,657		$	90,669,576		$	138,765,415
Cash & Cash Equivalents		95,520			108,751			45,291			684			212,237			58,078			27,620			541			975,232			1,523,954
Rent Receivable		5,529			—			9,470			10,842			825			18,180			10,991			20,212			150,399			226,448
Real Estate Tax Escrow		111,718			—			18,889			—			—			0			19,216			238,391			273,553			661,767
Prepaid Expenses & Other Assets		105,580			1533			42,394			770,237			0			487,987			23,196			108,507			1,667,709			3,207,143
Total Assets	$	8,116,903		$	2,732,305		$	6,610,310		$	3,594,315		$	213,062		$	5,048,694		$	6,093,361		$	18,239,308		$	93,736,469		$	144,384,727
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,886,240		$	—		$	9,761,919		$	—		$	—		$	—		$	5,883,726		$	16,784,966		$	82,621,527		$	124,938,378
Accounts Payable & Accrued Expense		62,932			850			63,851			10,978			1,182			35,122			48,956			140,046			642,256			1,006,173
Advance Rental Pmts & Security Deposits		251,183			—			210,629			42,231			101			65,705			119,247			377,911			3,412,120			4,479,127
Total Liabilities		10,200,355			850			10,036,399			53,209			1,283			100,827			6,051,929			17,302,923			86,675,903			130,423,678
Partners’ Capital		(2,083,452)			2,731,455			(3,426,089)			3,541,106			211,779			4,947,867			41,432			936,385			7,060,566			13,961,049
Total Liabilities and Capital	$	8,116,903		$	2,732,305		$	6,610,310		$	3,594,315		$	213,062		$	5,048,694		$	6,093,361		$	18,239,308		$	93,736,469		$	144,384,727
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$			$	1,365,727		$	—		$	1,770,552		$	105,889		$	2,473,933		$	20,716		$	468,192		$	2,824,225			9,029,232
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(1,041,726)		$	—		$	(1,713,045)		$	—		$	—		$	—		$	—		$	—		$	—			(2,754,771)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,274,462
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			1			—			—			42			148			409			690
Units to be sold		—			—			—			175			120			48			—			—			—			343
Units sold through August 1, 2017		—			—			—			148			120			10			—			—			—			278
Unsold units		—			—			—			27			—			38			—			—			—			65
Unsold units with deposits for future sale as of  August 1, 2017		—			—			—			4			—			9			—			—			—			13

20

Financial information for the six months ended June 30, 2017

			Hamilton						Hamilton				Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Bay		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	723,284	$	120,000	$	727,167	$	237,200	$	5,282	$	397,962	$	516,798	$	1,655,234		7,545,962	$	11,928,889
Laundry and Sundry Income		7,590		—		2,136		—		—		—		1,270		18,368		48,939		78,303
		730,874		120,000		729,303		237,200		5,282		397,962		518,068		1,673,602		7,594,901		12,007,192
Expenses
Administrative		9,929		850		14,039		2,184		2,148		5,197		2,411		17,237		95,269		149,264
Depreciation and Amortization		226,998		1,415		173,435		91,251		(38,440)		202,598		173,810		490,218		1,668,723		2,990,008
Management Fees		31,978		4,800		29,464		8,803		207		14,869		20,466		66,082		175,469		352,138
Operating		39,707		—		36,420		100		38		1,374		52,003		183,191		617,663		930,496
Renting		9,516		—		12,248		332		181		181		4,104		21,398		50,757		98,717
Repairs and Maintenance		49,551		3,180		51,430		115,717		3,100		192,826		39,286		327,427		590,844		1,373,361
Taxes and Insurance		121,101		29,080		66,970		56,565		1,213		87,349		62,894		218,416		859,625		1,503,213
		488,780		39,325		384,006		274,952		(31,553)		504,394		354,974		1,323,969		4,058,350		7,397,197
Income Before Other Income		242,094		80,675		345,297		(37,752)		36,835		(106,432)		163,094		349,633		3,536,551		4,609,995
Other Income (Loss)
Interest Expense		(164,394)		—		(197,793)		(777)		(2)		(41,741)		(118,019)		(382,898)		(2,381,971)		(3,287,595)
Gain on Sale of Real Estate		—		—		—		939,332		93,392		1,337,920		—		—		—		2,370,644
		(164,394)		—		(197,793)		938,555		93,390		1,296,179		(118,019)		(382,898)		(2,381,970)		(916,951)
Net Income (Loss)	$	77,700	$	80,675	$	147,504	$	900,803	$	130,225	$	1,189,747	$	45,075	$	(33,265)	$	1,154,581	$	3,693,044
Net Income (Loss)—NERA 50%	$	38,851	$	40,338	$	73,751	$	450,401	$	65,113	$	594,874	$	22,538	$	(16,633)				1,269,232
Net Income —NERA 40%																	$	461,830		461,830
																			$	1,731,062

Financial information for the three months ended June 30, 2017

			Hamilton						Hamilton				Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Bay		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	767,917	$	120,000	$	724,962	$	472,476	$	27,690	$	494,357	$	491,754	$	1,604,997	$	7,411,976	$	12,116,129
Laundry and Sundry Income		8,357		—		2,097		—		—		—		299		20,634		54,646		86,033
		776,274		120,000		727,059		472,476		27,690		494,357		492,053		1,625,631		7,466,622		12,202,162
Expenses
Administrative		20,096		889		16,198		2,745		2,984		5,870		2,600		20,131		97,201		168,714
Depreciation and Amortization		225,194		1,415		173,831		118,064		12,584		158,855		169,581		477,061		1,618,053		2,954,638
Management Fees		30,050		4,800		30,825		17,927		1,076		19,604		19,922		64,262		165,333		353,799
Operating		50,358		—		36,666		585		200		1,008		46,231		151,015		608,261		894,324
Renting		6,839		—		10,540		1,789		—		954		4,802		9,516		55,595		90,035
Repairs and Maintenance		76,084		3,150		29,334		155,898		13,569		200,605		110,941		227,253		593,075		1,409,909
Taxes and Insurance		115,308		30,602		64,423		86,209		7,071		83,979		59,499		255,822		733,758		1,436,671
		523,929		40,856		361,817		383,217		37,484		470,875		413,576		1,205,060		3,871,276		7,308,090
Income Before Other Income		252,345		79,144		365,242		89,259		(9,794)		23,482		78,477		420,571		3,595,346		4,894,072
Other Income (Loss)
Interest Expense		(141,647)		—		(199,009)		(138,688)		(59)		(130,978)		(152,347)		(383,871)		(2,434,648)		(3,581,247)
Interest Income		—		—		—		9		—		—		—		—		—		9
Gain on sale of real estate		—		—		—				235,470				—		—		—		235,470
		(141,647)		—		(199,009)		(138,679)		235,411		(130,978)		(152,347)		(383,871)		(2,434,648)		(3,345,768)
Net Income (Loss)	$	110,698	$	79,144	$	166,233	$	(49,420)	$	225,617	$	(107,496)	$	(73,870)	$	36,700	$	1,160,698	$	1,548,304
Net Income (Loss)—NERA 50%	$	55,350	$	39,572	$	83,116	$	(24,710)	$	112,809	$	(53,749)	$	(36,936)	$	18,350				193,802
Net Income (Loss)—NERA 40%																	$	464,280		464,280
																			$	658,082

21

Future annual mortgage maturities at June 30, 2017 are as follows:

	Hamilton		345		Hamilton		Hamilton		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Franklin		1025		Bay Apts		Minuteman		Main Apts		Park		Total
6//30/2018	$	—	$	186,608	$	—	$	—	$	—	$	—	$	1,630,749	$	1,817,357
6/30/2019		—		193,959		—		—		—		—		1,723,938		1,917,897
6/30/2020		—		201,599		—		—		—		—		79,402,271		79,603,870
6/30/2021		—		209,541		—		—		—		—		—		209,541
6/30/2022		—		217,796		—		—		—		—		—		217,796
Thereafter		10,000,000		8,825,660		—		—		6,000,000		16,900,000		—		41,725,660
		10,000,000		9,835,163		—		—		6,000,000		16,900,000		82,756,958		125,492,121
Less: unamortized deferred financing costs		(113,760)		(73,244)		—		—		(116,274)		(115,034)		(135,431)		(553,743)
	$	9,886,240	$	9,761,919	$	—	$	—	$	5,883,726	$	16,784,966	$	82,621,527	$	124,938,378

At June 30, 2017 the weighted average interest rate on the above mortgages was 5.00%. The effective rate was 5.08% including the amortization expense of deferred financing costs.

22

Summary financial information as of June 30, 2016

				Hamilton									Hamilton						Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Bay			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Sales			Bay Apts			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	8,233,823		$	2,617,251		$	6,607,281		$	4,829,662		$	241,741		$	6,017,735		$	6,200,372		$	18,146,220		$	93,105,409		$	145,999,494
Cash & Cash Equivalents		111,271			42,323			183,078			288			28,695			4,943			170			172,519			1,096,874			1,640,161
Rent Receivable		46,713			—			8,347			18,732			2,400			12,257			—			13,230			81,431			183,110
Real Estate Tax Escrow		83,814			—			16,713			83,537			—			37,780			46,263			37,745			233,654			539,506
Prepaid Expenses & Other Assets		105,562			1351			37,218			68,884			1,891			74,021			159,492			109,424			2,132,688			2,690,531
Total Assets	$	8,581,183		$	2,660,925		$	6,852,637		$	5,001,103		$	274,727		$	6,146,736		$	6,406,297		$	18,479,138		$	96,650,056		$	151,052,802
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,872,451		$	—		$	9,920,098		$	4,693,693		$	—		$	4,463,701		$	5,169,696		$	16,768,914		$	84,018,197		$	134,906,750
Accounts Payable & Accrued Expense		54,553			850			67,207			28,749			1,395			9,232			57,401			130,506			636,852			986,745
Advance Rental Pmts& Security Deposits		196,372			—			259,754			89,470			2,373			98,765			110,976			357,657			3,027,025			4,142,392
Total Liabilities		10,123,376			850			10,247,059			4,811,912			3,768			4,571,698			5,338,073			17,257,077			87,682,074			140,035,887
Partners’ Capital		(1,542,193)			2,660,075			(3,394,422)			189,191			270,959			1,575,038			1,068,224			1,222,061			8,967,982			11,016,915
Total Liabilities and Capital	$	8,581,183		$	2,660,925		$	6,852,637		$	5,001,103		$	274,727		$	6,146,736		$	6,406,297		$	18,479,138		$	96,650,056		$	151,052,802
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$			$	1,330,037		$	—		$	94,595		$	135,479		$	787,518		$	534,111		$	611,031		$	3,587,193		$	7,079,963
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(771,097)		$	—		$	(1,697,211)		$	—		$	—		$	—		$	—		$	—		$	—			(2,468,308)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	4,611,654
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 May1, 2016		—			—			—			127			118			—			—			—			—			245
Unsold units		—			—			—			—			2			—			—			—			—			2
Unsold units with deposits for future sale as of May 1, 2016		—			—			—			—			—			—			—			—			—			—

23

Financial information for the six months ended June 30, 2016

			Hamilton						Hamilton				Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Bay		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	767,917	$	120,000	$	724,962	$	472,476	$	27,690	$	494,357	$	491,754	$	1,604,997	$	7,411,976	$	12,116,129
Laundry and Sundry Income		8,357		—		2,097		—		—		—		299		20,634		54,646		86,033
		776,274		120,000		727,059		472,476		27,690		494,357		492,053		1,625,631		7,466,622		12,202,162
Expenses
Administrative		20,096		889		16,198		2,745		2,984		5,870		2,600		20,131		97,201		168,714
Depreciation and Amortization		225,194		1,415		173,831		118,064		12,584		158,855		169,581		477,061		1,618,053		2,954,638
Management Fees		30,050		4,800		30,825		17,927		1,076		19,604		19,922		64,262		165,333		353,799
Operating		50,358		—		36,666		585		200		1,008		46,231		151,015		608,261		894,324
Renting		6,839		—		10,540		1,789		—		954		4,802		9,516		55,595		90,035
Repairs and Maintenance		76,084		3,150		29,334		155,898		13,569		200,605		110,941		227,253		593,075		1,409,909
Taxes and Insurance		115,308		30,602		64,423		86,209		7,071		83,979		59,499		255,822		733,758		1,436,671
		523,929		40,856		361,817		383,217		37,484		470,875		413,576		1,205,060		3,871,276		7,308,090
Income Before Other Income		252,345		79,144		365,242		89,259		(9,794)		23,482		78,477		420,571		3,595,346		4,894,072
Other Income (Loss)
Interest Expense		(141,647)		—		(199,009)		(138,688)		(59)		(130,978)		(152,347)		(383,871)		(2,434,648)		(3,581,247)
Interest Income		—		—		—		9		—		—		—		—		—		9
Gain on sale of real estate		—		—		—				235,470				—		—		—		235,470
		(141,647)		—		(199,009)		(138,679)		235,411		(130,978)		(152,347)		(383,871)		(2,434,648)		(3,345,768)
Net Income (Loss)	$	110,698	$	79,144	$	166,233	$	(49,420)	$	225,617	$	(107,496)	$	(73,870)	$	36,700	$	1,160,698	$	1,548,304
Net Income (Loss)—NERA 50%	$	55,350	$	39,572	$	83,116	$	(24,710)	$	112,809	$	(53,749)	$	(36,936)	$	18,350				193,802
Net Income (Loss)—NERA 40%																	$	464,280		464,280
																			$	658,082

Financial information for the three months ended June 30, 2016

			Hamilton						Hamilton				Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Bay		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	369,120	$	60,000	$	358,043	$	237,156	$	11,025	$	245,530	$	243,193	$	806,669	$	3,694,670	$	6,025,406
Laundry and Sundry Income		4,375		—		507		—		—		—		53		10,051		29,114		44,100
		373,495		60,000		358,550		237,156		11,025		245,530		243,246		816,720		3,723,784		6,069,506
Expenses
Administrative		4,545		464		6,211		1,319		1,085		3,890		1,293		8,623		47,931		75,361
Depreciation and Amortization		113,230		707		86,915		58,999		6,291		79,462		84,896		239,165		813,046		1,482,711
Management Fees		15,366		2,400		15,988		8,402		406		9,362		9,588		32,337		84,237		178,086
Operating		19,855		—		16,542		220		48		714		22,568		81,925		248,392		390,264
Renting		6,299		—		10,355		1,789		—		477		947		4,013		27,106		50,986
Repairs and Maintenance		42,149		3,150		12,627		78,417		5,551		100,814		57,281		131,233		329,444		760,666
Taxes and Insurance		57,873		15,431		30,407		43,260		2,855		42,070		30,075		128,012		365,599		715,582
		259,317		22,152		179,045		192,406		16,236		236,789		206,648		625,308		1,915,755		3,653,656
Income Before Other Income		114,178		37,848		179,505		44,750		(5,211)		8,741		36,598		191,412		1,808,029		2,415,850
Other Income (Loss)
Interest Expense		(71,039)		—		(99,505)		(69,173)		(11)		(65,065)		(76,031)		(191,988)		(1,214,929)		(1,787,741)
Interest Income		—		—		—		5		—		—		—		—		—		5
Gain on sale of Real Estate		—		—		—		—		67,462		—		—		—		—		67,462
		(71,039)		—		(99,505)		(69,168)		67,451		(65,065)		(76,031)		(191,988)		(1,214,929)		(1,720,274)
Net Income (Loss)	$	43,139	$	37,848	$	80,000	$	(24,418)	$	62,240	$	(56,324)	$	(39,433)	$	(576)	$	593,100	$	695,576
Net Income (Loss)—NERA 50%	$	21,570	$	18,924	$	40,000	$	(12,209)	$	31,120	$	(28,162)	$	(19,717)	$	(288)				51,238
Net Income (Loss)—NERA 40%																	$	237,240		237,240
																			$	288,478

24

NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

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

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

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

NOTE 16. SUBSEQUENT EVENTS

On July 6, 2017, Woodland Park Partners, LLC, a newly formed subsidiary of the Partnership, purchased the Woodland Park Apartments, a 126-unit apartment complex located at 264-290 Grove Street, Newton, Massachusetts (the “Property”), for a purchase price of $45,500,000.   

To fund the purchase price, the Partnership borrowed $25,000,000 under its outstanding line of credit with KeyBank, NA, and $16,000,000 from HBC Holdings, LLC, a Massachusetts limited liability company controlled by Harold Brown. The loan from HBC Holdings will mature on July 16, 2018, with interest only at 4.75%.  The balance of the purchase price was funded by the Partnership’s cash reserves.

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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 2017 and beyond. Should one or more of the risks or uncertainties mentioned below materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We expressly disclaim any responsibility to update our forward looking statements, whether as a result of new information, future events or otherwise. Accordingly, investors should use caution in relying on past forward looking statements, which are based on results and trends at the time they are made, to anticipate future results or trends.

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

The second quarter performance is consistent with Management’s expectations as noted in the first quarter 10Q.  Revenue growth for the first and second quarters has come from both the previous year’s rental cycle and improved renewal rates during this current season.  At the beginning of the year, Management focused on forward looking leasing exposure and market/renewal revenue opportunities throughout the portfolio.  The past six months have begun to yield improved results compared to last year on same store sales.  Management expects the current revenue growth to continue for the balance of the year and will be evident over the next four quarters. Excluding Depreciation and Amortization from operating expenses, same store operating expenses grew by 1.2%, NOI (Net Operating Income = Income before Other Income and Discontinued Operations plus Depreciation and Amortization) grew by 7.5% and revenue grew by 4.5%.  Management anticipates similar performance of the Partnership holdings for the balance of 2017.  

Management started marketing the remaining condominiums at Hamilton Bay and 1025 Hancock Street in 2016 and expects a complete sellout by the end of 2018.  As expected, unit sale prices have exceeded the unit sales prices when the buildings were converted 10 years ago and have steadily risen since marketing began in June 2016.  Management originally estimated a sellout of both properties totaling $23 million and now has raised expectations to $25 million.  With the past retirement of debt of approximately $8 million, rehab and other costs, Management anticipates that nearly $16 million will be returned to the Joint Ventures resulting in approximately $8 million to the Partnership by 2018.

The acquisition of Woodland Park on July 6th was a key purchase for the Partnership.  The use of the Partnership’s line of credit, loan from HBC Holdings, LLC (a related party) and partnership funds allowed the Partnership to acquire a well-run and extremely well located, transit oriented property in Newton, Massachusetts.   Management immediately engaged in improving revenue and reducing operating costs.  The property has already begun to meet expectations on revenue for new incoming residents and upcoming renewals.  Modest capital improvements designed to improve curb appeal and improve utility costs are slated for the next three months.   The Partnership’s line of credit with an original expiration date of July 31, 2017 has been extended for 90 days.  Management is currently working on refinancing the debt with HBC Holdings and obtaining a new long-term debt on the property.  This refinancing is expected to close during the third quarter of 2017.

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The Stock Repurchase Program that was initiated in 2007 has purchased 1,365,306 Depositary Receipts through June 30, 2017 or approximately 32% of the outstanding Class A Depositary Receipts.  During the second quarter, the Partnership did not purchase any Depositary Receipts. Management anticipates purchases for 2017  to be less than 2016.

At August 1, 2017, Harold Brown, his brother Ronald Brown and the President of Hamilton, Carl Valeri, collectively own approximately 47% of the Depositary Receipts representing the Partnership Class A Units (including Depositary Receipts held by trusts for the benefit of such persons’ family members). Harold Brown also controls 75% of the Partnership’s Class B Units, 75% of the capital stock of NewReal, Inc. (“NewReal”), the Partnership’s sole general partner, and all of the outstanding stock of Hamilton. Ronald Brown also owns 25% of the Partnership’s Class B Units and 25% of NewReal’s capital stock. In addition, Ronald Brown is the President and director of NewReal and Harold Brown is NewReal’s Treasurer and a director. The 75% of the issued and outstanding Class B units of the Partnership, controlled by Harold Brown, are owned by HBC Holdings LLC, an entity of which he is the manager.

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

Residential tenants sign a one year lease. During the six months ended June 30, 2017, tenant renewals were approximately 63% with an average rental increase of approximately 4.0%, new leases accounted for approximately 37% with rental rate increases of approximately 2.9 %.  During the six months ended June 30, 2017, leasing commissions were approximately $53,000 compared to approximately $101,000 for the six months ended June 30, 2016, a decrease of approximately $48,000 (48.0%) from 2016. Tenant concessions were approximately $18,000 for the six months ended June 30, 2017, compared to approximately $32,000 for the six months ended June 30, 2016, a decrease of approximately $14,000 (44.0%).  Tenant improvements were approximately $870,000 for the six months ended June 30, 2017, compared to approximately $1,145,000 for the six months ended June 30, 2016, a decrease of approximately $275,000 (24.0%).

Hamilton accounted for approximately 2.7% of the repair and maintenance expenses paid for by the Partnership during the six months ended June 30, 2017 and 5.2 % during the six months ended June 30, 2016. 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 $122,000 (82.2 %) and approximately $102,000 (86.4%) of the legal services paid for by the Partnership during the six months ended June 30, 2017 and 2016, 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, 2017, Hamilton provided the Partnership approximately $83,000 in construction and architectural services, compared to approximately $128,000 for the six months ended June 30, 2016.

Hamilton’s accounting staff perform bookkeeping and accounting functions for the Partnership. During the six months ended June 30, 2017 and 2016, 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.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

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

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

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carrying amount of the property over the fair value of the property. The Partnership’s estimates of aggregate future cash flows expected to be generated by each property are based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter management’s assumptions, the future cash flows estimated by management in its impairment analyses may not be achieved. The Partnership has not recognized an impairment loss during the first six months of 2017.

Investments in Joint Ventures:  The Partnership accounts for its 40%‑50% ownership in the Investment Properties under the equity method of accounting, as it exercises significant influence over, but does not control these entities. These investments are recorded initially at cost, as Investments in Joint Ventures, and subsequently adjusted for the Partnership’s share in earnings, cash contributions and distributions. Under the equity method of accounting, our net equity is reflected on the consolidated balance sheets, and our share of net income or loss from the Partnership is included on the consolidated statements of income. Generally, the Partnership would discontinue applying the equity method when the investment (and any advances) is reduced to zero and would not provide for additional losses unless the Partnership has guaranteed obligations of the venture or is otherwise committed to providing further financial support for the investee. If the venture subsequently generates income, the Partnership only recognizes its share of such income to the extent it exceeds its share of previously unrecognized losses.

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

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

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

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RESULTS OF OPERATIONS

Three Months Ended June 30,  2017 and June 30, 2016

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures, gain on sale of real estate and other income and expense of approximately $3,971,000 during the three months ended June 30, 2017, compared to approximately $3,235,000 for the three months ended June 30, 2016, an increase of approximately $736,000 (22.8%).

The rental activity is summarized as follows, excluding the subsequent acquisition of Woodland Park Apartments:

	Occupancy Date
	August 1, 2017		August 1, 2016
Residential
Units	2,525		2,525
Vacancies	101		75
Vacancy rate	4.0	%	3.0	%
Commercial
Total square feet	108,043		108,043
Vacancy	—		1,950
Vacancy rate	0.0	%	1.8	%

	Rental Income (in thousands)
	Three Months Ended  June 30,
	2017						2016
	Total			Continuing			Total			Continuing
	Operations			Operations			Operations			Operations
Total rents	$	12,684		$	12,684		$	12,136		$	12,136
Residential percentage		93	%		93	%		93	%		93	%
Commercial percentage		7	%		7	%		7	%		7	%
Contingent rentals	$	166		$	166		$	146		$	146

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Three Months Ended June 30, 2017 Compared to Three Months Ended June 30, 2016:

	Three Months Ended June 30,				Dollar		Percent
	2017		2016		Change		Change
Revenues
Rental income	$	12,683,517	$	12,136,355	$	547,162	4.5	%
Laundry and sundry income		104,274		117,909		(13,635)	(11.6)	%
		12,787,791		12,254,264		533,527	4.4	%
Expenses
Administrative		463,008		455,160		7,848	1.7	%
Depreciation and amortization		3,009,698		3,060,994		(51,296)	(1.7)	%
Management fee		518,533		501,288		17,245	3.4	%
Operating		1,032,064		1,069,692		(37,628)	(3.5)	%
Renting		94,532		155,962		(61,430)	(39.4)	%
Repairs and maintenance		2,053,272		2,193,186		(139,914)	(6.4)	%
Taxes and insurance		1,646,053		1,583,385		62,668	4.0	%
		8,817,160		9,019,667		(202,507)	(2.2)	%
Income Before Other Income  (Expense)		3,970,631		3,234,597		736,034	22.8	%
Other Income (Expense)
Interest income		404		203		201	99.0	%
Interest expense		(2,545,553)		(2,542,692)		(2,861)	0.1	%
Income  from investments in unconsolidated joint ventures		1,058,225		288,478		769,747	266.8	%
		(1,486,924)		(2,254,011)		767,087	(34.0)	%
Net Income	$	2,483,707	$	980,586	$	1,503,121	153.3	%

Rental income for the three months ended June 30, 2017 was approximately $12,683,000, compared to approximately $12,136,000 for the three months ended June 30, 2016, an increase of approximately $547,000 (4.5%). The factors that can be attributed to this increase are as follows:   Rental income has increased at a number of properties due to increased demand and increases in rental rates. The Partnership Properties with the most significant increases in rental income include, Westgate Apartments, 1144 Commonwealth Avenue, Hamilton Oaks, Westside Colonial, School Street, Hamilton Green, and Captain Parker, with increases of approximately $87,000, $74,000, $51,000, $47,000, $41,000, $36,000 and $36,000 respectively. Included in rental income is contingent rentals collected on commercial properties. Contingent rentals include such charges as bill backs of common area maintenance charges, real estate taxes, and utility charges.

Operating expenses for the three months ended June 30, 2017 were approximately $8,817,000 compared to approximately $9,020,000 for the three months ended June 30, 2016, a decrease of approximately $203,000 (2.2%).  The factors contributing to this net decrease are a decrease in repairs and maintenance costs of approximately $ 140,000 (6.4%), a decrease in renting expenses of approximately $61,000 (39.4%), and a decrease in depreciation and amortization costs of approximately $51,000 (1.7%), partially offset by an increase in taxes and insurance of approximately $63,000 (4.0%).

Interest expense for the three months ended June 30, 2017 was approximately $2,546,000 compared to approximately $2,543,000 for the three months ended June 30, 2016,  an increase of approximately $3,000 (0.1%). 

At June 30, 2017, the Partnership has between a 40% and 50% ownership interests in nine different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 14 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.

As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net income  from the Investment Properties was approximately $1,058,000 for the three months ended June 30, 2017, compared to net income of approximately $288,000 for the three months ended June 30, 2016,  an increase in income of approximately $770,000 (266.8%). This increase is primarily due to a gain on the sale of real estate of approximately $1,660,000 on the sale of 13 units at Hamilton Bay LLC,  Hamilton 1025, and Hamilton Bay Sales, compared to a gain of approximately $67,000  for the sale of one unit at Hamilton Bay LLC for the three months ended June 30, 2016. Included in the income for the three months ended June 30, 2017 is depreciation and amortization expense of

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approximately $1,501,000. The proportional income for the three months ended June 30, 2017 from the investment in Dexter Park is approximately $204,000.

As a result of the changes discussed above, net income for the three months ended June 30, 2017 was approximately $2,483,000 compared to income of approximately $980,000 for the three months ended June 30, 2016, an increase in income of approximately $1,503,000 (153.3 %).

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Six Months Ended June 30, 2017 Compared to Six Months Ended June 30, 2016:

The Partnership and its Subsidiary Partnerships earned income before interest expense, income from investments in unconsolidated joint ventures and other income and expense of approximately $7,712,000 during the six months ended June 30, 2017, compared to approximately $6,649,000 for the six months ended June 30, 2016, an increase of approximately $1,063,000 (16.0  %).

	Six Months Ended June 30,				Dollar		Percent
	2017		2016		Change		Change
Revenues
Rental income	$	25,314,962	$	24,209,211	$	1,105,751	4.6	%
Laundry and sundry income		216,436		228,341		(11,905)	(5.2)	%
		25,531,398		24,437,552		1,093,846	4.5	%
Expenses
Administrative		988,744		953,416		35,328	3.7	%
Depreciation and amortization		5,982,753		6,088,148		(105,395)	(1.7)	%
Management fee		1,055,248		1,001,495		53,753	5.4	%
Operating		2,746,025		2,493,937		252,088	10.1	%
Renting		180,735		243,226		(62,491)	(25.7)	%
Repairs and maintenance		3,508,894		3,820,886		(311,992)	(8.2)	%
Taxes and insurance		3,356,457		3,187,255		169,202	5.3	%
		17,818,856		17,788,363		30,493	0.2	%
Income Before Other Income ( Expense)		7,712,542		6,649,189		1,063,353	16.0	%
Other Income (Expense)
Interest income		716		405		311	76.8	%
Interest (expense)		(5,066,379)		(5,096,325)		29,946	(0.6)	%
Income  from investments in unconsolidated joint ventures		1,731,062		658,082		1,072,980	163.0	%
		(3,334,601)		(4,437,838)		1,103,237	(24.9)	%
Net Income	$	4,377,941	$	2,211,351	$	2,166,590	98.0	%

Rental income for the six months ended June 30, 2017 was approximately $25,315,000, compared to approximately $24,209,000 for the six months ended June 30, 2016, an increase of approximately $1,106,000 (4.6 %).                             Rental income has increased at a number of properties due to increased demand and increases in rental rates. The Partnership Properties with the most significant increases in rental income include, Westgate Apartments, 1144 Commonwealth Avenue, School Street,  Hamilton Oaks, Captain Parker, Westside Colonial, and 140 North Beacon Street,  with increases of approximately $203,000, $156,000, $98,000, $93,000, $86,000,  $76,000 and $65,000 respectively. Included in rental income is contingent rentals collected on commercial properties. Contingent rentals include such charges as bill backs of common area maintenance charges, real estate taxes, and utility charges.

Operating expenses for the six months ended June 30, 2017 were approximately $17,818,000 compared to approximately $17,788,000 for the six months ended June 30, 2016, an increase of approximately $ 30,000, (0.2%). The factors contributing to this net increase are an increase in operating costs of approximately $252,000 (10.1%), due to an increase in utility costs and snow removal, an increase in taxes and insurance of approximately $169,000 (5.3%), partially offset by a decrease in repairs and maintenance costs of approximately $ 312,000 (8.2%), and a decrease in depreciation and amortization expense of approximately $105,000 (1.7%).

Interest expense for the six months ended June 30, 2017 was approximately $5,066,000 compared to approximately $5,096,000 for the six months ended June 30, 2016, a decrease of approximately $30,000 (0.6%). 

At June 30, 2017, the Partnership has between a 40% and 50% ownership interests in nine different Investment Properties. See a description of these properties included in the section titled Investment Properties as well as Note 14 to the Consolidated Financial Statements for a detail of the financial information of each Investment Property.

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As described in Note 14 to the Consolidated Financial Statements, the Partnership’s share of the net income  from the Investment Properties was approximately $1,731,000 for the six months ended June 30, 2017, compared to net income of approximately $658,000 for the six months ended June  30, 2016,  an increase in income of approximately $1,073,000 (163.0%). This increase is primarily due to an increase in the gain on the sale of 17 units of real estate of approximately $2,371,000 at Hamilton Bay Apartments, Hamilton 1025, and Hamilton Bay LLC,  compared to a gain of approximately $235,000 on the sale of three units at Hamilton Bay LLC for the six months ended June 30, 2016. Included in the income for the six months ended June 30, 2017 is depreciation and amortization expense of approximately $2,990,000. The allocable income for the six months ended June 30, 2017 from the investment in Dexter Park is approximately $462,000.

As a result of the changes discussed above, net income for the six months ended June 30, 2017 was approximately $4,378,000 compared to income of approximately $2,211,000 for the six months ended June 30, 2016, an increase in income of approximately $2,167,000 (98.0 %).

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LIQUIDITY AND CAPITAL RESOURCES

The Partnership’s principal source of cash during the first six months of 2017 was the collection of rents.  The Partnership’s principal source of cash in 2016 was the collection of rents and the proceeds from the mortgage for Captain Parker.  The majority of cash and cash equivalents of $10,953,067 at June 30, 2017 and $7,463,697 at December 31, 2016 were held in interest bearing accounts at creditworthy financial institutions.

The increase in cash of $3,489,370 for the six months ended June 30, 2017 is summarized as follows:

	Six Months Ended June 30,
	2017		2016
Cash provided by operating activities	$	8,258,963	$	6,818,246
Cash (used in) investing activities		(1,618,649)		(1,194,298)
Cash  (used in) financing activities		(869,228)		(5,463,896)
Repurchase of Depositary Receipts, Class B and General Partner Units		(42,548)		(694,380)
Distributions paid		(2,239,168)		(1,873,850)
Net  increase (decrease) in cash and cash equivalents	$	3,489,370	$	(2,408,178)

The increase in cash provided by operating activities is primarily due to an increase in rent collections and a decrease in cash operating expenses. The decrease in cash used in investing activities is due primarily to the Partnership contributing $2,222,000 to pay off the principal of the mortgage on Hamilton Bay Apartments. The change in cash used in financing activities is due to the payment of mortgage notes payable. During the six months ended June 30, 2017, the Partnership purchased 549 Depositary Receipts for an average price of $62.00 for a total cost of $34,038; 4.3 Class B Units for a cost of $8,084 and 0.2 General Partnership Units for a cost of $426, for a total cost of $42,548.

During 2017, the Partnership and its Subsidiary Partnerships have completed improvements to certain of the Properties at a total cost of approximately $2,214,000. These improvements were funded from cash reserves. Cash reserves have been adequate to fully fund improvements. The most significant improvements were made at 1144 Commonwealth, Westside Colonial, Hamilton Oaks, Redwood Hills, 62 Boylston Street, and School Street Associates  at a cost of approximately $571,000, $324,000, $250,000, $220,000, $168,000 and $150,000 respectively. The Partnership plans to invest approximately $1,532,000 in additional capital improvements in 2017.

On January 7, 2016, Captain Parker entered into a Multifamily Loan and Security Agreement (the “Loan Agreement”) with KeyBank National Association (the “Lender”). The manager of Captain Parker is NewReal, Inc. (“New Real”), the general partner of New England Realty Associates Limited Partnership (the “Partnership”).  The Partnership is the sole member of Captain Parker. The Loan Agreement provides for a term loan (the “Loan”) in the principal amount of $20,071,000.  The Loan is due on February 1, 2026 (the “Due Date”), unless the due date is accelerated in accordance with the Loan’s terms.  The proceeds of the Loan were used to refinance existing indebtedness. The Partnership is a limited guarantor of certain of the Captain Parker obligations under the Loan Agreement.

During the six months ended June 30, 2017 the Partnership received distributions of approximately $3,657,000 from the investment properties. For the six months ended June 30, 2016, the Partnership received distributions of approximately $1,631,000 from the investment properties. Included in these distributions is the amount from Dexter Park of approximately $1,160,000 and $740,000 for the six months ended June 30, 2017 and 2016 respectively.

On July 6, 2017, Woodland Park Partners, LLC, a newly formed subsidiary of the Partnership, purchased the Woodland Park Apartments, a 126-unit apartment complex located at 264-290 Grove Street, Newton, Massachusetts (the “Property”), for a purchase price of $45,500,000.   

To fund the purchase price, the Partnership borrowed $25,000,000 under its outstanding line of credit with KeyBank, NA, and $16,000,000 from HBC Holdings, LLC, a Massachusetts limited liability company controlled by Harold Brown. The loan from HBC Holdings will mature on July 16, 2018, with interest only at 4.75%.  The balance of the purchase price was funded by the Partnership’s cash reserves.

35

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit.  The term of the line is three years with a floating interest rate equal to a base rate of the greater of (a) the Prime Rate (b) the Federal Funds Rate plus one-half of one percent per annum, or (c) the LIBOR Rate for a period of one month plus 1% per annum, plus the applicable margin of 2.5%. The costs associated with the line of credit were approximately $125,000. As of June 30, 2017, the credit line had no outstanding balance. The agreement expired on July 31,2017. The lender has provided a 90 day extension and is working with the Partnership on a renewal agreement

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

Off-Balance Sheet Arrangements—Joint Venture Indebtedness

As of June 30, 2017, 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, 2017, our proportionate share of the non-recourse debt related to these investments was approximately $54,470,000. See Note 14 to the Consolidated Financial Statements.

Contractual Obligations

As of June 30, 2017, we are subject to contractual payment obligations as described in the table below.

				Payments due by period
		2018		2019		2020		2021		2022		Thereafter		Total
Contractual Obligations
Long -term debt
Mortgage debt	$	1,803,695	$	7,882,668	$	4,317,962	$	2,176,096	$	2,535,875	$	194,548,667	$	213,264,963
Other obligations		—		—		—		—		—		—		—
Total Contractual Obligations	$	1,803,695	$	7,882,668	$	4,317,962	$	2,176,096	$	2,535,875	$	194,548,667	$	213,264,963

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

See Notes 5 and 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.

36

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

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

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

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

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

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

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

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

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

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

37

· 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, 2017, the Partnership, its Subsidiary Partnerships and the Investment Properties collectively have approximately $338,757,000 in long-term debt, substantially all of which require payment of interest at fixed rates. Accordingly, the fair value of these debt instruments is affected by changes in market interest rates. This long term debt matures through 2029. The Partnership, its Subsidiary Partnerships and the Investment Properties collectively have variable rate debt of $30,071,000 (without taking out unamortized deferred financing costs) as of June 30, 2017 ranged from LIBOR plus 201 basis points to LIBOR plus 350 basis points. Assuming interest- rate caps are not in effect, if market rates of interest on the Partnership’s variable rate debt increased or decreased by 100 basis points, then the increase or decrease in interest costs on the Partnership’s variable rate debt would be approximately $301,000 annually and the increase or decrease in the fair value of the Partnership’s fixed rate debt as of June 30, 2017 would be approximately $15 million. For information regarding the fair value and maturity dates of these debt obligations,  See Note 5 to the Consolidated Financial Statements — “Mortgage Notes Payable,” Note 12 to the Consolidated Financial Statements — “Fair Value Measurements” and Note 14 to the Consolidated Financial Statements — “Investment in Unconsolidated Joint Ventures.”

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

ITEM 4.  CONTROLS AND PROCEDURES

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

Changes in Internal Control over Financial Reporting.  There were no changes in our internal control over financial reporting during the second quarter of 2017 that materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II  —  OTHER INFORMATION

Item 1.  Legal Proceedings

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

Item 1A.  Risk Factors

There were no material changes to the risk factors disclosed in our annual report on Form 10-K for the year ended December 31, 2016.

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 2017:

				Remaining number of Depositary
			Depositary Receipts	Receipts that may be purchased
Period	Average Price Paid		Purchased as Part of Publicly Announced Plan	Under the Plan (as Amended)
April 1-30, 2017	$	—	—	634,694
May 1-31, 2017	$	—	—	634,694
June 1-30, 2017	$	—	—	634,694
Total			—

On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program (“Repurchase Program”) under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one‑tenth of a Class A Unit). Over time, the General Partner has authorized increases in the equity repurchase program. On March 10, 2015, the General Partner authorized an increase in the Repurchase Program 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, 2017, the Partnership has repurchased 1,365,306 Depositary Receipts at an average price of $27.14 per receipt (or $814.20 per underlying Class A Unit), 3,072 Class B Units and 162 General Partnership Units, both at an average price of $926.26 per Unit, totaling approximately $40,274,000 including brokerage fees paid by the Partnership.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosure

Not applicable.

39

Item 5.  Other Information

None.

Item 6.  Exhibits

See the exhibit index below.

40

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 8, 2017

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	August 8, 2017
Ronald Brown	(Principal Executive Officer)
/s/ HAROLD BROWN	Treasurer and Director of the General Partner	August 8, 2017
Harold Brown	(Principal Financial Officer and Principal Accounting Officer)
/s/ GUILLIAEM AERTSEN	Director of the General Partner	August 8, 2017
Guilliaem Aertsen
/s/ DAVID ALOISE	Director of the General Partner	August 8, 2017
David Aloise
/s/ EUNICE HARPS	Director of the General Partner	August 8, 2017
Eunice Harps

41

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, 2017, formatted in XBRL: (i) Consolidated Balance Sheets, (unaudited) (ii) Consolidated Statements of Income, (unaudited) (iii) Consolidated Statements of Changes in Partners’ Capital, (unaudited) (iv) Consolidated Statements of Cash Flows, (unaudited) and (v) Notes to Consolidated Financial Statements, (unaudited).

42

EX-31.1

Exhibit 31.1

New England Realty Associates Limited Partnership

CERTIFICATION

I, Ronald Brown, certify that:

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

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

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

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

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

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

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

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

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

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

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

	/s/ RONALD BROWN
	Principal Executive Officer (President and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: August 8, 2017

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 8, 2017

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of New England Realty Associates Limited Partnership for the three months ended  June 30, 2017, 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 8, 2017
	/s/ Harold Brown
	Harold Brown
	Principal Financial Officer
	(Treasurer and Director of the Partnership’s General Partner, NewReal, Inc.)
Date: August 8, 2017

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

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

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2017	Aug. 04, 2017
Entity Registrant Name	NEW ENGLAND REALTY ASSOCIATES LIMITED PARTNERSHIP
Entity Central Index Key	0000746514
Document Type	10-Q
Document Period End Date	Jun. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Class A
Entity Common Stock, Shares Outstanding		99,509
Class B
Entity Common Stock, Shares Outstanding		23,633

XML

CONSOLIDATED BALANCE SHEETS - USD ($)	Jun. 30, 2017	Dec. 31, 2016
ASSETS
Rental Properties	$ 165,745,385	$ 169,462,811
Cash and Cash Equivalents	10,953,067	7,463,697
Rents Receivable	472,606	567,627
Insurance Recovery Receivable	68,270	700,931
Real Estate Tax Escrows	469,807	444,625
Prepaid Expenses and Other Assets	4,245,465	3,585,870
Investments in Unconsolidated Joint Ventures	9,029,232	8,336,505
Total Assets	190,983,832	190,562,066
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	211,934,121	212,709,080
Distribution and Loss in Excess of Investment in Unconsolidated Joint Venture	2,754,771	2,577,606
Accounts Payable and Accrued Expenses	2,728,121	4,052,095
Advance Rental Payments and Security Deposits	5,695,319	5,448,011
Total Liabilities	223,112,332	224,786,792
Partners’ Capital 124,387 and 124,409 units outstanding in 2017 and 2016 respectively	(32,128,500)	(34,224,726)
Total Liabilities and Partners' Capital	$ 190,983,832	$ 190,562,066

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - shares	Jun. 30, 2017	Dec. 31, 2016	Jun. 30, 2016	Dec. 31, 2015
CONSOLIDATED BALANCE SHEETS
Partners' Capital, units outstanding	124,386	124,409	124,923	125,374

XML

CONSOLIDATED STATEMENTS OF INCOME - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016
Revenues
Rental income	$ 12,683,517	$ 12,136,355	$ 25,314,962	$ 24,209,211
Laundry and sundry income	104,274	117,909	216,436	228,341
Total Revenues	12,787,791	12,254,264	25,531,398	24,437,552
Expenses
Administrative	463,008	455,160	988,744	953,416
Depreciation and amortization	3,009,698	3,060,994	5,982,753	6,088,148
Management fee	518,533	501,288	1,055,248	1,001,495
Operating	1,032,064	1,069,692	2,746,025	2,493,937
Renting	94,532	155,962	180,735	243,226
Repairs and maintenance	2,053,272	2,193,186	3,508,894	3,820,886
Taxes and insurance	1,646,053	1,583,385	3,356,457	3,187,255
Total Expenses	8,817,160	9,019,667	17,818,856	17,788,363
Income Before Other Income (Expense)	3,970,631	3,234,597	7,712,542	6,649,189
Other Income (Expense)
Interest income	404	203	716	405
Interest expense	(2,545,553)	(2,542,692)	(5,066,379)	(5,096,325)
Income from investments in unconsolidated joint ventures	1,058,225	288,478	1,731,062	658,082
Total Other Income (Expense)	(1,486,924)	(2,254,011)	(3,334,601)	(4,437,838)
Net Income	$ 2,483,707	$ 980,586	$ 4,377,941	$ 2,211,351
Income per Unit
Income before discontinued operations	$ 19.97	$ 7.85	$ 35.19	$ 17.69
Net Income (Loss), Per Outstanding Limited Partnership Unit, Basic, Net of Tax	$ 19.97	$ 7.85	$ 35.19	$ 17.69
Weighted Average Number of Units Outstanding (in units)	124,386	124,923	124,392	125,032

XML

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL - USD ($)	Subtotal	General Partnership	Treasury Units	Class A	Class B	Total
Balance at Dec. 31, 2015		$ (306,870)		$ (24,673,535)	$ (5,830,548)	$ (30,810,953)
Balance (in units) at Dec. 31, 2015	180,225	1,802	(54,851)	144,180	34,243	125,374
Increase (Decrease) in Partners' Capital
Distribution to Partners		$ (18,738)		$ (1,499,080)	$ (356,032)	$ (1,873,850)
Stock Buyback		(6,783)		(558,723)	(128,874)	$ (694,380)
Stock Buyback (in units)			(451)			(451)
Net income		22,113		1,769,081	420,157	$ 2,211,351
Balance at Jun. 30, 2016		$ (310,278)		$ (24,962,257)	$ (5,895,297)	$ (31,167,832)
Balance (in units) at Jun. 30, 2016	180,225	1,802	(55,302)	144,180	34,243	124,923
Balance at Dec. 31, 2016		$ (340,840)		$ (27,407,924)	$ (6,475,961)	$ (34,224,726)
Balance (in units) at Dec. 31, 2016	180,225	1,802	(55,816)	144,180	34,243	124,409
Increase (Decrease) in Partners' Capital
Distribution to Partners		$ (22,392)		$ (1,791,334)	$ (425,442)	$ (2,239,168)
Stock Buyback		(426)		(34,038)	(8,084)	$ (42,548)
Stock Buyback (in units)			(23)			(23)
Net income		43,779		3,502,353	831,809	$ 4,377,941
Balance at Jun. 30, 2017		$ (319,879)		$ (25,730,943)	$ (6,077,678)	$ (32,128,500)
Balance (in units) at Jun. 30, 2017	180,225	1,802	(55,839)	144,180	34,243	124,386

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
Cash Flows from Operating Activities
Net income	$ 4,377,941	$ 2,211,351
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	5,982,753	6,088,148
Amortization of deferred finance costs	94,269	93,986
(Income) from investments in joint venture	(1,731,062)	(658,082)
Change in operating assets and liabilities
Decrease in rents receivable	95,021	(65,414)
(Decrease) in accounts payable and accrued expense	(1,323,974)	(1,940,803)
Decrease in insurance recovery receivable	632,661	177,514
Decrease (Increase) in real estate tax escrow	(25,182)	(20,463)
Decrease in prepaid expenses and other assets	(90,772)	600,109
Increase in advance rental payments and security deposits	247,308	331,900
Total Adjustments	3,881,022	4,606,895
Net cash provided by operating activities	8,258,963	6,818,246
Cash Flows From Investing Activities
Proceeds from unconsolidated joint ventures	3,322,250	1,331,282
Distribution in excess of investment in unconsolidated joint ventures	334,767	300,000
(Investment) in unconsolidated joint ventures	(2,441,517)	(53,782)
Deposit and escrow held for the acquisition of real estate	(620,129)
Improvement of rental properties	(2,214,020)	(2,771,798)
Net cash (used in) investing activities	(1,618,649)	(1,194,298)
Cash Flows from Financing Activities
Payment of financing costs		(174,718)
Proceeds of mortgage notes payable		20,071,000
Payment of note payable		(25,000,000)
Principal payments of mortgage notes payable	(869,228)	(360,178)
Stock buyback	(42,548)	(694,380)
Distributions to partners	(2,239,168)	(1,873,850)
Net cash (used in) financing activities	(3,150,944)	(8,032,126)
Net (Decrease) in Cash and Cash Equivalents	3,489,370	(2,408,178)
Cash and Cash Equivalents, at beginning of period	7,463,697	10,298,186
Cash and Cash Equivalents, at end of period	$ 10,953,067	$ 7,890,008

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SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2017

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

Line of Business:  New England Realty Associates Limited Partnership (“NERA” or the “Partnership”) was organized in Massachusetts in 1977. NERA and its subsidiaries own 25 properties which include 17 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,506 apartment units, 19 condominium units and 108,043 square feet of commercial space. Additionally, the Partnership also owns a 40- 50% interest in 9 residential and mixed use properties consisting of 754 apartment units, 12,500 square feet of commercial space and a 50 car parking lot. The properties are located in Eastern Massachusetts and Southern New Hampshire.

Basis of Presentation: The financial statements have been prepared in conformity with GAAP. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. These estimates and assumptions are based on management’s historical experience that are believed to be reasonable at the time. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgement. The Partnership’s critical accounting policies are those which require assumptions to be made about matters that are highly uncertain. Different estimates could have a material effect on the Partnership’s financial results. Judgements and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions and circumstances.

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

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

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

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

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

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

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

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

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

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

Deferred Financing Costs:  Costs incurred in obtaining financing are capitalized and amortized over the term of the related indebtedness. Deferred financing costs are presented in the balance sheet as a direct deduction from the carrying value of the debt liability to which they relate, except deferred financing costs related to the revolving credit facility, which are presented in prepaid expenses and other assets. In all cases, amortization of such costs is included in interest expense and was approximately $94,000 and $94,000 for the six months ended June 30, 2017 and 2016, respectively.

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

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

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

Comprehensive Income:  Comprehensive income is defined as changes in partners’ equity, exclusive of transactions with owners (such as capital contributions and dividends). NERA did not have any comprehensive income items in 2017 or 2016 other than net income as reported.

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

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

Concentration of Credit Risks and Financial Instruments:  The Partnership’s properties are located in New England, and the Partnership is subject to the general economic risks related thereto. No single tenant accounted for more than 5% of the Partnership’s revenues in 2017 or 2016. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At June 30, 2017, 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, 2017 and December 31, 2016, respectively approximately $12,485,000, and $8,911,000 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 $98,811and $93,394 for the six months ended June 30, 2017 and 2016, respectively.

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, 2017 and 2016 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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RENTAL PROPERTIES

6 Months Ended

Jun. 30, 2017

RENTAL PROPERTIES

RENTAL PROPERTIES

NOTE 2. RENTAL PROPERTIES

As of June 30, 2017, the Partnership and its Subsidiary Partnerships owned 2,506 residential apartment units in 21 residential and mixed-use complexes (collectively, the “Apartment Complexes”). The Partnership also owns 19 condominium units in a residential condominium complex, all of which are leased to residential tenants (collectively referred to as the “Condominium Units”). The Apartment Complexes and Condominium Units are located primarily in the metropolitan Boston area of Massachusetts.

Additionally, as of June 30, 2017, 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, 2017 with a total of 754 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, 2017		December 31, 2016		Useful Life
Land, improvements and parking lots	$	52,918,495	$	52,612,929	15	-	40	years
Buildings and improvements		173,761,734		173,536,288	15	-	40	years
Kitchen cabinets		9,022,944		8,738,323	5	-	10	years
Carpets		7,962,417		7,621,292	5	-	10	years
Air conditioning		690,535		690,535	5	-	10	years
Laundry equipment		274,389		269,784	5	-	7	years
Elevators		1,139,296		1,139,296	20	-	40	years
Swimming pools		444,629		444,629	10	-	30	years
Equipment		10,354,242		10,029,639	5	-	30	years
Motor vehicles		237,954		237,954			5	years
Fences		37,465		37,465	5	-	15	years
Furniture and fixtures		8,371,845		8,127,100	5	-	7	years
Smoke alarms		657,369		174,059	5	-	7	years
Total fixed assets		265,873,314		263,659,293
Less: Accumulated depreciation		(100,127,929)		(94,196,482)
	$	165,745,385	$	169,462,811

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RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2017

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 of rental revenue and laundry income on the majority of the Partnership’s properties and 3% on Linewt. Total fees paid were approximately $1,055,000 and $1,001,000 for the six months ended June 30, 2017 and 2016, 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, 2017 and 2016, approximately $363,000 and $557,000, was charged to NERA for legal, accounting, construction, maintenance, brokerage fees, rental and architectural services and supervision of capital improvements. Of the 2017 expenses referred to above, approximately $95,000 consisted of repairs and maintenance, $184,000 of administrative expense and $1,000 for commercial brokerage fees. Approximately $83,000 of expenses for construction, architectural services and supervision of capital projects were capitalized in rental properties. Additionally in 2017, the Hamilton Company received approximately $798,000 from the Investment Properties of which approximately $352,000 was the management fee, approximately $27,000 was for maintenance services, approximately $14,000 was for administrative services and approximately $405,000 for architectural services and supervision of capital projects. The management fee is equal to 4% of gross receipts of 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 $1,671,000 and $1,509,000 for the six months ended June 30, 2017 and 2016, 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 2017 and 2016.

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, 2017 and 2016, 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, 2017 and 2016 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 56%. See Note 14 for a description of the properties and their operations.

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

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OTHER ASSETS

6 Months Ended

Jun. 30, 2017

OTHER ASSETS

OTHER ASSETS

NOTE 4. OTHER ASSETS

Approximately $2,466,000, and $2,381,000 of security deposits are included in prepaid expenses and other assets at June 30, 2017 and December 31, 2016, respectively. The security deposits and escrow accounts are restricted cash.

Included in prepaid expenses and other assets at June 30, 2017 and December 31, 2016 is approximately $424,000 and $423,000, respectively, held in escrow to fund future capital improvements.

Intangible assets on the acquisition of the Residence at Captain Parkers are included in prepaid expenses and other assets.  Intangible assets are approximately $4,000 net of accumulated amortization of approximately $500,000 and approximately $12,000 net of accumulated amortization of approximately $492,000 at June 30, 2017 and December 31, 2016, respectively.

Included in deposits and escrows held for acquisition is approximately $620,000 in connection with the purchase of Woodland Park apartments in Newton, Massachusetts. See Note 16-Subsequent Events.

Financing fees in association with the line of credit of approximately $24,000 and $28,000 are net of accumulated amortization of approximately $137,000 and $113,000 at June 30, 2017 and December 31, 2016 respectively.

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MORTGAGE NOTES PAYABLE

6 Months Ended

Jun. 30, 2017

MORTGAGE NOTES PAYABLE

MORTGAGE NOTES PAYABLE

NOTE 5. MORTGAGE NOTES PAYABLE

At June 30, 2017 and December 31, 2016, 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, 2017, the interest rates on these loans ranged from 2.80% to 5.97%, payable in monthly installments aggregating approximately $976,000 including principal, to various dates through 2029. The majority of the mortgages are subject to prepayment penalties. At June 30, 2017, the weighted average interest rate on the above mortgages was 4.63%. The effective rate of 4.72% includes the amortization expense of deferred financing costs. See Note 12 for fair value information. The Partnership’s mortgage debt and the mortgage debt of its unconsolidated joint ventures generally is non-recourse except for customary exceptions pertaining to misuse of funds and material misrepresentations.

Financing fees of approximately $1,337,000 and $1,454,000 are net of accumulated amortization of approximately $1,179,000 and $1,061,000 at June 30, 2017 and December 31, 2016, respectively.

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

Approximate annual maturities at June 30, 2017 are as follows:

2018—current maturities	$	1,804,000
2019		7,883,000
2020		4,318,000
2021		2,176,000
2022		2,535,000
Thereafter		194,549,000
		213,265,000
Less: unamortized deferred financing costs		(1,331,000)
	$	211,934,000

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

Captain Parker is required to repay the aggregate principal amount of the Loan by the Due Date. Interest payments on the Loans are payable monthly in arrears on specified dates set forth in the Loan Agreement. Principal payments on the Loan are also payable monthly commencing on March 1, 2022.  The note issued by Captain Parker in connection with the Loan Agreement (the “Note”) also contains provisions for optional prepayment with a penalty under certain circumstances.

Line of Credit

On July 31, 2014, the Partnership entered into an agreement for a $25,000,000 revolving line of credit.  The term of the line is three years with a floating interest rate equal to a base rate of the greater of (a) the Prime Rate (b) the Federal Funds Rate plus one-half of one percent per annum, or (c) the LIBOR Rate for a period of one month plus 1% per annum, plus the applicable margin of 2.5%. The costs associated with the line of credit were approximately $125,000. As of June 30, 2017, the credit line had no outstanding balance. The agreement expired on July 31,2017. The lender has provided a 90 day extension and is working with the Partnership on a renewal agreement.

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

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

On July 6, 2017, the Partnership, in connection with the purchase of Woodland Park Apartments, used the entire line of credit, along with a loan from HBC Holdings, LLC, a company controlled by Harold Brown for $16,000,000, and cash reserves, to purchase the property. See Note 16-Subsequent Events.

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

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

The Partnership paid fees to secure the line of credit. Any unused balance of the line of credit is subject to a fee ranging from 15 to 20 basis points per annum. The Partnership paid approximately $25,000 for the six months ended June 30, 2017.

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

The Partnership is in compliance with these covenants as of June 30, 2017.

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ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS

6 Months Ended

Jun. 30, 2017

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, 2017, amounts received for prepaid rents of approximately $2,092,000 are included in cash and cash equivalents, and security deposits of approximately $2,466,000 are included in prepaid expenses and other assets and are restricted cash.

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PARTNERS' CAPITAL

6 Months Ended

Jun. 30, 2017

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 2017, the Partnership announced the approval of a quarterly distribution of its Class A Limited Partners and holders of Depositary Receipts of record as of March 15, 2017, and June 15, 2017 and payable on March 31, 2017, and June 30, 2017 of $9.00 per unit ($0.30 per receipt).

In 2016, regular quarterly distributions of $7.50 per unit ($0.25 per receipt) were paid in March, June, September and December. In December 2016, the Partnership paid a special distribution of $24.00 per unit ($0.80 per receipt). In 2016, the Partnership paid a total distribution of an aggregate of $54.00 per unit ($1.80 per Receipt).

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,
	2017		2016
Net Income per Depositary Receipt	$	1.17	$	0.59
Distributions per Depositary Receipt	$	0.60	$	0.50

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TREASURY UNITS

6 Months Ended

Jun. 30, 2017

TREASURY UNITS

TREASURY UNITS

NOTE 8. TREASURY UNITS

Treasury Units at June 30, 2017 are as follows:

Class A	44,671
Class B	10,609
General Partnership	559
	55,839

On August 20, 2007, NewReal, Inc., the General Partner authorized an equity repurchase program (“Repurchase Program”) under which the Partnership was permitted to purchase, over a period of twelve months, up to 300,000 Depositary Receipts (each of which is one-tenth of a Class A Unit).Over time, the General Partner has authorized increases in the equity repurchase program.On March 10, 2015, the General Partner authorized an increase in the Repurchase Program from 1,500,000 to 2,000,000 Depository Receipts and extended the Program for an additional five years from March 31, 2015 until March 31, 2020. 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, 2017, the Partnership has repurchased 1,365,306 Depositary Receipts at an average price of $27.14 per receipt (or $814.20 per underlying Class A Unit), 3,072 Class B Units and 162 General Partnership Units, both at an average price of $926.26 per Unit, totaling approximately $40,274,000 including brokerage fees paid by the Partnership.

During the six months ended June 30, 2017, the Partnership purchased a total of 549 Depositary Receipts. The average price was $62.00 per receipt or $1,860.00 per unit. The total cost including commission was $34,038. The Partnership was required to repurchase 4.3 Class B Units and 0.2 General Partnership units at a cost of $8,084 and $425 respectively.

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2017

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 9. COMMITMENTS AND CONTINGENCIES

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

On November 19, 2016, a pipe broke at 62 Boylston Street in Boston, MA. resulting in water damage to 24  apartments. The Partnership has insurance coverage on both the repairs and rental loss. As of June 30, 2017, the Partnership has received payments of approximately $344,000 on this claim.

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RENTAL INCOME

6 Months Ended

Jun. 30, 2017

RENTAL INCOME

RENTAL INCOME

NOTE 10. RENTAL INCOME

During the six months ended June 30, 2017, approximately 93% of rental income was related to residential apartments and condominium units with leases of one year or less. The majority of these leases expire in June, July and August. Approximately 7% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30, 2017 as follows:

	Commercial
	Property Leases
2018	$	3,447,000
2019		2,284,000
2020		1,687,000
2021		1,474,000
2022		594,000
Thereafter		391,000
	$	9,877,000

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 $319,000 and $304,000 for the six months ended June 30, 2017 and 2016 respectively. Staples and Trader Joes, tenants at Staples Plaza, are approximately 33% of the total commercial rental income.

The following information is provided for commercial leases:

	Annual base				Percentage of
	rent for		Total square feet	Total number of	annual base rent for
Throguh June 30,	expiring leases		for expiring leases	leases expiring	expiring leases
2018	$	418,813	18,181	11	14	%
2019		338,133	10,684	11	12	%
2020		631,713	22,328	9	22	%
2021		621,421	25,004	6	21	%
2022		579,164	23,267	6	20	%
2023		78,000	1,950	1	2	%
2024		251,627	6,629	2	9	%
2025		—	—	—	—	%
2026		—	—	—	—	%
2027		—	—	—	—	%
Totals	$	2,918,871	108,043	46	100	%

Rents receivable are net of an allowance for doubtful accounts of approximately $686,000 and $523,000 at June 30, 2017 and December 31, 2016. Included in rents receivable at June 30, 2017 is approximately $120,000 resulting from recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis. The majority of this amount is for long-term leases at 62 Boylston Street in Boston, Massachusetts.

Rents receivable at June 30, 2017 also includes approximately $71,000 representing the deferral of rental concession primarily related to the residential properties.

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CASH FLOW INFORMATION

6 Months Ended

Jun. 30, 2017

CASH FLOW INFORMATION

CASH FLOW INFORMATION

NOTE 11. CASH FLOW INFORMATION

During the six months ended June 30, 2017 and 2016, cash paid for interest was approximately $4,985,000, and $4,947,000 respectively.  Cash paid for state income taxes was approximately $37,000 and $41,000 during the six months ended June 30, 2017 and 2016 respectively.

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FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2017

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 12. FAIR VALUE MEASUREMENTS

Fair Value Measurements on a Recurring Basis

At June 30, 2017 and December 31, 2016, 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, 2017 and December 31, 2016 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, 2017 and December 31, 2016, 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, 2017 and December 31, 2016, 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, 2017	*	$	211,934,121	$	219,698,686
At December 31, 2016	*	$	212,709,080	$	219,086,450
Investment Properties
At June 30, 2017	*	$	124,938,378	$	127,583,710
At December 31, 2016	*	$	130,152,297	$	133,991,269

* Net of unamortized deferred financing costs

Disclosure about fair value of financial instruments is based on pertinent information available to management as of June 30, 2017 and December 31, 2016. 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, 2017 and current estimates of fair value may differ significantly from the amounts presented herein.

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TAXABLE INCOME AND TAX BASIS

6 Months Ended

Jun. 30, 2017

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, timing differences related to prepaid rents, allowances and intangible assets related to significant acquisitions. Taxable income of approximately $4,893,000 was approximately $57,000 less than statement income for the year ended December 31, 2016. The primary reason for the difference is due to accelerated depreciation, tax free exchange and other differences in the treatment of certain expenditures. The cumulative tax basis of the Partnership’s real estate at December 31, 2016 is approximately $7,200,000 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 $2,100,000 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.

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

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

In the normal course of business the Partnership or one of its subsidiaries is subject to examination by federal, state and local jurisdictions in which it operates, where applicable. As of June 30, 2017, the tax years that remain subject to examination by the major tax jurisdictions under the statute of limitations are from the year 2013 forward.

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IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

6 Months Ended

Jun. 30, 2017

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

NOTE 15. IMPACT OF RECENTLY-ISSUED ACCOUNTING STANDARDS

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

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

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

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2017

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 16. SUBSEQUENT EVENTS

On July 6, 2017, Woodland Park Partners, LLC, a newly formed subsidiary of the Partnership, purchased the Woodland Park Apartments, a 126-unit apartment complex located at 264-290 Grove Street, Newton, Massachusetts (the “Property”), for a purchase price of $45,500,000.   

To fund the purchase price, the Partnership borrowed $25,000,000 under its outstanding line of credit with KeyBank, NA, and $16,000,000 from HBC Holdings, LLC, a Massachusetts limited liability company controlled by Harold Brown. The loan from HBC Holdings will mature on July 16, 2018, with interest only at 4.75%.  The balance of the purchase price was funded by the Partnership’s cash reserves.

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2017

SIGNIFICANT ACCOUNTING POLICIES

Line of Business

Line of Business:  New England Realty Associates Limited Partnership (“NERA” or the “Partnership”) was organized in Massachusetts in 1977. NERA and its subsidiaries own 25 properties which include 17 residential buildings; 4 mixed use residential, retail and office buildings; 3 commercial buildings and individual units at one condominium complex. These properties total 2,506 apartment units, 19 condominium units and 108,043 square feet of commercial space. Additionally, the Partnership also owns a 40- 50% interest in 9 residential and mixed use properties consisting of 754 apartment units, 12,500 square feet of commercial space and a 50 car parking lot. The properties are located in Eastern Massachusetts and Southern New Hampshire.

Basis of Presentation

Basis of Presentation: The financial statements have been prepared in conformity with GAAP. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. These estimates and assumptions are based on management’s historical experience that are believed to be reasonable at the time. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgement. The Partnership’s critical accounting policies are those which require assumptions to be made about matters that are highly uncertain. Different estimates could have a material effect on the Partnership’s financial results. Judgements and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions and circumstances.

Principles of Consolidation

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

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

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

Impairment

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

Revenue Recognition

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

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

Rental Properties

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

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

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

Leasing Fees and Financing

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

Deferred Financing Costs:  Costs incurred in obtaining financing are capitalized and amortized over the term of the related indebtedness. Deferred financing costs are presented in the balance sheet as a direct deduction from the carrying value of the debt liability to which they relate, except deferred financing costs related to the revolving credit facility, which are presented in prepaid expenses and other assets. In all cases, amortization of such costs is included in interest expense and was approximately $94,000 and $94,000 for the six months ended June 30, 2017 and 2016, respectively.

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 2017 or 2016 other than net income as reported.

Income (Loss) Per Depositary Receipt

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

Income Per Unit

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

Concentration of Credit Risks and Financial Instruments

Concentration of Credit Risks and Financial Instruments:  The Partnership’s properties are located in New England, and the Partnership is subject to the general economic risks related thereto. No single tenant accounted for more than 5% of the Partnership’s revenues in 2017 or 2016. The Partnership makes its temporary cash investments with high-credit quality financial institutions. At June 30, 2017, 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, 2017 and December 31, 2016, respectively approximately $12,485,000, and $8,911,000 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 $98,811and $93,394 for the six months ended June 30, 2017 and 2016, respectively.

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, 2017 and 2016 there was no capitalized interest.

Extinguishment of Debt

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

Reclassifications

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

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RENTAL PROPERTIES (Tables)

6 Months Ended

Jun. 30, 2017

RENTAL PROPERTIES

Schedule of rental properties

	June 30, 2017		December 31, 2016		Useful Life
Land, improvements and parking lots	$	52,918,495	$	52,612,929	15	-	40	years
Buildings and improvements		173,761,734		173,536,288	15	-	40	years
Kitchen cabinets		9,022,944		8,738,323	5	-	10	years
Carpets		7,962,417		7,621,292	5	-	10	years
Air conditioning		690,535		690,535	5	-	10	years
Laundry equipment		274,389		269,784	5	-	7	years
Elevators		1,139,296		1,139,296	20	-	40	years
Swimming pools		444,629		444,629	10	-	30	years
Equipment		10,354,242		10,029,639	5	-	30	years
Motor vehicles		237,954		237,954			5	years
Fences		37,465		37,465	5	-	15	years
Furniture and fixtures		8,371,845		8,127,100	5	-	7	years
Smoke alarms		657,369		174,059	5	-	7	years
Total fixed assets		265,873,314		263,659,293
Less: Accumulated depreciation		(100,127,929)		(94,196,482)
	$	165,745,385	$	169,462,811

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MORTGAGE NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2017

MORTGAGE NOTES PAYABLE

Schedule of approximate annual maturities

Approximate annual maturities at June 30, 2017 are as follows:

2018—current maturities	$	1,804,000
2019		7,883,000
2020		4,318,000
2021		2,176,000
2022		2,535,000
Thereafter		194,549,000
		213,265,000
Less: unamortized deferred financing costs		(1,331,000)
	$	211,934,000

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PARTNERS' CAPITAL (Tables)

6 Months Ended

Jun. 30, 2017

PARTNERS' CAPITAL

Schedule of information per depositary receipt

	Six Months Ended
	June 30,
	2017		2016
Net Income per Depositary Receipt	$	1.17	$	0.59
Distributions per Depositary Receipt	$	0.60	$	0.50

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TREASURY UNITS (Tables)

6 Months Ended

Jun. 30, 2017

TREASURY UNITS

Schedule of treasury units

Treasury Units at June 30, 2017 are as follows:

Class A	44,671
Class B	10,609
General Partnership	559
	55,839

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RENTAL INCOME (Tables)

6 Months Ended

Jun. 30, 2017

RENTAL INCOME

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

Approximately 7% was related to commercial properties, which have minimum future annual rental income on non-cancellable operating leases at June 30, 2017 as follows:

	Commercial
	Property Leases
2018	$	3,447,000
2019		2,284,000
2020		1,687,000
2021		1,474,000
2022		594,000
Thereafter		391,000
	$	9,877,000

Schedule of information for commercial leases

	Annual base				Percentage of
	rent for		Total square feet	Total number of	annual base rent for
Throguh June 30,	expiring leases		for expiring leases	leases expiring	expiring leases
2018	$	418,813	18,181	11	14	%
2019		338,133	10,684	11	12	%
2020		631,713	22,328	9	22	%
2021		621,421	25,004	6	21	%
2022		579,164	23,267	6	20	%
2023		78,000	1,950	1	2	%
2024		251,627	6,629	2	9	%
2025		—	—	—	—	%
2026		—	—	—	—	%
2027		—	—	—	—	%
Totals	$	2,918,871	108,043	46	100	%

XML

FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2017

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, 2017	*	$	211,934,121	$	219,698,686
At December 31, 2016	*	$	212,709,080	$	219,086,450
Investment Properties
At June 30, 2017	*	$	124,938,378	$	127,583,710
At December 31, 2016	*	$	130,152,297	$	133,991,269

* Net of unamortized deferred financing costs

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables)

6 Months Ended

Jun. 30, 2017

2017

Summary of financial position relating to investment in unconsolidated joint ventures

Summary financial information as of June 30, 2017

				Hamilton									Hamilton						Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Bay			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Sales			Bay Apts			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	7,798,556		$	2,622,021		$	6,494,266		$	2,812,552		$	0		$	4,484,449		$	6,012,338		$	17,871,657		$	90,669,576		$	138,765,415
Cash & Cash Equivalents		95,520			108,751			45,291			684			212,237			58,078			27,620			541			975,232			1,523,954
Rent Receivable		5,529			—			9,470			10,842			825			18,180			10,991			20,212			150,399			226,448
Real Estate Tax Escrow		111,718			—			18,889			—			—			0			19,216			238,391			273,553			661,767
Prepaid Expenses & Other Assets		105,580			1533			42,394			770,237			0			487,987			23,196			108,507			1,667,709			3,207,143
Total Assets	$	8,116,903		$	2,732,305		$	6,610,310		$	3,594,315		$	213,062		$	5,048,694		$	6,093,361		$	18,239,308		$	93,736,469		$	144,384,727
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,886,240		$	—		$	9,761,919		$	—		$	—		$	—		$	5,883,726		$	16,784,966		$	82,621,527		$	124,938,378
Accounts Payable & Accrued Expense		62,932			850			63,851			10,978			1,182			35,122			48,956			140,046			642,256			1,006,173
Advance Rental Pmts & Security Deposits		251,183			—			210,629			42,231			101			65,705			119,247			377,911			3,412,120			4,479,127
Total Liabilities		10,200,355			850			10,036,399			53,209			1,283			100,827			6,051,929			17,302,923			86,675,903			130,423,678
Partners’ Capital		(2,083,452)			2,731,455			(3,426,089)			3,541,106			211,779			4,947,867			41,432			936,385			7,060,566			13,961,049
Total Liabilities and Capital	$	8,116,903		$	2,732,305		$	6,610,310		$	3,594,315		$	213,062		$	5,048,694		$	6,093,361		$	18,239,308		$	93,736,469		$	144,384,727
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$			$	1,365,727		$	—		$	1,770,552		$	105,889		$	2,473,933		$	20,716		$	468,192		$	2,824,225			9,029,232
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(1,041,726)		$	—		$	(1,713,045)		$	—		$	—		$	—		$	—		$	—		$	—			(2,754,771)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	6,274,462
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			1			—			—			42			148			409			690
Units to be sold		—			—			—			175			120			48			—			—			—			343
Units sold through August 1, 2017		—			—			—			148			120			10			—			—			—			278
Unsold units		—			—			—			27			—			38			—			—			—			65
Unsold units with deposits for future sale as of  August 1, 2017		—			—			—			4			—			9			—			—			—			13

Summary of income statement relating to investment in unconsolidated joint ventures

Financial information for the six months ended June 30, 2017

			Hamilton						Hamilton				Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Bay		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	723,284	$	120,000	$	727,167	$	237,200	$	5,282	$	397,962	$	516,798	$	1,655,234		7,545,962	$	11,928,889
Laundry and Sundry Income		7,590		—		2,136		—		—		—		1,270		18,368		48,939		78,303
		730,874		120,000		729,303		237,200		5,282		397,962		518,068		1,673,602		7,594,901		12,007,192
Expenses
Administrative		9,929		850		14,039		2,184		2,148		5,197		2,411		17,237		95,269		149,264
Depreciation and Amortization		226,998		1,415		173,435		91,251		(38,440)		202,598		173,810		490,218		1,668,723		2,990,008
Management Fees		31,978		4,800		29,464		8,803		207		14,869		20,466		66,082		175,469		352,138
Operating		39,707		—		36,420		100		38		1,374		52,003		183,191		617,663		930,496
Renting		9,516		—		12,248		332		181		181		4,104		21,398		50,757		98,717
Repairs and Maintenance		49,551		3,180		51,430		115,717		3,100		192,826		39,286		327,427		590,844		1,373,361
Taxes and Insurance		121,101		29,080		66,970		56,565		1,213		87,349		62,894		218,416		859,625		1,503,213
		488,780		39,325		384,006		274,952		(31,553)		504,394		354,974		1,323,969		4,058,350		7,397,197
Income Before Other Income		242,094		80,675		345,297		(37,752)		36,835		(106,432)		163,094		349,633		3,536,551		4,609,995
Other Income (Loss)
Interest Expense		(164,394)		—		(197,793)		(777)		(2)		(41,741)		(118,019)		(382,898)		(2,381,971)		(3,287,595)
Gain on Sale of Real Estate		—		—		—		939,332		93,392		1,337,920		—		—		—		2,370,644
		(164,394)		—		(197,793)		938,555		93,390		1,296,179		(118,019)		(382,898)		(2,381,970)		(916,951)
Net Income (Loss)	$	77,700	$	80,675	$	147,504	$	900,803	$	130,225	$	1,189,747	$	45,075	$	(33,265)	$	1,154,581	$	3,693,044
Net Income (Loss)—NERA 50%	$	38,851	$	40,338	$	73,751	$	450,401	$	65,113	$	594,874	$	22,538	$	(16,633)				1,269,232
Net Income —NERA 40%																	$	461,830		461,830
																			$	1,731,062

Financial information for the three months ended June 30, 2017

			Hamilton						Hamilton				Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Bay		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	767,917	$	120,000	$	724,962	$	472,476	$	27,690	$	494,357	$	491,754	$	1,604,997	$	7,411,976	$	12,116,129
Laundry and Sundry Income		8,357		—		2,097		—		—		—		299		20,634		54,646		86,033
		776,274		120,000		727,059		472,476		27,690		494,357		492,053		1,625,631		7,466,622		12,202,162
Expenses
Administrative		20,096		889		16,198		2,745		2,984		5,870		2,600		20,131		97,201		168,714
Depreciation and Amortization		225,194		1,415		173,831		118,064		12,584		158,855		169,581		477,061		1,618,053		2,954,638
Management Fees		30,050		4,800		30,825		17,927		1,076		19,604		19,922		64,262		165,333		353,799
Operating		50,358		—		36,666		585		200		1,008		46,231		151,015		608,261		894,324
Renting		6,839		—		10,540		1,789		—		954		4,802		9,516		55,595		90,035
Repairs and Maintenance		76,084		3,150		29,334		155,898		13,569		200,605		110,941		227,253		593,075		1,409,909
Taxes and Insurance		115,308		30,602		64,423		86,209		7,071		83,979		59,499		255,822		733,758		1,436,671
		523,929		40,856		361,817		383,217		37,484		470,875		413,576		1,205,060		3,871,276		7,308,090
Income Before Other Income		252,345		79,144		365,242		89,259		(9,794)		23,482		78,477		420,571		3,595,346		4,894,072
Other Income (Loss)
Interest Expense		(141,647)		—		(199,009)		(138,688)		(59)		(130,978)		(152,347)		(383,871)		(2,434,648)		(3,581,247)
Interest Income		—		—		—		9		—		—		—		—		—		9
Gain on sale of real estate		—		—		—				235,470				—		—		—		235,470
		(141,647)		—		(199,009)		(138,679)		235,411		(130,978)		(152,347)		(383,871)		(2,434,648)		(3,345,768)
Net Income (Loss)	$	110,698	$	79,144	$	166,233	$	(49,420)	$	225,617	$	(107,496)	$	(73,870)	$	36,700	$	1,160,698	$	1,548,304
Net Income (Loss)—NERA 50%	$	55,350	$	39,572	$	83,116	$	(24,710)	$	112,809	$	(53,749)	$	(36,936)	$	18,350				193,802
Net Income (Loss)—NERA 40%																	$	464,280		464,280
																			$	658,082

Schedule of future annual mortgage maturities

Future annual mortgage maturities at June 30, 2017 are as follows:

	Hamilton		345		Hamilton		Hamilton		Hamilton		Hamilton on		Dexter
Period End	Essex 81		Franklin		1025		Bay Apts		Minuteman		Main Apts		Park		Total
6//30/2018	$	—	$	186,608	$	—	$	—	$	—	$	—	$	1,630,749	$	1,817,357
6/30/2019		—		193,959		—		—		—		—		1,723,938		1,917,897
6/30/2020		—		201,599		—		—		—		—		79,402,271		79,603,870
6/30/2021		—		209,541		—		—		—		—		—		209,541
6/30/2022		—		217,796		—		—		—		—		—		217,796
Thereafter		10,000,000		8,825,660		—		—		6,000,000		16,900,000		—		41,725,660
		10,000,000		9,835,163		—		—		6,000,000		16,900,000		82,756,958		125,492,121
Less: unamortized deferred financing costs		(113,760)		(73,244)		—		—		(116,274)		(115,034)		(135,431)		(553,743)
	$	9,886,240	$	9,761,919	$	—	$	—	$	5,883,726	$	16,784,966	$	82,621,527	$	124,938,378

2016

Summary of financial position relating to investment in unconsolidated joint ventures

Summary financial information as of June 30, 2016

				Hamilton									Hamilton						Hamilton			Hamilton
	Hamilton			Essex			345			Hamilton			Bay			Hamilton			Minuteman			on Main			Dexter
	Essex 81			Development			Franklin			1025			Sales			Bay Apts			Apts			Apts			Park			Total
ASSETS
Rental Properties	$	8,233,823		$	2,617,251		$	6,607,281		$	4,829,662		$	241,741		$	6,017,735		$	6,200,372		$	18,146,220		$	93,105,409		$	145,999,494
Cash & Cash Equivalents		111,271			42,323			183,078			288			28,695			4,943			170			172,519			1,096,874			1,640,161
Rent Receivable		46,713			—			8,347			18,732			2,400			12,257			—			13,230			81,431			183,110
Real Estate Tax Escrow		83,814			—			16,713			83,537			—			37,780			46,263			37,745			233,654			539,506
Prepaid Expenses & Other Assets		105,562			1351			37,218			68,884			1,891			74,021			159,492			109,424			2,132,688			2,690,531
Total Assets	$	8,581,183		$	2,660,925		$	6,852,637		$	5,001,103		$	274,727		$	6,146,736		$	6,406,297		$	18,479,138		$	96,650,056		$	151,052,802
LIABILITIES AND PARTNERS’ CAPITAL
Mortgage Notes Payable	$	9,872,451		$	—		$	9,920,098		$	4,693,693		$	—		$	4,463,701		$	5,169,696		$	16,768,914		$	84,018,197		$	134,906,750
Accounts Payable & Accrued Expense		54,553			850			67,207			28,749			1,395			9,232			57,401			130,506			636,852			986,745
Advance Rental Pmts& Security Deposits		196,372			—			259,754			89,470			2,373			98,765			110,976			357,657			3,027,025			4,142,392
Total Liabilities		10,123,376			850			10,247,059			4,811,912			3,768			4,571,698			5,338,073			17,257,077			87,682,074			140,035,887
Partners’ Capital		(1,542,193)			2,660,075			(3,394,422)			189,191			270,959			1,575,038			1,068,224			1,222,061			8,967,982			11,016,915
Total Liabilities and Capital	$	8,581,183		$	2,660,925		$	6,852,637		$	5,001,103		$	274,727		$	6,146,736		$	6,406,297		$	18,479,138		$	96,650,056		$	151,052,802
Partners’ Capital %—NERA		50	%		50	%		50	%		50	%		50	%		50	%		50	%		50	%		40	%
Investment in Unconsolidated Joint Ventures	$			$	1,330,037		$	—		$	94,595		$	135,479		$	787,518		$	534,111		$	611,031		$	3,587,193		$	7,079,963
Distribution and Loss in Excess of investments in Unconsolidated Joint Ventures	$	(771,097)		$	—		$	(1,697,211)		$	—		$	—		$	—		$	—		$	—		$	—			(2,468,308)
Total Investment in Unconsolidated Joint Ventures (Net)																												$	4,611,654
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 May1, 2016		—			—			—			127			118			—			—			—			—			245
Unsold units		—			—			—			—			2			—			—			—			—			2
Unsold units with deposits for future sale as of May 1, 2016		—			—			—			—			—			—			—			—			—			—

Summary of income statement relating to investment in unconsolidated joint ventures

Financial information for the six months ended June 30, 2016

			Hamilton						Hamilton				Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Bay		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	767,917	$	120,000	$	724,962	$	472,476	$	27,690	$	494,357	$	491,754	$	1,604,997	$	7,411,976	$	12,116,129
Laundry and Sundry Income		8,357		—		2,097		—		—		—		299		20,634		54,646		86,033
		776,274		120,000		727,059		472,476		27,690		494,357		492,053		1,625,631		7,466,622		12,202,162
Expenses
Administrative		20,096		889		16,198		2,745		2,984		5,870		2,600		20,131		97,201		168,714
Depreciation and Amortization		225,194		1,415		173,831		118,064		12,584		158,855		169,581		477,061		1,618,053		2,954,638
Management Fees		30,050		4,800		30,825		17,927		1,076		19,604		19,922		64,262		165,333		353,799
Operating		50,358		—		36,666		585		200		1,008		46,231		151,015		608,261		894,324
Renting		6,839		—		10,540		1,789		—		954		4,802		9,516		55,595		90,035
Repairs and Maintenance		76,084		3,150		29,334		155,898		13,569		200,605		110,941		227,253		593,075		1,409,909
Taxes and Insurance		115,308		30,602		64,423		86,209		7,071		83,979		59,499		255,822		733,758		1,436,671
		523,929		40,856		361,817		383,217		37,484		470,875		413,576		1,205,060		3,871,276		7,308,090
Income Before Other Income		252,345		79,144		365,242		89,259		(9,794)		23,482		78,477		420,571		3,595,346		4,894,072
Other Income (Loss)
Interest Expense		(141,647)		—		(199,009)		(138,688)		(59)		(130,978)		(152,347)		(383,871)		(2,434,648)		(3,581,247)
Interest Income		—		—		—		9		—		—		—		—		—		9
Gain on sale of real estate		—		—		—				235,470				—		—		—		235,470
		(141,647)		—		(199,009)		(138,679)		235,411		(130,978)		(152,347)		(383,871)		(2,434,648)		(3,345,768)
Net Income (Loss)	$	110,698	$	79,144	$	166,233	$	(49,420)	$	225,617	$	(107,496)	$	(73,870)	$	36,700	$	1,160,698	$	1,548,304
Net Income (Loss)—NERA 50%	$	55,350	$	39,572	$	83,116	$	(24,710)	$	112,809	$	(53,749)	$	(36,936)	$	18,350				193,802
Net Income (Loss)—NERA 40%																	$	464,280		464,280
																			$	658,082

Financial information for the three months ended June 30, 2016

			Hamilton						Hamilton				Hamilton		Hamilton
	Hamilton		Essex		345		Hamilton		Bay		Hamilton		Minuteman		on Main		Dexter
	Essex 81		Development		Franklin		1025		Sales		Bay Apts		Apts		Apts		Park		Total
Revenues
Rental Income	$	369,120	$	60,000	$	358,043	$	237,156	$	11,025	$	245,530	$	243,193	$	806,669	$	3,694,670	$	6,025,406
Laundry and Sundry Income		4,375		—		507		—		—		—		53		10,051		29,114		44,100
		373,495		60,000		358,550		237,156		11,025		245,530		243,246		816,720		3,723,784		6,069,506
Expenses
Administrative		4,545		464		6,211		1,319		1,085		3,890		1,293		8,623		47,931		75,361
Depreciation and Amortization		113,230		707		86,915		58,999		6,291		79,462		84,896		239,165		813,046		1,482,711
Management Fees		15,366		2,400		15,988		8,402		406		9,362		9,588		32,337		84,237		178,086
Operating		19,855		—		16,542		220		48		714		22,568		81,925		248,392		390,264
Renting		6,299		—		10,355		1,789		—		477		947		4,013		27,106		50,986
Repairs and Maintenance		42,149		3,150		12,627		78,417		5,551		100,814		57,281		131,233		329,444		760,666
Taxes and Insurance		57,873		15,431		30,407		43,260		2,855		42,070		30,075		128,012		365,599		715,582
		259,317		22,152		179,045		192,406		16,236		236,789		206,648		625,308		1,915,755		3,653,656
Income Before Other Income		114,178		37,848		179,505		44,750		(5,211)		8,741		36,598		191,412		1,808,029		2,415,850
Other Income (Loss)
Interest Expense		(71,039)		—		(99,505)		(69,173)		(11)		(65,065)		(76,031)		(191,988)		(1,214,929)		(1,787,741)
Interest Income		—		—		—		5		—		—		—		—		—		5
Gain on sale of Real Estate		—		—		—		—		67,462		—		—		—		—		67,462
		(71,039)		—		(99,505)		(69,168)		67,451		(65,065)		(76,031)		(191,988)		(1,214,929)		(1,720,274)
Net Income (Loss)	$	43,139	$	37,848	$	80,000	$	(24,418)	$	62,240	$	(56,324)	$	(39,433)	$	(576)	$	593,100	$	695,576
Net Income (Loss)—NERA 50%	$	21,570	$	18,924	$	40,000	$	(12,209)	$	31,120	$	(28,162)	$	(19,717)	$	(288)				51,238
Net Income (Loss)—NERA 40%																	$	237,240		237,240
																			$	288,478

XML

SIGNIFICANT ACCOUNTING POLICIES (Business) (Details)	Jun. 30, 2017 ft² property item	Jun. 30, 2016 property
Residential and mixed-use properties
Line of Business
Number of Real Estate Properties	21
Number of units	2,506
Condominium
Line of Business
Number of units	19
Wholly owned properties
Line of Business
Number of Real Estate Properties	25
Wholly owned properties | Residential buildings
Line of Business
Number of Real Estate Properties	17
Number of units	2,506
Wholly owned properties | Mixed use residential, retail and office buildings
Line of Business
Number of Real Estate Properties	4
Wholly owned properties | Commercial
Line of Business
Number of Real Estate Properties	3
Area of property (in square feet) | ft²	108,043
Wholly owned properties | Condominium
Line of Business
Number of Real Estate Properties	1
Number of units	19
Partially owned properties | Residential and mixed-use properties
Line of Business
Number of Real Estate Properties	9
Number of units	754
Area of property (in square feet) | ft²	12,500
Partially owned properties | Residential and mixed-use properties | Minimum
Line of Business
Ownership interest (as a percent)	40.00%
Partially owned properties | Residential and mixed-use properties | Maximum
Line of Business
Ownership interest (as a percent)	50.00%
Partially owned properties | Car parking lot
Line of Business
Capacity of real estate property (in cars per lot)	50
Investment Properties
Line of Business
Number of units | property	1,033	1,033
Investment Properties | Residential buildings
Line of Business
Number of units | property	1,030	1,030
Investment Properties | Commercial
Line of Business
Number of units | property	3	3
Investment Properties | Partially owned properties | Residential and mixed-use properties
Line of Business
Number of units | property	754

XML

SIGNIFICANT ACCOUNTING POLICIES (Details)		6 Months Ended
	Jan. 03, 2012	Jun. 30, 2017 USD ($) item shares	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)	Aug. 20, 2007
Principles of Consolidation
Value at which partnership investments discontinue use of equity method		$ 0
Amount of legal obligations related to investments no longer classified as equity method		$ 0
Revenue Recognition
Period for which arrears are charged against income		60 days
Deferred Financing Costs
Amortization of deferred financing costs		$ 94,000	$ 94,000
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		$ 12,485,000		$ 8,911,000
Advertising Expense
Advertising expense		98,811	933
Interest Capitalized
Capitalized interest		$ 0	$ 0
Minimum
Principles of Consolidation
Ownership interest in each subsidiary (as a percent)		99.67%
Interest Capitalized
Criteria of capitalization of interest on property based on specified period of construction		1 year
Minimum | Cash and cash equivalents
Concentration of Credit Risks and Financial Instruments
Interest rate on interest bearing accounts (as a percent)		0.01%
Maximum
Principles of Consolidation
Ownership interest in each subsidiary (as a percent)		100.00%
Maximum | Cash and cash equivalents
Concentration of Credit Risks and Financial Instruments
Interest rate on interest bearing accounts (as a percent)		0.35%
Investment Properties
Principles of Consolidation
Number of limited liability companies/partnerships | item		9
Investment Properties | Minimum
Principles of Consolidation
Percentage of ownership interest		40.00%
Investment Properties | Maximum
Principles of Consolidation
Percentage of ownership interest		50.00%
Class A
Income (Loss) Per Depositary Receipt
Forward split of depositary receipts	3
Exchange ratio of depositary receipts for partnership units before adjustment	10
Exchange ratio of depositary receipts for partnership units after adjustment	30
Number of units in each depository receipt	0.03333				0.1

XML

RENTAL PROPERTIES (Details)	6 Months Ended
	Jun. 30, 2017 USD ($) property item	Dec. 31, 2016 USD ($)	Jun. 30, 2016 property
Rental properties
Total fixed assets	$ 265,873,314	$ 263,659,293
Less: Accumulated depreciation	(100,127,929)	(94,196,482)
Total fixed assets, net	165,745,385	169,462,811
Land, improvements and parking lots
Rental properties
Total fixed assets	$ 52,918,495	52,612,929
Land, improvements and parking lots | Minimum
Rental properties
Useful Life	15 years
Land, improvements and parking lots | Maximum
Rental properties
Useful Life	40 years
Buildings and improvements
Rental properties
Total fixed assets	$ 173,761,734	173,536,288
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	$ 9,022,944	8,738,323
Kitchen cabinets | Minimum
Rental properties
Useful Life	5 years
Kitchen cabinets | Maximum
Rental properties
Useful Life	10 years
Carpets
Rental properties
Total fixed assets	$ 7,962,417	7,621,292
Carpets | Minimum
Rental properties
Useful Life	5 years
Carpets | Maximum
Rental properties
Useful Life	10 years
Air conditioning
Rental properties
Total fixed assets	$ 690,535	690,535
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	$ 274,389	269,784
Laundry equipment | Minimum
Rental properties
Useful Life	5 years
Laundry equipment | Maximum
Rental properties
Useful Life	7 years
Elevators
Rental properties
Total fixed assets	$ 1,139,296	1,139,296
Elevators | Minimum
Rental properties
Useful Life	20 years
Elevators | Maximum
Rental properties
Useful Life	40 years
Swimming pools
Rental properties
Total fixed assets	$ 444,629	444,629
Swimming pools | Minimum
Rental properties
Useful Life	10 years
Swimming pools | Maximum
Rental properties
Useful Life	30 years
Equipment
Rental properties
Total fixed assets	$ 10,354,242	10,029,639
Equipment | Minimum
Rental properties
Useful Life	5 years
Equipment | Maximum
Rental properties
Useful Life	30 years
Motor vehicles
Rental properties
Total fixed assets	$ 237,954	237,954
Motor vehicles | Maximum
Rental properties
Useful Life	5 years
Fences
Rental properties
Total fixed assets	$ 37,465	37,465
Fences | Minimum
Rental properties
Useful Life	5 years
Fences | Maximum
Rental properties
Useful Life	15 years
Furniture and fixtures
Rental properties
Total fixed assets	$ 8,371,845	8,127,100
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	$ 657,369	$ 174,059
Smoke alarms | Minimum
Rental properties
Useful Life	5 years
Smoke alarms | Maximum
Rental properties
Useful Life	7 years
Wholly owned properties
RENTAL PROPERTIES
Number of properties | item	25
Investment Properties
RENTAL PROPERTIES
Number of units | property	1,033		1,033
Residential and mixed-use properties
RENTAL PROPERTIES
Number of units | item	2,506
Number of properties | item	21
Residential and mixed-use properties | Partially owned properties
RENTAL PROPERTIES
Number of units | item	754
Number of properties | item	9
Residential and mixed-use properties | Partially owned properties | Minimum
RENTAL PROPERTIES
Ownership interest (as a percent)	40.00%
Residential and mixed-use properties | Partially owned properties | Maximum
RENTAL PROPERTIES
Ownership interest (as a percent)	50.00%
Residential and mixed-use properties | Investment Properties | Partially owned properties
RENTAL PROPERTIES
Number of units | property	754
Condominium
RENTAL PROPERTIES
Number of units | item	19
Condominium | Wholly owned properties
RENTAL PROPERTIES
Number of units | item	19
Number of properties | item	1

XML

RELATED PARTY TRANSACTIONS (Details)	3 Months Ended		6 Months Ended		18 Months Ended
	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($) item	Jun. 30, 2016 USD ($)	Jun. 30, 2017 USD ($)
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue			4.00%
Management fee as a percentage of gross receipts rental revenue of Linewt, LLC			3.00%
Management fees of related party			$ 1,055,000	$ 1,001,000
Management fee	$ 518,533	$ 501,288	1,055,248	1,001,495
Repairs and maintenance	2,053,272	2,193,186	3,508,894	3,820,886
Administrative expense	$ 463,008	$ 455,160	$ 988,744	953,416
Number of limited partnerships and limited liability companies in which the entity has invested | item			9
Dexter Park
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue			2.00%
President of Management Company
RELATED PARTY TRANSACTIONS
Quarterly fee for asset management consulting services			$ 37,500	37,500
Harold Brown | Minimum
RELATED PARTY TRANSACTIONS
Ownership interest (as a percent)	43.20%		43.20%		43.20%
Harold Brown | Maximum
RELATED PARTY TRANSACTIONS
Ownership interest (as a percent)	56.00%		56.00%		56.00%
General Partner or Management Company [Member]
RELATED PARTY TRANSACTIONS
Repairs and maintenance			$ 95,000
Administrative expense			184,000
Commercial brokerage fees			1,000
Expenses for construction, architectural services and supervision of capital projects			83,000
Costs related to professional services			363,000	557,000
Management Company [Member]
RELATED PARTY TRANSACTIONS
Reimbursement to related party for payroll transfers			1,671,000	1,509,000
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
Number of employees having ownership interest in the investment properties | item			6
Fees for accounting and bookkeeping services per year					$ 125,000
Partially owned properties
RELATED PARTY TRANSACTIONS
Management fee as percentage of gross receipts rental revenue			4.00%
Management fee			$ 352,000
Repairs and maintenance			27,000
Administrative expense			14,000
Construction, architectural services and supervision of capital projects			405,000
Amount paid to related party			$ 798,000
Residential and mixed-use properties | Partially owned properties | Minimum
RELATED PARTY TRANSACTIONS
Ownership interest (as a percent)	40.00%		40.00%		40.00%
Residential and mixed-use properties | Partially owned properties | Maximum
RELATED PARTY TRANSACTIONS
Ownership interest (as a percent)	50.00%		50.00%		50.00%

XML

OTHER ASSETS (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Security deposits	$ 2,466,000	$ 2,381,000
Escrow deposits to fund future capital improvements	424,000	423,000
Deposits and escrows held for acquisitions	469,807	444,625
Intangible assets, net of accumulated amortization	4,000	12,000
Financing fees, net	24,000	28,000
Accumulated amortization on intangible assets	500,000	$ 492,000
Woodland Park Apartments
Deposits and escrows held for acquisitions	$ 620,000

XML

MORTGAGE NOTES PAYABLE (Mortgages Payable) (Details) - USD ($)	6 Months Ended
	Jun. 30, 2017	Dec. 31, 2016
MORTGAGE NOTES PAYABLE
Effective interest rate (as a percent)	5.08%
Financing fees, net	$ 24,000	$ 28,000
Accumulated amortization on financing and leasing fees	137,000	113,000
Annual maturities of mortgage debt
2017-current maturities	1,804,000
2018	7,883,000
2019	4,318,000
2020	2,176,000
2021	2,535,000
Thereafter	194,549,000
Total	213,265,000
Less: unamortized deferred financing costs	(1,331,000)
Secured Debt	211,934,121	212,709,080
Mortgages payable
MORTGAGE NOTES PAYABLE
Amount of monthly installments including principal	$ 976,000
Weighted average interest rate (as a percent)	4.63%
Effective interest rate (as a percent)	4.72%
Financing fees, net	$ 1,337,000	1,454,000
Accumulated amortization on financing and leasing fees	$ 1,179,000	$ 1,061,000
Mortgages payable | Minimum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)	2.80%
Mortgages payable | Maximum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)	5.97%

XML

MORTGAGE NOTES PAYABLE (Mortgage by property) (Details) - USD ($)		1 Months Ended	12 Months Ended
	Sep. 30, 2015	Aug. 31, 2014	Dec. 31, 2005	Jun. 30, 2017	Jan. 15, 2016	Jan. 07, 2016
Line of Credit
MORTGAGE NOTES PAYABLE
Mortgage amount						$ 0
Residences at Captain Parkers LLC Residential Apartments Lexington, Massachusetts
MORTGAGE NOTES PAYABLE
Amount of loan proceeds utilized for pay off the existing mortgage					$ 2,000,000	23,000,000
Mortgages payable | Hamilton Essex 81
MORTGAGE NOTES PAYABLE
Term of debt	10 years
Amount of loan proceeds utilized for pay off the existing mortgage	$ 8,040,719
Mortgages payable | Hamilton on Main Apartments, LLC
MORTGAGE NOTES PAYABLE
Amount of mortgage paid off		$ 15,205,000
Term of debt		10 years	10 years
Interest rate (as a percent)		4.34%	5.18%
Period for which the entity is required to make interest only payments			3 years
Amortization period of debt			30 years
Mortgages payable | Residences at Captain Parkers LLC Residential Apartments Lexington, Massachusetts
MORTGAGE NOTES PAYABLE
Mortgage amount						$ 20,071,000
Mortgages payable | Minimum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)				2.80%
Mortgages payable | Maximum
MORTGAGE NOTES PAYABLE
Interest rate (as a percent)				5.97%

XML

MORTGAGE NOTES PAYABLE (Line of Credit) (Details)				1 Months Ended	6 Months Ended	12 Months Ended
	Jan. 07, 2016	Sep. 30, 2015	Jul. 31, 2014 USD ($) item	Aug. 31, 2014	Jun. 30, 2017 USD ($)	Dec. 31, 2005	Jul. 06, 2017 USD ($)	Mar. 07, 2005 item
Line of Credit
Line Of Credit Facility Unused Capacity Commitment Fee					$ 25,000
Woodland Park Apartments | HBC Holdings, LLC | Subsequent event
Line of Credit
Principal amount							$ 16,000,000
Hamilton Essex 81
Line of Credit
Number of properties in which borrowing amount collateralized | item								1
LIBOR | Residences at Captain Parkers LLC Residential Apartments Lexington, Massachusetts
Line of Credit
Margin over basis of interest rate (as a percent)	201.00%
Minimum
Line of Credit
Tangible net worth					$ 150,000,000
Ratio of net operating income to total indebtedness					9.50%
Debt service coverage ratio					1.6
Maximum
Line of Credit
Leverage ratio					65.00%
Aggregate increase in indebtedness					$ 15,000,000
Mortgages payable | Hamilton Essex 81
Line of Credit
Term of debt		10 years
Mortgages payable | Hamilton on Main Apartments, LLC
Line of Credit
Term of debt				10 years		10 years
Mortgages payable | LIBOR | Hamilton Essex 81
Line of Credit
Margin over basis of interest rate (as a percent)		2.18%
Line of Credit
Line of Credit
Maximum borrowings			$ 25,000,000
Term of debt			3 years
Amount of refinancing costs			$ 125,000
Credit line balance					$ 0
Number of properties in which borrowing amount collateralized | item			23
Line of Credit | Base Rate
Line of Credit
Reference rate used in calculation of Base Rate			base
Line of Credit | Prime Rate [Member]
Line of Credit
Reference rate used in calculation of Base Rate			Prime
Line of Credit | Federal Funds Rate
Line of Credit
Reference rate used in calculation of Base Rate			Federal Funds
Basis of effective interest rate used in calculation of Base Rate (as a percent)			0.50%
Line of Credit | LIBOR
Line of Credit
Reference rate used in calculation of Base Rate			one month LIBOR
Basis of effective interest rate used in calculation of Base Rate (as a percent)			1.00%
Line of Credit | Minimum
Line of Credit
Pledged interests of the Partnership's ownership interest (as a percent)			49.00%
Commitment fee for unused amount (as a percent)			0.15%
Line of Credit | Minimum | Base Rate
Line of Credit
Margin over basis of interest rate (as a percent)			2.50%
Line of Credit | Maximum
Line of Credit
Pledged interests of the Partnership's ownership interest (as a percent)			100.00%
Commitment fee for unused amount (as a percent)			0.20%

XML

ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS (Details)	6 Months Ended
	Jun. 30, 2017 USD ($)
ADVANCE RENTAL PAYMENTS AND SECURITY DEPOSITS
Period for advance rental payment	1 month
Amount received for prepaid rent	$ 2,092,000
Security deposits	$ 2,466,000

XML

PARTNERS' CAPITAL (Details)			6 Months Ended		12 Months Ended
	Mar. 15, 2017 $ / item	Jan. 03, 2012	Jun. 30, 2017 item $ / item	Jun. 30, 2016 $ / item	Dec. 31, 2016 $ / item	Aug. 20, 2007
Depositary receipts exchange ratio for Class A units | item			30
Quarterly distributions per depositary receipt (in dollars per receipt)					0.25
Quarterly distribution per unit (in dollars per unit)					7.50
Total distribution per unit (in dollars per unit)					54.00
Total distribution per depository receipt (in dollars per receipt)					1.80
Special distribution per unit (in dollars per unit)					24.00
Special distribution per depository receipt (in dollars per receipt)					0.80
Earnings per depository receipt
Net Income per Depositary Receipt (in dollars per receipt)			1.17	0.59
Distributions per Depositary Receipt (in dollars per share)			0.60	0.50
Limited Partner
Number of classes of partners | item			2
General Partnership
Number of classes of partners | item			1
Fixed distribution percentage of unit holders			1.00%
Class A
Fixed distribution percentage of unit holders			80.00%
Forward split of depositary receipts		3
Exchange ratio of depositary receipts for partnership units before adjustment		10
Exchange ratio of depositary receipts for partnership units after adjustment		30
Number of units in each depository receipt		0.03333				0.1
Class B
Fixed distribution percentage of unit holders			19.00%
Class A
Quarterly distribution per unit approved (in dollars per unit)	9.00
Quarterly distributions per depositary receipt (in dollars per receipt)	0.30

XML

TREASURY UNITS (Details)				6 Months Ended		115 Months Ended
	Mar. 31, 2017 $ / item shares	Mar. 10, 2015 shares	Aug. 20, 2007 $ / item shares	Jun. 30, 2017 USD ($) $ / item shares	Jun. 30, 2016 USD ($) shares	Mar. 31, 2017 USD ($) $ / item	Mar. 06, 2008 shares
Treasury units				55,839
Period for repurchase of depository receipts		5 years	12 months
Depository receipts authorized to be repurchased		2,000,000	300,000				1,500,000
Number of depository receipts repurchased	1,365,306		1,365,306
Repurchase price of depository receipts (in dollars per receipt) | $ / item						27.14
Units repurchased (in shares)				23	451
Total cost of repurchase | $				$ 42,548	$ 694,380	$ 40,274,000
General Partnership
Treasury units				559
Fixed distribution percentage of unit holders				1.00%
Number of depository receipts repurchased	162		162
Total cost of repurchase | $				$ 426	$ 6,783
Value of units required to be repurchased | $				$ 425
Repurchases required (in units)				0.2
Treasury Units
Units repurchased (in shares)				23	451
Class A
Treasury units				44,671
Fixed distribution percentage of unit holders				80.00%
Repurchase price of depository receipts (in dollars per receipt) | $ / item				62.00
Repurchase price of units (in dollars per unit) | $ / item	814.20		814.20	1,860.00
Total cost of repurchase | $				$ 34,038	$ 558,723
Class B
Treasury units				10,609
Fixed distribution percentage of unit holders				19.00%
Number of depository receipts repurchased	3,072		3,072
Total cost of repurchase | $				$ 8,084	$ 128,874
Value of units required to be repurchased | $				$ 8,084
Repurchases required (in units)				4.3
Class A
Repurchase of depository receipts | $				$ 549
Class B | General Partnership
Repurchase price of units (in dollars per unit) | $ / item	926.26		926.26

XML

COMMITMENTS AND CONTINGENCIES (Details)	6 Months Ended
	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)	Nov. 19, 2016 property
Loss Contingencies [Line Items]
Insurance recovery receivable	$ 68,270	$ 700,931
62 Boylston Street in Boston, MA
Loss Contingencies [Line Items]
Number of apartments damaged | property			24
Proceeds from Insurance	$ 344,000

XML

RENTAL INCOME (Details) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
RENTAL INCOME
Percentage of rental income related to residential apartments and condominium units with leases of one year or less	93.00%
Maximum period of non-cancelable operating lease	1 year
Percentage of rental income related to commercial properties	7.00%
Minimum future rental income
2017	$ 3,447,000
2018	2,284,000
2019	1,687,000
2020	1,474,000
2021	594,000
Thereafter	391,000
Commercial Property Leases	9,877,000
Aggregate contingent rentals from continuing operations	$ 319,000	$ 304,000

XML

RENTAL INCOME (Concentration) (Details)	6 Months Ended
	Jun. 30, 2017
Commercial rental income | Major tenant
Concentration Risk
Concentration risk percentage	33.00%

XML

RENTAL INCOME (Commercial Leases) (Details)	6 Months Ended
	Jun. 30, 2017 USD ($) ft² item
RENTAL INCOME
Annual base rent for expiring leases | $	$ 2,918,871
Total square feet for expiring leases | ft²	108,043
Total number of leases expiring | item	46
Percentage of annual base rent for expiring leases	100.00%
Through December 31, 2017
RENTAL INCOME
Annual base rent for expiring leases | $	$ 418,813
Total square feet for expiring leases | ft²	18,181
Total number of leases expiring | item	11
Percentage of annual base rent for expiring leases	14.00%
Through December 31, 2018
RENTAL INCOME
Annual base rent for expiring leases | $	$ 338,133
Total square feet for expiring leases | ft²	10,684
Total number of leases expiring | item	11
Percentage of annual base rent for expiring leases	12.00%
Through December 31, 2019
RENTAL INCOME
Annual base rent for expiring leases | $	$ 631,713
Total square feet for expiring leases | ft²	22,328
Total number of leases expiring | item	9
Percentage of annual base rent for expiring leases	22.00%
Through December 31, 2020
RENTAL INCOME
Annual base rent for expiring leases | $	$ 621,421
Total square feet for expiring leases | ft²	25,004
Total number of leases expiring | item	6
Percentage of annual base rent for expiring leases	21.00%
Through December 31, 2021
RENTAL INCOME
Annual base rent for expiring leases | $	$ 579,164
Total square feet for expiring leases | ft²	23,267
Total number of leases expiring | item	6
Percentage of annual base rent for expiring leases	20.00%
Through December 31, 2022
RENTAL INCOME
Annual base rent for expiring leases | $	$ 78,000
Total square feet for expiring leases | ft²	1,950
Total number of leases expiring | item	1
Percentage of annual base rent for expiring leases	2.00%
Through December 31, 2023
RENTAL INCOME
Annual base rent for expiring leases | $	$ 251,627
Total square feet for expiring leases | ft²	6,629
Total number of leases expiring | item	2
Percentage of annual base rent for expiring leases	9.00%

XML

RENTAL INCOME (Rent Receivable) (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
RENTAL INCOME
Allowance for doubtful rent receivable	$ 686,000	$ 523,000
Recognizing rental income from non-cancelable commercial leases with future rental increases on a straight-line basis	120,000
Deferred rental concession	$ 71,000

XML

CASH FLOW INFORMATION (Details) - USD ($)	6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016
CASH FLOW INFORMATION
Cash paid for interest	$ 4,985,000	$ 4,947,000
Cash paid for state income taxes	$ 37,000	$ 41,000

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FAIR VALUE MEASUREMENTS (Details) - USD ($)	Jun. 30, 2017	Dec. 31, 2016
Mortgage Notes Payable
Carrying Amount	$ 211,934,121	$ 212,709,080
Estimated Fair Value	219,698,686	219,086,450
Partially owned properties
Mortgage Notes Payable
Carrying Amount	124,938,378	130,152,297
Estimated Fair Value	$ 127,583,710	$ 133,991,269

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TAXABLE INCOME AND TAX BASIS (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Dec. 31, 2016
TAXABLE INCOME AND TAX BASIS
Excess amount of statement income over taxable income					$ 57,000
Excess amount of cumulative statement basis over cumulative taxable basis					7,200,000
Excess amount of statement income from joint venture investments over taxable income					2,100,000
Reconciliation of GAAP net income to taxable income
Financial statement ("book") net income	$ 2,483,707	$ 980,586	$ 4,377,941	$ 2,211,351
Reconciliation of Income from Book Basis to Tax Basis Profit (Loss) Tax Basis					$ 4,893,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details)	6 Months Ended
	Jun. 30, 2017 item
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of limited partnerships and limited liability companies in which the entity has invested	9
Number of partnerships investing in commercial property	3
Management Company [Member]
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of employees having ownership interest in the investment properties	6
Minimum | Limited Partnerships
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)	40.00%
Minimum | Harold Brown
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)	43.20%
Maximum | Limited Partnerships
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)	50.00%
Maximum | Harold Brown
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)	56.00%

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Dexter) (Details)	Oct. 28, 2009 USD ($) item	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture		$ 9,029,232	$ 8,336,505
Outstanding amount of mortgage		211,934,121	$ 212,709,080
Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture	$ 15,925,000
Ownership interest (as a percent)	40.00%
Number of units | item	409
Purchase price of investments	$ 129,500,000
Dexter Park | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)	5.57%
Period for which the entity is required to make interest only payments	2 years
Amortization period of debt	30 years
Outstanding amount of mortgage		$ 82,757,000
Borrowings	$ 89,914,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton Bay Apts and Sales) (Details)	1 Months Ended
	Feb. 28, 2007 item	Jun. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture		$ 9,029,232	$ 8,336,505
Outstanding amount of mortgage		$ 211,934,121	$ 212,709,080
Hamilton Bay Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units refinanced | item	48
Mortgages payable | Minimum
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)		2.80%
Mortgages payable | Maximum
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)		5.97%

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton Essex) (Details)				6 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 28, 2015 USD ($)	Mar. 07, 2005 USD ($) item	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture				$ 9,029,232		$ 8,336,505
Distribution to the Partnership				2,239,168	$ 1,873,850
Mortgage Notes Payable				211,934,121		$ 212,709,080
Hamilton Essex Development, LLC and Hamilton Essex 81, LLC
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture			$ 2,000,000
Ownership interest (as a percent)			50.00%
Purchase price of investments			$ 14,300,000
Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units | item			48
Number of properties in which borrowing amount collateralized | item			1
Capital contributions		$ 100,000
Distribution to the Partnership	$ 978,193
Hamilton Essex Development
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Capacity of real estate property (in cars per lot) | item			50
Capital contributions		978,193
Mortgages payable | Hamilton Essex Development, LLC and Hamilton Essex 81, LLC
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Borrowings			$ 10,750,000
Mortgages payable | Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Amount of loan proceeds utilized for pay off the existing mortgage	$ 8,040,719
Term of debt	10 years
Mortgage Notes Payable				$ 10,000,000
Borrowings	$ 10,000,000
Mortgages payable | Hamilton Essex 81 | LIBOR
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Margin over basis of interest rate (as a percent)	2.18%
Mortgages payable | Hamilton Essex Development
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Repayment of loan		$ 1,952,286

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton 1025) (Details)			6 Months Ended	12 Months Ended
	Jul. 08, 2016 USD ($)	Mar. 02, 2005 USD ($) item	Jun. 30, 2017 USD ($) item	Dec. 31, 2016 USD ($) item
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture			$ 9,029,232	$ 8,336,505
Outstanding amount of mortgage			$ 211,934,121	$ 212,709,080
Hamilton 1025
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture		$ 2,352,000
Ownership interest (as a percent)		50.00%
Number of units | item		176
Number of units sold | item		127	8	10
Unsold units | item			30
Number of units retained for long-term investment | item		49	4
Capital contributions	$ 2,359,500
Purchase price of investments		$ 23,750,000
Gain on sale of assets			$ 939,000	$ 1,324,000
Hamilton 1025 | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Term of debt		10 years
Interest rate (as a percent)		5.67%
Period for which the entity is required to make interest only payments		5 years
Amortization period of debt		30 years
Borrowings		$ 5,000,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton Minuteman) (Details)		1 Months Ended		6 Months Ended
	Sep. 12, 2016 USD ($)	Jan. 31, 2007 USD ($)	Oct. 31, 2004 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2006 USD ($)	Sep. 30, 2004 USD ($) item
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture				$ 9,029,232		$ 8,336,505
Distribution to the Partnership				2,239,168	$ 1,873,850
Outstanding amount of mortgage				211,934,121		$ 212,709,080
Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture								$ 5,075,000
Ownership interest (as a percent)								50.00%
Number of units | item								42
Cash contribution by the entity towards loan							$ 1,250,000
Outstanding amount of mortgage				$ 6,000,000
Purchase price of investments								$ 10,100,000
Amount returned to partnership			$ 3,775,000
Mortgages payable | Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Distribution to the Partnership	$ 385,000
Mortgage amount	6,000,000
Term of debt		10 years
Amount of mortgage paid off	5,158,000
Refinancing costs	$ 123,000
Interest rate (as a percent)	3.71%	5.67%
Period for which the entity is required to make interest only payments	15 years	5 years
Amortization period of debt		30 years
Borrowings		$ 5,500,000	$ 8,025,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Hamilton on Main) (Details)	1 Months Ended	6 Months Ended		12 Months Ended
	Aug. 31, 2014 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2005 USD ($) item	Dec. 31, 2016 USD ($)	Aug. 31, 2004 USD ($) item
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture		$ 9,029,232			$ 8,336,505
Outstanding amount of mortgage		211,934,121			$ 212,709,080
Distribution to the Partnership		2,239,168	$ 1,873,850
Hamilton on Main Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture						$ 8,000,000
Ownership interest (as a percent)						50.00%
Number of units | item						280
Number of units sold | item						137
Purchase price of investments						$ 56,000,000
Mortgages payable | Hamilton on Main Apartments, LLC
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Term of debt	10 years			10 years
Number of buildings | item				3
Outstanding amount of mortgage		$ 16,900,000
Interest rate (as a percent)	4.34%			5.18%
Period for which the entity is required to make interest only payments				3 years
Amortization period of debt				30 years
Debt Instrument, Loan Proceeds distributed to the Partnership	$ 850,000
Term excluding period for which interest only payments to be made				7 years
Net proceeds after funding escrow accounts and closing costs				$ 16,700,000
Repayment of loan	15,205,000
Cost associated with loan extension	161,000
Borrowings	$ 16,900,000			$ 16,825,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (345 Franklin) (Details)	1 Months Ended	6 Months Ended
	Jun. 30, 2013 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2016 USD ($)	Dec. 31, 2016 USD ($)	Nov. 30, 2001 USD ($) item
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture		$ 9,029,232		$ 8,336,505
Distribution to the Partnership		2,239,168	$ 1,873,850
Outstanding amount of mortgage		211,934,121		$ 212,709,080
345 Franklin | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Outstanding amount of mortgage		9,835,000
345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture					$ 1,533,000
Ownership interest (as a percent)					50.00%
Number of units | item					40
Distribution to the Partnership	$ 1,610,000
Legal obligation to fund operating results		$ 0
345 Franklin | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Term of debt	15 years
Interest rate (as a percent)	3.87%
Period for which the entity is required to make interest only payments	3 years
Amortization period of debt	30 years
Repayment of loan	$ 6,776,000
Borrowings	$ 10,000,000

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Balance Sheet) (Details)	Jun. 30, 2017 USD ($) property item	Dec. 31, 2016 USD ($) item	Jun. 30, 2016 USD ($) property	Oct. 28, 2009 USD ($) item	Oct. 03, 2005 USD ($) item	Mar. 07, 2005 item	Mar. 02, 2005 USD ($) item	Sep. 30, 2004 USD ($) item	Aug. 31, 2004 USD ($) item	Nov. 30, 2001 USD ($) item
LIABILITIES AND PARTNERS' CAPITAL
Investment in Unconsolidated Joint Ventures	$ 9,029,232	$ 8,336,505
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	(2,754,771)	$ (2,577,606)
Investment Properties
ASSETS
Rental Properties	138,765,415		$ 145,999,494
Cash & Cash Equivalents	1,523,954		1,640,161
Rent Receivable	226,448		183,110
Real Estate Tax Escrow	661,767		539,506
Prepaid Expenses & Other Assets	3,207,143		2,690,531
Total Assets	144,384,727		151,052,802
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	124,938,378		134,906,750
Accounts Payable and Accrued Expenses	1,006,173		986,745
Advance Rental Payments and Security Deposits	4,479,127		4,142,392
Total Liabilities	130,423,678		140,035,887
Partners' Capital	13,961,049		11,016,915
Total Liabilities and Capital	144,384,727		151,052,802
Investment in Unconsolidated Joint Ventures	9,029,232		7,079,963
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	(2,754,771)		(2,468,308)
Total Investment in Unconsolidated Joint Ventures (Net)	$ 6,274,462		$ 4,611,654
Total units/ condominiums
Total | property	1,033		1,033
Units to be retained | property	690		786
Units to be sold | property	343		247
Units sold | property	278		245
Unsold units | property	65		2
Units unsold with deposits for future sale | property	13
Investment Properties | Residential buildings
Total units/ condominiums
Total | property	1,030		1,030
Investment Properties | Commercial
Total units/ condominiums
Total | property	3		3
Hamilton Essex 81
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$ 9,886,240
Total units/ condominiums
Total | item						48
Hamilton Essex 81 | NERA 50%
ASSETS
Rental Properties	7,798,556		$ 8,233,823
Cash & Cash Equivalents	95,520		111,271
Rent Receivable	5,529		46,713
Real Estate Tax Escrow	111,718		83,814
Prepaid Expenses & Other Assets	105,580		105,562
Total Assets	8,116,903		8,581,183
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	9,886,240		9,872,451
Accounts Payable and Accrued Expenses	62,932		54,553
Advance Rental Payments and Security Deposits	251,183		196,372
Total Liabilities	10,200,355		10,123,376
Partners' Capital	(2,083,452)		(1,542,193)
Total Liabilities and Capital	$ 8,116,903		$ 8,581,183
Partners' Capital % - NERA	50.00%		50.00%
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	$ (1,041,726)		$ (771,097)
Total units/ condominiums
Total | property	49		49
Units to be retained | property	49		49
Hamilton Essex 81 | Residential buildings | NERA 50%
Total units/ condominiums
Total | property	48		48
Hamilton Essex 81 | Commercial | NERA 50%
Total units/ condominiums
Total | property	1		1
Hamilton Essex Development | NERA 50%
ASSETS
Rental Properties	$ 2,622,021		$ 2,617,251
Cash & Cash Equivalents	108,751		42,323
Prepaid Expenses & Other Assets	1,533		1,351
Total Assets	2,732,305		2,660,925
LIABILITIES AND PARTNERS' CAPITAL
Accounts Payable and Accrued Expenses	850		850
Total Liabilities	850		850
Partners' Capital	2,731,455		2,660,075
Total Liabilities and Capital	$ 2,732,305		$ 2,660,925
Partners' Capital % - NERA	50.00%		50.00%
Investment in Unconsolidated Joint Ventures	$ 1,365,727		$ 1,330,037
Total units/ condominiums
Total | property	1		1
Units to be retained | property	1		1
Hamilton Essex Development | Commercial | NERA 50%
Total units/ condominiums
Total | property	1		1
345 Franklin
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$ 9,761,919
Partners' Capital % - NERA										50.00%
Investment in Unconsolidated Joint Ventures										$ 1,533,000
Total units/ condominiums
Total | item										40
345 Franklin | NERA 50%
ASSETS
Rental Properties	6,494,266		$ 6,607,281
Cash & Cash Equivalents	45,291		183,078
Rent Receivable	9,470		8,347
Real Estate Tax Escrow	18,889		16,713
Prepaid Expenses & Other Assets	42,394		37,218
Total Assets	6,610,310		6,852,637
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	9,761,919		9,920,098
Accounts Payable and Accrued Expenses	63,851		67,207
Advance Rental Payments and Security Deposits	210,629		259,754
Total Liabilities	10,036,399		10,247,059
Partners' Capital	(3,426,089)		(3,394,422)
Total Liabilities and Capital	$ 6,610,310		$ 6,852,637
Partners' Capital % - NERA	50.00%		50.00%
Distribution and Loss in Excess of investments in Unconsolidated Joint Venture	$ (1,713,045)		$ (1,697,211)
Total units/ condominiums
Total | property	40		40
Units to be retained | property	40		40
345 Franklin | Residential buildings | NERA 50%
Total units/ condominiums
Total | property	40		40
Hamilton 1025
LIABILITIES AND PARTNERS' CAPITAL
Partners' Capital % - NERA							50.00%
Investment in Unconsolidated Joint Ventures							$ 2,352,000
Total units/ condominiums
Total | item							176
Units to be retained | item	(4)						(49)
Units sold | item	8	10					127
Unsold units | item	30
Hamilton 1025 | NERA 50%
ASSETS
Rental Properties	$ 2,812,552		$ 4,829,662
Cash & Cash Equivalents	684		288
Rent Receivable	10,842		18,732
Real Estate Tax Escrow			83,537
Prepaid Expenses & Other Assets	770,237		68,884
Total Assets	3,594,315		5,001,103
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable			4,693,693
Accounts Payable and Accrued Expenses	10,978		28,749
Advance Rental Payments and Security Deposits	42,231		89,470
Total Liabilities	53,209		4,811,912
Partners' Capital	3,541,106		189,191
Total Liabilities and Capital	$ 3,594,315		$ 5,001,103
Partners' Capital % - NERA	50.00%		50.00%
Investment in Unconsolidated Joint Ventures	$ 1,770,552		$ 94,595
Total units/ condominiums
Total | property	176		176
Units to be retained | property	1		49
Units to be sold | property	175		127
Units sold | property	148		127
Unsold units | property	27
Units unsold with deposits for future sale | property	4
Hamilton 1025 | Residential buildings | NERA 50%
Total units/ condominiums
Total | property	175		175
Hamilton 1025 | Commercial | NERA 50%
Total units/ condominiums
Total | property	1		1
Hamilton Bay Sales | NERA 50%
ASSETS
Rental Properties	$ 0		$ 241,741
Cash & Cash Equivalents	212,237		28,695
Rent Receivable	825		2,400
Prepaid Expenses & Other Assets	0		1,891
Total Assets	213,062		274,727
LIABILITIES AND PARTNERS' CAPITAL
Accounts Payable and Accrued Expenses	1,182		1,395
Advance Rental Payments and Security Deposits	101		2,373
Total Liabilities	1,283		3,768
Partners' Capital	211,779		270,959
Total Liabilities and Capital	$ 213,062		$ 274,727
Partners' Capital % - NERA	50.00%		50.00%
Investment in Unconsolidated Joint Ventures	$ 105,889		$ 135,479
Total units/ condominiums
Total | property	120		120
Units to be sold | property	120		120
Units sold | property	120		118
Unsold units | property			2
Hamilton Bay Sales | Residential buildings | NERA 50%
Total units/ condominiums
Total | property	120		120
Hamilton Bay Apts
LIABILITIES AND PARTNERS' CAPITAL
Partners' Capital % - NERA					50.00%
Investment in Unconsolidated Joint Ventures					$ 2,500,000
Total units/ condominiums
Total | item					168
Units to be retained | item					(48)
Units sold | item					120
Hamilton Bay Apts | NERA 50%
ASSETS
Rental Properties	$ 4,484,449		$ 6,017,735
Cash & Cash Equivalents	58,078		4,943
Rent Receivable	18,180		12,257
Real Estate Tax Escrow	0		37,780
Prepaid Expenses & Other Assets	487,987		74,021
Total Assets	5,048,694		6,146,736
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable			4,463,701
Accounts Payable and Accrued Expenses	35,122		9,232
Advance Rental Payments and Security Deposits	65,705		98,765
Total Liabilities	100,827		4,571,698
Partners' Capital	4,947,867		1,575,038
Total Liabilities and Capital	$ 5,048,694		$ 6,146,736
Partners' Capital % - NERA	50.00%		50.00%
Investment in Unconsolidated Joint Ventures	$ 2,473,933		$ 787,518
Total units/ condominiums
Total | property	48		48
Units to be retained | property			48
Units to be sold | property	48
Units sold | property	10
Unsold units | property	38
Units unsold with deposits for future sale | property	9
Hamilton Bay Apts | Residential buildings | NERA 50%
Total units/ condominiums
Total | property	48		48
Hamilton Minuteman
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$ 5,883,726
Partners' Capital % - NERA								50.00%
Investment in Unconsolidated Joint Ventures								$ 5,075,000
Total units/ condominiums
Total | item								42
Hamilton Minuteman | NERA 50%
ASSETS
Rental Properties	6,012,338		$ 6,200,372
Cash & Cash Equivalents	27,620		170
Rent Receivable	10,991
Real Estate Tax Escrow	19,216		46,263
Prepaid Expenses & Other Assets	23,196		159,492
Total Assets	6,093,361		6,406,297
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	5,883,726		5,169,696
Accounts Payable and Accrued Expenses	48,956		57,401
Advance Rental Payments and Security Deposits	119,247		110,976
Total Liabilities	6,051,929		5,338,073
Partners' Capital	41,432		1,068,224
Total Liabilities and Capital	$ 6,093,361		$ 6,406,297
Partners' Capital % - NERA	50.00%		50.00%
Investment in Unconsolidated Joint Ventures	$ 20,716		$ 534,111
Total units/ condominiums
Total | property	42		42
Units to be retained | property	42		42
Hamilton Minuteman | Residential buildings | NERA 50%
Total units/ condominiums
Total | property	42		42
Hamilton on Main Apts
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$ 16,784,966
Partners' Capital % - NERA									50.00%
Investment in Unconsolidated Joint Ventures									$ 8,000,000
Total units/ condominiums
Total | item									280
Units sold | item									137
Hamilton on Main Apts | NERA 50%
ASSETS
Rental Properties	17,871,657		$ 18,146,220
Cash & Cash Equivalents	541		172,519
Rent Receivable	20,212		13,230
Real Estate Tax Escrow	238,391		37,745
Prepaid Expenses & Other Assets	108,507		109,424
Total Assets	18,239,308		18,479,138
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	16,784,966		16,768,914
Accounts Payable and Accrued Expenses	140,046		130,506
Advance Rental Payments and Security Deposits	377,911		357,657
Total Liabilities	17,302,923		17,257,077
Partners' Capital	936,385		1,222,061
Total Liabilities and Capital	$ 18,239,308		$ 18,479,138
Partners' Capital % - NERA	50.00%		50.00%
Investment in Unconsolidated Joint Ventures	$ 468,192		$ 611,031
Total units/ condominiums
Total | property	148		148
Units to be retained | property	148		148
Hamilton on Main Apts | Residential buildings | NERA 50%
Total units/ condominiums
Total | property	148		148
Dexter Park
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	$ 82,621,527
Partners' Capital % - NERA				40.00%
Investment in Unconsolidated Joint Ventures				$ 15,925,000
Total units/ condominiums
Total | item				409
Dexter Park | NERA 40%
ASSETS
Rental Properties	90,669,576		$ 93,105,409
Cash & Cash Equivalents	975,232		1,096,874
Rent Receivable	150,399		81,431
Real Estate Tax Escrow	273,553		233,654
Prepaid Expenses & Other Assets	1,667,709		2,132,688
Total Assets	93,736,469		96,650,056
LIABILITIES AND PARTNERS' CAPITAL
Mortgage Notes Payable	82,621,527		84,018,197
Accounts Payable and Accrued Expenses	642,256		636,852
Advance Rental Payments and Security Deposits	3,412,120		3,027,025
Total Liabilities	86,675,903		87,682,074
Partners' Capital	7,060,566		8,967,982
Total Liabilities and Capital	$ 93,736,469		$ 96,650,056
Partners' Capital % - NERA	40.00%		40.00%
Investment in Unconsolidated Joint Ventures	$ 2,824,225		$ 3,587,193
Total units/ condominiums
Total | property	409		409
Units to be retained | property	409		409
Dexter Park | Residential buildings | NERA 40%
Total units/ condominiums
Total | property	409		409

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Income) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2017	Jun. 30, 2016	Jun. 30, 2017	Jun. 30, 2016	Oct. 28, 2009	Oct. 03, 2005	Mar. 02, 2005	Sep. 30, 2004	Aug. 31, 2004	Nov. 30, 2001
Investment Properties
Revenues
Rental income	$ 12,116,129	$ 6,025,406	$ 11,928,889	$ 12,116,129
Laundry and Sundry Income	86,033	44,100	78,303	86,033
Total Revenues	12,202,162	6,069,506	12,007,192	12,202,162
Expenses
Administrative	168,714	75,361	149,264	168,714
Depreciation and amortization	2,954,638	1,482,711	2,990,008	2,954,638
Management Fees	353,799	178,086	352,138	353,799
Operating	894,324	390,264	930,496	894,324
Renting	90,035	50,986	98,717	90,035
Repairs and Maintenance	1,409,909	760,666	1,373,361	1,409,909
Taxes and Insurance	1,436,671	715,582	1,503,213	1,436,671
Total Expenses	7,308,090	3,653,656	7,397,197	7,308,090
Income Before Other Income	4,894,072	2,415,850	4,609,995	4,894,072
Other Income (loss)
Interest Expense	(3,581,247)	(1,787,741)	(3,287,595)	(3,581,247)
Interest Income	9	5		9
Gain on Sale of Real Estate	235,470	67,462	2,370,644	235,470
Total Other Income (Loss)	(3,345,768)	(1,720,274)	(916,951)	(3,345,768)
Net Income (Loss)	1,548,304	695,576	3,693,044	1,548,304
Proportionate share of net income (loss)	658,082	288,478	1,731,062	658,082
Investment Properties | NERA 50%
Other Income (loss)
Proportionate share of net income (loss)	193,802	51,238	1,269,232	193,802
Investment Properties | NERA 40%
Other Income (loss)
Proportionate share of net income (loss)	464,280	237,240	461,830	464,280
Hamilton Essex 81
Revenues
Rental income		369,120
Laundry and Sundry Income		4,375
Total Revenues		373,495
Expenses
Administrative		4,545
Depreciation and amortization		113,230
Management Fees		15,366
Operating		19,855
Renting		6,299
Repairs and Maintenance		42,149
Taxes and Insurance		57,873
Total Expenses		259,317
Income Before Other Income		114,178
Other Income (loss)
Interest Expense		(71,039)
Total Other Income (Loss)		(71,039)
Net Income (Loss)		43,139
Hamilton Essex 81 | NERA 50%
Revenues
Rental income	767,917		723,284	767,917
Laundry and Sundry Income	8,357		7,590	8,357
Total Revenues	776,274		730,874	776,274
Expenses
Administrative	20,096		9,929	20,096
Depreciation and amortization	225,194		226,998	225,194
Management Fees	30,050		31,978	30,050
Operating	50,358		39,707	50,358
Renting	6,839		9,516	6,839
Repairs and Maintenance	76,084		49,551	76,084
Taxes and Insurance	115,308		121,101	115,308
Total Expenses	523,929		488,780	523,929
Income Before Other Income	252,345		242,094	252,345
Other Income (loss)
Interest Expense	(141,647)		(164,394)	(141,647)
Total Other Income (Loss)	(141,647)		(164,394)	(141,647)
Net Income (Loss)	110,698		77,700	110,698
Proportionate share of net income (loss)	$ 55,350	$ 21,570	$ 38,851	$ 55,350
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
Hamilton Essex Development | NERA 50%
Revenues
Rental income	$ 120,000	$ 60,000	$ 120,000	$ 120,000
Total Revenues	120,000	60,000	120,000	120,000
Expenses
Administrative	889	464	850	889
Depreciation and amortization	1,415	707	1,415	1,415
Management Fees	4,800	2,400	4,800	4,800
Repairs and Maintenance	3,150	3,150	3,180	3,150
Taxes and Insurance	30,602	15,431	29,080	30,602
Total Expenses	40,856	22,152	39,325	40,856
Income Before Other Income	79,144	37,848	80,675	79,144
Other Income (loss)
Net Income (Loss)	79,144	37,848	80,675	79,144
Proportionate share of net income (loss)	$ 39,572	$ 18,924	$ 40,338	$ 39,572
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
345 Franklin
Other Income (loss)
Ownership interest (as a percent)										50.00%
345 Franklin | NERA 50%
Revenues
Rental income	$ 724,962	$ 358,043	$ 727,167	$ 724,962
Laundry and Sundry Income	2,097	507	2,136	2,097
Total Revenues	727,059	358,550	729,303	727,059
Expenses
Administrative	16,198	6,211	14,039	16,198
Depreciation and amortization	173,831	86,915	173,435	173,831
Management Fees	30,825	15,988	29,464	30,825
Operating	36,666	16,542	36,420	36,666
Renting	10,540	10,355	12,248	10,540
Repairs and Maintenance	29,334	12,627	51,430	29,334
Taxes and Insurance	64,423	30,407	66,970	64,423
Total Expenses	361,817	179,045	384,006	361,817
Income Before Other Income	365,242	179,505	345,297	365,242
Other Income (loss)
Interest Expense	(199,009)	(99,505)	(197,793)	(199,009)
Total Other Income (Loss)	(199,009)	(99,505)	(197,793)	(199,009)
Net Income (Loss)	166,233	80,000	147,504	166,233
Proportionate share of net income (loss)	$ 83,116	$ 40,000	$ 73,751	$ 83,116
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
Hamilton 1025
Other Income (loss)
Ownership interest (as a percent)							50.00%
Hamilton 1025 | NERA 50%
Revenues
Rental income	$ 472,476	$ 237,156	$ 237,200	$ 472,476
Total Revenues	472,476	237,156	237,200	472,476
Expenses
Administrative	2,745	1,319	2,184	2,745
Depreciation and amortization	118,064	58,999	91,251	118,064
Management Fees	17,927	8,402	8,803	17,927
Operating	585	220	100	585
Renting	1,789	1,789	332	1,789
Repairs and Maintenance	155,898	78,417	115,717	155,898
Taxes and Insurance	86,209	43,260	56,565	86,209
Total Expenses	383,217	192,406	274,952	383,217
Income Before Other Income	89,259	44,750	(37,752)	89,259
Other Income (loss)
Interest Expense	(138,688)	(69,173)	(777)	(138,688)
Interest Income	9	5		9
Gain on Sale of Real Estate			939,332
Total Other Income (Loss)	(138,679)	(69,168)	938,555	(138,679)
Net Income (Loss)	(49,420)	(24,418)	900,803	(49,420)
Proportionate share of net income (loss)	$ (24,710)	$ (12,209)	$ 450,401	$ (24,710)
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
Hamilton Bay Sales | NERA 50%
Revenues
Rental income	$ 27,690	$ 11,025	$ 5,282	$ 27,690
Total Revenues	27,690	11,025	5,282	27,690
Expenses
Administrative	2,984	1,085	2,148	2,984
Depreciation and amortization	12,584	6,291	(38,440)	12,584
Management Fees	1,076	406	207	1,076
Operating	200	48	38	200
Renting			181
Repairs and Maintenance	13,569	5,551	3,100	13,569
Taxes and Insurance	7,071	2,855	1,213	7,071
Total Expenses	37,484	16,236	(31,553)	37,484
Income Before Other Income	(9,794)	(5,211)	36,835	(9,794)
Other Income (loss)
Interest Expense	(59)	(11)	(2)	(59)
Gain on Sale of Real Estate	235,470	67,462	93,392	235,470
Total Other Income (Loss)	235,411	67,451	93,390	235,411
Net Income (Loss)	225,617	62,240	130,225	225,617
Proportionate share of net income (loss)	$ 112,809	$ 31,120	$ 65,113	$ 112,809
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
Hamilton Bay Apts
Other Income (loss)
Ownership interest (as a percent)						50.00%
Hamilton Bay Apts | NERA 50%
Revenues
Rental income	$ 494,357	$ 245,530	$ 397,962	$ 494,357
Total Revenues	494,357	245,530	397,962	494,357
Expenses
Administrative	5,870	3,890	5,197	5,870
Depreciation and amortization	158,855	79,462	202,598	158,855
Management Fees	19,604	9,362	14,869	19,604
Operating	1,008	714	1,374	1,008
Renting	954	477	181	954
Repairs and Maintenance	200,605	100,814	192,826	200,605
Taxes and Insurance	83,979	42,070	87,349	83,979
Total Expenses	470,875	236,789	504,394	470,875
Income Before Other Income	23,482	8,741	(106,432)	23,482
Other Income (loss)
Interest Expense	(130,978)	(65,065)	(41,741)	(130,978)
Gain on Sale of Real Estate			1,337,920
Total Other Income (Loss)	(130,978)	(65,065)	1,296,179	(130,978)
Net Income (Loss)	(107,496)	(56,324)	1,189,747	(107,496)
Proportionate share of net income (loss)	$ (53,749)	$ (28,162)	$ 594,874	$ (53,749)
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
Hamilton Minuteman
Revenues
Rental income		$ 243,193
Laundry and Sundry Income		53
Total Revenues		243,246
Expenses
Administrative		1,293
Depreciation and amortization		84,896
Management Fees		9,588
Operating		22,568
Renting		947
Repairs and Maintenance		57,281
Taxes and Insurance		30,075
Total Expenses		206,648
Income Before Other Income		36,598
Other Income (loss)
Interest Expense		(76,031)
Total Other Income (Loss)		(76,031)
Net Income (Loss)		(39,433)
Ownership interest (as a percent)								50.00%
Hamilton Minuteman | NERA 50%
Revenues
Rental income	$ 491,754		$ 516,798	$ 491,754
Laundry and Sundry Income	299		1,270	299
Total Revenues	492,053		518,068	492,053
Expenses
Administrative	2,600		2,411	2,600
Depreciation and amortization	169,581		173,810	169,581
Management Fees	19,922		20,466	19,922
Operating	46,231		52,003	46,231
Renting	4,802		4,104	4,802
Repairs and Maintenance	110,941		39,286	110,941
Taxes and Insurance	59,499		62,894	59,499
Total Expenses	413,576		354,974	413,576
Income Before Other Income	78,477		163,094	78,477
Other Income (loss)
Interest Expense	(152,347)		(118,019)	(152,347)
Total Other Income (Loss)	(152,347)		(118,019)	(152,347)
Net Income (Loss)	(73,870)		45,075	(73,870)
Proportionate share of net income (loss)	$ (36,936)	$ (19,717)	$ 22,538	$ (36,936)
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
Hamilton on Main Apts
Other Income (loss)
Ownership interest (as a percent)									50.00%
Hamilton on Main Apts | NERA 50%
Revenues
Rental income	$ 1,604,997	$ 806,669	$ 1,655,234	$ 1,604,997
Laundry and Sundry Income	20,634	10,051	18,368	20,634
Total Revenues	1,625,631	816,720	1,673,602	1,625,631
Expenses
Administrative	20,131	8,623	17,237	20,131
Depreciation and amortization	477,061	239,165	490,218	477,061
Management Fees	64,262	32,337	66,082	64,262
Operating	151,015	81,925	183,191	151,015
Renting	9,516	4,013	21,398	9,516
Repairs and Maintenance	227,253	131,233	327,427	227,253
Taxes and Insurance	255,822	128,012	218,416	255,822
Total Expenses	1,205,060	625,308	1,323,969	1,205,060
Income Before Other Income	420,571	191,412	349,633	420,571
Other Income (loss)
Interest Expense	(383,871)	(191,988)	(382,898)	(383,871)
Total Other Income (Loss)	(383,871)	(191,988)	(382,898)	(383,871)
Net Income (Loss)	36,700	(576)	(33,265)	36,700
Proportionate share of net income (loss)	$ 18,350	$ (288)	$ (16,633)	$ 18,350
Ownership interest (as a percent)	50.00%	50.00%	50.00%	50.00%
Dexter Park
Other Income (loss)
Ownership interest (as a percent)					40.00%
Dexter Park | NERA 40%
Revenues
Rental income	$ 7,411,976	$ 3,694,670	$ 7,545,962	$ 7,411,976
Laundry and Sundry Income	54,646	29,114	48,939	54,646
Total Revenues	7,466,622	3,723,784	7,594,901	7,466,622
Expenses
Administrative	97,201	47,931	95,269	97,201
Depreciation and amortization	1,618,053	813,046	1,668,723	1,618,053
Management Fees	165,333	84,237	175,469	165,333
Operating	608,261	248,392	617,663	608,261
Renting	55,595	27,106	50,757	55,595
Repairs and Maintenance	593,075	329,444	590,844	593,075
Taxes and Insurance	733,758	365,599	859,625	733,758
Total Expenses	3,871,276	1,915,755	4,058,350	3,871,276
Income Before Other Income	3,595,346	1,808,029	3,536,551	3,595,346
Other Income (loss)
Interest Expense	(2,434,648)	(1,214,929)	(2,381,971)	(2,434,648)
Total Other Income (Loss)	(2,434,648)	(1,214,929)	(2,381,970)	(2,434,648)
Net Income (Loss)	1,160,698	593,100	1,154,581	1,160,698
Proportionate share of net income (loss)	$ 464,280	$ 237,240	$ 461,830	$ 464,280
Ownership interest (as a percent)	40.00%	40.00%	40.00%	40.00%

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Mortgage Maturities) (Details) - USD ($)	Jun. 30, 2017	Jun. 30, 2016
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Less: unamortized deferred financing costs	$ (1,331,000)
Weighted average interest rate (as a percent)	5.00%
Effective interest rate (as a percent)	5.08%
Investment Properties
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2018	$ 1,817,357
3/31/2019	1,917,897
3/31/2020	79,603,870
3/31/2021	209,541
3/31/2022	217,796
Thereafter	41,725,660
Total	125,492,121
Less: unamortized deferred financing costs	(553,743)
Debt maturities net of unamortized deferred financing costs	124,938,378	$ 134,906,750
Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Thereafter	10,000,000
Total	10,000,000
Less: unamortized deferred financing costs	(113,760)
Debt maturities net of unamortized deferred financing costs	9,886,240
345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2018	186,608
3/31/2019	193,959
3/31/2020	201,599
3/31/2021	209,541
3/31/2022	217,796
Thereafter	8,825,660
Total	9,835,163
Less: unamortized deferred financing costs	(73,244)
Debt maturities net of unamortized deferred financing costs	9,761,919
Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Thereafter	6,000,000
Total	6,000,000
Less: unamortized deferred financing costs	(116,274)
Debt maturities net of unamortized deferred financing costs	5,883,726
Hamilton on Main Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Thereafter	16,900,000
Total	16,900,000
Less: unamortized deferred financing costs	(115,034)
Debt maturities net of unamortized deferred financing costs	16,784,966
Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
3/31/2018	1,630,749
3/31/2019	1,723,938
3/31/2020	79,402,271
Total	82,756,958
Less: unamortized deferred financing costs	(135,431)
Debt maturities net of unamortized deferred financing costs	$ 82,621,527

XML

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details)									1 Months Ended						6 Months Ended		12 Months Ended
	Sep. 12, 2016 USD ($)	Jul. 08, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 28, 2015 USD ($)	Oct. 18, 2013 USD ($)	Oct. 28, 2009 USD ($) item	Mar. 07, 2005 USD ($) item	Mar. 02, 2005 USD ($) item	Aug. 31, 2014 USD ($)	Jun. 30, 2013 USD ($)	Apr. 30, 2008 USD ($) item	Feb. 28, 2007 USD ($)	Jan. 31, 2007 USD ($)	Oct. 31, 2004 USD ($)	Jun. 30, 2017 USD ($) property item	Jun. 30, 2016 USD ($) property	Dec. 31, 2016 USD ($) property item	Dec. 31, 2005 USD ($)	Mar. 01, 2017 USD ($)	Dec. 31, 2006 USD ($)	Oct. 03, 2005 USD ($) item	Sep. 30, 2004 USD ($) item	Aug. 31, 2004 USD ($) item	Nov. 30, 2001 USD ($) item
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of limited partnerships and limited liability companies in which the entity has invested | item															9
Number of partnerships investing in commercial property | item															3
Investments in joint venture															$ 9,029,232		$ 8,336,505
Outstanding amount of mortgage															211,934,121		$ 212,709,080
Interest paid															4,985,000	$ 4,947,000
Distribution to the Partnership															2,239,168	1,873,850
Carrying value of investment to discontinue applying the equity method															0
Dexter Park
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)						40.00%
Investments in joint venture						$ 15,925,000
Number of units | item						409
Purchase price of investments						$ 129,500,000
Dexter Park | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Outstanding amount of mortgage															82,757,000
Interest rate (as a percent)						5.57%
Period for which the entity is required to make interest only payments						2 years
Amortization period of debt						30 years
Borrowings						$ 89,914,000
Hamilton Bay Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)																					50.00%
Investments in joint venture																					$ 2,500,000
Number of units | item																					168
Number of units retained for long-term investment | item																					48
Number of units sold | item																					120
Interest rate (as a percent)												5.57%
Period for which the entity is required to make interest only payments												5 years
Amortization period of debt												30 years
Purchase price of investments																					$ 30,875,000
Borrowings												$ 4,750,000
Hamilton Bay Apts | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Outstanding amount of mortgage																			$ 2,222,000
Hamilton Bay Sales
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Capital contributions					$ 660,000
Hamilton Bay Sales | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units | item											20
Interest rate (as a percent)											5.75%
Borrowings											$ 2,368,000
Hamilton Essex Development, LLC and Hamilton Essex 81, LLC
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)							50.00%
Investments in joint venture							$ 2,000,000
Purchase price of investments							14,300,000
Hamilton Essex Development, LLC and Hamilton Essex 81, LLC | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Borrowings							$ 10,750,000
Hamilton Essex 81
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units | item							48
Capital contributions				$ 100,000
Number of properties | item							1
Distribution to the Partnership			$ 978,193
Hamilton Essex 81 | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Outstanding amount of mortgage															$ 10,000,000
Borrowings			$ 10,000,000
Term of debt			10 years
Hamilton Essex 81 | Mortgages payable | LIBOR
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Margin over basis of interest rate (as a percent)			2.18%
Hamilton Essex Development
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Capacity of real estate property (in cars per lot) | item							50
Capital contributions				978,193
Hamilton Essex Development | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Repayment of loan				$ 1,952,286
Hamilton 1025
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)								50.00%
Investments in joint venture								$ 2,352,000
Number of units | item								176
Number of units retained for long-term investment | item								49							4
Number of units sold | item								127							8		10
Purchase price of investments								$ 23,750,000
Capital contributions		$ 2,359,500
Hamilton 1025 | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)								5.67%
Period for which the entity is required to make interest only payments								5 years
Amortization period of debt								30 years
Borrowings								$ 5,000,000
Term of debt								10 years
Hamilton Minuteman
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)																						50.00%
Investments in joint venture																						$ 5,075,000
Outstanding amount of mortgage															$ 6,000,000
Number of units | item																						42
Purchase price of investments																						$ 10,100,000
Amount returned to partnership														$ 3,775,000
Cash contribution by the entity towards loan																				$ 1,250,000
Hamilton Minuteman | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Mortgage amount	$ 6,000,000
Interest rate (as a percent)	3.71%												5.67%
Period for which the entity is required to make interest only payments	15 years												5 years
Amortization period of debt													30 years
Borrowings													$ 5,500,000	$ 8,025,000
Term of debt													10 years
Repayment of loan	$ 5,158,000
Distribution to the Partnership	$ 385,000
Hamilton on Main Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)																							50.00%
Investments in joint venture																							$ 8,000,000
Number of units | item																							280
Number of units sold | item																							137
Purchase price of investments																							$ 56,000,000
Hamilton on Main Apartments, LLC | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Outstanding amount of mortgage															16,900,000
Interest rate (as a percent)									4.34%									5.18%
Period for which the entity is required to make interest only payments																		3 years
Amortization period of debt																		30 years
Borrowings									$ 16,900,000									$ 16,825,000
Term of debt									10 years									10 years
Repayment of loan									$ 15,205,000
Cost associated with loan extension									$ 161,000
Term excluding period for which interest only payments to be made																		7 years
Net proceeds after funding escrow accounts and closing costs																		$ 16,700,000
345 Franklin
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)																								50.00%
Investments in joint venture																								$ 1,533,000
Number of units | item																								40
Distribution to the Partnership										$ 1,610,000
345 Franklin | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)										3.87%
Period for which the entity is required to make interest only payments										3 years
Amortization period of debt										30 years
Borrowings										$ 10,000,000
Term of debt										15 years
Repayment of loan										$ 6,776,000
Investment Properties
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture															$ 9,029,232	$ 7,079,963
Number of units | property															1,033	1,033
Number of units retained for long-term investment | property															(690)	(786)
Number of units sold | property															278	245
Units to be sold | property															343	247
Residential buildings | Investment Properties
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units | property															1,030	1,030
Apartment | Hamilton Bay Sales
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units sold | property																	1
Gain on Sale of Real Estate																	$ 93,000
Commercial | Investment Properties
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units | property															3	3
Management Company [Member]
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of employees having ownership interest in the investment properties | item															6
Minimum | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)															2.80%
Minimum | Limited Partnerships
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)															40.00%
Minimum | Harold Brown
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)															43.20%
Maximum | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)															5.97%
Maximum | Limited Partnerships
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)															50.00%
Maximum | Harold Brown
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)															56.00%

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Details)	1 Months Ended	6 Months Ended
	Feb. 28, 2007 item	Jun. 30, 2017 USD ($) property item	Jun. 30, 2016 USD ($) property	Dec. 31, 2016 USD ($)
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of limited partnerships and limited liability companies in which the entity has invested | item		9
Number of partnerships investing in commercial property | item		3
Investments in joint venture | $		$ 9,029,232		$ 8,336,505
Outstanding amount of mortgage | $		211,934,121		$ 212,709,080
Distribution to the Partnership | $		2,239,168	$ 1,873,850
Investment Properties
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Investments in joint venture | $		$ 9,029,232	$ 7,079,963
Number of units		1,033	1,033
Number of units sold		278	245
Number of units retained for long-term investment		(690)	(786)
Unsold units		65	2
Hamilton Bay Apts
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units refinanced | item	48
345 Franklin | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Outstanding amount of mortgage | $		$ 9,835,000
Condominium
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units | item		19
Residential buildings | Investment Properties
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units		1,030	1,030
Commercial | Investment Properties
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Number of units		3	3
Minimum | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)		2.80%
Minimum | Harold Brown
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)		43.20%
Maximum | Mortgages payable
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Interest rate (as a percent)		5.97%
Maximum | Harold Brown
INVESTMENT IN UNCONSOLIDATED JOINT VENTURES
Ownership interest (as a percent)		56.00%

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SUBSEQUENT EVENTS (Details) - Subsequent event	Jul. 06, 2017 USD ($) item
Subsequent events
Purchase of apartment property	$ 45,500,000
Woodland Park Apartments
Subsequent events
Number of apartment units | item	126
Keybank, NA | Woodland Park Apartments
Subsequent events
Line of credit	$ 25,000,000
HBC Holdings, LLC | Woodland Park Apartments
Subsequent events
Principal amount	$ 16,000,000
Interest rate (as a percent)	4.75%